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HomeMy WebLinkAbout15-19 Resolution 15-19 RESOLUTION AUTHORIZING EXECUTION OF A RESTAURANT LEASE AND SERVICES AGREEMENT WITH G&L GLENWOOD, LLC TO OPERATE FOOD AND BEVERAGE OPERATIONS AT THE HIGHLANDS OF ELGIN GOLF COURSE 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 a restaurant lease and services agreement on behalf of the City of Elgin with G&L Glenwood, LLC to operate food and beverage operations at The Highlands of Elgin Golf Course, a copy of which is attached hereto and made a part hereof by reference. s/David J. Kaptain David J. Kaptain, Mayor Presented: February 11, 2015 Adopted: February 11, 2015 Omnibus Vote: Yeas: 9 Nays: 0 Attest: s/Kimberly Dewis Kimberly Dewis, City Clerk RESTAURANT LEASE AND SERVICES AGREEMENT THIS LEASE AND SERVICES AGREEMENT (hereinafter referred to as the "Agreement") is made and entered into this 11th day of February , 2015, by and between the City of Elgin, an Illinois municipal corporation (hereinafter referred to as the "Lessor"), and G&L Glenwood, LLC, a Delaware limited liability company (hereinafter referred to as "Lessee"), and constitutes a lease between the parties of the Premises as identified in the Basic Lease Provisions below, on the terms and conditions and with and subject to the covenants and agreements of the parties hereinafter set forth. WITNESSETH: WHEREAS, Lessor owns and operates a golf course and clubhouse associated therewith, commonly known as The Highlands of Elgin (hereinafter referred to as the "Highlands"); and, WHEREAS, Lessee operates a restaurant facility providing dining, catering and other bar services for its customers under the name the "Elgin Public House" located in Elgin, Illinois; and, WHEREAS, Lessor desires that Lessee develop, operate and provide certain restaurant, banquet service, full-service bar, concession and on-course beverage service at The Highlands, in accordance with the terms and conditions of this Agreement; and, WHEREAS, Lessee desires and is ready, willing and able to establish and provide such services upon the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the sufficiency of which is hereby mutually acknowledged, the parties hereto hereby agree as follows: 1. Basic Lease Provisions. The following are certain lease provisions which are part of, and, in certain instances, referred to, in subsequent provisions of this Agreement: Lessor's Name and Address: City of Elgin, 150 Dexter Court, Elgin, IL 60120- 5555. Lessee's Name and Address: G&L Glenwood, LLC, 501 Glenwood Trail, Elgin, Illinois 60120 Premises: Certain premises located at The Highlands of Elgin, 875 Sports Way, Elgin, Kane County, Illinois 60123, and consisting of approximately 5,000 square feet within the clubhouse, as more particularly identified on Exhibit A, attached hereto and incorporated herein by this reference (hereinafter referred to as the "Premises"). In addition to the square footage being leased hereunder Lessee shall have the non-exclusive right to utilize the following spaces (the "Additional Spaces"): 1. The veranda surrounding the Main Grill Room; 2. The meeting room/private dining room adjoining the Main Grill Room; 3. The entry foyer; 4. The paver patio space along the south side of the lower level of the clubhouse; 5. Any other areas of the clubhouse or grounds not for the exclusive use of any other entity or provider. Lessee shall have the right to use all or any of these Additional Spaces at any time provided Lessee's use thereof does not interfere with the use of the spaces by Lessor. If Lessee desires to use all or any of the spaces exclusively for any particular event or occasion Lessee shall notify the Director of Golf Operations of said desire and all reasonable efforts shall be made to accommodate Lessee's request. If Lessor desires to use all or any of the spaces exclusively for any particular event or occasion Lessor shall notify Lessee in advance of which spaces will not be available and the dates and times of said unavailability. 2. Grant. 2.1 Grant. Lessor hereby grants to Lessee, and Lessee takes from Lessor, the Premises in consideration for the rent to be paid and the covenants to be performed by Lessee. 2.2 Possession. Lessor and Lessee hereby agree that Lessee's taking possession of the Premises shall be deemed conclusive evidence of Lessee's acceptance of the Premises in satisfactory condition and in full compliance with all covenants and obligations of Lessor in connection therewith. Lessee agrees that it will accept possession of the Premises in a "where- is," "as-is" condition and that Lessor has made no representations or inducements respecting the condition of the Premises to Lessee, and that Lessor has made no warranty, express, implied or with regard to suitability for a particular purpose of the Premises, nor any fixture nor equipment subject to this Agreement. Lessor expressly disclaims any warranty regarding the presence or absence of any environmental hazard on, upon, beneath or within the Premises to include the presence of asbestos or other material. 3. Rent. 2 3.1 Rent. For all of the Premises during the entire term of this Agreement, Lessee covenants and agrees to provide the following services to the City: develop, operate, manage and provide certain restaurant, banquet service, full-service bar, concession and on-course beverage services at the Premises (such services are hereinafter referred to as the "Food and Beverage Operations") for the purposes and on the terms and conditions set forth in this Agreement, provided that Lessee shall have no right or authority, express or implied, to commit or otherwise obligate City in any manner whatsoever except to the extent specifically provided for in this Agreement. In addition, beginning with the 2017 Operating Year, and continuing for any subsequent Operating Years, including any renewals of this Agreement, Lessee covenants and agrees to pay to Lessor as rent, in lawful money of the United States, without any prior demand and free from all claims, demands, set-offs or counterclaims of any kind, an annual Percentage Rent amount, which shall be calculated based upon a percentage of the Lessee's Gross Revenues from the Food and Beverage Operations, as described below: Percentage Rent. Lessee shall pay to Lessor as rent an additional compensation of one percent (1%) on Lessee's total Gross Revenues from the Food and Beverage Operations on an annual basis, which payment shall be made within sixty (60) days of the end of the Operating Year. The amount of additional compensation due to Lessor shall be automatically increased five percent (5%) if received by Lessor after the 10th day from the date on which it is due. 3.2 Gross Revenues. Except as otherwise provided for herein, any Gross Revenues generated, earned, or received from the Food and Beverage Operations shall be retained by the Lessee. For the purposes of this Agreement, the term "Gross Revenues" shall mean all revenues, from whatever source, received by the Lessee from or in respect of the operation of the Food and Beverage Operations, and from any income generating activity associated with the Food and Beverage Operations. Without limiting the foregoing, "Gross Revenues" shall mean all monies or other consideration paid or payable to Lessee, its officers, employees and agents from all business conducted upon or from the Premises by Lessee and all others, and whether such sales be evidenced by cash, check, credit charge account, exchange or otherwise, and shall include,but not be limited to, the amount received from the sale of goods, wares and merchandise and for services performed on or at or originated from the Premises, together with the amount of all orders taken, received or originated at the Premises or sales completed by delivery at the Premises, whether such orders be filled from the Premises or elsewhere. Each charge or sale upon installment or credit shall be treated as a sale for the full price in the month during which such charge or sale shall be made, irrespective of the time when Lessee shall receive payment (whether full or partial) thereof. No deductions of any kind shall be made from Gross Revenues, including but not limited to any uncollected or uncollectible installment or credit accounts, credit card discounts or thefts. Any provisions of this Agreement to the contrary notwithstanding, Gross Revenues includes only those revenues generated from or in respect to the Food and Beverage Operations, and does not 3 include any other revenues generated with respect to The Highlands of Elgin, including, but not limited to,the operations of the The Highlands of Elgin golf course and pro shop. 3.3 Expenses. Unless another provision of this Agreement expressly provides that the Lessor is responsible for an expense under this Agreement, Lessee shall be solely responsible for, and shall pay when due, all expenses incurred by Lessee and its officers, employees and agents, in connection with the Food and Beverage Operations or in any way related to this Agreement. 3.3 Operating Year. For the purposes of this Agreement, an "Operating Year" shall run from January 1 of a calendar year to December 31 of the same calendar year, inclusive. 3.4 Independent Covenant. Notwithstanding anything to the contrary, Lessee acknowledges and agrees that its obligation to pay rent under this Agreement is an independent covenant, and that such obligation to pay rent is not subject to set-off or recoupment in connection with any action for summary proceedings to recover possession of the Premises. 4. Security Deposit. 4.1 Security Deposit. No security deposit shall be required. 5. Term. 5.1 Effective Date. This Agreement shall be effective and binding as of the date first set forth above (the "Effective Date"). 5.2 Term. The Term of this Agreement shall commence on March 1, 2015, and shall continue in full force and effect until December 31, 2017, unless terminated prior thereto as provided in this Agreement. This Agreement shall be automatically renewed for two (2) additional three-year term unless Lessor or Lessee notifies the other party of its intention not to renew the Agreement in writing not less than ninety (90) days before the expiration date of the current term. Such renewed term shall be upon the same terms and conditions of the initial term of the Agreement, including but not limited to the provisions requiring payment of Percentage Rent, unless otherwise agreed to in writing by the parties hereto. Any subsequent terms to this Agreement following the initial term and any renewal term shall be subject to negotiation and further written agreement between the parties hereto. 5.3 All rents, fees, charges and payments due hereunder shall commence on March 1, 2015. 5.4 Commencement of Operations. The Main Grille Room shall be opened for business, fully-fixtured, stocked and staffed, in accordance with this Agreements' terms and provisions, by April 15, 2015. All other locations and services which are the subject of this Agreement shall be opened for business, fully-fixtured, stocked and staffed, in accordance with this Agreement's terms and provisions, by April 15, 2015. In the event that Lessee fails to open for business any of the individual locations and services which are the subject of this Agreement, 4 fully-fixtured, stocked and staffed, in accordance with this Agreement's terms and provisions, for any reason whatsoever, then Lessor shall have, in addition to any and all remedies herein provided, the right to collect as an additional rent the amount of one hundred fifty dollars ($150.00) per day until each and every one of the said locations and services, has been opened for business, fully-fixtured, stocked and staffed in accordance with the terms and provisions of this Agreement. This paragraph is subject the agreed Hours of Service contained in Section 7.10, based upon the seasonal nature of the restaurant services provided. 6. Accounting and Right to Inspect Records. 6.1 Monthly Reports. Beginning on the second month of the Term of this Agreement, and continuing until and including the month immediately following the termination or expiration of this Agreement, on or before the twentieth (20th) calendar day of each calendar month, without prior demand, Lessee shall submit to Lessor reports setting forth the amount of Lessee's Gross Revenues for the preceding calendar month. Such reports shall, at a minimum, reflect total Gross Revenues, Gross Revenues by Lessee's operation within the Premises, and Gross Revenues by category (e.g., food, alcoholic beverages, etc.). Such reports shall be in a form acceptable to Lessor, and shall be accompanied by a statement of Lessee that, to the best of its knowledge,the information contained in the report is true, accurate and complete. 6.2 Records. Lessee shall keep full and accurate books and pertinent original and duplicate records showing all of Lessee's revenues and expenses from the Food and Beverage Operations. Such records shall be kept in a form consistent with good accounting practices for at least a three (3) year period after the expiration or earlier termination of this Agreement. Lessee shall make available such books and records at The Highlands within thirty (30) days of any request by Lessor. Lessor shall have the right itself or through its representatives at all reasonable times to audit and otherwise examine and inspect such books and records, including sales tax returns for the State of Illinois. Pertinent original records shall include, but not be limited to, the following: (a) point of sale systems records; (b) cash register tapes, including tapes from temporary registers; (c) serially numbered sales slips; (d) such other sales records that would normally be examined by an independent accountant pursuant to accepted accounting standards in performing an audit of Lessee's profits or Gross Revenues; (e) employee time records; (f) records of payments made pursuant to this Agreement. 6.3 Independent Accountant Report. In determining the Percentage Rent for any Operating Year, Lessee shall employ an independent certified public accountant, who shall furnish a written report to Lessor stating that in its opinion all of Lessee's Gross Revenues during the preceding operating year were correctly and completely reported in accordance with the terms of this Agreement. The independent certified public accountant shall certify that its review of Lessee's Gross Revenues and Percentage Rent due Lessor was performed in accordance with generally accepted auditing standards and that the report was performed in accordance with the terms and provisions of this Agreement. 6.4 Annual Report. Lessee shall also furnish a written report to Lessor listing Lessee's Gross Revenue during the preceding Operating Year as reflected in the independent certified public accountant's report as hereinabove described. This report shall compute total 5 Percentage Rent due to Lessor by Lessee for Lessee's Gross Revenues during the preceding Operating Year and certify that all Percentage Rent due to Lessor by Lessee's operations at The Highlands were correctly and completely made in accordance with the terms of this Agreement. An officer of Lessee who holds at a minimum the title of Vice-President shall certify Lessee's report. Attached to Lessee's report shall be the independent certified pubic accountant's reports as hereinabove described. These reports shall be completed within sixty (60) calendar days after the end of the Operating Year, and shall be furnished prior to or contemporaneously with Lessee's payment of the Percentage Rent. 6.5 Understatement of Percentage Rent. Should any examination, inspection, and audit of such books and records by Lessor disclose an understatement of the Gross Revenues or the Percentage Rent for an Operating Year, any additional Percentage Rent due shall be paid by Lessee to Lessor with interest thereon at the lesser of the rate of eighteen percent (18%) per annum or the maximum interest rate permitted by law from the date such additional percentage rental became due. 6.6 Lessee shall, within thirty (30) days of preparation thereof, provide Lessor with any copies of any financial statements, quarterly or annual shareholder reports, internal or external audit reports or any other publications of Lessee relating to Lessee's operation of the Premises. 7. Conduct of Business and Use of Leased Premises by Lessee. 7.1 Use and Occupancy. Lessee shall have the right, privilege and obligation to continuously and uninterruptedly use and occupy the Premises in accordance with the provisions of this Agreement, solely for the purposes of developing and providing restaurant, banquet service, full-service bar, concession and on-course beverage service through the Grumpy Goat Tavern and for no other purposes whatsoever. 7.2 Use of Grumpy Goat Tavern Name; Reliance on Lessee. Lessee's business in the Premises shall be conducted under the name the Grumpy Goat Tavern. Lessee shall not use or permit the Premises to be used under any other trade name without Lessor's written consent. Lessee acknowledges and hereby agrees that the identity, skill, experience and reputation of Lessee, the specific character of Lessee's business, the anticipated use of the Premises, potential for payment of Percentage Rent, and the relationship between such use and other uses within The Highlands were all relied upon by Lessor and served as significant and material inducements contributing to Lessor's decision to entering into this Agreement with Lessee. Any change in the character of Lessee's business, trade name or use without Lessor's written consent shall constitute a material default under this Agreement. 7.3 Rebranding of Food and Beverage Operations by Lessor. Lessor shall be and is authorized, in its sole discretion, to rebrand the Food and Beverage Operations. Such authority shall include, but not be limited to, renaming the Food and Beverage Operations, designing or redesigning any logos relating to the Food and Beverage Operations, alterations to the physical space of the Premises, capital construction at the Premises, and changes to the decor of the Premises. Any such rebranding activities or efforts shall be at the sole expense of the Lessor, 6 and shall remain the property of the Lessor; provided, however, that Lessee shall be authorized to utilize any new name and/or logo for business and marketing purposes consistent with the terms and provisions of this Agreement. 7.4 Menus. Lessee shall provide all menus. Menus shall be of excellent quality and sufficient in number to meet peak period demands. 7.5 Advertising. Lessee shall not offer for sale or advertise any item, product, service or thing which is not available within the Premises. 7.6 Ingress and Egress. Lessee or Lessee's agents shall have the non-exclusive right of ingress and egress from the Premises at all reasonable times. 7.7 Access. Lessee shall have access to all The Highlands' refrigerators, freezers, ovens, coolers and employee spaces as may be reasonably necessary. Lessee shall hold Lessor harmless from and against any suits, causes of action, claims for damages, or other liability arising out of or in connection with any injury to any person or property as a result of Lessee's use of such refrigerators, freezers, coolers, ovens and employee spaces. All such fixtures and equipment shall remain the property of the Lessor, and shall not be removed from, and shall remain with, the Premises following the expiration or termination of this Agreement. 7.8 Staff and Supplies. Lessee shall supply, at its own expense, all staff and operational supplies necessary to manage and operate The Grumpy Goat Tavern as a full-service bar, restaurant, banquet facility, concession operations and on-course beverage service established within the The Highlands at Elgin property. The beginning inventory level of tables, equipment, silverware, flatware, glassware, cookware and utensils will be supplied by Lessor. In addition, Lessor shall provide a beginning inventory level of food and liquor at the beginning of the Term of this Agreement. The inventory shall be maintained by Lessee, replacing any items that are damaged or lost. All such inventory, whether originally provided or replaced by Lessee, shall remain the property of the Lessor, and shall not be removed from, and shall remain with, the Premises following the expiration or termination of this Agreement. Lessee shall provide additional servers, linens, plates, centerpieces and other accoutrements as may be reasonably required from time-to-time. Such additional servers and materials shall be included in any "per plate"price. 7.9 All labor, food, food-related costs, miscellaneous food and beverage operating expenses, equipment replacement, linen service, grease removal service, staff uniforms, office expenditures and marketing costs shall be at Lessee's sole cost and expense. All utilities, electricity service, natural gas service, water and sewer service, telephone service, trash removal service, and general building and facility maintenance shall be at Lessor's sole cost and expense. General maintenance does not include the cleaning of the areas of the Premises occupied by the Food and Beverage Operations to comply with local health codes. Notwithstanding the foregoing, a not to exceed amount of Five Thousand Dollars ($5,000) of Lessor's annual marketing budget may be allocated for joint marketing efforts, in the Director of Golf Operations' sole discretion. 7 7.10 Hours of Service. Lessor has established minimum hours of service for each operational area, based upon business volume and customer service needs. Lessee shall be continuously and uninterruptedly open for business and provide all services and sales activities as required by the Agreement at such minimum hours unless prior arrangements are made with and approved in writing by Lessor's Director of Golf Operations or his appointed designee. The minimum hours of operation shall be as follows: Prime Season. The Clubhouse shall be open from April 1 to September 30 with seven (7) days per week operation and full food and beverage service. The Main Grille Room shall be open from 11:00 a.m. through 9:00 p.m. for lunch and dinner service. The Turn Stand on the lower level shall be open from 7:00 a.m. through 6:00 p.m. Beverage cart service will be required from May 15 through September 15, and will be provided for such hours as determined by the Lessor's Director of Golf Operations. Shoulder Season. The Clubhouse will have reduced hours of operation in the months of March and October, with seven (7) days per week operation as the facility gears up or slows down, respectively. The Main Grille Room shall be open from 11:00 a.m. through 3:00 p.m. for lunch on Monday through Thursday. The Main Grille Room shall be open from 11:00 a.m. through 9:00 p.m. for lunch and dinner service on Friday and Saturday. The Turn Stand may be closed. Beverage cart service will be required as agreed upon by Lessor's Director of Golf Operations and Lessee. Off Season. The Clubhouse will have limited hours of operation from November 1 through February 28, with reduced service days. The Main Grille Room may be closed Saturday through Monday, and shall be open from 11:00 a.m. through 3:00 p.m. for lunch on Tuesday through Friday. The Turn Stand may be closed. Hours of operation of the bar may extend until 2:00 a.m., as per local municipal codes and Lessee's liquor license. The dates and hours contained with this Section 7.9 are the minimum times during which the facilities and services described herein must remain open. Lessee may maintain additional dates and hours of operation for its facilities and services In Lessee's sole and absolute discretion. In addition, modifications to this schedule shall be made for banquet services. 7.11 Lessee shall be required, in each of the individual locations which comprise the Premises, to prominently post in an area visible to employees and the public the most current copy of Lessee's hours of operation. 8. Operational Standards. 8.1 Adherence to Standards. Lessee, its employees, agents, and servants shall at all times observe, obey and adhere to all the standards, rules, regulations and procedures that may from time to time be promulgated by Lessor. Lessee shall also submit to Lessor a copy of any customer service, operations or organizational standards, rules, regulations and procedures that 8 may from time to time be promulgated by Lessee, and shall ensure continuous adherence to Lessee's own standards in addition to Lessor's standards as set forth herein. Further, Lessee, its employees, agents and servants shall comply with all with all applicable federal, state, city and other requirements of law, including, but not limited to, any applicable requirements regarding prevailing wages, minimum wage, workplace safety and legal status of employees. Without limiting the foregoing, Lessee hereby certifies, represents and warrants to the Lessor that all Lessee's employees and/or agents who will be providing products and/or services with respect to this Agreement shall be legal residents of the United States. Lessee shall also at its expense secure all permits and licenses, pay all charges and fees and give all notices necessary and incident to the due and lawful prosecution of the work, and/or the products and/or services to be provided for in this Agreement. Lessor shall have the right to audit any records in the possession or control of Lessee to determine Lessee's compliance with the provisions of this paragraph. In the event Lessor proceeds with such an audit, Lessee shall make available to Lessor the Lessee's relevant records at no cost to Lessor. Lessor's Director of Golf Operations, in his or her sole opinion, shall have the right to determine Lessee's compliance with all operational standards, rules,regulations or procedures. 8.2 Care of Premises. Lessee shall keep the Premises (including the service areas adjacent to the Premises, windows, and signs) orderly, neat, safe, and clean. The kitchen, bar and all food-related facilities shall be cleaned and disinfected by Lessee's staff at such levels as required by applicable codes and as deemed necessary by Lessor's Director of Golf Operations. Lessor shall provide basic janitorial services to the common areas of the Premises. 8.3 Testing and Inspection by Lessor. Lessee hereby acknowledges and agrees that Lessor may monitor, test or inspect Lessee's services at any time through the use of its own direct review and/or the use of third parties and/or by other reasonable means that do not unduly interfere with Lessee's business. 8.4 Lessee Conduct of Business. Lessee shall operate its business in the Premises so as to maximize the gross sales produced by such operations and shall maintain an adequate staff of employees and maintain in the Premises at all times a stock of merchandise as is reasonably designed to produce the maximum return to Lessor and will tend to assure Lessor a return of the greatest possible amount of Percentage Rent. 8.5 Entertainment Systems. No radio, television, antenna, aerial or other similar device shall be installed without first obtaining in each instance Lessor's Director of Golf Operations' written consent. Any radio, television, antenna, aerial or other similar device, so installed without such prior written consent shall be subject to removal and/or forfeiture without notice at any time. The cost of said removal shall be borne by Lessee. No loudspeakers, televisions, phonographs, radios, or other devices shall be used in a manner so as to be heard or seen outside the Premises without the prior written consent of Lessor's Director of Golf Operations. 8.6 Delivery. All loading and unloading of goods and the delivery or shipping of merchandise, supplies, and fixtures to and from the Premises shall be done only at such time, in the areas, and through the routes designated for such purposes by Lessor. Lessee shall be 9 responsible for providing the necessary equipment to properly move such goods from one location to another. Lessee shall be required to make significant efforts to avoid using the public areas for large quantity deliveries during peak periods. Lessee shall ensure that any items being transported within The Highlands are handled with care in a manner that ensures that items are safely packaged within appropriate containers. 8.7 Plumbing Facilities. The plumbing facilities in the Premises shall not be used for any purpose other than that which they are constructed, and no foreign substance of any kind shall be thrown therein, and the expense of any breakage, stoppage, or damage resulting from a violation of this provision, wherever such occurs, shall be borne by Lessee. 8.8 Method of Payment. Lessee shall accept and honor U.S. currency, major companies' travelers-type checks and at least the following three major credit cards: American Express, Visa and MasterCard for any purchase. 8.9 Point of Sale Devices. Lessee shall install and use, or cause to be installed and used at the Premises, cash registers, sales slips, invoicing machines and other automatic accounting equipment or devices required to properly and accurately record the Gross Revenues on all sales, by type and location, services, and other business transactions made by Lessee under this Agreement all of which are in conformance of The Highlands specifications. Lessee shall be responsible for providing annual service to the Point of Sale System and maintaining the same in good working order. All transactions recorded on these devices shall be visibly displayed so that the amount recorded can be viewed by customers from a reasonable distance. All persons handling sales shall promptly recover said sales (cash or credit) in cash registers and other electronic or mechanical devices and shall not delay or"gang" register or record such sales. 8.10 Level of Service. Lessee shall conduct its operations in a first-class manner in accordance with the highest standards. Lessee shall conduct its operation to provide prompt and timely service. Lessee shall maintain its Premises and conduct its operations at all times in a safe, clean, orderly and inviting condition, to the satisfaction of Lessor's Director of Golf Operations. Lessee shall not create any nuisance, annoy, or be offensive or disturbing to others. 8.11 Management. All Lessee's operations shall be supervised at all times by an active, qualified, competent manager having prior experience in the management of a food and beverage operations of similar quality and scale, or a qualified assistant manager in the manager's absence. The manager or qualified assistant manager shall be available at the Premises during Lessee's hours of operation. Said manager shall have full authority to make day-to-day business decisions on behalf of Lessee with respect to the Premises and shall be responsible for ordering and receiving merchandise, maintaining merchandise and supplies, and supervising sales personnel and other personnel employed in the business of Lessee, represent Lessee in dealings with Lessor, and coordinate all concession activities with Lessor. Lessee shall also designate such manager or qualified assistant manager to attend a weekly golf managers' meeting, as deemed necessary by the Lessor's Director of Golf Operations. Lessee and such persons employed or designated by Lessee to manage or supervise the Food and Beverage Operations shall report directly to the Lessor's Director of Golf Operations with respect to matters arising under this Agreement. 10 8.12 Staffing Levels. Lessee shall recruit, train, supervise, direct and deploy the number of representatives, agents and employees, collectively referred to as "personnel," necessary to promptly provide services to all customers and to meet all of the requirements of this Agreement. Lessee shall be continuously responsible for actively managing personnel levels to ensure that changes in passenger activity, due to schedule changes, load factor changes or flight delays are adequately accommodated through increased levels of personnel. Upon Lessor's Director of Golf Operations' or his or her designee's reasonable request, Lessee shall remove any employee, agents, partner or assign from the building and not allow that person to again serve without the written approval of Lessor's Director of Golf Operations or his or her designee. 8.13 Personnel. Lessee shall ensure that all personnel utilized in its Premises shall conform to the following: a. All personnel employed by Lessee shall be neat, clean and courteous at all times. Lessee shall provide and maintain uniforms for all employees. b. Lessee shall insure that employees working at The Highlands report to work and remain drug-free during all work hours. c. All Lessee employees shall be subject to criminal background checks performed Illinois State Police at Lessee's cost and effort. Lessee's hiring of any employee or prospective employee having a criminal record shall be subject to the sole discretion of Lessor's Director of Golf Operations. d. No loud, boisterous or otherwise improper actions or language shall be permitted while on or about The Highlands. e. All personnel shall be attentive to customer needs, display a positive attitude and refrain from discussing personal issues/problems within the sales areas of the Premises. f. All personnel shall know and utilize practices of good customer service, such as the following: (1) assisting customers with purchase decisions; (2) identify product alternatives; (3) posses and display good product knowledge; and (4) utilize appropriate suggestive selling. g. All personnel shall provide warm, friendly, smiling, prompt and courteous service. h. All necessary personnel shall be proficient with and trained in the required operations of all equipment and devices used in the Premises to facilitate sales (i.e. point of sale devices, credit card transaction equipment, etc.). i. All personnel shall be familiar will all applicable polices of this Agreement, The 11 Highlands and Lessee. j. All personnel engaged in sales activities shall speak and comprehend English at a level appropriate to their duties. k. All personnel shall attend regularly scheduled training classes to be conducted by Lessee, which training shall include the areas of customer service, position skills training (including banquet service, buffet set-up and serving techniques), and BASSETT training. I. All personnel shall park motor vehicles only in those places designated by Lessor. 8.14 Customer Complaints. Lessee shall be required to respond to any complaints in writing within ten (10) days of receipt, with a good faith effort to explain, resolve or rectify the corresponding problem. Lessee shall provide Lessor with a copy of any complaint received the same day it is received by Lessee and shall provide Lessor with a copy of the written response the same day it is sent. Complaints received by Lessor shall be forwarded to Lessee, who shall respond utilizing the above procedure. 8.15 Pricing. Lessee acknowledges by its entering into this Lessee, Lessor's desire to provide the public with a mix of high-quality products and a high-level of public service at prices comparable to off-site locations from The Highlands. 8.16 Product. All items sold or offered at the Premises shall be first quality and conform to all applicable regulations. Lessee shall at all times maintain the degree of quality and quantity for all items offered for sale comparable to items offered for sale at similar restaurants in the area commonly referred to as the "Fox Valley." Lessee shall restore products and/or specifications to Lessor's Director of Golf Operations' reasonable satisfaction within ten (10) days of such notice. 8.17 Interference with Systems. Lessee shall not do, or permit, anything which may interfere with the effectiveness of utility, heating, ventilating or air-conditioning systems or portions thereof on or adjoining the facilities (including lines, pipes, wires, conduits and equipment connected with or appurtenant thereto) or overload any floor in the Premises. 8.18 Unauthorized Locks. Lessee shall not place, or suffer to be placed, any additional lock of any kind upon any window or interior or exterior door in the Premises, or make any change in any existing door or window lock or the mechanism thereof Lessee shall pay Lessor, on demand, the cost for replacement thereof, and the cost of re-keying any such locks. 8.19 Loitering. Lessee shall not permit undue loitering on or about the Premises. 9. Alterations; Lessee and Lessor Alterations. 9.1 Lessee may make repairs and improvements to the Premises only with prior written approval of Lessor, subject to The Highlands' standards and all building, health, fire, and 12 other applicable codes, ordinances, rules and regulations. All alterations, decorations, additions, and improvements made by Lessee shall be deemed to have attached to the leasehold and to have become the property of Lessor upon such attachment, and upon expiration of this Agreement, Lessee shall not remove any of such alterations, decorations, additions, and improvements, except trade fixtures installed by Lessee may be removed if all rents due herein are paid in full and Lessee is not otherwise in default hereunder. Prior to commencing any renovation work approved by Lessor, Lessee shall procure certificates of insurance from all contractors and subcontractors showing general liability and worker's compensation coverage and naming Lessor as an additional insured. Lessee shall in any event be responsible for repairing any damage caused to the Premises by virtue of any unauthorized alteration, addition, or improvement installed by or on behalf of Lessee. Lessee shall not remove or demolish, in whole or in part, any fixed improvements upon the Premises without the prior written consent of Lessor, which consent may be conditioned upon the obligation of Lessee to replace the same by a specified fixed improvement. 10. Signs 10.1 Lessee agrees not to use any advertising media without first receiving written approval from Lessor. All signage shall be professionally prepared and Lessee further agrees to maintain any such sign, awning, canopy, decoration, lettering, advertising matter, or other thing, as may be approved, in good condition and repair at all times. All signs shall be accurate, showcase a cross section of product and be visible. All interior store signage shall require the prior written approval of Lessor's Director of Golf Operations prior to installation. Such signage shall assist and complement the overall effective and creative merchandising and marketing of the permitted merchandise. All signage shall be professionally designed and no hand-lettered or hand-modified signs shall be permitted without the prior written approval of Lessor's Director of Golf Operations. 10.2 All displays, posters, computer or TV projections, and sounds in the Premises shall reflect good taste, be professionally developed and presented in such a manner as not to be offensive to the general public and be of such high caliber so as to reflect the dignity of The Highlands and the services provided to the public by Lessor. All reasonable complaints from the public to Lessor, or from Lessor, will be forwarded to Lessee in writing. Lessee shall remedy such offensive items within two (2) calendar days of receipt of said complaints. 10.3 Lessor shall have the right to use The Grumpy Goat Tavern name, logos and trademarks in the marketing of services. 11. Maintenance and Repair of Premises. 11.1 Lessee agrees to provide at its own expense maintenance, custodial, and cleaning services for the Premises. Lessee shall keep and maintain the Premises in a clean, sanitary, and safe condition in accordance with the laws of the State of Illinois and in accordance with all directions, rules, and regulations of the health officer, fire marshal, building inspector, or other proper officials of the governmental agencies having jurisdiction at the sole cost and expense of Lessee, and Lessee shall comply with all requirements of law, ordinance, and otherwise, 13 affecting the Premises. 11.2 Lessee shall use at Lessee's sole cost and expense such pest extermination contractor as Lessor may direct and at such intervals as Lessor may require. 11.3 Lessee shall ensure that all personnel conform to personal hygiene and product- handling requirements established by Lessee, Lessor or applicable laws, rules, regulations and ordinances. 11.4 Lessee agrees, at its own expense, to keep and maintain in good working order, and to make necessary repairs to, any equipment provided for under this Agreement or otherwise utilized in the Food and Beverage Operations, including regular cleaning and maintenance of the grease trap. Such repairs shall be in compliance with all laws now or hereafter adopted for the Premises and every part thereof, and any and all appurtenances thereto wherever located, and for any equipment provided for under this Agreement; provided, however, that Lessor agrees to provide, in its sole discretion, for the maintenance and repair of the building. Notwithstanding anything to the contrary within this Agreement, the parties hereby acknowledge and agree that under no circumstances shall Lessee be responsible for the payment of capital expenditures or capital improvements (including without limitation, the costs to replace all or any component part of the HVAC, plumbing, electrical and mechanical systems of the Premises or of any component of the Highlands) and that Lessee shall be responsible only for the cost of "reasonable" repairs required under the terms hereof. All capital improvement costs and replacements to the Premises shall be the sole and absolute responsibility of the Lessor, without contribution by Lessee. 11.5 Lessor and its agents shall have the right to inspect the Premises during the hours of operation and/or at any time in case of emergency, to determine whether Lessee has complied with and is complying with the terms and conditions of this Agreement. Lessor may, at its sole discretion, require Lessee to effect repairs required under this Agreement at Lessee's sole cost and expense. The Lessor shall further have the right to perform any and all things which Lessee is obligated to and has failed to do after fifteen (15) calendar days written notice to act and/or at any time in case emergency, including: maintenance, repairs and replacements to the Premises. The cost of all labor and materials, and other charges required for performance of such work, plus twenty-five (25) percent thereof for administrative overhead, will be invoiced to Lessee and Lessee shall remit payments in full thereof to Lessor within ten (10) calendar days following receipt of invoice by Lessee as additional rent. 11.6 Lessee shall keep the Premises and all other parts of The Highlands free from any and all liens arising out of any work performed, materials furnished, or obligations incurred by or for Lessee, and agrees to bond against or discharge any mechanic's or materialmen's lien within ten (10) days. Lessee shall reimburse Lessor for any and all costs and expenses which may be incurred by Lessor by reason of the filing of any such liens and/or the removal of same, such reimbursement to be made within ten (10) days after receipt by Lessee from Lessor of a statement setting forth the amount of such costs and expenses. The failure of Lessee to pay any such amount to Lessor within said ten (10) day period shall carry with it the same consequences as failure to pay any installment of rental. 14 11.7 Lessee, at its own expense, shall install and maintain fire extinguishers and other fire protection devices as may be required from time to time by any agency having jurisdiction thereof and the insurance underwriters insuring the Building. Lessee further agrees to comply with any and all requirements of the insurance underwriters insuring the Premises. 12. Use of Golf Course; Food Allowance. 12.1 Lessor shall provide Lessee annually with up to thirty (30) complimentary rounds of golf to be used at Lessee's discretion, the days and times of such use subject to approval by Lessor's Director of Golf Operations. In return the Lessor shall be entitled to an equally valued food allowance or house account to be used with the approval of the Director of Golf Operations and at the Director of Golf Operations' discretion to promote the City's business and affairs. 13. Hazardous Materials. 13.1 Lessee covenants and agrees that it shall not receive, use, store, maintain, discharge or operate, whether intentionally or unintentionally, any material or merchandise that is toxic, explosive, highly flammable or classified by law as hazardous, on the Premises or The Highlands in violation of any applicable federal, state, county or local statutes, laws, regulations, rules, ordinances, codes, standards, orders, licenses or permits of any governmental authorities. Lessee shall immediately notify Lessor if Lessee learns of any noncompliance or of any facts that could give rise to a claim of noncompliance with such laws or rules and regulations promulgated thereunder. Lessee shall indemnify, defend, and hold harmless Lessor from and against any and all claims, damages, costs, losses and liabilities arising during or after the term as a result of or arising from: (a) a breach by Lessee of its obligations contained in this Paragraph; (b) any release of Hazardous Substance from, in, on or about the Premises or The Highlands caused by any act or omission of Lessee, its members, officers, agents, servants, employees and customers or, (c) the existence of any Hazardous Materials within the interior portions of the Premises. The obligations of this paragraph shall survive the expiration or termination of this Agreement. 14. Insurance. 14.1 Insurance during the Life of this Agreement. As additional rent for the Premises, Lessee shall pay for and maintain in full force and effect all policies of insurance required hereunder with an insurance company(ies) either (i) admitted by the Illinois Insurance Commissioner to do business in the State of Illinois and rated not less than "A-VII" in Best's Insurance Rating Guide; or (ii) authorized by Lessor's Risk Management Assistant. The following policies of insurance are required: a. Commercial General Liability. Commercial general liability insurance which shall include Owners, Lessor and Lessee liability, premises liability, contractual,products and completed operations coverage, fire legal liability, bodily injury and property damage liability insurance with combined single limits of not less than $1,000,000 per occurrence. 15 b. Commercial Automobile Liability. Commercial automobile liability insurance endorsed for "any auto" with combined single limits of liability of not less than $1,000,000 per occurrence. c. Property Insurance. An all-risk property insurance policy covering all contents, and Lessee's trade fixtures, machinery, equipment, furniture and furnishings in the Premises to the extent of at least ninety percent (90%) of their replacement cost under standard fire and extended coverage insurance, including, without limitation, vandalism and malicious mischief. In the event of loss, the proceeds of any such policy shall promptly be used by Lessee for restoration of its improvements, alterations and trade fixtures and the replacement of its personal property. c. Worker's Compensation. As required under Illinois law. In addition, employer's liability insurance shall be provided with limits of$100,000 per accident, and $100,000 per employee for disease, with a minimum policy limit of$500,000 for disease. d. Dram Shop Insurance. A policy of insurance in the sum of not less than $1,000,000 issued by an insurance company approved by the City of Elgin Local Liquor Control Commission in the form commonly known as "dramshop insurance." 14.2 Proof of Insurance. The above described policies of insurance shall be endorsed to provide an unrestricted thirty (30) day written notice in favor of Lessor, of policy cancellation, change or reduction of coverage, except for the Workers' Compensation policy which shall provide a ten (10) day written notice of such cancellation, change or reduction of coverage. In the event any policies are due to expire during the term of this Agreement, Lessee shall provide a new certificate evidencing renewal of such policy(ies). Upon issuance by the insurer, broker, or agent of a notice of cancellation, change or reduction in coverage, Lessee shall file with Lessor a certified copy of the new or renewal policy and certificates for such policy. 14.3 The General Liability and Automobile Liability insurance policies shall be written on an occurrence form and shall name Lessor, its officers, officials, agents, employees and volunteers as an additional insured. Such policies of insurance shall be endorsed so Lessee's insurance shall be primary and no contribution shall be required of Lessor. Lessee shall furnish Lessor with the certificates and applicable endorsements for all required insurance prior to Lessor's execution of the Agreement. Lessee shall furnish Lessor with copies of the actual policies upon the request of Lessor's Fiscal Services Manager at any time during the life of the Agreement or any extension. 14.4 Failure to Maintain Insurance. If at any time during the life of the Agreement or any extension Lessee fails to maintain the required insurance in full force and effect, Lessor may, but is not required to, obtain and maintain insurance for protection of its own interests, and all premiums paid or payable by Lessor therefore shall be deemed to be additional Rent, and shall be due on the payment date of the next installment of Rent under this Lease. 14.5 Lessee shall not do or permit any act or thing upon the Premises which will 16 invalidate, suspend or increase the rate of any insurance policy carried by Lessor covering the Premises, or the buildings in which the same are located or The Highlands, or which, in the opinion of Lessor, may constitute a hazardous condition that will increase the risks normally attendant upon the operations contemplated under this Agreement. 14.6 Each party hereto shall give to the other prompt and timely written notice of any claim made or suit instituted coming to its knowledge which in any way directly or indirectly, contingently or otherwise, affects or might affect either, and each shall have the right to participate in the defense of the same to the extent of its own interest. 15. Liability and Indemnity. 15.1 To the fullest extent permitted by law, Lessee agrees to indemnify, defend and hold harmless Lessor, its officials, officers, employees, boards and commissions from and against any and all claims, suits, judgments, costs, fines, fees, expenses, penalties, damages, or other relief, including attorneys' fees, of any kind and nature arising out of or resulting from or through or alleged to arise out of any reckless or negligent acts or omissions of Lessee and/or of Lessee's officials, officers, employees or agents in connection with the leasing of the Premises and/or in the performance of this agreement. In the event of any action against Lessor, its officials, officers, employees, agents, boards or commissions covered by the foregoing duty to indemnify, defend and hold harmless, such action shall be defended by legal counsel of Lessor's choosing. The provisions of this section shall survive any termination and/or expiration of this Agreement. 15.2 Lessor shall not be liable for, and is hereby released from, all liability to Lessee, Lessee's insurance carrier(s), or any person claiming under or through Lessee, for any loss or damage to Lessee's business or any loss of income therefrom or for damage to the goods, wares, merchandise or other property located in, upon or about the Premises, whether belonging to Lessee or any other person; nor shall Lessor be liable for injury to Lessee or Lessee's employees, agents, contractors, subcontractors, customers, or invitees caused by fire, steam, electricity, gas, water, rain, leakage, breakage, obstruction, pipe defects, sprinkler, wires, appliances, plumbing, air conditioning, lighting fixtures, or any other cause, arising on the leased premises. Lessee shall be solely responsible for the safety and security of the leased premises and the safety and security of all equipment, supplies, and commodities used or sold by Lessee. Lessee also covenants and agrees that Lessor shall not be liable for damages arising from any act or neglect on the part of any third parties. 15.3 Lessee agrees that the sole remedy available to Lessee upon any breach of this Agreement by Lessor shall be the cancellation of the Agreement under its terms. It is the essence of this Agreement that Lessor shall not be liable in money damages for any breach of this Agreement, and in no event shall Lessor be liable for any other monetary damages, including, but not limited to, compensatory, consequential or incidental damages or attorney's fees, arising from or in any way related to any breach or other violation of the terms of this Agreement. 15.4 The provisions of this Section 15 shall survive any termination and/or expiration of this Agreement. 17 16. Utilities. 16.1 Lessor shall be solely responsible for and promptly pay all charges for water, gas, heat, electricity, sewer, voice over internet phone service, and internet access reasonably necessary for the Food and Beverage Operations. Lessor does not warrant that any of the connections for services and utilities will be free from interruption, but Lessor will take reasonable steps to restore service if interrupted. Interruption of services or utilities shall not be deemed an eviction and shall not excuse performance of any of Lessee's obligations under this Agreement, nor shall it render Lessor liable for damages. Lessee agrees to utilize prudent energy management to the satisfaction of the Director of Golf Operations. 16.2 Lessee shall be responsible for the proper disposal of all refuse and waste materials created by its operations, which shall be promptly disposed of at the end of each day. Waste food shall be kept in closed metal or plastic containers until removed. Waste receptacles shall conform and blend with interior design of The Highlands at the Premises. Lessor shall dispose of all refuse when placed in designated receptacles. Lessee shall regularly monitor these areas for cleanliness and trash removal during the day/event. 16.3 Non-interference with utilities. Lessee shall do nothing, and shall permit nothing to be done, that may interfere with the utilities at The Highlands, including by way of example and without limitation such water, gas, heat, electricity, sewer, phone and internet service, trash removal and any other utility used upon or furnished to the Premises. Lessee's duties under this section include, but are not limited to, preventing grease and oils from entering waste lines, drains, and sewers. 17. Assignment,Delegation and Change of Ownership. 17.1 This Agreement and the rights and privileges contained herein are personal to Lessee and Lessee agrees that it shall not assign, mortgage, pledge, or transfer this Agreement or any other right, privilege or license conferred by this Agreement, either in whole or in part, or sublet or permit use of any Premises by another, or in any manner encumber the Premises or any part thereof, without obtaining in advance the written consent of Lessor, which may be withheld for any reason whatsoever. It is understood and agreed that Lessor's consent hereunder (and wherever else in this Agreement required, unless specifically provided to the contrary) may be arbitrarily withheld, notwithstanding any statutory or other provisions of law to the contrary. 18. Waste and Nuisance. 18.1 Lessee shall not commit or suffer to be committed any waste upon the Premises or any nuisance or other act or thing which may disturb the quiet enjoyment of surrounding properties. Lessee shall not use or permit to be used any medium that might constitute a nuisance, such as loudspeakers, sound amplifiers, phonographs, radios, televisions, or any other sound-producing device which will carry sound outside the Premises. 18 19. Damage or Destruction of Leased Premises. 19.1 In the event the Premises shall be rendered untenantable by fire, explosion or other casualty, Lessor may, at its sole option, terminate this Agreement or repair the Premises within sixty (60) days, with the exception of Lessee improvements, alterations and trade fixtures, the restoration of which shall be Lessee's sole obligation and expense. If Lessor does not repair the Premises within said time, or the building on the Premises shall have been wholly destroyed, the term hereby created by the Agreement shall cease and determine without further liability between the parties hereto. 20. Compliance. 20.1 Lessee, its officers, agents, servants, employees, contractors, licensees, and any other person over which Lessee has the right to exercise control shall comply with all present and future laws, ordinances, orders, directives, codes, rules, regulations, and directives of, or imposed by, the federal, state, and local governmental agencies, including those of Lessor, which may be applicable to Lessee's operations at The Highlands, including, but not limited to, any applicable requirements regarding prevailing wages, minimum wages, workplace safety, and legal status of employees. 20.2 Lessee shall pay on or before their respective due dates, to the appropriate collecting authority, all federal, state, and local taxes and fees, including all real estate taxes, special assessments and leasehold taxes, which are now or may hereafter be levied, charged and or assessed upon the Premises, the improvements and/or the leasehold of the Premises, or upon Lessee, or upon Lessee's business conducted at The Highlands, or upon Lessee's interest hereunder, or upon any of Lessee's property used in connection therewith, including possessory interest as and when such be applicable to Lessee. Lessee agrees to protect and hold harmless Lessor and the Premises and any and all improvements located therein or thereon and any and all facilities and fixtures appurtenant thereto and any and all other property located therein or thereon and any and all of Lessee's interest in or to said Premises, improvements, appurtenant facilities, fixtures or other property, from any and all such taxes and assessments, including any and all interest, penalties and other expenses which may be imposed thereby or result therefrom, and from any lien therefore or sale or other proceedings to enforce payment thereof. Nothing in this paragraph shall be deemed to limit any of Lessee's rights to appeal any such levies or assessments in accordance wit the rules, regulations, laws, statutes, or ordinances governing the appeal process of the taxing authority making such levies or assessments. 20.3 Lessee agrees to pay, and hereby guarantees payment of all lawful fines and penalties as may be assessed by the City, Federal, State or local agencies or against Lessor for violations of federal, state or local laws, ordinances, ruling or regulations, or City rules and regulations by Lessee or its officers, agents, servants, employees, contractors, licensees, or any other person over which Lessee has the right to exercise control within the earlier of delinquency or thirty(30) calendar days of written notice of such fines or penalties. 20.4 Lessee shall obtain, pay for and continuously maintain current all licenses and permits necessary or required by all applicable Federal, State, county or local laws, regulations, 19 rules, ordinances, codes, standards, orders, licenses or permits for the conduct of the permitted activities hereunder. Lessee is expressly required to obtain a retail alcoholic liquor dealer's license from the State of Illinois and the City of Elgin Local Liquor Control Commission as a material condition to the performance of this Agreement and Lessee's failure to obtain and maintain in lawful effect such retail alcoholic liquor dealer's licenses shall constitute a breach of this Agreement. Lessee shall ensure that any such required items are displayed prominently and/or in conformance with applicable guidelines. 20.5 Liquor License. Lessee shall be responsible for obtaining the appropriate liquor license and complying with all local and state requirements with respect to the same. All servers provided by Lessee shall be TIPS or BASSETT certified as may be required by law and at Lessor's discretion. Training for all servers shall be required at Lessee's sole cost and expense. The cost of any training materials shall be paid by Lessee. 20.6 If applicable, Lessee shall provide Lessor with a copy of any health inspection report within twenty-four (24) hours after Lessee receives such report. If a health inspection does not result in a report, Lessee shall submit a written summary of the nature and findings of such inspection as they were communicated to Lessee. Lessee shall also provide Lessor with any required corrective actions and timeframes for each corrective action to be continuously implemented. 21. Termination by Lessee. 21.1 In addition to all other remedies otherwise available to Lessee at law or in equity, Lessee may terminate this Agreement by giving a thirty (30) calendar day written notice to Lessor of its intent to do so, should any one or more of the following events occur, provided however, that only that Rent, charges and fees which are to be paid by Lessee herein will be refunded to Lessee on a pro-rata basis, and Lessor shall have no other or further obligation to Lessee, and further provided that Lessee shall remain liable for all obligations accrued under this Agreement through the effective date of termination: a. The breach by Lessor in the performance of any material covenant of this Agreement required to be performed by Lessor and the failure of Lessor to commence to remedy such breach for a period of thirty (30) calendar days after receipt of written notice of such breach by Lessor; or 22. Termination by Lessor. 22.1 In addition to all other remedies otherwise available to Lessor at law or in equity, Lessor may terminate this Agreement or may, without terminating this Agreement, take possession of the Premises by giving a thirty (30) calendar day written notice of its intent to do so to Lessee, should any one or more of the following events occur and Lessee fails to remedy or correct such condition or event within said forty-five (45) calendar days: a. Lessee fails to cooperate with any inspection of books and records by Lessor and/or fails to maintain its books and records as required hereunder; 20 b. Except as otherwise permitted in this Agreement, a majority of the ownership interest of Lessee is transferred, passes to or devolves upon, by operation of law or otherwise, to any other person, firm or corporation without the written consent of Lessor; c. Except as otherwise permitted in this Agreement, Lessee becomes, without the prior written approval of Lessor, a successor or merged corporation in a merger, a constituent corporation in a consolidation, or a corporation in dissolution; d. Lessee shall breach, materially breach, default under and/or neglect or fail to perform and observe any promise, covenant or condition set forth in this Agreement within thirty (30) days after the giving of written notice of such failure by Lessor to Lessee, except where fulfillment of such obligation requires activity over a period of time and Lessee has commenced to perform whatever may be required to remedy such failure within thirty (30) calendar days after giving of such written notice and continues such performance without interruption; or e. Lessee service shall deteriorate to the point which, in the sole opinion of Lessor, materially and adversely affects the operation of service required to be performed by Lessee after the giving of written notice of such deterioration by Lessor to Lessee, except where fulfillment of such obligation requires activity over a period of time and Lessee has commenced to perform whatever may be required to remedy such failure within ten (10) calendar days after giving of such written notice and continues such performance without interruption. 22.2 In addition to all other remedies otherwise available to Lessor at law or in equity, Lessor may immediately terminate this Agreement or may, without terminating this Agreement, take immediate possession of the Premises by giving written notice of its intent to do so to Lessee,upon the occurrence of any one or more of the following: a. Lessee fails to pay any rent or payments when due under this Agreement, or to provide and maintain insurance as required in accordance with this Agreement; b. Any lien is filed against the Premises arising by or through Lessee or because of any act or omission of Lessee and such lien is not removed, enjoined or a bond for satisfaction of such lien is not posted within sixty (60) calendar days after Lessee receives notice of the filing thereof; c. Lessee permits to continue, for a period of three (3) days after receipt of written notice from an agency having jurisdiction, the existence of unsanitary conditions or practices in or about the Premises; provided however, if the unsanitary condition is such as to require replacement, repair or construction, Lessee shall have thirty (30) in which to correct, but must begin action on the matter immediately upon receipt of said notice; 21 d. Lessee abandons, deserts, vacates or discontinues its operation of the business herein authorized from the Premises for a period of three (3) calendar days without prior written consent of Lessor, provided however, that this Section 22.2.d. shall not apply to situations caused by circumstances beyond the Lessee's control, including, but not limited to, acts of war, acts of God, and other similar circumstances; or e. A petition is filed by or against Lessee for relief under the bankruptcy laws, or Lessee shall make an assignment for the benefit of creditors, or if a receiver of any property of Lessee be appointed in any action, suit, or proceeding by or against Lessee, or if Lessee shall admit that it is insolvent, or it is generally not paying its debts as such debts become due, or if the interest of Lessee in the premises shall be sold under execution or other legal process; £ This Agreement or the Premises or any part of the Premises are taken upon execution or by other process of law directed against Lessee, or are taken upon or subject to any attachment at the instance of any creditor or claimant against Lessee, and the attachment is not discharged or disposed of within fifteen (15) days after its levy; g. Lessee is dissolved and not placed back in good standing and restated within ten days of Lessee's receiving notice of such dissolution. 22.3 Acceptance by Lessor of any rentals or other payments specified in this Agreement, after a breach, material breach, default under, neglect or failure to perform or observe any of the terms of this Agreement shall not be deemed a waiver of any right on the part of Lessor to terminate this Agreement on account thereof No receipt of money by Lessor from Lessee after the termination of this Agreement shall reinstate, continue, or extend the term, nor affect or waive any notice given by Lessor to Lessee prior to such receipt of money. 22.4 Upon termination or reentry by Lessor, Lessor may reassign the Premises and any improvements thereon or any part thereof to be operated by one or more sub-operators or any other party acceptable to Lessor, at such rentals, fees and charges and upon such other terms and conditions as Lessor, in its sole discretion, may deem advisable, with the right to make alterations, repairs or improvements on said Premises. 22.5 In the event Lessor, without terminating this Agreement, re-enters, regains or resumes possession of the Premises, Lessee shall have no further right to possession under the Agreement, but all of the obligations of Lessee hereunder shall survive and shall remain in full force and effect for the full term of this Agreement. The amount or amounts of rent, charges, and fees shall become due and payable to Lessor to the same extent, at the same time or times and in the same manner as if no re-entry, regaining or resumption of possession had taken place. Should Lessor elect to re-enter, as herein provided, it may from time to time, without terminating this Agreement, make such alterations and repairs as may be necessary in order to relet the Premises, and relet said Premises or any part thereof for such term or terms (which may be for a term extending beyond the term of this Agreement) and at such rental or rentals and upon such 22 other terms and conditions as Lessor in its sole discretion may deem advisable. Lessor may maintain separate actions each month to recover any monies then due, or at its sole and absolute discretion and at any time, may sue to recover the full deficiency. In the event that the Lessor begins to operate the facilities itself or retains another party to operate the facilities on its behalf under this Section 22.5, the profit or rental received from said activities shall be applied to offset sums due and owing from Lessee, but only to the extent that such sums become due and owing after the commencement of such operations by the Lessor or other party. Any sums due and owing prior to the commencement of operations by the Lessor or other party, and any sums due and owing that are not fully offset in a given calendar month, shall not be offset by subsequent receipt of profits or rental by the Lessor. 22.6 Bankruptcy. If Lessor shall not be permitted to terminate this Agreement as hereinabove provided because of the provisions of Title 11 of the United States Code relating to Bankruptcy, as amended ("Bankruptcy Code"), then Lessee as a debtor-in possession or any trustee for Lessee agrees to promptly, within no more than sixty (60) days upon request by Lessor to the Bankruptcy Court, assume or reject this Agreement. In such event, Lessee or any trustee for Lessee may only assume this Agreement if (a) it cures and provides adequate assurance that the trustee will promptly cure any default hereunder, (b) compensates or provides adequate assurances that the trustee or Lessee will promptly compensate Lessor for any actual pecuniary loss to Lessor resulting from Lessee's default, and (c) provides adequate assurance of performance during the fully stated term hereof of all of the terms, covenants, and provisions of this Agreement to be performed by Lessee. In no event after the assumption of this Agreement shall any then existing default remain uncured for a period in excess of the earlier of ten (10) days or the time period set herein. 22.7 Upon the occurrence of an event of default and the failure of the Lessee to remedy or cure such event within thirty (30) calendar days after written notice, Lessor shall have the right to terminate the Agreement and shall be entitled to possession of the Premises. Lessor may make its election to terminate known to Lessee by delivery of a notice of termination. Such termination shall be immediately effective unless otherwise provided in this Agreement, and Lessor shall be entitled to forthwith commence an action in summary proceedings to recover possession of the Premises, but such termination shall not terminate Lessee's liabilities hereunder. Lessee waives all notice in connection with such termination, including by way of illustration, but not limitation, notice of intent to terminate, demand for possession or payment, and notice of re-entry. Notwithstanding anything herein to the contrary, Lessor may, without demand or notice, re-enter and take possession of the Premises or any part of the Premises, repossess the same, expel Lessee and those claiming through or under Lessee, and remove the effects of both or either, using such force for such purposes as may be necessary, without being liable for prosecution, without being deemed guilty of any manner of trespass, and without prejudice to any remedies for arrears of amounts payable under this Agreement or as a result of any preceding breach of covenants or conditions. 22.8 Cure of Defaults. Upon default with respect to any provision of this Agreement, the non-defaulting party may choose to allow the defaulting party an opportunity to cure the default, in accordance with the provisions of this paragraph. The non-defaulting party shall provide written notice of the default to such other party, who shall then have thirty (30) days to 23 correct the default, or to commence corrective action in the event that such default cannot be corrected within thirty (30) days, whereby such corrections shall be completed within a reasonable time thereafter. In the event that such default is not cured, the non-defaulting party may then immediately terminate this Agreement without further liability. The remedy in this paragraph is cumulative, and shall not be exclusive of or otherwise prejudice the right to pursue any other rights, remedies and benefits allowed by law. 22.10 Right of Termination. In addition to any other termination rights provided for in this Agreement, this Agreement may be terminated at the convenience of Lessor or Lessee, without cause, upon one hundred eighty (180) days written notice to the other party, without further liability. 22.11 Remedies are Cumulative. Lessor's rights, remedies, and benefits provided by this Agreement shall be cumulative, and shall not be exclusive of any other rights, remedies and benefits allowed by law. 23. Surrender of Premises. 23.1 Condition on Surrender. At the expiration or earlier termination of this Agreement, Lessee shall quit and surrender up the Premises to Lessor, peaceably, quietly and broom clean and in the same condition as when tendered by Lessor, or hereinafter improved by Lessee, reasonable wear and tear and insured casualty excepted. All trade fixtures or personal property installed in the Premises by Lessee shall be removed by Lessee, provided that Lessee is not in default hereunder, and further provided that the same can be removed without damage to the Premises or to The Highlands. At the sole option of Lessor, all fixed improvements shall, without compensation to Lessee, become the property of Lessor, free and clear of all claims to or against them by Lessee or any third person, upon surrender of the Premises by Lessee for whatever reason. Should Lessor elect not to take ownership of any fixed improvements, prior to the date of surrender, Lessee shall be solely responsible for the expense of the removal of said fixed improvements and restoring the Premises to the same condition as when originally tendered by Lessor. In the event that Lessee shall fail to remove its personal property and/or trade fixtures on or before the termination (whether by expiration of the lease term, cancellation, forfeiture, or otherwise, whichever first occurs) of this Agreement, at the sole option of Lessor, (i) said personal property and trade fixtures may be stored at a public warehouse or elsewhere at Lessee's sole cost and expense; or (ii) title to such trade fixtures and personal property shall vest in Lessor, free and clear of all claims to or against them by Lessee or any third person, at no cost to Lessor, in the manner allowed by law. In such event Lessor shall not be responsible for any losses related to such personal property or trade fixtures and Lessor may sell or otherwise dispose of such items. 23.2 Holding Over. In the event Lessee shall hold over and remain in possession of the Premises after the expiration of the term of this Agreement without the written consent of Lessor, such holding over shall not be deemed to operate as a renewal or extension of this Agreement (or any lease or license hereunder) but shall only create a month-to-month permit at the same rentals, fees, charges, and other terms, conditions and covenants contained in this Agreement and effective at the time holdover commenced, which may be terminated at any time by Lessor or 24 Lessee by providing written notice to the other to be effective on the first day of the month following the month in which such notice was served. 24. Nondiscrimination and Sexual Harassment. 24.1 Lessee covenants and agrees that no person shall be unlawfully discriminated against in the use and operation of the Premises pursuant to this Agreement. 24.2 Nondiscrimination. a. Lessee, for itself, its personal representatives, successors in interest, and assigns, as part of the consideration hereof, does hereby covenant and agree that (1) no person, on the grounds of race, color, or national origin shall be excluded from participation, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities; (2) that in the construction of any improvements and the furnishing of services, no person on the grounds of race, color, creed, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination. b. That in the event of breach of any of the above nondiscrimination covenants, Lessor shall have the right to terminate this Agreement and re-enter and repossess said Premises, and hold the same as if said Agreement had never been made or issued and no reimbursement shall be made to Lessee. c. Lessee shall furnish its accommodations and/or services and operate the Food and Beverages Operation on a fair, equal, and nondiscriminatory basis to all users thereof, and it shall charge fair, reasonable, and nondiscriminatory prices for each unit of services provided. 24.3 Sexual Harassment Policy. As a condition of this Agreement, the Lessee shall have a written sexual harassment policy that includes, at a minimum, the following information: a. The illegality of sexual harassment; b. The definition of sexual harassment under state law; c. A description of sexual harassment, utilizing examples; d. The vendor's internal complaint process including penalties; e. The legal recourse, investigative and complaint process available through the Illinois Human Rights Commission; f. Directions on how to contact the department and commission; g. Protection against retaliation as provided by section 6-101 of the Human Rights 25 Act. 25. Miscellaneous. 25.1 Nonwaiver of Rights. No failure by either party to insist upon strict compliance of any obligation of the other party under this Agreement or to exercise any right, power or remedy of a breach thereof, irrespective of the length of time for which such failure continues (except in cases where this Agreement expressly limits the time for exercising rights or remedies arising out of a breach), shall constitute a waiver of such breach or of that party's right to demand strict compliance with such term, covenant or condition or operate as a surrender of this Agreement. No waiver of breach by Lessor or Lessee of any of the terms, covenants, and conditions hereof to be performed, kept, and observed by the other party shall be construed as, or shall operate as, a waiver of any subsequent breach of any of the terms, covenants, or conditions herein contained, to be performed, kept, and observed by the other parties, and the consent or approval by Lessor to or of any act by Lessee requiring Lessor's consent or approval shall not be deemed a waiver of Lessor's consent or approval to or of any subsequent similar act by Lessee. No breach of a covenant, term, condition, or provision of this Agreement shall be deemed to have been waived by Lessor, unless such waiver (i) is in writing signed by Lessor, (ii) identifies the breach, and (iii) expressly states that it is a waiver of the identified breach. 25.2 Notice. Any notice, demand, request, consent, approval, or other instrument which may be or is required to be given under this Agreement shall be sent by overnight courier or United States certified mail return receipt requested, postage prepaid, and shall be addressed to the addresses and persons set forth hereunder: To Lessor: To Lessee: City Manager G&L Glenwood, LLC City of Elgin 501 Glenwood Trail 150 Dexter Court Elgin, Illinois 60120 Elgin, IL 60120-5555 With a copy to: With copy to: Corporation Counsel Andrew Kolb, Esq. City of Elgin Vanek, Larson & Kolb, LLC 150 Dexter Court 200 W. Main Street Elgin, IL 60120-5555 St. Charles, Illinois 60174 25.3 Captions. The headings of the several articles and paragraphs of this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit, or describe the scope or intent of any provisions of this Agreement and shall not be construed to affect in any manner the terms and provisions hereof or the interpretation or construction thereof 25.4 Severability. The terms of this Agreement shall be severable. If any provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be 26 void, invalid or otherwise unenforceable for any reason, the remainder of this Agreement shall not be affected thereby and each provision of the Agreement shall be valid and enforceable to the fullest extent permitted by law, and the remaining provisions of this Agreement shall be interpreted so as to nearly as possible conform to the intent of the parties as indicated in this Agreement. 25.5 Waiver of Claims. Lessee hereby waives any claim against Lessor and its directors, officers, agents, or employees for loss of anticipated profits caused by any suit or proceedings directly or indirectly attacking the validity of this Agreement or any part thereof, or by any judgment or award in any suit or proceeding declaring this Agreement null, void or voidable, or delaying the same or any part thereof from being carried out. 25.6 Right to Develop The Highlands. It is covenanted and agreed that Lessor reserves the right to further develop or improve The Highlands regardless of the desires or views of Lessee and without interference or hindrance. 25.7 Incorporation of Exhibits. All exhibits, documents and instruments referred to in this Agreement are intended to be and hereby are specifically made a part of this Agreement. It is specifically agreed that any or all Exhibits may be modified and substituted in accordance with the provisions of this Agreement without formal amendment hereto. 25.8 Incorporation of Required Provisions. The parties incorporate herein by this reference all provisions lawfully required to be contained herein by any governmental body or agency. 25.9 Relationship of Parties. Nothing contained herein shall be deemed or construed by Lessor or Lessee, or by any other parties, as creating the relationship of employer and employee, principal and agent, partners, joint venturers, or any other similar such relationship, between the parties hereto. Lessor and Lessee shall understand and agree that neither the method of computation of rent, nor any other provision contained herein, nor any acts of Lessor and Lessee creates a relationship other than the relationship of Lessee as permitted of Lessor. No manager, chef, staff member, employee or any other individual associated with Lessee shall be deemed or construed as an employee of Lessor. 25.10 Non-liability of Agents or Employees. No director, officer, agent, or employee of Lessor or Lessee shall be charged personally or held contractually liable by or to the other party under the provisions of this Agreement or because of any breach thereof or because of its or their execution or attempted execution. 25.11 Successors and Assigns Bound. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto, where permitted by this Agreement. 25.12 Time of Essence. Time is expressed to be of the essence in this Agreement. 25.13 Gender. Words of any gender used in this Agreement shall be held and construed 27 to include any other gender and words in the singular number shall be held to include the plural, unless the context otherwise requires. 25.14 Force Majeure. Except for the payment of any rent or fee or charge required by this Agreement, neither Lessor nor Lessee shall be liable to the other for any failure, delay or interruption in the performance of any of the terms, covenants or conditions of this Agreement due to causes beyond the control of that party or persons or entities for whose acts or omissions that party is responsible under this Agreement or applicable law, including, without limitation, strikes, boycotts, labor disputes, embargoes, acts of God, acts of the public enemy, acts of superior governmental authority, weather conditions, floods, riots, rebellion, sabotage or any other circumstance for which such party is not responsible or which is not in its own power to control, provided that, should said cause(s) continue for a period beyond six (6) months, such shall be a grounds for termination by either party in the manner provided in this Agreement. 25.15 Representative of Lessor. The Elgin City Manager, or his/her representative, shall be designated as the official representative of Lessor in all matters pertaining to this Agreement. To the extent expressly authorized by City Council, the Elgin City Manager, or his/her representative, shall have the right and authority to act on behalf of Lessor with respect to all action required of Lessor in this Agreement. 25.16 Governing Law and Venue. This Agreement is governed by the laws of the State of Illinois. Any disputes relating to this Agreement or the interpretation thereof must be resolved in accordance with the laws of Illinois. Lessee and Lessor agree that any legal or equitable action for claims, debts, or obligations arising out of or to enforce the terms of this Agreement shall be brought by Lessee or Lessor in the Circuit Court for the Sixteenth Judicial Circuit, Kane County, Illinois and that such court shall have personal jurisdiction over the parties and venue of the action shall be appropriate in each such court. 25.17 Writing Required. This Agreement may not be amended or otherwise modified in any way whatsoever, except in writing approved by City Council and signed by the parties authorized agents. 25.18 Rights Cumulative. Each right of the parties hereto is cumulative and in addition to each of the other legal rights that a party may have in law or equity. 25.19 Sub-agreements. Lessee hereby assures that it shall include all of the terms, conditions, covenants and other obligations contained herein in any and all agreements and contracts or sub-agreements and subcontracts entered into by it under which Lessee grants a right or privilege to any person, firm or corporation to render accommodations and/or services within or for the Premises. Lessee shall require that any document so entered into is subordinate in all terms to this Agreement. Lessee hereby also assures that it shall similarly cause the same to be included in any further subleases, subcontracts or sub-agreements. The voluntary or other surrender of this Agreement by Lessee or a mutual termination hereof, or a termination by Lessor, or an automatic termination, or termination by a court of competent jurisdiction, or any other termination hereof shall not work a merger, and shall, at the option of Lessor, terminate any or all existing sub-agreements or subcontracts, or may, at the option of Lessor, operate as an 28 assignment to Lessor of any or all such sub-agreements or subcontracts 25.20 Inspection of Records. Lessee shall provide all information and reports and shall permit access to and audit of its books, record, accounts and other sources of information and its facilities as may be determined by Lessor to be pertinent to ascertain compliance with this Agreement for the term of this agreement and three (3) years thereafter. Where any information required of Lessee is in the exclusive possession of another who fails or refuses to furnish this information, Lessee shall so certify to Lessor and shall set forth what efforts it has made to obtain the information. This paragraph shall survive termination of the Agreement. 25.21 Precedence of Document. In the event of any conflict between this Agreement and any exhibit or attachment hereto, the terms and conditions of the Agreement shall control and take precedence over the terms and conditions expressed within the exhibit or attachment. Furthermore, any terms or conditions contained within any exhibit or attachment hereto which purport to modify the allocation of risk between the parties provided for within the Agreement shall be null and void. 25.22 Recording. Lessee shall not record this Agreement without the consent of Lessor, which may be withheld for any reason whatsoever, in Lessor's absolute discretion. 25.23 No Encumbrance to Title. Lessee shall not do any act which shall in any way encumber the title of Lessor in and to the Premises or the improvements, nor shall the interest or estate of Lessor in the Premises or the improvements be in any way subject to any claim by way of lien, mortgage or encumbrance, whether by operation of law or by virtue of any express or implied contract by Lessee. 25.24 Estoppel. The parties agree that they shall rely solely upon the terms of this Agreement to govern their relationship. They further agree that reliance upon any representation, act, or omission outside the terms of this Agreement shall be deemed unreasonable, and shall not establish any rights or obligations on the part of either party. 26.25 Eminent Domain. If the whole of the Premises hereby leased, or any portion thereof shall be taken by any public authority under the power of eminent domain, or by deed in lieu thereof, then the term of this Agreement shall cease as of the day possession shall be taken by such public authority and the Rent and other charges due hereunder, shall be paid up to that day with a proportionate refund by Lessor of such rent as may have been paid in advance for a period subsequent to the date of the taking. If less than the whole of the Premises shall be taken under eminent domain, Lessor shall have the right either to terminate this Agreement and declare same void, or require Lessee to continue in the possession of the remainder of the Premises if such can reasonably be accomplished. Lessor shall notify Lessee in writing within twenty (20) days after such taking of Lessor's intention. If the Lessee is to remain in possession, all of the terms herein provided shall continue in effect, except that the Annual Base Lease Payment shall be reduced in proportion to the amount of the Premises, if any, taken. All damages awarded for such taking under the power of eminent domain, whether for the whole or a part of the Premises, shall belong to and be the property of Lessor whether such damages shall be awarded as compensation for diminution in value to the leasehold or to the fee of the Premises. The Lessee 29 may pursue its own claims for damages with the appropriate government authority so long as same does not interfere with, or in any manner diminish, the award of Lessor. 26. Entire Agreement. 26.1 This Agreement and the Exhibits attached hereto and forming a part hereof, set forth all the covenants, promises, agreements, conditions, and understandings between Lessor and Lessee concerning the Premises; that there are no covenants, promises, agreements, conditions, or understandings, either oral or written, between them other than are herein set forth; and that no claim or liability shall arise for any representations or promises not expressly stated in this Agreement. Any other writing or parol agreement with the other party being expressly waived. No alteration, amendment, change, or addition to this Agreement shall be binding upon Lessor or Lessee unless reduced to writing and signed by the party to be charged. 30 IN WITNESS WHEREOF, Lessor and Lessee have signed this Agreement as of the day and year first above written. 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