AMENDMENT TO GROUND LEASE
This Amendment to Ground Lease is made and entered into as
of the 21 day of May, 1999 by and between Ameristar Casino
Council Bluffs, Inc., an Iowa corporation, with an address of 000
Xxxx Xxxxxxxx, Xxxxx 000, X.X. Xxx 0000, Xxxxxxx Xxxxxx, Xxxx
00000 ("Ameristar") and Council Bluffs Hotel Associates, L.C., an
Iowa limited liability company, with an address of 0 Xxxxx Xxxxx
Xxxxxx, Xxxxx Xxxxxxx, Xxxx 00000 ("Xxxxxxx").
RECITALS
A. Ameristar, as ground lessor, and Xxxxxxx Hotel
Corporation, as the original ground lessee, entered into an
Amended and Restated Ground Lease Agreement dated September 7,
1995 (the "Ground Lease"). Xxxxxxx Hotel Corporation assigned
its interest in the Ground Lease to Xxxxxxx.
B. The Ground Lease covers approximately .623 acres of
real property in Pottawattamie County, Iowa (the "Leased Land,"
as defined in the Ground Lease), on which Xxxxxxx constructed and
continues to operate a 140 room Holiday Inn franchise hotel (the
"Hotel").
C. The parties amended the Ground Lease as to certain
operational issues pursuant to a letter agreement dated February
14, 1996 (the "Letter Agreement"). Hereafter, the term "Ground
Lease" incorporates the terms of such Letter Agreement. All
other capitalized terms not otherwise defined in this Amendment
shall have the meaning defined in the Ground Lease.
D. The Ground Lease allows Xxxxxxx to expand the Hotel by
up to an additional thirty-five (35) rooms, up to a total of 175
rooms, upon the satisfaction of certain terms and conditions as
described therein.
X. Xxxxxxx desires to expand the Hotel by up to fifty (50)
rooms, for a total of up to 190 rooms, and has requested
Ameristar's consent for such expansion. The expansion will
require an increase in the footprint of the Leased Land under the
Ground Lease.
F. Ameristar is willing to consent to such expansion,
including an increase in the Leased Land, subject to the terms
and conditions as stated below.
NOW THEREFORE, for and in consideration of the mutual
covenants, conditions and promises contained herein, Ameristar
and Xxxxxxx agree to amend the Ground Lease as follows:
1. Consent to Expansion. Section 2.1 of the Ground Lease
is hereby amended to allow an expansion of the Hotel by up to
fifty (50) additional hotel rooms, for a total of up to one
hundred ninety (190) hotel rooms, subject to the following
conditions:
a) Approval of Plans. Prior to any construction,
Xxxxxxx shall deliver to Ameristar the plans and specifications
for the exterior and interior proposed expansion by Xxxxxxx. In
addition to hotel rooms, such plans and specifications call for
approximately 3000 square feet in additional meeting space,
public area, and support facilities such as kitchen space. The
plans and specifications must also incorporate any landscaping
which may be necessary to blend the expanded Hotel into the
remainder of the Casino Property. The parties acknowledge that a
color rendering of the expansion has been produced by Ameristar
and that the appearance of the exterior shall be substantially
similar to that shown in the rendering. The parties further
acknowledge and agree that the quality and appearance of the
interior of the expansion shall be at least equivalent to and
complimentary of the existing hotel. Any objection by Ameristar
to the proposed plans and specifications for the expansion shall
be made in writing within ten (10) days following the delivery of
said plans and specifications by Xxxxxxx to Ameristar. In the
event of any such objection, each party agrees to cooperate with
the other party and use its best efforts to immediately resolve
the dispute.
b) Description of Additional Land. The description of
any additional land beyond the current Leased Land ("Additional
Land") must be described and shown in a survey conducted by a
licensed surveyor in the State of Iowa. The term "Leased Land"
under the Ground Lease shall be amended to include the Additional
Land effective upon the commencement of construction of the Hotel
expansion. A description of the current proposed description for
the perimeter of the Leased Land to include the Additional Land
is described and shown on Exhibit "A" hereto, which shall
constitute the revised Exhibit A to the Ground Lease. The parties
agree, to the extent necessary, to execute additional addenda or
amendments to the Ground Lease and the Memorandum of Ground Lease
to specifically identify the Additional Land.
c) Gaming Commission and Other Approvals. Ameristar
must obtain any necessary approvals for this Amendment from the
Iowa State Gaming Commission, or its designee, and any other
consents and approvals to the Amendment and the Hotel expansion
from any governmental authorities having jurisdiction over
Ameristar, the Ground Lease or the Casino Property, which
approvals Ameristar will pursue with reasonable diligence. In
addition, Ameristar must satisfactorily complete a background
investigation of Xxxxxxx pursuant to the Ameristar Casinos, Inc.
Gaming Compliance Program as a condition to the effectiveness of
this Amendment, which Ameristar will pursue with reasonable
diligence. Xxxxxxx agrees to cooperate fully with such
investigation to the extent reasonably requested by Ameristar.
d) Xxxxxxx Financing. Xxxxxxx must obtain a
commitment for construction financing by a reputable lender
acceptable to Ameristar, which commitment may be subject only to
conditions and contingencies that are customarily required by
construction lenders. Ameristar shall have reasonable discretion
to determine whether such conditions are acceptable. Subject to
the terms of Section 4.2 of the Ground Lease, Xxxxxxx shall have
the right to refinance its interest in the Ground Lease and the
improvements on the Leased Land, and Ameristar will reasonably
cooperate with Xxxxxxx in its efforts to obtain such financing.
e) Construction Contracts. Xxxxxxx shall have entered
into all necessary contracts for the construction of the
expansion, and provided Ameristar with a true and correct copy of
such contracts.
f) Ameristar Lender Approval. The expansion, and this
Amendment, must be approved in writing by Ameristar's mortgage
lender, and any amendments to agreements previously obtained
under Section 4.1 of the Ground Lease must be obtained and
Ameristar will pursue such approvals and amendments with
reasonable diligence.
g) Time for Satisfaction of Conditions. Xxxxxxx
agrees to use reasonable diligence to satisfy all conditions on
its part stated herein. If the conditions for performance
relating to the expansion are not satisfied within 60 days from
the date of this Amendment, either party shall have the right to
terminate this Amendment upon written notice to the other party.
h) Costs of Construction. All construction costs
relating to the expansion from the curb back shall be Xxxxxxx'x
sole responsibility. Costs for new curb and gutter, and costs
relating to changes from the curb forward (e.g., redirection of
drainage, removal of existing improvements including asphalt in
parking areas) necessitated by the expansion shall be Ameristar's
sole responsibility. In addition, Ameristar shall continue to
maintain the access road between the hotel and the river.
However, any necessary alterations or improvements to such access
road shall be the sole responsibility of Xxxxxxx. All other
terms and conditions of the Ground Lease relating to construction
standards, insurance, indemnification and compliance with laws
during construction of the expansion shall remain in full force
and effect.
2. Rent.
a) Section 1.4 (a) of the Ground Lease is hereby
amended such that upon the earlier of Substantial Completion of
the expansion, or two hundred forty (240) days from the date of
the commencement of construction, the annual base rental for the
Leased Land shall increase from $60,000 to $70,000, payable at
$5833.33 per month, with any initial partial month to be
prorated. However, the threshold amount of Gross Sales for
calculating percentage rents in Section 1.4(b) of the Ground
Lease shall remain at $2,000,000, and the percentage figure shall
remain at five percent (5%).
b) The second sentence of Section 1.4(b) of the
Ground Lease is hereby amended to read:
The term "Gross Sales" means the total
price charged for all services and goods
rendered or sold at, in on or from the Leased
Land by Xxxxxxx, whether for cash or on a
charge, credit, time basis or otherwise,
without reserve or deduction for inability or
failure to collect, including without
limitation room charges and rentals, food and
beverage revenues (reduced by the cost of food
and beverage items), but specifically excluding
merchandise sales, telephone and vending
machine revenues, video rental revenues and
other miscellaneous sales.
3. Franchise Rating. The first sentence of Section 2.3(a)
of the Ground Lease is amended to read as follows: "So long as
Ameristar has gaming operations on the Casino Property, the
Building must be operated as a franchise of Holiday Inn, or such
other franchisor that is acceptable to Ameristar subject to the
terms of Section 3.8(m) below".
4. Use of Marks. Section 3.7 of the Ground Lease is
hereby restated in its entirety as follows:
a) License to Use Ameristar Service Marks
i. Ameristar hereby grants to Xxxxxxx a
nonexclusive worldwide right and license to use the names and
service marks listed on Exhibit B hereto and such other names and
marks as Ameristar may add to Exhibit B from time to time upon
written notice to Xxxxxxx (the "Ameristar Marks") in connection
with the promotion and advertising of the hotel located on the
Leased Land during the term of this Lease, subject to the
limitations described in this paragraph. All other use of the
Ameristar Marks by Xxxxxxx is prohibited.
ii. Each and every use of the Ameristar Marks
shall include the service xxxx notices, colors, designs, and
proportionate sizes, shapes, and features all precisely as
indicated by Ameristar, from time to time. Xxxxxxx shall submit
to Ameristar for approval all proposed uses of the Ameristar
Marks prior to Xxxxxxx'x publication, distribution or use
thereof.
iii. The rights and licenses granted under this
Lease permitting the use of the Ameristar Marks shall not be
assignable or transferable by Xxxxxxx in any manner whatsoever,
nor shall Xxxxxxx have the right to grant any sublicenses, except
by prior written consent of Ameristar, which consent Ameristar
may grant or withhold in its sole discretion. Any unauthorized
assignment or transfer by Xxxxxxx shall be voidable by Ameristar.
iv. Ameristar specifically reserves the right in
its sole discretion to use and without limitation to license
others to use and to license the Ameristar Marks. Xxxxxxx
acknowledges the ownership rights of Ameristar Casinos, Inc. and
the licensed rights of Ameristar in the Ameristar Marks, and
further acknowledges that Xxxxxxx will not challenge such
ownership or licensed rights in the Ameristar Marks.
b) License to Use Xxxxxxx and Franchisor Service
Marks
x. Xxxxxxx hereby grants to Ameristar a
nonexclusive worldwide right and license to use the names and
service marks, including to the extent permissible, its
franchisor's Marks and designations, listed on Exhibit C hereto
and such other names and marks as Xxxxxxx may add to Exhibit C
from time to time upon written notice to Ameristar (the "Xxxxxxx
Marks") in connection with the promotion and advertising of the
Casino during the term of this Lease, subject to the limitations
described herein. All other use of the Xxxxxxx Marks by
Ameristar is prohibited.
ii. Each and every use of the Xxxxxxx Marks shall
include the service xxxx notices, colors, designs, and
proportionate sizes, shapes and features all precisely as
indicated by Xxxxxxx, from time to time.
iii. The rights and licenses granted under this
Lease permitting the use of the Xxxxxxx Marks shall not be
assignable or transferable by Ameristar in any manner whatsoever,
nor shall Ameristar have the right to grant any sublicenses,
except by prior written consent of Xxxxxxx. Any unauthorized
assignment or transfer by Ameristar shall be voidable by Xxxxxxx.
iv. Xxxxxxx specifically reserves the right in
its sole discretion to use and without limitation to license
others to use and to license the Xxxxxxx Marks. Ameristar
acknowledges the ownership rights of Xxxxxxx and its franchisor
in the Xxxxxxx Marks and further acknowledges that Ameristar will
not challenge such rights in the Xxxxxxx Marks.
5. Change of Franchisor. Section 3.8(m) is hereby added
to the Ground Lease as follows:
(m) Change of Franchisor. Notwithstanding references
in this Ground Lease to Holiday Inn as franchisor of Xxxxxxx,
Xxxxxxx may change its franchisor, but only upon prior written
consent of Ameristar, which consent shall not be unreasonably
withheld provided that quality standards are not diminished and
the terms of this Ground Lease can be met by Xxxxxxx under the
terms of any new franchise agreement entered into in connection
with such change.
6. Taxes. Article VI of the Ground Lease states that
Xxxxxxx is solely responsible for all taxes and assessments
levied on the Leased Land and the improvements thereon. However,
because the Leased Land is owned by Ameristar and taxed as part
of a larger tract, the Pottawattamie County Assessor's Office
does not tax the Leased Land separately. Thus, Ameristar and
Xxxxxxx agree to negotiate as soon as practicable as to a
mutually acceptable methodology for allocating responsibility for
such taxes, and to reduce such agreement to a letter to be signed
by both parties.
7. Signage. Ameristar grants to Xxxxxxx the right to
erect a sign on Ameristar's property at a location to be approved
by Ameristar in its sole and absolute discretion. The costs of
acquiring, erecting and maintaining the sign shall be borne by
Xxxxxxx. Ameristar agrees to grant to Xxxxxxx all necessary
easements allowing the existence of the sign and access to
Xxxxxxx to maintain the sign. The proposed design of the sign
shall be submitted by Xxxxxxx to Ameristar and it shall not be
inconsistent or interfere with the Ameristar sign or obstruct or
interfere with "view corridors" of any Ameristar facility. In
the event of any dispute with respect to the proposed design or
location of the sign, such party agrees to cooperate with the
other party and use its best efforts to immediately resolve the
dispute.
8. Group Rate Referrals. If Ameristar refers a block of
rooms which are part of a larger group to Xxxxxxx as a result of
an Ameristar generated group sale or promotions (including
promotions designed to increase occupancy by offering specific
hotel packages to potential guests), Xxxxxxx shall match the
group rate offered by Ameristar for such group unless Xxxxxxx'x
hotel is or is reasonably expected to be "fully occupied" (i.e.,
more than 95% full). If Ameristar is fully occupied and refers
an entire group to Xxxxxxx, Xxxxxxx will match the group rate
offered by Ameristar for other groups booked in the Ameristar
hotel in the same time period, unless Xxxxxxx'x hotel is or is
reasonably expected to be fully occupied. Notwithstanding the
foregoing, Xxxxxxx shall not be obligated to accept hotel guests
referred to Xxxxxxx by Ameristar if the room rate is less than
50% of Xxxxxxx'x rack rate on a requested date for standard room
types (i.e., king or double room types).
9. Option To Purchase. So long as Xxxxxxx is proceeding
with the planning, development and construction of the expansion,
Ameristar agrees not to exercise the option to purchase contained
in Section 11.11 of the Ground Lease until the Substantial
Completion of the expansion. Section 11.11 of the Ground Lease
is hereby amended such that, upon the Substantial Completion of
the expansion the option period shall re-commence for a ten-year
period. The option price shall be the greater of (a) $12,000,000
or (b) the "mean" appraised value (representing 125% of the mean
of the two closest appraised values during the first year of the
re-commenced option period, and 115% of such mean during the
remainder of the option period and otherwise), determined
pursuant to the terms of the Ground Lease.
10. Confidentiality. In addition to the confidentiality
provisions in Section 6 of the Letter Agreement, Xxxxxxx agrees
to reasonably cooperate with Ameristar so as to provide to
Ameristar, upon its request, names and addresses of Xxxxxxx'x
hotel guests so that Ameristar can market, by direct mail, its
gaming and dining operations. Xxxxxxx acknowledges that such
information is critical to Ameristar so that proper attention can
be given to preferred customers of Ameristar's casino. Ameristar
recognizes that such information is proprietary and of great
value to Xxxxxxx. Ameristar acknowledges and agrees that such
lists are to be kept separate form other information, and that
Ameristar is not authorized to use such information to market
hotel rooms to individuals on such list without Xxxxxxx'x prior
written approval.
11. Marketing. In addition to the provisions regarding
marketing outlined in Section 8 of the Letter Agreement, Xxxxxxx
agrees that it shall have the right to provide marketing
materials for Ameristar's casino in its hotel rooms, but shall
not provide such materials relating to other casino properties.
Ameristar shall have the right to inspect Xxxxxxx'x facilities
and hotel rooms at reasonable times to verify that no marketing
materials for competing properties are being distributed.
12. Additional Hotel. It is contemplated that an
additional hotel may be constructed on Ameristar's property by
Xxxxxxx or an entity controlled by Xxxxxxx. In the event of such
construction, both parties agree to cooperate to the extent
necessary with such construction, provided that any new building
does not detrimentally interfere with their current operations,
including driveways, parking areas, ingress, egress and
compliance with local codes. The construction plans of such other
hotel will call for a covered, climate controlled breezeway
connecting the hotels and/or the casino (the "Link"). Xxxxxxx
agrees to use its best efforts to seek its franchisor's approval
for the Link, if such approval is necessary. Ameristar, Xxxxxxx
and the owner of the additional hotel shall share equally in
repairs, maintenance and periodic replacement (e.g., carpets) of
items in the corridor from the Link through the existing hotel.
The cost of constructing and maintaining the Link shall be borne
by the owner of the new hotel. Xxxxxxx and Ameristar shall
cooperate with respect to policing conduct in the Link. Xxxxxxx
agrees that any agreements as to the Link will be structured in
such a way as to continue in full force and effect upon any sale
of the existing hotel or the new hotel.
13. Assignment. Section 10.1 of the Ground Lease is hereby
amended to read as follows:
Ameristar may assign its interests in this Lease upon
written notice to Xxxxxxx and its Leasehold Lender. Except for
assignment to a Leasehold Lender as contemplated under Article IV
of this Lease, Xxxxxxx may not assign this Lease or sublet its
interest in the Leased Land without the prior written consent of
Ameristar, which consent shall not be unreasonably withheld by
Ameristar provided that the proposed assignee is: (a) of equal
or greater financial capacity and net worth as Xxxxxxx on the
date of such assignment, but in any event having a financial
capacity and net worth reasonable, under the circumstances at the
time of the assignment, to require for a lessee under this Lease;
(b) an experienced manager and/or operator of similar hotel
properties; (c) a franchisee of the same hotel chain as Xxxxxxx
or of another franchisor approved pursuant to Sections 2.3(a) and
3.8(m) above; and (d) highly reputable as a hotel and business
operator. A change of the manager of Xxxxxxx (currently Xxxxxxx
Hotel Corporation), (to an entity other than one in which Xxxxx
Xxxxxxx, Xxx Xxxxxxx, Xxxxx Xxxxxxx and Xxxx Xxxxxxx or their
families maintain, directly or indirectly, voting and operating
control) or the failure of Xxxxx Xxxxxxx, Xxx Xxxxxxx, Xxxxx
Xxxxxxx, and Xxxx Xxxxxxx or their families to maintain, directly
or indirectly, voting and operating control of the manager of
Xxxxxxx shall be considered an assignment for purposes of this
section. An assignment of 50% or more of the membership
interests in Xxxxxxx in and of itself shall not be considered an
assignment for purposes of this section. In the event Ameristar
gives its consent for any assignment or subletting of this Lease,
the assignee or subtenant shall assume in writing all of
Xxxxxxx'x obligations and duties under this Lease and shall be
subject to all of the terms of this Lease, and Ameristar shall be
subject only to those obligations and shall enjoy such rights and
privileges as are set forth in this Lease. Such sublease or
assignment shall not relieve Xxxxxxx from its liability under
this Lease without Ameristar's written consent, which shall be in
Ameristar's sole discretion. The provisions of this Section 10.1
are specifically subject to the provisions of Section 4.5 of this
Lease, and in the event of any conflict, the provisions of
Section 4.5 shall control.
14. Notices. Section 11.7 is amended such that the
addresses for notices are as follows:
If to Ameristar:
Ameristar Casino Council Bluffs, Inc.
Attention: General Manager
0000 Xxxxx Xxxx
Xxxxxxx Xxxxxx, Xxxx 00000
Fax: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Saunders, Barnet, Xxxxxxx, Xxxxxx & Mosk
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
If to Xxxxxxx:
Council Bluffs Hotel Associates, L.C.
Attention: Xxxxx Xxxxxxx
0 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxx 00000
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx X. Xxxx, Esq.
Xxxxx, Brown, Koehn, Shors & Xxxxxxx, P.C.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, Xxxx 00000
Fax: (000) 000-0000
15. Continuing Effect. Except as specifically amended
herein, the terms of the Ground Lease shall remain in full force
and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first written above.
Ameristar:
Ameristar Casino Council
Bluffs, Inc.,
an Iowa corporation
By: /s/ Xxxxxx Xxxxxxxxxx
Its Vice President
Xxxxxxx:
Council Bluffs Hotel
Associates, L.C.,
an Iowa limited liability company
By: /s/ Xxxxxx X. Xxxxxxx
Its: Member
