HomeMy WebLinkAbout13-179 Resolution No. 13-179
RESOLUTION
AUTHORIZING EXECUTION OF AN ECONOMIC INCENTIVE AGREEMENT
WITH BRILLIANCE SUBARU OF ELGIN, INC. D/B/A BRILLIANCE SUBARU
(1500 N. Randall Road)
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS,
that David J. Kaptain, Mayor, and Kimberly A. Dewis, City Clerk, be and are hereby authorized
and directed to execute an Economic Incentive Agreement with Brilliance Subaru of Elgin, Inc.
d/b/a Brilliance Subaru on behalf of the City of Elgin for economic development assistance in
connection with the development of 1500 N. Randall Road, a copy of which is attached hereto
and made a part hereof by reference.
s/David J. Kaptain
David J. Kaptain, Mayor
Presented: October 23, 2013
Adopted: October 23, 2013
Vote: Yeas: 8 Nays: 1
Attest:
s/Kimberly Dewis
Kimberly Dewis, City Clerk
ECONOMIC INCENTIVE AGREEMENT
This Economic Incentive Agreement (the "Agreement") is made and entered into as of
the .23 day of October, 2013, by and between the City of Elgin, an Illinois municipal corpora-
tion (hereinafter referred to as the "City"), and Brilliance Subaru of Elgin, Inc., an Illinois corpo-
ration d/b/a Brilliance Subaru and Subaru of Elgin (hereinafter referred to as the "Developer").
WHEREAS, the Developer acquired the right to own and operate a Subaru automobile
franchise in 2013 and began searching for a suitable location to establish a new car dealership
within a territory that includes the City and neighboring municipalities; and
WHEREAS, the Developer would be unable to proceed with the establishment of the
Subaru automobile franchise in the City and to own and operate a dealership facility without
certain economic development assistance from the City as hereinafter described; and
WHEREAS, BLMS, LLC entered iritola'l?-rch'aseiAgreement in March, 2013, and plans to
construct with Developer a new automobile dealership and service facility on the vacant prop-
erty commonly known as 1500 North Randall Road,`Elgin,'IL 60123 and to.lease-the'land to`De=
veloper; and
` WHEREAS, the Developer will establish 'a Subaru'automobile franchise at'1500"North
Randall Road,,Elgin, Illinois (the "Dealership") and with BLMS, LLC, the Developer will be con-
structing atneW Deale•rship•and service facility'at.an estimated cost-of$;6'milliori; and-
WHEREAS,`Sectibh 8-11`-20 of tlie`Illiiiois Municipal-Code (65 ILCSt/8-11-20) authorizes
municipalities including the City to enter into economic incentive agreements, relating to the
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development dr'redeGelopriierit-of lands within the corporat'e`limits of'a municipality and under
such•a'greements itie-municipality-may agree to 'share or rebate'a' portiori of any Retailer's
Occupation Taxes received by the-municipality`that were generated"� y the `development or
redevelopment over a finite period of time; and
WHEREAS; the;City'is'a home,rule unit a'uthoirized to exercise any power and perform
any function'relating to its'government and'affairs;
WHEREAS, economic incentive agreements including the economic incentive agreement
as provided for irvthis'Agreement pertain to the goverri•m n-i t `affairs'of the City, -'rid
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WHEREAS,-the`De alership'is expected to'create job opportunities Within the'City; and
WHEREAS; the Dealership will serve to further the development-&adjacent areas' and`
` WHEREAS,-without this Agreement the D`ealership'would`not b'e possible; and
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WHEREAS, the Developer meets high standards of credit worthiness and financial
strength as demonstrated by equity financing for not less than ten percent (10%) of the total
project costs; and
WHEREAS,the Dealership will strengthen the commercial sector of the City; and
WHEREAS,the Dealership will enhance the tax base of the City; and
WHEREAS, this Agreement is made in the best interests of the City.
NOW, THEREFORE, for and in consideration of the mutual promises and undertakings
contained herein, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Recitals. The foregoing recitals are incorporated into this Agreement in their en-
2. Definitions.
A.— ` ' "Commencement Date" rriear s September 1; 2014 '
`B. "Safes'fax Revenues" means'forth-e-ten (10) year's following the Com-
mencement Date,all revenues that the City receives from retail sales tax-
es-frdrh the Stat'e'of Illinois'pursuant`tdthe Illinois Service Occupation Tax
(35 ILCS 115/1 et seq.) and the Illinois Retailer's Occupation Tax (35 ILCS
120/1-et seq.) derived solely'from'the'sale of:automobiles•and%o'r motor
vehicles;"parts and other'related retail items•at the Dealership.
3. Fast r'acV'Permitting Process and: - iver of El ildin�'Pe'rrriit"Fees`fo'r the Sub=
Jett Project.
A. :The. City agrees to conduct a "fast-track" permitting process for the De-
veloper's construction of the Dealership and agrees to waive and not re-
quire.Developer W'pay'any building permit fee which would otherwise be
due and payable to the City in connection with the establishment of the
Dealership.-The provisions of this section are intended and shall.be`con-
strued to'apply'only:to the.building permit fees. ' r
B. Any and all-impact fees or other,fees which may be due and,owing:t0he
City'and/or any other governmental,,entity.other.than•the.City_.shall, be
paid by.Developer: t.
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4. Rebate of a Portion of Sales Tax Revenues.
A. The City hereby agrees to rebate and pay to the Developer a portion of
the Sales Tax Revenues received by the City in accordance with this
Agreement, in order to reimburse the Developer for a portion of the
costs incurred by Developer in conjunction with the establishment of the
Dealership, all as set forth and detailed below.
B. The City shall pay to the Developer a rebate of a portion of Sales Tax Rev-
enues received by the City over the ten-year period following the Com-
mencement Date. Such rebate of Sales Tax Revenues from the City to the
Developer shall be paid in annual installments according to the following
formula:
The City shall rebate to Developer twenty-five percent (25%) of the Sales
Tax Revenues received by'the•City that have been derived solely from the
sale of automobiles and/or motor vehicles, parts and other related retail
items at the Dealership.
C. Notwithstanding-any other provision`of-this Agreement to the contrary`,•it
is agreed and 'understood-that,th'e amount'of the rebates'of Sales Tax
Revenues'provided`herein`have'been agreed to based upon the current
share of sales taxes received by the City in the amount of 1%. It is further
agreed'and understood that in the event the City s'sh-a"re of salesitaxes is
r'e'd*uced from'the currerit'amount of 1%`dunng the five years,following
the Commencement D'ate�-th'a't'the'subsequen't rebate of Sales Tax'1166--
hUes'from the City to the'D'eveloper shall be reduced proportionately. For
the purposes of clarification and example, in the event the City's share of
sales taxes currently in the amount of 1% is reduced by 10,percent, then
the amountbf the-subsequeritiebate-of'a'portiori`of'Sales Tak Revenues
from the City to the`De'veloper will also'be-reduced by 10 percent"in the
event'of-any conflict between 'the'provisions of #his paragraph-and-any
other .;-
rovisions of th'is•Agreement, the provisions of this paragraph shall
supersede and control.
D. The�-City`-sNail pay`to the Developer-th'e'annual`installinents*of the-rebates
of Sales_Tax Revenues prbijid ed�for herein within one-H undred-and ei ht
(180) days of each-of the first ten (10),anrival anniversaries of the Com-
mencement Date and the City having' determined the amount-of'sales
and Sales`Tax `Revenues `generated'by the` Dealership in the preceding
`in'th'e'event t.'6'e State'ofi-illinois'fails'to distribute`d'ocumer tation'to
tt ' fothe sals' n Sal'City providirg e es Tax Revenue's generated`by ih
t .
Dealership in sufficient;time for the''City'to' m'ak'e the annual''payments,
then the City shall'provide n'oti'ce of'such �fact'to the`Developer.`In such
event;:the City •stiall'make the required Sales Tax`ReVen-ue 'rebate pay=
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ment to the Developer within sixty (60) days after the date on which the
City actually receives the supporting documentation for the applicable
payment.
E. At the time of each fling of an Illinois Department of Revenue form ST-1
or any successor reporting form with the Illinois Department of Revenue
by the Dealership, the Developer shall cause a copy of such form to be
filed with the Treasurer of the City or such other official as the City may
designate. Within twenty (20) days after the Treasurer or other official
receives an ST-1 Form, the Treasurer or other official shall calculate and
certify to the City the amount of sales tax revenues due to the Developer
in accordance with this Agreement. The City and its Treasurer and other
officials shall keep strictly confidential all information in the ST-1 Form,
except to the extent that disclosure is necessary to third parties for the
proper administration of this Agreement, or is required by law or under
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this`Agreement.
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F. Developer, as a condition of the City's obligation to pay to such Sales Tax
Revenue rebate, shall be required to perform and observe the following
covenants, collectively referred to`as}-the "Dealership''Repo`rting and
Compliarice Obligations"`'"
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(i) Make written request th'_at ttieL`ocal'Tax `Division'of'the' Illinois
Department-of Revenue'( LTD-IDOR ), or.`such-succes`sor•to such
( '-agency, 'supply `to th'e City' on'"'a ''s'emi-annual: basis `lefte"r`
certifying the amount of SalesiTax Revenues received;by the`City
--for the Dealership'operations during the'preceding twelve•;(12)
month' period,'with such letter from the LTO IDOR'certifying the
amount of sales tax revenue "r 1e4 c
eive*d by the City'from the
' y ,!,. ,-- - - +
It
Dealership`being hereinafter referred to a's a`;IDOR 'Sales 'Tax
Revenue Certification Letter."
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00",'"Ta`ke'tall 'add'itionaly actions''as may_ reasonably 'be`necessary i.n I
order for the City to obtain the'inforrriation to insure the'accurate
calcula'tion`of Sale's Tax Revenues from We Dealersship;'""' •.
(iii) Supply or cause to be supplied to the City appropriate
authorizations 'for'the Illinois!Depart'ment of'Revenue t'o°�p'rovide
such information; •including copies of 'filings "with- 'the Illinois
Department of Revenue made by the Developer';and/or'the
Dealership.,-
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(iv) Upori'written request of'the City, provide a power of attorney in
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favor' of the City in'a 'fo_rm'`reasonably_'satisfactoN to'iM LT_ D'
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IDOR, a'uthoriiing tlie.City'to request and retrieve gross revenue
and other information necessary to allow the City to compute the
Sales Tax Revenues.
(v) Upon the request of the City, provide to the City copies of any
form ST-1 or form ST-556, or any successor reporting forms, filed
with the Illinois Department of Revenue by the Dealership.
(vi) Allow the City the right, upon reasonable notice to the Developer
and/or Dealership, to audit Dealership records in order to confirm
Sales Tax Revenues being generated by the Dealership.
G. Developer and the City agree to cooperate and take all additional actions
as may reasonably be necessary in order to obtain the necessary infor-
mation and to insure the accurate collection of deposits of Sales Tax Rev-
enues. The. City agrees to take all actions necessary to.proyide for the sys-
tematict_receipt-of saies taz information'for'ther D'ealers'hip from`the IIIi=
nois Depa'rtm'ent'of'Revenue. To assist the City, Developer will supply or
cause to be supplied to the City appropriate authorizations for the Illinois
Department'of'Revenue to provide such information, including copies
'of
filings with'the Illinois'r D'epartmenCof Revenue made`-by'Deale`rship.'De-
veloper's-Ul cause'Dealership;`upon written request of th'e City; to pro-
vide a Power of Attorney in a form reasonably satisfactory to the Illinois
'.—`.i,� `..
Department of Revrenue,?authoriii zing th'd City`to request and receive gross
revenue and-'other-information necessarylto allow th•e City to compute
the amount of SalesTaz Revenues. '
H. Notwithstanding•any'othei r-provision of this Agreement to the contrary, it
is agreed and u e'rstood_th'at. s-i. under'thistAgree'ment
to rebate a portion of•Sales Tax Revenues shall not'be'a-general debt of
the City onf orra 'charge'against'its' general credit or'taxing powers; and
`shall c'ons'titute a special'limited'obligati'on payable solely and only out Hof
the'Sales Tax'Revenues received by'the Dealers hip:`The`DevelopeYshall
have no right, and-agrees-'that`it'shall'not,compel any exercise of'the tax-.
,rig power ofthe City'to pay the S'ales'Tax`Revenues rebates; and"no exe'
y.
cution of any`claim,-demand,'cause of action or•judgment-shall'be levied
upon ror 'colle`cted Iron1`�the''general°credit; genera_i'ju'hd5 -dr'any-other
property of the City:The payments of`a rebate of'a'portion of'Sale-s Tax
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Revenues by the`City''to•the Developer as provided for iii'this Agreement
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shall'not constitute an indebtedness of the City or a loan or a liability of
the 'City'within the meaning of any constitutional or statutory provision.
No interest shall be due, owing or paidrby.the City with respect to the re-
bat'e'of'any-Sales Tax Revenues. Notwithstanding 'same; nothing herein
it ;.' -,,, ,r •,,-� �.. � - -, ..
shall bar the'Developer from enforcing the terms and obligations of this
Agreement in'the event of�nonr=compliance by the City:.. r
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5. Contingency. Notwithstanding any other provision of this Agreement to the con-
trary, it shall be a condition precedent to the obligations of the City under this
Agreement that the Developer commences operations at the Dealership on or
before September 1, 2014, and that the Dealership continues with its operations
at the Dealership location or another location in Elgin approved by the City for a
period of not less than ten (10) years after so commencing Dealership opera-
tions. In the event that any of the foregoing contingencies are not satisfied, then
the City, upon written notice to the Developer, may elect to terminate this
Agreement, and thereupon this Agreement shall be null and void and of no fur-
ther force and effect without any further obligations of the City hereto.
6. Miscellaneous.
A. That this Agreement shall not be deemed or construed to create an em-
ployment, joint venture, partnership, or other agency relationship be-
*;
tw'een tfie parties' 'ereto'.
"That all.'notices or other'communications Hereunder`shall 'be"made in
Writing and'sliall- b'e deemed given-i'f personally deliveretd or mailed 'by
`registered or'certified,mail;'return receipt'request°ed; to_the parties}at the
following.ad�dres'ses, or at'such otli-er-addressed'for".a-,party ;as`sliall be
specified by like 'notice;'an:d*'shall be'•deemed"received"on'th�e date ;ori
whicli said'hand deliJered or'the second business day following'tH'e
at'e
on which so`mailed:
TO THE CITY: TO THE DEVELOPER:
City of Elgin Stephen McDaniels
150 Dexter`Courf ` 'B'rilliance Subaru
Elgin; IL. 60120-5555' 680 W:'Terra'Cotta'Ave.'
Crystal Lake, IL 60014
Attention: Richard G. Kozal
With'acopy of'any such notice to:
City of Elgin Scott'G`'Richriiond, Esq.'`'
150 Dexter Court ' '' "'Ariario, Hardy'Ritt'et al.
Elgin; IL 60120'5555'` " `' '2000 McDonald'Rd: Sfe. 200
Attention: -William A. Cogley South Elgin, IL 60177
Corporation Counsel
C. That the failure by a party to enforce any provision of this.Agreement
against the'other party shall not be deemed a waiver'of the right to do so
thereafter:
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D. That this Agreement may be modified or amended only in writing signed
by both parties hereto, or their permitted successors or assigns, as the
case may be.
E. That this Agreement contains the entire agreement and understanding of
the parties hereto with respect to the subject matter as set forth herein,
all prior agreements and understandings having been merged herein and
extinguished hereby.
F. That this Agreement is and shall be deemed and construed to be a joint
and collective work product of the City and the Developer and, as such,
this Agreement shall not be construed against the other party, as the
otherwise purported drafter of same, by any court of competent jurisdic-
tion in order to resolve any inconsistency, ambiguity, vagueness or con-
flict, if any, in the terms or,provisions contained herein.
G. That this'-Agreement'is'subject'to and shall be governed by the'laws of
the State of Illinois.
H. That this`Agreeme'nt`shaIP a binding'on the parties hereto an d'their�rel
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spective successors and permitted assigns This Agreement and the Ali'
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gations.herein may not be assigne ithout the express'writte'n consent
of'eacli'of'tlie�`part'i'es hereto, which consent may be withheld at the sole
discretion of either the parties hereto.
I. The City`an'd Devel'operI agree.that; i`n"the'event of-a default 5by"the other
part y, the other party shall, prior to•takmg any such actions as may be
available to'it, provide written notice to the defaulting party stating that
they are givingthe'defaulting party thi'rty'(30) days'Within which to cure
'such default.' If the''default`"s'liall'not be'cur`ed with nrthe thirty (30) days
periodr aforesaid, then the party giving such notice shall be permitted to
avail itself of�remedies to which it may lie`entitled`under this'Agreeirent:�
J. If either party fails or refuses to carry out any of the material covenants
or ObllgatlOnS hereunder,{the bother party shallr be entitled'to'pursue'any
a`nd all'availA remedies as 'specified herein or otherwise'-available at
laW, equity or'otherwise'.'Notw thstanding'the'foregoing oranythingelse
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to the contrary in this Agreement, with'the sole exception of'an'action to
recover-them on`ies�the`Cit'"has'a reed to a
y g pay pursuant to the preceding
I Section 3 hereof, no action shall be commenced by the Developer against
the City,for monetary damage`s" Venue•for tKe re-s`ol'ution o^f any disputes
ri t• ( �, a.r ,•, r '1_ •!il `y�` ,' " S r t.:
or the enforcement'of any rights pursuant=to this'Agreement shall be in
the `6— uit" Court of Kane County;`Illinois: In rthe`'event' any action -is
brought'_ by;the City againslfthe'Developer or its permitted'assigns with
respect to this'.Agreement and'thd City is-tlie`prevailing party in`such ac-
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7 ,.
tion, the City shall also be entitled to recover from the Developer reason-
able interest and reasonable attorney's fees.
K. Time is of the essence of this Agreement.
L. This Agreement shall be construed, and the rights and obligations of the
City and the Developer hereunder shall be determined in accordance
with the laws of the State of Illinois without reference to its conflict of
laws rules.
M. No past, present or future elected or appointed official, officer, employ-
ee, attorney, agent or independent contractor of the City shall be
charged personally or held contractually liable under any term or provi-
sion of this Agreement including, but not limited to, because of their ne-
gotiation, approval, execution or attempted execution of this Agreement.
N. Notwitlisfanding any other provisions of this Agreement, it is expressly
agreed and understood by the Developer and the City that in connection
with'the'peiform"`ance'of'this `Agreement, including, but not limited to,
providing for improvements to the D_ealership,�and that Developer shall
comply with`all applicable fed eral;'state,;'city*and'other"requirements of
law. Developer`shall'Aso at its •expense. secure-all' permits and licenses;
- _
pay all'clarges F "'S' , .-,� ', •
'and-feeand give notices necessary and- incident to the
d'ue' and lawful prosecution of the work necessary to provide for the im-
provements to the Dealership. Without limiting the foregoing, and not-
withsta4 nding anyiking'to the contrary'Wthis'Agreem'ent, Developer;and
it's contractors and-subcontractors shal,lE comply with"the Prevailing Wage
Act in all respects relating to the improvements to the Dealership:
0. To`tlie fullest`extent per`mitfed 'by law', Developer agrees to ai d'-shall'in-
demnify, defend and hold harmless, the City, its officials,•.officers, em-
ployees, attorneys,,agents, boards an'd commissions`feom and against any
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and all claims, suits,judgments; costs,`-attorneys fees, damages or-otK6r
relief, including but'riot'limited to workers' compensation` claims; in'a'ny
way resulting from or arising out of or alleged to be resulting from or arcs
it g out of negligent'actions or-omissions of the Developer in'"connection
ng.herewith, includi'" e'gligence or omissions*of employees;-agents or suh4'
cont'ra`ctors=of the' Developer- Prising,-out`-of,:the ,peFformance`of'this
.'.
Agreement; orin any way es
rulting fe ii or-arising out'of oe'alli ged`to be
'resulting from or arising out of any violation`and/or breach of the terms
or provisions of this'Agreement by the.Developer; including any violation
and/6r-breath by employees, agents or subcontractors of ttie`Devel'oper
In thee' ent of any action against'the City,'its'officials', bfte'Ys}'employ-
ees, agents, attorneys, boards or commissions covered by the foregoing
n' duty toy'mtlemni N',' de'fend`and`hold''harmles's"such action} sUl' be'de-
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fended by legal counsel of the City's choosing the costs of which shall be
paid by the Developer. The provisions of this paragraph shall survive any
termination, completion and/or expiration of this Agreement.
P. To the fullest extent permitted by law, Developer agrees to and shall in-
demnify, defend and hold harmless the City, its officials, officers, em-
ployees, attorneys, agents, boards and commissions, from and against
any and all third party claims, suits, judgments, costs, attorneys' fees, ex-
pert witness fees and expenses, damages or other relief, in any resulting
from or arising out of or alleged to be resulting from or arising out of the
existence of this Agreement, the provisions of this Agreement, the per-
formance of this Agreement, and/or any other actions to the parties
hereto provided for or arising from this Agreement. In the event of any
action against the City, its officials, officers, employees, agents, attorneys,
boards or commissions, covered by the foregoing duty to indemnify, and
defend and hold harmless, such action h1. defendedbyategal counsel
of the'Gty s choosing and the costs of which will -be'paid'forby the De=
veloper.`A:dditior ally;'iii the-event cif`s'uch'th'ir'd'parfy`action the Develop-
er to the extent permitted by law shall upon the request of the City, at-
r; a,i!;.-t = 't_ ,. -i;-'.! IC.,t t:',; I-:.'d i',,•,. i,--, �• '.-, ,.')A i '
tempt',to intervene in such proceedings:and join the_Gty m the defense
thereof.
Q. Developer agrees-to arid'shall`provide to the City written reports on the
"status of`the' Dealer'hip.- Such wr'itteri- reports ,shall `be'provided to.the
City upon request of the City Such written reports shall 'contain a status
repo on construction activities acid'such'other'iriformatib 'as`may'b'e
requested by the'City:'
R. D'evel'oper, ontbeh`alf"of-itself land its"-respective successors,issigns`and
grantees ofthe Dealership Hereby acknowledges,the pro priety',°necessity
and-legality of all'of the terms and provisions of`this'Agreement and"does
hereby-further'agreearid'does waive any and all rights to any and all'legal
or other challenges or defenses to any bf'the terms`and'provisions of'this
Agreement'a'nd hereby agrees and'covenants"on behalf'bf itself and 'its
• l�• j;�l: `. ;', ;.c "hi ii'�°� f t •. t,, ti `- ti
successors, assigns and grantees of the Dealersp, not to sue the City'or
maintain any legal action or other defenses against the City with respect
to any challenges of the terms and provisions of this Agreement. The
provisions of this
`paragraph"sh`all survive any termination;completion
and%or_`expiratiori oftlis Agreement}'" " ' ° _ ;..
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IN WITNESS WHEREOF, the City and Brilliance Subaru of Elgin, Inc., an Illinois corpora-
tion d/b/a Brilliance Subaru have executed this Agreement on the date first set forth above.
CITY OF ELGIN, BRILLIANCE SUBARU OF ELGIN, INC.
d/b/a BRILLIANCE SUBARU, a Illinois corporation
an Illinois municipal corporation
By: By:
'aa
David Kaptain, ayo
Attest:
Kimberly Dewis, City Clerk
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