07-319Resolution 07 -319
RESOLUTION
AUTHORIZING EXECUTION OF A LEASE AGREEMENT WITH
ADDISON RESTAURANT SERVICES, INC.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that
Ed Schock, Mayor, and Diane Robertson, City Clerk, be and are hereby authorized and directed to
execute a lease agreement on behalf of the City of Elgin with Addison Restaurant Services, Inc. to
operate food and beverage operations at The Highlands Elgin Golf Course, a copy of which is
attached hereto and made a part hereof by reference.
s/ Ed Schock
Ed Schock, Mayor
Presented: December 19, 2007
Adopted: December 19, 2007
Omnibus Vote: Yeas: 7 Nays: 0
Attest:
s/ Diane Robertson
Diane Robertson, City Clerk
THIS LEASE AND SERVICES AGREEMENT hereinafter referred to as the "Agreement ")
is made and entered into this day of ftm):)_ 200J, by and between the City of
Elgin, an Illinois municipal corporation (hereinafter referred to as the "Lessor"), and Addison
Restaurant Services II, Inc., an Illinois limited liability corporation (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 multiple restaurant facilities, which provide dining, catering and
other bar services for its customers; 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: Addison Restaurant Services 11, Inc., 1571 West Lake Street,
Addison, IL 60101.
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 veranda surrounding the Main Grill Room;
The meeting room /private dining room adjoining the Main
Grill Room;
The entry foyer;
4. The paver patio space along the south side of the lower
level of the clubhouse;
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 spaces at anytime
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 Golf Services Manager 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 rimes 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,
3.1 Rent. For all of the Premises during the entire term of this Agreement, Lessee
covenants and agrees to pay Lessor, in lawful money of the United States, without any prior
demand and free from all claims, demands, set -offs or counterclaims of any kind, the following
amounts in Rent:
Annual Base Lease Payment. The Annual Base Lease Payment for the Premises shall be
Fifty Thousand Dollars ($50,000.00). Lessee agrees to pay to Lessor the sum of Four
Thousand One Hundred Sixty -Six Dollars and Sixty -Seven Cents ($4,166.67) monthly as the
total monthly rent due under the terms of this Agreement. The rent shall be paid on the 1 st
day of each month in advance at Lessor's address stated in the Basic Lease Provisions. The
monthly rent shall be automatically increased five percent (5 %) if received by Lessor after
the 10th of the month for which it is due.
Pereenta e Rent. In addition to the Annual Base Lease Payment, Lessee shall pay to Lessor
an additional compensation of three percent (3 %) on only those amounts of Gross Revenues
that exceed One Million Dollars ($1,000,000) in any Operating Year, which payment shall be
made within sixty (60) days of the end of the Operating Year. The additional compensation
amount 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. For the purposes of this Agreement, "Gross Revenues" shall mean
all monies or other consideration paid or payable to Lessee, its officers, employees and agents from
all sales of Lessee 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.
3.3 Operating
Year. For the purposes
of this
Agreement, an "Operating Year" shall run
from February I
of a calendar year to January 31
of the
following calendar year.
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 reeoupment 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 February 1, 2008, and shall
continue in full force and effect until January 31, 2001, unless terminated prior thereto as provided in
this lease. This Agreement shall be automatically extended for five (5) three -year terms unless
Lessor or Lessee notifies the other party of its intention not to renew the Agreement in writing not
less than one hundred eighty (180) days before the expiration date of the current term. Such
extended terms shall be upon the same terms and conditions of the initial term of the Agreement,
except for the amount of the Annual Base Lease Payment and the amount of Percentage Rent, which
the parties agree shall be renegotiated and subject to written mutual agreement by the parties.
5.3 All rents, fees, charges and payments due hereunder shall commence on February 1,
2008, subject to the 10 -day grace period for the payment of rent provided in Section 3. 1, herein.
5.4 Failure of Lessee to Open. The Main Grille Room shall be opened for business, fully -
fixtured, stocked and staffed, in accordance with this Agreements' terms and provisions, by February
1, 2008. 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 1, 2008. In the event that Lessee fails to open for business any of the individual
locations and services which are the subject of this Agreement, fully - fixtured, stocked and staffed, in
accordance with this Agreement's terms and provisions, by the dates provided for in this section 5.4,
then Lessor shall have, in addition to any and all remedies herein provided, the right to collect
additional rent at the rate of 1 /360th of the Annual Base Lease Payment 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 7.9, 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.).
6.2 Records. Lessee shall keep full and accurate books and pertinent original and
duplicate records showing all of Lessee's Gross Revenues in a form consistent with good accounting
practices for at least a three (3) year period after the expiration or earlier termination of the Term of
4
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 sales records shall include, but not be
limited to, the following: (a) cash register tapes, including tapes from temporary registers; (b) serially
numbered sales slips; (c) 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
Gross Revenues.
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 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 terns 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 Hickory Stick Bar & Grill at The
Highlands, and for no other purposes whatsoever.
7.2 Lessee's business in the Premises shall be conducted under the common name of The
Hickory Stick Bar & Grille. Lessee shall not use or permit the Premises to be used under any other
trade name without Lessor's written consent, such consent not to be unreasonably withheld. 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 Menus. Lessee shall provide all menus. The initial menu shall be mutually agreed
upon by Lessee and Lessor's Golf Services Manager. Menus shall be of excellent quality and
sufficient in number to meet peak period demands. In the absence of complaints from customers,
Lessee is free to modify the menu as Lessee deems necessary or to serve any menu item or items it
desires, without prior authorization from Lessor. If after receiving complaints from customers the
Lessor's Golf Services Manager determines that any item or service displayed, offered for sale or
sold by Lessee is objectionable, Lessee shall, upon written notice from Lessor's Golf Services
Manager, immediately remove such item or service from display and from its inventory and Lessee
agrees that it shall not thereafter display, offer for sale, or sell such item or service.
7.4 Advertising. Lessee shall not offer for sale or advertise any item, product, service or
thing which is not available within the Premises. This paragraph is not intended to limit or disallow
Lessee from advertising Lessee's products or services available at The Highlands, as provided
herein.
7.5
Ingress
and
Egress. Lessee
or Lessee's
agents
shall have the non - exclusive right of
ingress and
egress
from the Premises at all
reasonable
rimes.
7.6 Lessee shall have access to all The Highlands' refrigerators, freezers, ovens, coolers
and employee spaces as maybe deemed necessary by Lessor's Golf Services Manager. 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.
7.7 Lessee shall supply all staff and operational supplies necessary to manage and operate
The Hickory Stick Bar & Grille as a full- service bar, restaurant, banquet facility, concession
operations and on- course beverage service established within The Highlands property. The
beginning inventory level of tables, equipment, silverware, flatware, glassware, cookware and
utensils will be supplied by Lessor. The inventory shall be maintained by Lessee, replacing any
1
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.
7.8 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. Electricity service,
natural gas service, water and sewer service, telephone service, and trash removal service shall be at
Lessor's sole cost and expense. Notwithstanding the foregoing, a not to exceed amount of Fifteen
Thousand Dollars ($15,000) of Lessor's marketing budget shall be allocated for joint marketing
efforts, and any such amount shall be at Lessor's cost and expense.
7.9 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 Golf Services Manager 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 8:00 a.m. through 7:00 p.m.
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 Tom Stand
shall be closed. Beverage cart service will be required as agreed upon by Lessor's Golf
Services Manager and Lessee. Modifications to this schedule will be made for banquets
only.
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. Friday fish fiy shall be available for dinner from 4:00 p.m. through 9:00
p.m. in no event less than twelve (12) weeks. The Turn Stand shall be closed. Beverage cart
service will be required as agreed upon by Lessor's Golf Services Manager and Lessee.
Modifications to this schedule will be made for banquets only.
7
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, and may have additional Friday
fish fries, in its discretion.
7.10 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.
7.11 Grand Opening V.I.P. Event. Lessee, at its sole cost and expense, shall be the
provider of food and beverage for the Grand Opening V.I.P. Event, to take place on a date mutually
agreed upon by the parties hereto. The expected attendance of the Grand Opening V.I.P. Event is
one hundred fifty (150) persons.
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 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 laws and regulations of the United States of America, the State of Illinois and
of governmental authorities having jurisdiction over Lessee's operation hereunder. Lessor's Golf
Services Manager, 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 Golf Service Manager.
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 ofinerchandise 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.
E
8.5 Entertainment Systems. No radio, television, antenna, aerial or other similar device
shall be installed without first obtaining in each instance Lessor's Golf Services Manager's 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 Golf Services Manager.
8.6 Delivery. All loading and unloading of goods, 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 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. 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 Golf Services Manager. Lessee
shall not create any nuisance, annoy, or be offensive or disturbing to others.
8.11 Mana eg ment. All Lessee's operations shall be supervised at all times by an active,
qualified, competent manager 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
G
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.
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 Golf Services Manager's 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
Golf Services Manager or his or her designee.
8.13
shall
Personnel.
employees working at The Highlands report to work and
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 Golf Services Manager.
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.
It. 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
10
devices, credit card transaction equipment, etc.).
All personnel shall be familiar will all applicable polices of this Agreement, The
Highlands and Lessee.
j. All personnel engaged in sales activities shall speak and comprehend English at a
level appropriate to their duties.
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 and
obligation 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. The increase of any items or
services price by Lessee without the prior written consent of Lessor shall be deemed a material
breach of this Agreement.
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." The quality, quantity and specifications of all items shall
at all times be subject to the review and approval of Lessor's Golf Services Manager. Lessee shall
restore products and /or specifications to Lessor's Golf Services Manager's 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 Loiterinu. 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 other
11
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.
9.2 At the expiration of the term of this Agreement, for all of the Premises, the Net Book
Value of Lessee's Fixed Improvements shall be $0.00.
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 Golf Services Manager 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 Golf Services Manager.
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 Hickory Stick Bar & Grille's name, logos and
trademarks in the marketing of services, subject to the approval of Lessee's owner or designee. Such
approval should not be unreasonably withheld.
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,
12
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, 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
make necessary repairs, which repairs shall include all necessary replacements, capital expenditures
and compliance with all laws now or hereafter adopted, the Premises and every part thereof and any
and all appurtenances thereto wherever located, any equipment provided for under this Agreement,
and all other work, improvements and repairs and replacements, renewals and restorations, interior
and exterior, ordinary and extraordinary, foreseen and unforeseen.
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 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.
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.
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12.1 Lessor shall provide Lessee annually with up to forty (40) complimentary rounds of
golf to be used at Lessee's discretion, the days and times of such use subject to approval by Lessor's
Golf Services Manager.
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 ri se
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 "AN11" in Best's Insurance Rating Guide; (ii)
authorized by Lessor's Fiscal Services Manager. The following policies of insurance are required:
a. Commercial General Liability. Commercial general liability insurance which shall
include Owners, Landlords and Tenant's 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.
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. Worker's Compensation. As required under Illinois law.
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
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 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
15
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. The foregoing provisions
notwithstanding, the Lessor shall not be entitled to any indemnification for the intentional actions or
gross negligence of the Lessor, its officials, officers, employees, boards and /or commissions.
153 Lessee agrees that Lessor's liability under this Agreement shall be limited to arefund
of any pre -paid rent, on a pro -rata basis. 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.
16. Utilities.
16.1 Lessor shall be solely responsible for and promptly pay all charges for water, gas,
heat, electricity, sewer, phone service trash removal and any other utility used upon or furnished
to the Premises. 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.
16.2 Lessee shall be responsible for the proper disposal of all refuse and waste materials
created by its operations. 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.
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
16
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.
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 or Lessee may, at its 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.
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 maybe 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.
17
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, 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 maybe 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
IN
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 thirty (30) 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;
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
C. 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
falfillment 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
19
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 the Lessor or other 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;
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;
f 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.
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. The foregoing provisions not withstanding, even
though the time for cure provided in this Agreement has elapsed, if Lessor voluntarily accepts the
rental or other payments that constituted the sole cause for a default under this Agreement, this
Agreement shall be reinstated.
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.
20
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 bad 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 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 tinder 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, or such greater time ordered by
the Bankruptcy Court, 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, and
(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. In no event after the
assumption of this Agreement shall any then existing default remain uncured for aperiod 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
21
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 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 parry 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
apublic 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.
22
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 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.
25. Miscellaneous.
25.1 Nonwaiver of Rights. 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 Addison Restaurant Services II, Inc.
City of Elgin c/o Jose Fernandez
150 Dexter Court 1571 West Lake Street
Elgin, IL 60120 -5555 Addison, IL 60101
With a copy to:
Corporation Counsel Frank J. Savaiano
City of Elgin Savaiano & Spear
23
150 Dexter Court 105 Fairbank
Elgin, IL 60120 -5555 Addison, IL 60101
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 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
24
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 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,
25
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 teens 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 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
26
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 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.
27
IN WITNESS WHEREOF, Lessor and Lessee have signed this Agreement as of the day and
year first above written.
LESSEE:
ADDISON RESTAURANT SERVICES II, INC.
28
LESSOR:
CITY OF ELGIN
Attest:
City Clerk
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August 3, 2007
TO: Mayor and Members of the City Council
FROM: Olufemi Folarin, City Manager
Randy Reopeile, Parks and Recreation Director
SUBJECT: Highlands of Elgin Restaurant and Banquet Agreement
PURPOSE
The purpose of this memorandum is to provide the Mayor and members of the City Council with
information to consider entering into an agreement with Addison Restaurant Services, Inc. to
operate the food and beverage operations at The Highlands of Elgin Golf Course.
RECOMMENDATION
It is recommended that the City Council approve the agreement with Addison Restaurant
Services, Inc. for an annual rental fee of $50,000 with a 3 percent (3 %) adjustment for gross
revenues over $1,000,000.
BACKGROUND
In the fall of 2006, the City began the construction of the new clubhouse at The Highlands of
Elgin. The construction of the clubhouse is going well and should be completed by early fall.
Rather than initially performing all the restaurant functions internally, e.g hire all cook and wait
staff, order all food and liquor, deal with inventory and spoilage issues, etc., an alternate method
would be to investigate hiring an outside vendor to operate the food and beverage portions of the
clubhouse. This would allow the golf staff to focus on growing the core golf revenues, while at
the same time bringing in a vendor who specializes in food and beverage operations.
Requests for proposals were sent out to five vendors and were advertised on the City's web site.
Three vendors submitted proposals, which were reviewed by an evaluation team. It was
determined that Addison Restaurant Services, Inc. (ARS) provided the most complete and
responsive bid. ARS currently operates seven different restaurants including the LaMagdalina
chain of restaurants.
Working with ARS provides the City an opportunity to offer a superior restaurant option for the
citizens and golfers alike. It also eliminates the possibility of a financial Loss as the proposed
agreement calls for annual payments of $50,000 plus 3% of gross revenues over $1 million. The
August 3, 2007
TO: Mayor and Members of the City Council
FROM: Olufemi Folarin, City Manager
Randy Reopelle, Parks and Recreation Director
SUBJECT: Highlands of Elgin Restaurant and Banquet Agreement
PURPOSE
The purpose of this memorandum is to provide the Mayor and members of the City Council with
information to consider entering into an agreement with Addison Restaurant Services, Inc. to
operate the food and beverage operations at The Highlands of Elgin Golf Course.
RECOMMENDATION
It is recommended that the City Council approve the agreement with Addison Restaurant
Services, Inc. for an annual rental fee of $50,000 with a 3 percent (3 %) adjustment for gross
revenues over $1,000,000.
BACKGROUND
In the fall of 2006, the City began the construction of the new clubhouse at The highlands of
Elgin. The construction of the clubhouse is going well and should be completed by early fall.
Rather than initially performing all the restaurant functions internally, e.g hire all cook and wait
staff, order all food and liquor, deal with inventory and spoilage issues, etc., an alternate method
would be to investigate hiring an outside vendor to operate the food and beverage portions of the
clubhouse. This would allow the golf staff to focus on growing the core golf revenues, while at
the same time bringing in a vendor who specializes in food and beverage operations.
Requests for proposals were sent out to five vendors and were advertised on the City's web site.
Three vendors submitted proposals, which were reviewed by an evaluation team. It was
determined that Addison Restaurant Services, Inc. (ARS) provided the most complete and
responsive bid. ARS currently operates seven different restaurants including the LaMagdalina
chain of restaurants.
Working with ARS provides the City an opportunity to offer a superior restaurant option for the
citizens and golfers alike. It also eliminates the possibility of a financial Loss as the proposed
agreement calls for annual payments of $50,000 plus 3% of gross revenues over $1 million. The
Highlands of Elgin Restaurant and Banquet Agreement
August 3, 2007
Page 2
original business plan for The Highlands estimated a loss of near $100,000 within the food and
beverage operation in the first year when operated internally by a newly hired staff. It was
additionally estimated that it would take three years of operations to reach breakeven on the food
and beverage operations. The option with ARS allows the City to generate $50,000 of revenue
from food and beverage operations to help offset projected utility expenses of $10,368 and
building maintenance expenses of $12,006, for those areas utilized by the food and beverage
operations. These revenues will also help to offset the $15,000 committed by the City for joint
marketing efforts.
The restaurant within the clubhouse will be named The Hickory Stick Bar & Grille as part of the
agreement and offer a steak and seafood menu with a southwest flair. A Friday night fish fry
will be one of many specials offered at the new restaurant.
COMMUNITY GROUPSlINTERESTED PERSONS CONTACTED
None
FINANCIAL IMPACT
The agreement with the Addison Restaurant Services, Inc. would generate minimum annual
revenues of $50,000, plus 3% of gross revenues over $1,000,000. All revenues would be
credited to the Golf Fund.
LEGALIMPACT
The proposed agreement is being reviewed by the Legal Department.
ALTERNATIVES
The Council may choose to approve the contract with Addison Restaurant Services, Inc.
2. The Council may choose not to approve the contract with Addison Restaurant Services,
Inc.
Respectfully submitted for Council consideration.
MI