HomeMy WebLinkAboutWatermark Hotel Equities, LLC, d/b/a Ramadaanung, S a 3-cn
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MODIFICATION
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MODIFICATION AGREEMENT
This Modification Agreement is entered into as of May .V3 , 2005, by and between the City of
Waterloo, Iowa ("City") and Watermark Hotel Equities, LLC, d/b/a Ramada Waterloo Civic and
Convention Center ("Hotel").
RECITALS
A. City and Hotel, or their predecessors in interest, are parties to a certain Lease and
Management Agreement dated March 24, 1980 and subsequently amended pursuant to an
Amendment dated February 3, 1992 (collectively, the "Contract"). The Contract
establishes the terms of the parties' relationship with each other and their respective rights
and duties in relation to the facility known as "Five Sullivan Brothers Convention Center"
in Waterloo, Iowa (the "Center").
B. City and Hotel are parties to a letter of intent dated September 17, 2004 (the "Letter of
Intent"), which set forth general terms of agreement with respect to various matters
concerning the Contract and other agreements relating to the Center.
C. The parties desire to amend the Contract on the terms set forth herein in light of proposed
significant and costly environmental system upgrades for the Center to be performed by
City. Said improvements to the Center and modification of the Contract are expected to
be of material benefit to both parties. The parties furthermore desire to memorialize and
give effect to the specific terms they have negotiated based on the general terms and
commitments made in the Letter of Intent.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises exchanged herein and for other
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Substitution of Party. The term "Continental" is hereby deleted and the term "Tenant"
substituted in lieu thereof in each of the following places in the Contract:
a. Paragraph 4; Lines 3, 4, and 5.
b. Paragraph 4; Lines I, 2, and 4 following the schedule of rental commissions.
c. Paragraph 6; Lines 5 and 6.
2. Paragraph 3. Paragraph 3 is hereby amended to delete the words "the thirty-first day of
December, 2013" therefrom and to substitute in lieu thereof "the thirty-first day of December, 2019."
3. Paragraph 8(d). Paragraph 8(d), and all subparagraphs thereunder, are hereby deleted in
their entirety and the following new paragraph 8(d) is substituted in lieu thereof:
(d) Tenant shall, during the term of this lease and until its actual removal from the premises,
at its own expense care for and maintain said premises in a reasonably safe and serviceable
condition (except for the responsibilities undertaken by Landlord herein), including but
not limited to the following:
i. Tenant shall not permit or allow the premises to be damaged or depreciated in value
by any act of negligence of the Tenant, its agents or employees.
ii. Tenant shall keep all faucets closed as to prevent waste of water and flooding of the
premises and will promptly attend to, on an emergency basis, any leakage or
stoppage in any water, plumbing, gas, or waste pipes pending final repairs to same.
Tenant shall clean all plumbing system drains and pipes.
Hi. Tenant shall maintain adequate heat to prevent freezing of pipes.
iv. Tenant shall clean carpets, floor coverings, and floors on a regular basis, keeping
same in a first rate condition of cleanliness, and promptly advise Landlord of any
need for repairs to or replacement of flooring or floor coverings. Tenant shall also
perform other reasonable and necessary janitorial duties on the premises to maintain
the premises in first rate condition. Tenant shall furnish all necessary equipment,
chemicals, detergents, and supplies, subject to Landlord's duty to provide floor care
equipment as set forth in paragraph 8(e)(ii) below.
v. Tenant shall be responsible for removal of snow and ice and for related sidewalk and
surface treatments and preparations on the steps and under the overhang and shall
cooperate with Landlord in removing snow and ice elsewhere on the premises.
vi. Tenant shall promptly remove trash and litter from adjoining sidewalks, driveways,
and parking areas.
vii. Tenant shall provide, care for, and replace all china, glassware, silverware, and other
tableware for banquet or convention use on the premises.
viii. Tenant shall care for and maintain all tables, chairs, staging, dance floors, podiums,
and other furniture or accoutrements provided by Landlord for banquet or convention
use on the premises.
ix. Tenant shall furnish, care for, and repair or replace all stage or table skirting, table
linens, and other soft goods for banquet or convention use on the premises.
x. Tenant shall care for and clean any dishwashing machine provided by Landlord on
the premises and shall furnish all chemicals, detergents, and cleaning supplies
necessary for use of such machine.
xi. Tenant shall care for and clean all kitchen equipment and range hoods on the
premises and shall furnish all cleaning supplies necessary for same.
xii. Tenant shall care for all plants provided by Landlord on the premises, including but
not limited to watering, weeding, and cleaning.
xiii. Tenant shall clean plate glass and other window surfaces on a regular basis (inside
and out), attend to closure or protection of the building upon breakage of plate glass
on an emergency basis pending repair or replacement of same by Landlord.
xiv. Tenant shall replace bulbs as necessary in all lighting fixtures.
xv. Tenant shall make no structural alterations or improvements without the written
approval of the Landlord.
xvi. Notwithstanding that this lease may assign specific responsibilities to Landlord,
Tenant shall be liable for any repairs or replacements to the premises and any
equipment, furniture, or fixtures therein or thereon that are necessary as a result of
damage caused by the negligent, reckless, or willful acts or omissions of Tenant, its
employees, agents, or contractors, or users, known or unknown, of the premises.
Tenant may, in its discretion, require security deposits from users of the premises to
protect Tenant in respect of its obligations under this paragraph.
4. Paragraph 8(e). Paragraph 8(e), and all subparagraphs thereunder, are hereby deleted in
their entirety and the following new paragraph 8(e) is substituted in lieu thereof:
(e) Without limiting the generality of other provisions of this paragraph 8, Landlord agrees as
follows with respect to the leased premises:
i. Landlord shall make necessary repairs or replacements to the sewer, plumbing, water
pipes, lighting, and electrical wiring.
ii. Landlord shall repair and replace floor coverings and surfaces as necessary to
maintain them in good and serviceable condition, subject to Tenant's maintenance
and cleaning duties set forth in paragraph 8(d)(iv) above. Landlord shall furnish
floor care equipment for Tenant's use.
iii. Landlord shall remove snow and ice and provide related sidewalk and surface
treatments and preparations in areas where Tenant is not primarily responsible as
indicated in paragraph 8(d)(v) above. Snow shall be removed to a suitable location.
iv. Landlord shalt furnish all tables, chairs, staging, dance floors, podiums, and other
furniture or accoutrements for banquet or convention use on the premises, subject to
Tenant's duties of care and maintenance as set forth in paragraph 8(d)(viii) above.
v. Landlord shall furnish and repair a dishwashing machine for Tenant's use on the
premises.
vi. Landlord shall furnish all kitchen equipment for Tenant's use on the premises, and
shall repair and maintain same.
vii. Landlord shall provide all plants for the premises and shall trim, replace, or replant
same as necessary, subject to Tenant's duties of care as set forth in paragraph
8(d)(xii) above.
viii. Landlord shall repair or replace plate glass in the windows of the premises
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ix. Landlord shall furnish, repair, and maintain a sound system for Tenant's use on the
premises, provided, however, that any personnel of Tenant or its agents who will use
the system shall first be trained in proper use of the system to the satisfaction of
Landlord.
x. Landlord shall furnish, repair, and maintain forklifts and scissorlifts for use on the
premises.
xi. Landlord shall furnish, repair, and maintain all exterior signs on the premises.
xii. Landlord shall be responsible for all painting, wallpapering, and other wall
treatments.
xiii. Landlord shall maintain the structural integrity of and physical condition of the
parking areas, driveways, and sidewalks on and abutting the leased premises, subject
to Tenant's duties of weather-related maintenance as set forth in paragraph 8(d)(v)
above.
5. Paragraph 9. Paragraph 9 is hereby deleted in its entirety and the following new
paragraph 9 is substituted in lieu thereof:
9. UTILITIES, HEATING AND AIR CONDITIONING.
(a) As promptly as is practicable following execution of a modification agreement to
this lease, Landlord shall make or cause to be made extensive improvements to
heating, ventilation, and air conditioning systems and equipment (collectively, the
"Mechanicals") serving the premises. The Mechanicals shall be furnished and
maintained by Landlord. Landlord shall have sole right to determine, control, and
adjust all temperature settings and system controls for the Mechanicals in and on the
premises. Tenant agrees that it, its employees and agents, shall cooperate with
Landlord for optimal utilization of the Mechanicals, shall comply with all rules that
may be set or implemented governing use and operation of the Mechanicals, and shall
not do any act or thing to adjust, change, manipulate, or circumvent settings and
controls for the Mechanicals without the express prior consent of Landlord.
(b) During the term of the lease, Tenant shall pay, before delinquency, all charges for
use of telephone, water, sewer, garbage and trash disposal, and, not limited by the
foregoing, all other utilities or services of whatever kind and nature which may be
used in or upon the demised premises, except as otherwise provided in this Paragraph
9.
(c) Until the parties certify in writing that the Mechanicals are substantially installed
and operational (the "System Start Date"), Tenant shall pay, before delinquency, all
charges billed by a utility company for use of gas, electricity, power, heat, and air
conditioning (collectively, "Power Charges"). The parties shall jointly execute a
written instrument specifying the System Start Date, which instrument shall be
deemed an addendum to this lease. As soon as reasonably practicable on or after the
System Start Date, the accounts for Power Charges shall be transferred to, or
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terminated and reopened in, the name of Landlord. Commencing with the System
Start Date, Landlord shall pay on Tenant's behalf all Power Charges, and Tenant shall
pay to Landlord on or before the fifteenth (15th) day of each month thereafter an
amount (the "Utilities Payment") equal to ninety-five percent (95%) of the sum of (x)
plus (y) (the sum of (x) plus (y) is referred to as the "Historical Benchmark"), where
(x) and (y) are derived as follows:
(x) equals the product of (i) the price of each unit of natural gas charged to
Landlord by the utility company in the utility company's most recent billing
period as shown by the billing records of the utility company, and (ii) the
average number of units of natural gas actually used in the same calendar
month for the four years preceding the System Start Date.
(y)
equals the product of (i) the price of each unit of electricity charged to
Landlord by the utility company in the utility company's most recent billing
period as shown by the billing records of the utility company, and (ii) the
average number of units of electricity actually used in the same calendar
month for the four years preceding the System Start Date.
The Historical Benchmark for each calendar month shall be fixed by the parties with
historical utilities usage information available to them as of the System Start Date, and
a schedule of Historical Benchmarks shall be prepared, executed by representatives of
each party, and attached as an addendum to this lease. No later than the fifth (5th) day
of each month, Landlord shall provide to Tenant in writing all data inputs necessary to
determine the Utilities Payment for that month, and Tenant shall complete a
calculation sheet substantially in the form attached hereto as Schedule 1. The parties
acknowledge that Tenant has all relevant historic power usage information preceding
the System Start Date, and that from and after the System Start Date the Landlord's
delivery of a copy of the most recent utility bill will provide all other necessary
information.
(d) Notwithstanding anything in Paragraph 9(d) to the contrary, commencing with the
System Start Date, Tenant agrees that the Utilities Payment shall equal one hundred
percent (100%) of the Historical Benchmark, and Landlord shall set aside into a
separate escrow fund (the "Utilities Escrow Fund") an amount equal to five percent
(5%) of sums received from Tenant hereunder, until such time as the balance of the
Utilities Escrow Fund exceeds $25,000.00. Landlord shall notify Tenant in writing
when the Utilities Escrow Fund has a balance exceeding $25,000.00, at which time
Tenant shall pay to Landlord the amount determined under Paragraph 9(c) above. The
Utilities Escrow Fund shall be the sole property of Landlord and shall be used by
Landlord to cover any shortfall in payments received from Tenant pursuant to this
Paragraph 9. Landlord shall notify Tenant of any deductions made from the Utilities
Escrow Fund, and thereafter the Utilities Payment shall be adjusted to one hundred
percent (100%) of the Historical Benchmark until the Utilities Escrow Fund again
exceeds $25,000.00. If at any time the balance in the Utilities Escrow Fund is
insufficient to cover any natural gas or electric utility bill that comes due, Landlord
may at its election either pay said bill to the extent of available monies in the Utilities
Escrow Fund or decline to pay said bill.
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(e) If any Utilities Payment is more than thirty (30) days in arrears for any reason,
Landlord may terminate or cause to be terminated natural gas and/or electrical services
to the premises. Tenant's duty to make Utilities Payments pursuant to this Paragraph
9 is absolute and shall not be compromised, abated, or excused for any reason,
including but not limited to the acts or omissions of a management company or any
other person with any responsibility for management of the premises. Tenant hereby
agrees to indemnify Landlord and to hold it harmless against any and all loss, costs,
damage, and expenses of any type or nature whatsoever occasioned by, or arising out
of, any condition, accident, or other occurrence causing or inflicting injury and/or
damage of any type or nature whatsoever to any person or property, happening or
done, in, upon, or about the leased premises, or due directly or indirectly to the
interruption of utilities services to the premises, regardless of whether such loss, costs,
damage, or expenses are suffered or incurred by Tenant or any other person, including
but not limited to persons renting the premises for special events or activities and
persons providing goods or services in connection with such events and activities.
Tenant acknowledges and agrees that Landlord shall not be liable or in any manner or
to any extent responsible to Tenant or any other person for any claims, demands,
losses, or causes of action in any way arising from or in connection with the
interruption of utilities services to the premises. Tenant's duty to indemnify Landlord
pursuant to this Paragraph 9(e) is in addition to any other duties of indemnification
provided for elsewhere in this lease.
(f) Tenant shall not withhold from, hold back from, or set off against any Utilities
Payment any amount that Tenant claims is due it from Landlord or that in fact is due it
from Landlord. Any right or claim of setoff on the part of Tenant shall be handled
separately from and shall in no manner affect Tenant's duties in respect of Utilities
Payments pursuant to this Paragraph 9.
(g) Landlord shall have the option to terminate the method of handling Utilities
Payments as set forth in this Paragraph 9 if, in the exercise of its sole discretion, it
determines that said method is unsatisfactory or unworkable for any reason. Said
option is exercisable by Landlord for a period of thirty (30) days before the six-month
anniversary of the System Start Date and for a period of thirty (30) days before each
annual anniversary of the System Start Date. Landlord shall exercise said option, if at
all, by delivery of written notice to Tenant, and upon termination Tenant shall pay
directly all providers of natural gas and/or electric utilities for any billed Power
Charges. Said termination shall not affect any other provision or term of the lease.
(h) From each monthly Utilities Payment that Tenant makes to Landlord, Landlord
shall make payment in full to the utility company on its most recent unpaid bill. The
difference between the Utilities Payment for a given month and the actual bill for that
same month shall be retained by Landlord and applied to reimburse Landlord for its
costs and expenses in upgrading the Mechanicals for the benefit of Tenant, and shall
not be otherwise held or applied by Landlord to the account of Tenant or for Tenant's
benefit. The parties hereby agree that the total sum Landlord has expended for this
purpose and for which it shall be reimbursed is $495,716.00 (the "Reimbursable
Sum"). Interest shall accrue on the Reimbursable Sum at the rate of three percent
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(3%) per annum, commencing with the System Start Date and continuing until
payment in full of the Reimbursable Sum and accrued interest. In addition to sums it
receives from Tenant that are applied against the Reimbursable Sum and interest,
Landlord shall apply against the Reimbursable Sum any and all rebates it receives
from the utility company or any other person in consideration of having made
upgrades to the Mechanicals. Within forty-five (45) days after the end of each
calendar year after the System Start Date, Landlord shall furnish to Tenant a written
report showing the application of payments to the Reimbursable Sum and accrued
interest and showing the remaining balance.
(i) Within thirty (30) days after Landlord has fully recouped the Reimbursable Sum
and interest accrued thereon, Landlord shall provide written notice to Tenant of this
fact. Thereafter, the Utilities Payment Tenant makes to Landlord for a given month
shall be an amount equal to the actual utility bill for that month, plus 50% of the
difference (the "Cost Savings"), if any, between the Historical Benchmark calculated
for that month and the actual bill for that month. This method of calculating the
Utilities Payment shall continue for a period of sixty (60) months following
Landlord's notice of recoupment, unless the arrangement between Landlord and
Tenant is sooner terminated pursuant to paragraph 9(g) above. Landlord shall use its
share of the Cost Savings received from Tenant for general fund expenditures directed
primarily toward projects and expenses aimed at increasing tourism and visitors to the
downtown area of the City of Waterloo. Within forty-five (45) days after the end of
each calendar year during said 60 -month period, Landlord shall furnish to Tenant a
written report showing the manner in which Landlord has applied the Cost Savings
received for its intended use. At the end of said 60 -month period, the parties shall
promptly cause the utilities accounts to be transferred into the name of Tenant, and
thereafter Tenant shall pay all utility bills directly to the utility company.
(j) If the method of handling Utilities Payment as set forth in this paragraph 9 is
terminated by Landlord as permitted by the provisions of this paragraph 9, then within
sixty (60) days after Landlord fails to pay any bill for Power Charges or within five (5)
days after either party is notified that utilities to the premises will be shut off,
whichever occurs first, Landlord and Tenant shall cooperate to transfer the accounts
for Power Charges into Tenant's name and thereafter Tenant shall pay all utility bills
directly to the utility company.
6. Paragraph 11. Paragraph 11 is hereby deleted in its entirety and the following
new paragraph 11 is substituted in lieu thereof:
11. ASSIGNMENT AND SUBLETTING. Any assignment of this lease or subletting
of the premises or any part thereof, without the Landlord's written permission shall, at the
option of the Landlord, terminate this lease. Such written permission shall not be
unreasonably withheld; provided, however, that in the event of a proposed assignment or
sublease to a company owning or operating a hotel/motel facility in Black Hawk County,
Iowa, or to a company owning more than a ten percent (10%) beneficial ownership interest
in any such company, or to a company that is affiliated with such a company through
common (i.e., more than fifty percent (50%)) ownership or control, Landlord may condition
such permission upon execution of an agreement in which the proposed assignee or
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sublessee agrees to make best efforts to give preference for scheduling of banquets,
conferences, large meetings, and similar group events to facilities in the leased premises
over like facilities in any facility owned, leased, or operated by the proposed assignee or
sublessee.
7. Paragraph 23. Paragraph 23 is hereby deleted in its entirety and the following new
paragraph 23 is substituted in lieu thereof:
23. RENTAL RATES.
(a) Tenant shall, at the beginning of each calendar year, submit to Landlord a schedule of
rates to be charged for various meeting room rentals of the premises. Landlord shall have the
right to approve such rates annually. To the extent possible, Tenant shall accommodate the
scheduling of local organizations for convention, meeting and entertainment purposes.
(b) The parties acknowledge that Tenant may, from time to time, provide meeting room space
at a reduced rate or at no charge to the user as an incentive to boost hotel room occupancy
rates. In connection with any meeting room booked at a rate less than the scheduled rate, and
solely for purposes of calculating the rental commission owed to Landlord pursuant to
paragraph 4, Tenant agrees that it shall show an entry on its books equal to the rate actually
charged for the meeting room, plus $10.00 for each hotel room occupied by each member of
the group that receives the benefit of the reduced cost meeting room. In no event shall Tenant
be obligated make an entry on its books that is more than the scheduled rate.
8. Due Authorization. Landlord and Tenant each represents and warrants to the other: (i)
that it has the legal power and authority to make the commitments set forth in this Modification
Agreement, (ii) that all requisite action on its part to duly and validly authorize and approve the terms of
this Modification Agreement to ensure their enforceability has been taken, and (iii) that the person or
persons signing this Modification Agreement on its behalf is/are duly authorized to execute and deliver this
Modification Agreement on behalf of the representing party. Tenant further represents and warrants to
Landlord that it is duly organized, validly existing and in good standing under the laws of the State of
Iowa.
9. No Partnership or Joint Venture. Nothing in this Modification Agreement shall, or shall
be deemed or construed to, create or constitute any joint venture, partnership, agency, employment, or any
other relationship between Landlord or Tenant nor to create any liability for one party with respect to the
liabilities or obligations of the other party or any other person.
10. Entire Agreement Scope. This Modification Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof. Except as amended herein, the Contract shall
continue in full force and effect without modification.
11. Severability. In the event any provision of this Modification Agreement is held invalid,
illegal, or unenforceable, whether in whole or in part, the remaining provisions of this Modification
Agreement shall not be affected thereby and shall continue in full force and effect. If, for any reason, a
court finds that any provision of this Modification Agreement is invalid, illegal, or unenforceable as
written, but that by limiting such provision it would become valid, legal, and enforceable, then such
provision shall be deemed to be written and shall be construed and enforced as so limited.
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12. Binding Effect. The provisions of this Modification Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective personal representatives, successors, and
assigns.
13. Headings and Captions. The title or captions of paragraphs in this Modification
Agreement are provided for convenience of reference only and shall not be considered a part hereof for
purposes of interpreting or applying this Modification Agreement, and such titles or captions do not define,
limit, extend, explain, or describe the scope or extent of this Modification Agreement or any of its terms or
conditions.
14. Counterparts. This Modification Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties have executed this Modification Agreement as of the date
first written above.
LANDLORD
City of Waterloo, Iowa
By: /
TENANT
Watermar., otel E"tie
By:
Timothy J. Hurle 5' ayor / Ro ert J. Cata io, Managing Member
Attest:
Nancy Eck -rt, C
Jerk
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