HomeMy WebLinkAboutORDINANCES-2016-048-O-1611 /16/2016
48-0-16
E [•17 I RTI_L`l
Authorizing the City Manager to Execute a Lease of City -Owned Real
Property Located at 2222 Oakton Street with Smylie Brothers Draft
and Package LLC
WHEREAS, the City of Evanston owns certain real property located at
2222 Oakton Street, Evanston, Illinois 60202, which is improved with a single story
13,800 square foot building commonly known as the "Recycling Center" (the "Property");
and
WHEREAS, the Property is no longer used as a recycling processing
center and the City determined that it did not need the building for its operations any
longer;
WHEREAS, the City conducted a public process to solicit requests for
qualifications ("RFQ") to repurpose and redevelop the Property, formal proposals were
submitted, and use that is the subject of this lease agreement is accepted as the best fit
for the community and Property; and
WHEREAS, Smylie Brothers Brewing Company, LLC, d/b/a "Smylie
Brothers" operates a small scale brewing operation and restaurant in Evanston and
Smylie Brothers seeks to expand its brewing production business with a separate larger
space under the operation of a related and separate company, Smylie Brothers Draft
and Package LLC; and
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF
THE CITY OF EVANSTON, COOK COUNTY, ILLINOIS, THAT:
48-0-16
SECTION 1: The foregoing recitals are hereby found as fact and
incorporated herein by reference.
SECTION 2: Pursuant to Subsection 1-17-4-1 of the Evanston City Code
of 2012, as amended (the "City Code"), the City Manager is hereby authorized and
directed to execute, on behalf of the City of Evanston, a lease agreement with an initial
term of ten (10) years and two (2) five (5)-year options to renew the lease agreement,
between the City of Evanston and Smylie Brothers Draft and Package LLC, as tenant.
The Tenant is also granted the option to purchase the Property within 120 days of the
expiration of the Primary Term (10 years). The Lease Agreement shall be in substantial
conformity with the Lease Agreement attached hereto as Exhibit 1" and incorporated
herein by reference.
SECTION 3: Pursuant to City Code Subsection 1-17-4-2-(B)-3, Notice of
Intent to Sell and Lease Certain Real Estate by Negotiation was published in the
Evanston Review, a newspaper in general circulation in the City, on November 10,
2016. Said publication was neither less than fifteen (15) nor more than thirty (30) days
before the date on which the City Council considered adoption of this ordinance
authorizing the City Manager to negotiate the sale and lease of the Subject Property.
SECTION 4: Pursuant to Subsection 1-17-4-2-(B) of the Evanston City
Code, 2012, as amended (the "City Code"), an affirmative vote of two-thirds (%) of the
elected Aldermen is required to accept the recommendation of the City Manager on the
lease agreement authorized herein.
—2—
48-0-16
SECTION 5: If any provision of this ordinance or application thereof to
any person or circumstance is ruled unconstitutional or otherwise invalid, such invalidity
shall not affect other'provisions or applications of this ordinance that can be given effect
without the invalid appl'ication or provision, and each invalid provision or invalid
application of this ordinance is severable.
SECTION 6: All ordinances or parts of ordinances in conflict herewith are
hereby repealed.
SECTION 7: The findings and recitals contained herein are declared to be
prima facie evidence of the law of the City and shall be received in evidence as
provided by the Illinois Compiled Statutes and the courts of the State of Illinois.
SECTION 8: This ordinance shall be in full force and effect from and after
its passage, approval, and publication in the manner provided by law.
Ayes: ?�
Nays:
Approved:
IntroducedN0 V& ,Ujj Z') , 2016 `)URAXkA 14 12016
Adopted I �, � i of , 2016 _:5 �� -
Eli2geth B. Tisdahl, Mayor
Attes Approved as to form:
Rodney Gree/(e, ity Clerk W. Grant Farrar, Corporaon LL
Courrsdel
-3-
48-0-16
EXHIBIT 1
LEASE AGREEMENT
�4�
LEASE
between
Smylie Brothers Draft & Package LLC
an Illinois limited liability company
as Tenant
and
CITY OF EVANSTON
An Illinois municipal corporation,
as Landlord
2222 Oakton Street
EVANSTON, ILLINOIS 60202
49817532A
TABLE OF CONTENTS
1. PROPERTY..................................................................................................................................1
2. TERM.............................................................................................................................................1
3. RENT.............................................................................................................................................
2
4. CONSTRUCTION......................................................................................................................
3
5. FIXTURES.................................................................................................................................... 4
6. USE OF PREMISES....................................................................................................................
4
7. MAINTENANCE........................................................................................................................5
8. PAYMENT OF TAXES.............................................................................................................
6
9. DAMAGE AND DESTRUCTION.........................................................................................
7
10. INSURANCE................................................................................................................................
8
11. INDEMNIFICATION...............................................................................................................
9
12. EXERCISE OF EMINENT DOMAIN................................................................................10
13. UTILITIES..................................................................................................................................11
14. COVENANTS AGAINST LIENS.........................................................................................11
15. ASSIGNMENT AND SUBLETTING..................................................................................12
16. NOTICES....................................................................................................................................12
17. RIGHT TO GO UPON PREMISES.....................................................................................12
18. DEFAULT...................................................................................................................................13
19. SIGNS..........................................................................................................................................14
20. REPRESENTATIONS AND WARRANTIES....................................................................14
21. HOLDING OVER; END OF TERM...................................................................................16
22. EXPENSES OF ENFORCEMENT......................................................................................16
23. SUCCESSORS IN INTEREST...............................................................................................16
24. REMEDIES ARE CUMULATIVE........................................................................................16
25. QUIET POSSESSION..............................................................................................................16
26. ALTERATION...........................................................................................................................17
27. HAZARDOUS SUBSTANCES...............................................................................................17
28. GENERAL CONDITIONS....................................................................................................18
29. SUBORDINATION...................................................................................................................20
LEASE
THIS LEASE AGREEMENT is made by and between CITY OF EVANSTON
("Landlord"), an Illinois municipal corporation and SMYLIE BROTHERS DRAFT &
PACKAGE, LLC, an Illinois limited liability company d/b/a Smylie Bros. ("Tenant").
WIT NESSETH:
1. PROPERTY
(a) Property. Landlord is the fee simple owner of certain real property at 2222 Oakton Street,
Evanston, Illinois 60202, which is the former recycling processing center facility, legally described in
Exhibit "A" attached hereto and incorporated herein (the "Property"). The Property has a total of
approximately 33,580 square feet of land, improved with a 13,100 square foot one-story building
("Building")Landlord does hereby lease the Premises to Tenant, for Tenant's exclusive use and
control, together with all appurtenances thereto, pursuant to the terms and conditions of this Lease.
During this Lease Term, the Property and Building will be collectively referred to as "Premises".
(b) Parking. This Lease does include the use of seven (7) parking spaces for employees and one
(1) ADA compliant parking space, all located on the northern side of the Premises which is part of
the Rental Rate ("Premises Employee Parking"). Tenant and tenant's employees may not utilize any
on street parking spaces on Oakton Street. Landlord will install parking meters for the non -
employee parking space, which are outlined on the Site Plan. The parking lot portion of the
Premises will be included in the separate parcel from the building with the subsequent PIN Division,
as more fully described in Section 8(e).
2. TERM
(a) Primary Term. Subject to the provisions of this Lease, the "Primary Term" must_ be for 10
years (120 months) and must commence on the 1st day of , 2016 ("Commencement
Date") and must end at 11:59 p.m. on the day of , 2026, except as otherwise
terminated as provided herein.
(b) Inspection Period. The period beginning with the Commencement Date and ending at the
later of (a) four (4) months after the Commencement Date or (b) the date on which Landlord
delivers to Tenant the drawings of the Parking Lot described in Section 1(b) above and written
notice of the boundaries of the PIN Division of the two parcels as described in Section 8(e) below
plus sixty (60) days, must be considered a due diligence period for Tenant to inspect the Premises.
During this period (the "Inspection Period"), Tenant, at its sole expense, may obtain an inspection
of all buildings and related improvements located on the Property. In addition to Landlord's
Representations and Warranties set forth in Section 20 below, Landlord hereby gives Tenant the
right to conduct any sampling or other invasive testing of the Building, foundation, concrete, water,
soil, air or building improvements on or beneath the Property. Tenant must receive Landlord's
written consent prior to any soil testing, which consent shall not be unreasonably denied or delayed.
The Parties recognize that, prior to the execution of this Lease, Tenant was given the opportunity to
conduct inspection and testing of the concrete and foundation of the Building to preliminarily
determine whether they were suitable for Tenant's intended purpose, but that opportunity does not
preclude Tenant from conducting additional testing during the Inspection Period. Tenant must
1
repair any damage done to the Property by any inspection during the Inspection Period. Tenant
must insure that any party entering onto the Realty for purposes of inspection maintains
commercially reasonable liability insurance naming Landlord as an additional insured. Tenant must
indemnify, defend and hold Landlord harmless from and against any loss, cost, liability or expense
Landlord may incur resulting from any such inspection. Tenant must have until the end of the
Inspection Period to terminate this Lease by written notice to Landlord. If Tenant does not deliver
a written notice to Landlord before the end of the Inspection Period terminating this Lease, then
Tenant is deemed to have waived this inspection contingency and any right to object to the
condition of the Premises. In no event must Landlord be required to cure any matter to which the
Tenant objects relating to the condition of the Premises.
(c) Extended Lease Terms. Provided Tenant is not otherwise in default beyond any applicable
cure period, replaced or otherwise amended such that Tenant is still permitted to conduct the
Permitted Use from the Premises, Tenant must have two (2) options (individually, a "Lease
Extension Option"), for two (2) immediately successive periods of five (5) years each (each an
"Extension Term") upon the same terms, covenants and conditions as herein provided. Each
Lease Extension Option must be exercised by Tenant delivering to Landlord written notice of such
election, not less than one hundred twenty (120) days prior to the expiration of the then current
term. The exercise by Tenant of any one Lease Extension Option must not be deemed to impose
upon Tenant any duty or obligation to renew for any further period of time, and that the exercise of
any Lease Extension Option must be effective only upon the giving of notice of extension in
accordance with the foregoing provisions. The Primary Term together with any Extension Term(s)
is referred to herein collectively as the "Term".
(d) Option to Purchase.
(i) Option to Purchase. Tenant initially is a Tenant of the Property which is owned by
Landlord. As such, Tenant's monthly payments are rental payments and will not be applied to the
Purchase Price if Tenant exercises the option to purchase described herein. Tenant has an option to
purchase the Building and the Property, so long as the Tenant is in compliance with the terms of
this Agreement at the end of the Primary Term and at any time during any Extension Terms (the
"Option to Purchase"). Tenant must submit written notification to Landlord that it intends to
exercise the Option to Purchase within one hundred and twenty (120) days of expiration of the
Primary Term. The provisions of this Lease relating to taking the Property "As Is" (� 20(xiii)) and
waiver of claims arising under Environmental Laws (§27(d)) shall be a condition of purchase and
shall survive closing.
(ii) Purchase Price. The purchase price of the Building will be a negotiated price
between the Parties, with each Party relying on its own research and valuations, including
appraisal(s) of the Building and Property. If the Parties cannot agree upon a purchase price, then:
(a) each Party shall select its own appraiser; (b) the Parties' appraisers shall select a third appraiser;
(c) each of the three appraisers shall render an appraisal of the fair market value of the combined
Building and Property; and (d) the purchase price will be the middle appraised fair market value. A
closing will occur upon the Parties executing a purchase and sale contract ("Building and Property
Purchase Agreement") and the subsequent payment of the Purchase Price at a Closing. Tenant will
not be given credit towards the purchase price for the rental payments made to Landlord.
2
(iii) Delinquencies. Should the Tenant have incurred delinquencies in paying rent
with Landlord, the Tenant must payoff those delinquencies prior to any offer to exercise its Option
to Purchase.
(iv) No Obligation to Purchase. Tenant is under no obligation to purchase the
Building and has the right to continue under the terms of this Agreement as Tenant/renter for the
balance of the Term. However, if the Tenant fails to exercise the option at the conclusion of the
Primary Term or any Extension Term, the Option to Purchase must expire.
(v) Sale to Third Parties. If Landlord sells the Property to a third party which has no
legal affiliation to the Tenant, as a condition of sale, the new purchaser agrees to be bound by the
terms of this Agreement and must have no right to evict Tenant, to vary the terms of this
Agreement or to terminate this Lease under any terms other than those contained herein. The third
party must stand in the shoes of Landlord and must honor all obligations of Landlord and all rights
of Tenant as provided for herein.
(e) Should Tenant not exercise its Option to Purchase, then Tenant may remove from the Property
any non -fixed improvements materials, equipment, mechanics, appliances, and machinery related to
the operation of brewery, but must not include the removal of a HVAC unit. Prior to the removal,
the Landlord must review the list of items subject to the removal to ensure that the list does not
include any items which are affixed to the Property.
3. RENT
(a) Fixed Minimum Rent. Commencing on the Commencement Date, and subject to the terms
of this Lease, Tenant agrees to pay to Landlord for lease of the Premises: (i) Fixed Minimum Rent
(herein so called) described below; and (ii) all other charges due from Tenant to Landlord hereunder
as "Additional Rent" (herein so called).
(i) Initial Fixed Minimum Rent. Commencing on the Commencement Date and
continuing through the Primary Term, Tenant must pay to Landlord the sum of One Hundred
Sixty -Three Thousand Seven Hundred Fifty and no/100 Dollars per annum in monthly installments
of Thirteen Thousand Six Hundred Forty -Five and 83/100 Dollars ($13,645.83) ($12.50 per square
foot per annum/13,100 sq. feet). The rent specified in this paragraph 3(a) (i) as adjusted pursuant to
paragraph 3(a) (ii) below must be deemed "Fixed Minimum Rent" for purposes of this Lease.
The Parties agree that, during the first eighteen months (18 months) following the Commencement
Date the Fixed Minimum Rent will not be assessed. The first Rent payment will be due on the Vt
day of the 19th month from the Commencement Date.
(ii) Fixed Minimum Rent Adjustments. The Fixed Minimum Rent set forth in Section
3(a) (i) above must be adjusted at the beginning of each year during the Primary Term and during
the Extension Term years, if applicable, in an amount equal to the Consumer Price Index for that
year. In no event must adjustments be made based on Tenant's improvement of the Property or
expansion of the Building; to the extent Landlord relies on its own or third parties' value
assessments, the same must be based on the Building as it exists on the day before the
Commencement Date. Expansion of the Building footprint, as outlined on the Site Plan (Exhibit B)
will increase the Fixed Minimum Rent, which includes adding floor area within the Building or
expanding the patio area on the exterior of the Property. If Tenant installs detached outdoor
3
storage on the Property, such as a digester, this will not increase the Fixed Minimum Rent.
(iii) Late Fee and Interest. In the event any sums required hereunder to be paid are not
received by Landlord on or before the date the same are due, then, Tenant must on demand pay, as
additional rent, a service charge of Two Hundred Dollars ($200). In addition, interest must accrue
on all past due sums at an annual rate equal to the lesser of six percent (6.0%) per month and the
maximum legal rate. Such interest must also be deemed Additional Rent.
(b) Time and Place of Payment. Tenant must pay to Landlord Fixed Minimum Rent in advance,
in equal monthly installments, and without prior notice, setoff (unless otherwise expressly permitted
herein) or demand, except as otherwise specifically provided herein, on or before the first (V5 day of
each calendar month during the Term hereof to:
City of Evanston
Attn: Administrative Services Dept., Finance Division
2100 Ridge Avenue, Room 4500
Evanston, IL 60201
4. CONSTRUCTION
(a) Tenant Improvements. Tenant represents, covenants and agrees, at its sole cost and expense,
that it must construct and develop, or cause to be constructed, in accordance with the provisions of
this Lease and the City of Evanston Code of 2012, as amended, regulations, including but not
limited to the Zoning and Building Code, the improvements to the Premises, in accordance with the
Plans, hereinafter defined (herein "Tenant's Work"). Landlord, at the Commencement Date, must
deliver the Property and Building to Tenant in an "AS IS" condition, except as otherwise
represented and warranted in Sections 20 and 27, and vacant.
(b) Plans and Specifications. Landlord acknowledges and agrees that Tenant's plans for leasehold
improvements to the Premises, as set forth on Exhibit D, must be attached hereto and made a part
hereof by this reference not later than the conclusion of the Inspection Period ("Plans''). Tenant
must take the Plans through the building permit process as required by Code and Landlord does not
approve said Plans by this Lease Agreement. Landlord represents and warrants to Tenant that
Landlord will not withhold or condition any licenses, permits (including business licenses, building
permits or occupancy permits) or other permissions or authorizations required for Tenant to operate
in the Premises for any reason so long as Tenant's Work is constructed in conformance with the
Plans and City Code. Tenant must obtain, or cause to be obtained, in connection with, and prior to
the commencement of, the construction of such improvements, builder's risk insurance for the full
estimated value of the proposed improvements and workers' compensation insurance in amounts
required by law as well as all applicable permits.
(c) Tenant Construction Indemnification. Subject to Section 11(a), Tenant indemnifies, defends
and holds Landlord and Landlord's shareholders, officers, directors, employees and agents harmless
from and against any costs, claims, expenses (including, without limitation, reasonable attorney's
fees) or liabilities resulting from any injury or death of any person or persons or any damage to
property that arises from or relates to Tenant's Work. This provision must expressly survive the
termination or expiration of this Lease.
4
(d) Digester. This Lease does not permit Tenant to place a digester on adjacent City Property to
the south of Subject Property. If Tenant seeks to locate a digester at a later date on any adjacent
property, the parties will negotiate and if an agreement can be reached, the Lease will be modified in
writing, subject to City Council approval.
5. FIXTURES AND EQUIPMENT
All trade fixtures and equipment installed by Tenant in or on the Premises (including brewing
equipment, furniture, kitchen equipment, satellite communication dish and equipment, registers,
other equipment, shelving and signs) must remain the property of Tenant and Tenant may remove
the same or any part thereof at any time prior to or at the expiration or earlier termination of this
Lease. Tenant must repair at its own expense any damage to the Premises caused by the removal of
said fixtures or equipment by Tenant. This provision must expressly survive the termination or
expiration of this Lease.
6. USE OF PREMISES
(a) Permitted Use. Tenant must have the right, subject to applicable Federal, State and local
laws, including Environmental Laws (as hereafter defined) and the terms of this Lease, to use the
Premises for the following purpose(s): to run a commercial brewery for production and
distribution of beer, and selling beer and food in the Building and adjacent patio area, selling
closed container beer in a retail setting, selling associated merchandise, and performance of
business related functions to run the brewery (herein collectively "Permitted Use"). Tenant will
be constructing a tap room, patio and full service kitchen. Tenant agrees that both spaces must
include food service, which must include food that encompasses a meal (i.e. sandwiches, pizzas,
etc.) that is available during all hours that the business is open to the public. Tenant warrants that
it will ensure that customers do not exit the Building or patio area with open alcohol.
(b) Liquor License. Tenant will apply for and maintain a valid liquor license with the State and
City of Evanston. This Lease does not in any way bind the Liquor Control Review Board and
cannot be construed that Tenant's feature application is granted. Tenant expects to apply for
production volume at up to the maximum number of barrels per year for a business of the type
Tenant intends to operate, to correspond with its State and Local Liquor License application. Nothing
in this Lease must be intended to limit Tenant's production or to modify Tenant's rights under any
Liquor License that Tenant obtains from the Liquor Control Review Board.
(c) Patio Area. The Tenant intends to install a patio with an outdoor bar within the Property
(the "Patio"). The restrictions contained herein may be supplemented or expanded by the Liquor
Control Review Board:
(i) The patio must be maintained by the installation of additional fencing or other
structure(s) to demarcate the area utilized by the patio.
(ii) The patio must include a clear point of entrance and exit to allow for the checking
of identification cards to ensure patrons are over 21 years of age.
5
(iii) Patrons under 21 years of age are permitted to be present on the patio, but only if
they are accompanied by a parent or guardian over 21 years old.
(iv) Service to patrons of alcoholic beverages on the patio can only be from the
outdoor bar. Patrons on the patio must be able to order from the full menu offered by tap room.
(v) The Patio must not be open any time after 10:00 p.m..
(vi) Tenant's Site Plan for the Patio will be attached as Exhibit E at the conclusion of
the Inspection Period. The square footage area of the Patio must be no greater than the Site Plan
as proposed in Exhibit E. The Patio Area may be subject to the PIN Division described in
Section 8(e) and the City will amend the legal description provided in Exhibit A at a later date
following the PIN Division.
(vii) All maintenance and repairs necessary for the Patio area must be at the sole cost
and expense of Tenant.
(d) Tenant Exclusive Use of Premises. Landlord covenants and agrees that it has no rights to use,
modify, alter or lease any portion of the Building or Property other than as expressly provided in this
Lease.
(e) No Continuous Operation. Provided Tenant is open for business for at least one (1) day to the
general public for the Permitted Use provided herein, anything contained in this Lease, express or
implied, to the contrary notwithstanding, Tenant must be under no duty or obligation, either express
or implied to thereafter continuously conduct its business in the Premises and any such failure must
not, in any way, be deemed an event of default under this Lease, nor must such a failure otherwise
entitle Landlord to commence or to maintain any action, suit, or proceeding, whether at law or in
equity, relating in any way to Tenant's failure to continuously conduct its business in the Premises;
provided, however that Tenant must otherwise perform and obey the other covenants and agreements
contained in this Lease on the part of Tenant to be performed, including the payment of all Fixed
Minimum Rent, Additional Rent and any other charges due hereunder. In the event Tenant has ceased
operating its business for a continuous period of one hundred eighty (180) days, and the cessation is
not the result conduct by Landlord, an act(s) of God, catastrophe, or damage to the Premises,
Landlord must have the right, to be exercised by giving Tenant sixty (60) days written notice, to
recapture the Premises. During the sixty (60) day period, Tenant may, at its option, resume business. If
Tenant does not do so, Landlord may recapture the Premises, and, upon such recapture, this Lease
must terminate and neither party must be further obligated hereunder, except to the extent any such
obligation hereunder is expressly specified herein to survive the termination of this Lease.
(0 Trucks. The following is a list of expectations and covenants that Tenant makes to Landlord
regarding commercial trucks at the Property:
(i) Tenant's delivery and production trucks must use the eastern exit of the Premises as
the truck entrance and exit point to the extent logistically feasible. If not feasible, Tenant and Landlord
agree that Tenant can develop an alternative entrance and exit plan and provide Landlord with written
notice of the same. In no event must the Parking Lot contemplated in Section 1(b), Exhibit C and
6
Section 8(e) interfere with Tenant's enjoyment of the Premises during the Lease Term, including by
way of example and not limitation ingress and egress of pedestrians, customer vehicles, and delivery
and commercial vehicles associated with Tenant's use of the Premises.
(ii) Tenant agrees to instruct all trucks to exit and enter the Premises from the west, using
Oakton Street to McCormick Boulevard to the extent logistically feasible.
(iii) The daily delivery times must be between 9:00 a.m. and 6:00 p.m.
7. MAINTENANCE
(a) Tenant accepts the Premises in as -is condition and acknowledges that the Landlord has
made no representations to the condition or has made any repairs to same except as provided in this
Lease except as otherwise represented and warranted by Landlord in Sections 20 and 27 below. The
Landlord or Landlord's staff or other representatives have made no representations or assurances
that it will alter or remodel the Premises, other than as provided herein, and all renovations will be at
Tenant's sole cost and expense.
(b) Maintenance, Repair and Replacement Responsibilities of Tenant:
(i) Tenant is responsible for all aspects of the Premises, including exterior and interior
portions of the Premises, including but not limited to all structural and load bearing columns, roof,
the HVAC system for the Building, interior sprinkler and fire safety system within the Building, the
roof, windows and all soffits, and all srructural and non-structural elements of the Building. Any
major repairs or replacement work must be in consultation with the Landlord to ensure that the
Building and Property are maintained in a sustainable and responsible manner.
(ii) All refuse associated with Tenant's use must be placed in appropriate containers for
disposal. Tenant cannot dispose of construction building materials in the standard refuse
containers and must arrange for special pick-ups and containers for said materials. A refuse
container for regular refuse will be located at the Property in reasonable proximity to the Building.
Tenant will contract to have trash hauled from such container with reasonable frequency.
(iii) Tenant is responsible for snow, ice removal and leaf removal and general upkeep
of the exterior of the Building along the sidewalk and other carriage walks to and from the
Building. The snow must be moved to a suitable area on the Premises and not into the Parking
Lot described in Sections 1(b) and 8(e) or elsewhere to block the free flow of traffic. In no event
must Tenant be responsible for any maintenance whatsoever beyond the Property, including by
way of example and not limitation, the Parking Lot described in Sections 1(b) and 8(e) or any
other parcels adjacent the Property.
(iv) The Tenant will at all times maintain all of the Property in a clean, neat and orderly
condition. The Tenant will not use the Property in a manner that will violate or make void or
inoperative any policy of insurance held by the Landlord.
(v) Tenant will maintain the eastern access entrance to the Property for solely truck
traffic associated with the business operations. The eastern entrance cannot be accessed and is
closed other than for pickup and deliveries. Tenant will ensure that its customers and employees
17
utilize the western entrance to the Property with appropriate signage or markings.
(vi) Construct, maintain and repair the fence that will provide separation from the City of
Evanston James Park facilities and patrons from this Property.
(vii) Tenant must yield the Premises back to Landlord, upon the termination of this
Lease, whether such termination must occur by expiration of the Term, or in any other manner
whatsoever, in the same condition of cleanliness and repair as at the date of the execution hereof,
loss by casualty and reasonable wear and tear accepted. Tenant must make all necessary repairs and
replace broken fixtures with material of the same size and quality as that broken. If, however, the
Premises must not thus be kept in good repair and in a clean condition by Tenant, as aforesaid,
Landlord may enter the same, or by Landlord's agents, servants or employees, without such entering
causing or constituting a termination of this Lease or an interference with the possession of the
Premises by Tenant, and Landlord may replace the same in the same condition of repair and
cleanliness as existed at the date of execution hereof, and Tenant agrees to pay Landlord, in addition
to the rent hereby reserved, the expenses of Landlord in thus replacing the Premises in that
condition. Tenant must not cause or permit any waste, misuse or neglect of the water, or of the
water, gas or electric fixtures.
(viii) Tenant will keep all leasehold improvements in compliance with all laws and
regulations during the entire Term of this Lease, except for repairs required of the Landlord to be
made and damage occasioned by fire, wind or other causes as provided for in this Lease.
(c) Construction, Maintenance and Repair responsibilities of Landlord:
(i) Parking Lot. Landlord, at its sole cost and expense, must construct, maintain and
make repairs to the parking lot (except for damage caused by Tenant). Landlord intends to install
meters for parking spaces in the parking lot for community garden members, patrons and volunteers
of the Animal Shelter, users of James Park facilities and athletic fields, and customers of Tenant's
business. Except as provided in Section 1(b) above, Landlord is not providing any parking spaces in
the Parking Lot area to Tenant. Tenant is entitled to park vehicles next to the building for
employees.
(ii) Landlord is responsible for snow, ice, and leaf removal from the Parking Lot, but
not responsible for the Patio area or surrounding the Building as provided in this Lease. In no event
must Landlord's maintenance of the Parking Lot or any adjacent Property in any way interfere with
Tenant's enjoyment of the Premises or the flow of automobile or pedestrian traffic on the Premises.
(ii) Landlord, at its sole cost and expense, must be responsible for upgrading the current
traffic signal that permits vehicles to exit from the western entrance of the Property.
(iii) The Landlord's Facilities Division will inspect the Premises in the first quarter of
each calendar year to ensure that the Premises is maintained to Landlord standards and the Tenant is
maintaining the Premises in accordance with the terms of this Lease Agreement.
8. PAYMENT OF TAXES
M.
(a) Definition. For purposes hereof, "Taxes" must mean real property taxes and
"Assessments" must mean assessments, general and special, foreseen and unforeseen, for public
improvements levied or assessed against the Premises and the improvements thereon for that
portion of the Term.
(b) Payment. Landlord represents and warrants to Tenant that the Premises is currently exempt
from Taxes and Assessments. Upon the conclusion of the Inspection Period, Landlord will
endeavor to put the Premises back on the tax rolls with the Cook County Assessor ("Assessor").
Landlord will also list the Tenant as the taxpayer with the Cook County Assessor and Tenant will
receive and pay all installment invoices directly. Tenant must thereafter pay all Taxes assessed
against the Premises, for the period beginning with the conclusion of the Inspection Period, before
any fine, penalty, interest or cost may be added thereto, become due or be imposed by operation of
law for the nonpayment of late payment thereof.
(c) Prorations. At the end of the Term, Taxes and Assessments to be paid by Tenant must be
prorated based on the portion of the fiscal tax year in which this Lease is in effect.
(d) Personal Property Taxes. Tenant must pay before delinquency any and all taxes and
assessments levied or assessed and becoming payable during the Term, against Tenant's personal
property located upon the Premises.
(e) PIN Division. The Landlord will be filing a Resubdivision Application with the Cook
County Assessor to divide the Property into two parcels with two separate PINs. The Building will
be on one parcel and the parking will be on the other parcel. Tenant's parcel with the Building will
continue to be a taxable parcel, but likely reassessed, and the City will continue to operate and
maintain the other parcel with the parking lot. The boundaries for the resubdivided lots are outlined
on Exhibit B, the Plat of Resubdivision. The agreement will be amended at a later date with a
revised Exhibit A for the new legal description for the Premises and the two lots, and said
description will not encroach upon the Interior and Exterior Site Plan (Exhibit C) or the Patio Area
Plan (Exhibit D) or the Tenant's possession and enjoyment of the Building and Property.
9. DAMAGE AND DESTRUCTION
(a) Casualty. If the Premises must be damaged by fire or other casualty by an Act of God
("Casualty"), Landlord must, within one hundred eighty (180) days after such damage occurs
(subject to being able to obtain all necessary permits and approvals, including, without limitation,
permits and approvals required from any agency or body administering environmental laws, rules or
regulations, and taking into account the time necessary to effectuate a satisfactory settlement with
any insurance company) repair such damage at Landlord's expense and this Lease must not
terminate. If the foregoing damage is due to the negligence or willful misconduct of Tenant, then
Landlord must look first to the insurance carried by Tenant to pay for such damage.
Notwithstanding (i) any other provisions of the Lease to the contrary, and (ii) any legal
interpretation that all improvements become part of the realty upon being attached to the Premises,
following a Casualty, the Landlord must be responsible only for restoring the Premises to building
standard levels of improvement at the time of execution of this Lease and must not include the
tenant improvements completed and installed following execution of this Lease, and the tenant must
be responsible for insuring and replacing the above building standard tenant improvements or
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betterments that made the Premises "customized" for Tenant's use. Customized improvements
include, but not limited to: any and all brewing equipment and fixtures, alarm censored doors, wood
flooring, and custom cabinetry. Except as otherwise provided herein, if the entire Premises are
rendered untenantable by reason of any such damage, or if Tenant cannot utilize Property and
Building for its intended use by reason of any damage of any size or scope whatsoever, then all
Fixed Minimum Rent and Additional Rent must abate for the period from the date of the damage to
the date the damage is repaired, and if only a part of the Premises are so rendered untenantable but
the damage does not prevent Tenant from utilizing the Property for its Permitted Use, the Fixed
Minimum Rent and Additional Rent must abate for the same period in the proportion that the area
of the untenantable part bears to the total area of the Premises; provided, however, that if, prior to
the date when all of the damage has been repaired, any part of the Premises so damaged are
rendered tenantable and must be used or occupied by or through Tenant, then the amount by which
the Fixed Minimum Rent and Additional Rent abates must be apportioned for the period from the
date of such use or occupancy to the date when all the damage has been repaired.
(b) Repair to Leasehold Improvements. Landlord must have no obligation to repair damage to
or to replace any leasehold improvements, Tenant's personal property or any other property located
in the Premises, and Tenant must within thirty (30) days after the Premises is sufficiently repaired so
as to permit the commencement of work by Tenant, commence to repair, reconstruct and restore or
replace the Premises (including fixtures, furnishings and equipment) and prosecute the same
diligently to completion. Notwithstanding the foregoing, Tenant's Fixed Minimum Rent and
Additional Rent must continue to be abated as provided in Section 9(a) above, until the Property is
once again suitable for its Permitted Use.
(c) Termination Right. Notwithstanding any provision contained herein to the contrary, Tenant
must have the option and right to terminate this Lease if, (a) the Premises must be so damaged by
Casualty that it cannot be fully repaired within one hundred eighty (180) days after the date of
damage; (b) during the last eighteen (18) months of the Term of this Lease, the Premises is damaged
by a Casualty in amount exceeding thirty-three and one-third percent (33.33%) of the square footage
of the Premises or a lesser amount (no matter how small) that leaves Tenant unable to utilize the
Premises for their Permitted Use, provided that, in such event, such termination of this Lease must
be effected by written notice within ninety (90) days of the happening of the Casualty causing such
damage. This provision must expressly survive the termination or expiration of this Lease.
10. INSURANCE
(a) Tenant agrees to maintain a policy or policies of commercial general liability insurance
written by an insurance carrier rated at least Class A or better in Bests Key Rating Guide of
Property -Casualty Insurance Companies and licensed to do business in the state in which the
Premises is located which must insure against liability for injury to and/or death of and/or
damage to personal property and the Premises of any person or persons, with policy limits of not
less than $3,000,000.00 combined single limit for injury to or death of any number of persons or
for damage to property of others not arising out of any one occurrence. Said policy or policies
must provide, among other things, blanket contractual liability insurance. Tenant's policy must
cover the Premises and the business operated by Tenant and must name Landlord as an additional
insured. Landlord is self -insured up to $1.25 Million and agrees to maintain an excess policy or
policies of commercial general liability insurance over the self -insured limit written by an insurance
carrier with a rating at least Class A or better in the Bests Key Rating Guide and licensed to do
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business in the state in which the Premises is located which must insure against liability for injury
to and/or death of and/or damage to personal property of any person or persons, with policy
limits of not less than $2,000,000.00 combined single limit for injury to or death of any number of
persons or for damage to property of others not arising out of any one occurrence. Landlord's
policy must name Tenant as an additional insured. Subject to the terms of Paragraph 9(a),
Landlord must maintain casualty insurance covering the entire Premises and any alterations,
improvements, additions or changes made by Landlord thereto in an amount not less than their full
replacement cost from time to time during the Term, providing protection against any peril included
within the classification of "all risks".
(b) Each of the parties hereto agrees to maintain and keep in force, during the Term hereof, all
Workers' Compensation and Employers' Liability Insurance required under applicable Workers'
Compensation Acts.
(c) Within thirty (30) days after written request, each of the parties agrees to deliver to the other
a certificate of insurance as evidence that the policies of insurance required by this Section 10 have
been issued and are in effect.
(d) Waiver of Subrogation. Neither Landlord nor Tenant must be liable to the other or to any
insurance company (by way of subrogation or otherwise) insuring the other party for any loss or
damage to any building, structure or other tangible property, or any resulting loss of income for
property or general liability losses, even though such loss or damage might have been occasioned
by the acts or omissions of such party, its agents, contractors or employees. Landlord or Tenant
must look exclusively to the proceeds of insurance carried by it or for its benefit in the event of any
damage or destruction to its property located on the Premises. Notwithstanding anything to the
contrary contained herein, Landlord and Tenant hereby release and waive any and all rights of
recovery, claim, action or cause of action, against the other, or its respective directors, shareholders,
officers, agents, invitees and employees, for any loss or damage that may occur to the property or
the equipment, fixtures and improvements comprising any part of the Premises, by reason of fire,
the elements, or any other cause which could be insured against under the terms of an "all risk" fire
insurance policy, in the state where the Premises is located, regardless of cause or origin, including
negligence of the parties hereto, their agents, officers, invitees and employees. Subject to the
provisions of the Lease, no insurer of a party hereunder must ever hold or be entitled to any claim,
demand or cause of action against Tenant by virtue of a claim of loss paid under any such insurance
policies, whether such insurer's claim be in the nature of subrogation or otherwise. The waivers
provided pursuant to this paragraph must not operate to the extent that they would void coverage
under the provisions of any policy of insurance.
11. INDEMNIFICATION
(a) Indemnification of Landlord. Except as otherwise provided in this Lease, and except to the
extent caused by the willful misconduct of Landlord, or its agents, employees or contractors, or by
the breach of this Lease by Landlord, Tenant must protect, defend, indemnify and save Landlord
and its officers, directors, agents, attorneys, and employees harmless from and against any and all
obligations, liabilities, costs, damages, claims and expenses of whatever nature arising from (i) any
matter, condition or thing that occurs in the Premises, which is not the result of Landlord's
negligence or willful misconduct or an Act of God or an act of a third party, (ii) any negligence or
willful misconduct of Tenant, or its agents, employees or contractors; or (iii) Landlord's breach
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occasioned wholly or in part by any act, omission of Tenant, its agents, employees, contractors or
servants. The provisions of this Section must survive the expiration or earlier termination of this
Lease only with respect to any damage, injury or death occurring before such expiration or earlier
termination.
(b) Indemnification of Tenant. Except as otherwise provided in this Lease, and except to the
extent caused by the negligence or willful misconduct of Tenant, or its agents, employees or
contractors, or by the breach of this Lease by Tenant, Landlord must protect, defend, indemnify and
save Tenant and its officers, directors, agents, attorneys, and employees harmless from and against
any and all obligations, liabilities, costs, damages, claims and expenses of whatever nature arising
from any act, omission or negligence of Landlord, its agents, employees, contractors or servants;
The provisions of this Section must survive the expiration or earlier termination of this Lease only
with respect to any damage, injury or death occurring before such expiration or earlier termination.
12. EXERCISE OF EMINENT DOMAIN
(a) Taking. An appropriation or taking under the power of eminent domain of all, or a portion,
of the Property, are sometimes hereinafter called a "taking."
(b) Total Taking of the Property. If all of the Property must be taken by the State or Federal
government, or subdivision thereof, this Lease must terminate and expire as of the date of vesting of
title in, or taking of actual physical possession of the Property by, the condemnor, and Landlord and
Tenant must thereupon be released from any and all further liability hereunder except to the extent
any such liability hereunder expressly states that it must survive the termination of this Lease. In
such event, Tenant must be entitled to participate in any condemnation award so as to be
compensated for the cost of relocation, removal and decrease in value, as a result of such taking of
Tenant's fixtures, equipment and stock -in -trade located in the Premises, goodwill and any other
items to which Tenant is entitled under applicable law, and, the value of the leasehold of which
Tenant is being deprived for the remainder of the Term hereof so long as any such award made to
Tenant must not reduce any award which may be obtained by Landlord. Nothing in this Section
must be construed as a waiver by Landlord of any rights vested in it by law to recover damages from
a condemnor for the taking of its right, title, or interest in the Property.
(c) Partial Taking.
In the event of the taking of-
(i) any portion of the Property, so that the remainder thereof is not reasonably adapted to
the continued leasing of the Premises by Tenant; or
(d) access, whether by a taking or otherwise, of the Property or a portion thereof to
adjoining thoroughfares, so that all accessibility is substantially or materially restricted and as a result
the continued leasing of the Property by Tenant will become impracticable or unprofitable in
Tenant's sole discretion; then Tenant must have the right to cancel and terminate this Lease as
hereinafter provided. Within ninety (90) days after receipt by Tenant from Landlord of written
notice that a condemnation action has been commenced, Tenant may, by written notice to Landlord,
notify Landlord of its election to terminate this Lease, whereupon the parties must be released from
any and all further obligations under this Lease except to the extent any such obligation hereunder is
12
expressly provided hereunder that the same must survive the termination of this Lease and Tenant
must share any award or sale price as provided in Section 12(b) hereof.
(d) Notice of Proceedings. Upon service on either party hereto of any legal process in
connection with any condemnation proceedings, the party so served must give immediate notice
thereof to the other party hereto.
(e) Temporary Taking In the event of a taking of the Property, or any portion thereof, for
temporary use (specifically one not exceeding one hundred twenty (120) days in duration), without
the taking of the fee simple title thereto, this Lease must remain in full force and effect, except for
Tenant's payment of Fixed Minimum Rent which must be proportionally abated for any period
during which Tenant cannot operate its business from the Premises in the same manner as prior to
such temporary taking. All awards, damages, compensation and proceeds payable by the condemnor
by reason of such taking relating to the Premises, for periods prior to the expiration of the Lease
must be payable to Tenant. All such awards, damages, compensation and proceeds for periods after
the expiration of the Lease must be payable to Landlord.
(0 Lease Prevails. In the event of any taking, the rights and obligations of the parties must be
determined by this Lease and Landlord and Tenant waive any rights at law to the contrary.
13. UTILITIES
Tenant must pay during the Term hereof directly to the appropriate utility company or
governmental agency all electric, water, gas, telephone and other public utility charges in connection
with its occupancy and use of the Premises, including all costs of operating and maintaining all
equipment therein, all business licenses and similar permit fees but excluding any installation costs,
tap fees and/or connection fees or charges, with no right of reimbursement from the Landlord. All
utilities must be paid pursuant to separate meters measuring Tenant's consumption of utilities from
the Premises, which meter fee must be Landlord's obligation at its sole cost and expense. Landlord
must not be liable to Tenant for damages or otherwise (i) if any utilities must become unavailable
from any public utility company, public authority or any other person or entity supplying or
distributing such utility, or (ii) for any interruption in any utility service (including, but without
limitation, any heating, ventilation or air conditioning) caused by the making of any necessary repairs
or improvements or by any cause beyond Landlord's reasonable control, and the same must not
constitute a default, termination or an eviction. Tenant assures Landlord that it must arrange for an
adequate supply of electricity to the Premises and it must pay for any increased voltage and any
additional wiring required addressing the increased capacity.
14. COVENANTS AGAINST LIENS
Tenant covenants and agrees that it must not, during the Term hereof, suffer or permit any lien to
be attached to or upon the Property or the Premises by reason of any act or omission on the part of
Tenant or its agents, contractors or employees. In the event that any such lien does so attach, and
(i) is not released within thirty (30) days after notice to Tenant thereof, or (ii) if Tenant has not
bonded such lien within said thirty (30) day period, Landlord, in its sole discretion, may pay and
discharge the same and relieve the Premises or the Property therefrom, and Tenant agrees to repay
and reimburse Landlord upon demand for the amount so paid by Landlord and for other reasonable
costs incurred by Landlord in discharging and relieving said lien. The Tenant will hold the Landlord
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harmless from all claims, liens, claims of lien, demands, charges, encumbrances or litigation arising
out of any work or activity of Tenant on the Premises. Tenant will, within sixty (60) days after filing
of any lien, fully pay and satisfy the lien and reimburse Landlord for all resulting loss and expense,
including a reasonable attorney's fees. Provided, however, in the event that Tenant contests any lien
so filed in good faith and pursues an active defense of said lien, Tenant must not be in default of this
paragraph. However, in the event of any final judgment against Tenant regarding such lien, Tenant
agrees to pay such judgment and satisfy such lien within 60 days of the entry of any such judgment.
15. ASSIGNMENT AND SUBLETTING
Tenant must not have the right to assign this Lease, or to sublet the Premises, transfer and grant
concessions or licenses ("Transfer") in all or any part of the Premises without the Landlord's
written consent and City Council approval by Ordinance, which consent must not be unreasonably
withheld, conditioned or delayed. No Transfer must relieve Tenant from any of its obligations as
Tenant hereunder. Every such assignment or sublease must recite that it is and must be subject and
subordinate to the provisions of this Lease, and the termination or cancellation of this Lease must
constitute a termination and cancellation of every such assignment or sublease. Notwithstanding the
foregoing, Landlord agrees that no merger, consolidation, corporate reorganization, or sale or
transfer of Tenant's assets or stock (specifically including any inter -family or inter -company
transfers), redemption or issuance of additional stock of any class, or assignment or sublease to any
person or entity which controls, is controlled by or is under common control with Tenant, must be
deemed a Transfer hereunder.
16. NOTICES
Any notices required to be given hereunder, or which either party hereto may desire to give to the
other, must be in writing. Such notice may be given by reputable overnight delivery service (with
proof of receipt available), personal delivery or mailing the same by United States mail, registered or
certified, return receipt requested, postage prepaid, at the following addresses identified for Landlord
and Tenant, or to such other address as the respective parties may from time to time designate by
notice given in the manner provided in this Section.
If to the Landlord:
City of Evanston
Attn: City Manager
2100 Ridge Avenue
Evanston, IL 60201
If to Tenant:
Smylie Brothers Draft & Package LLC
Attn: Michael Smylie
2222 Oakton Street
Evanston, IL 60201
with a copy to:
City of Evanston
Attn: Corporation Counsel
2100 Ridge Avenue
Evanston, IL 60201
For purposes of this Lease, a notice must be deemed given upon the date of actual receipt thereof or
the date of proof of rejection thereof if delivered by hand or overnight courier service.
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17. RIGHT TO GO UPON PREMISES
Landlord hereby reserves the right for itself or its duly authorized agents and representatives at all
reasonable times during business hours of Tenant upon at least forty-eight (48) hours prior notice
to Tenant and accompanied by a representative of Tenant (which may be the store manager or
assistant manager) to enter upon the Premises for the purpose of inspecting the same and of
showing the same to any prospective purchaser or encumbrance or tenant, and for the purpose of
making any repairs which Landlord is required hereunder to make on the Property, but any such
repairs must be made with all due dispatch during normal construction trade working hours, and in
such manner as to minimize the inconvenience to Tenant in the conduct of its business, it being
agreed that in the event of a necessity of emergency repairs to be made by Landlord, Landlord may
enter upon the Premises forthwith to effect such repairs. Notwithstanding the foregoing, in the
event that due to an entry by or on behalf of Landlord into the Premises, Tenant's use is materially
interfered with and Tenant, from the standpoint of prudent business management, cannot open
and operate the Premises for business for two (2) consecutive days, all Fixed Minimum Rent and
other charges payable by Tenant hereunder must equitably abate commencing after such second
(2'` day, and continuing until such repairs are completed, unless such entry is required as a result
of Tenant's negligence or intentional misconduct.
18. DEFAULT
(a) Tenant Default.
(i) Events of Default. Including, but not limited to, the following events must be deemed to
be an "event of default" hereunder by Tenant subject to Tenant's right to cure:
a. Tenant must fail to pay any item of Fixed Minimum Rent per Section 3 at the time
and place when and where due and does not cure such failure within five (5) business days
after receipt of notice from Landlord of such failure;
b. Tenant must fail to comply with any other term, provision, covenant or warranty
made under this Lease or if any of Tenant's representations and warranties made under this
Lease are determined to be untrue, either when made or at any time during the Term, by
Tenant, and Tenant must not cure such failure within thirty (30) days after Landlord's
written notice thereof to Tenant. In the event Tenant cannot comply with such term,
provision, or warranty, within said thirty (30) day period, Tenant must not be in default if
Tenant is diligently and continuously making an effort to comply with such term, provision,
covenant or warranty and Tenant completes the cure of the default; or
c. Tenant must make a general assignment the benefit of creditors, or must admit in
writing its inability to pay its debts as they become due or must file a petition in bankruptcy.
(ii) Remedies. Upon the occurrence of an event of default, Landlord may, so long as such
default continues, as permitted by law and subject to Landlord's obligation to use good faith efforts
to mitigate damages, either:
15
a. terminate this Lease by written notice to Tenant, which written notice must
specify a date for such termination at least fifteen (15) days after the date of such written
termination notice and such termination must be effective as provided in such written notice
unless Tenant must cure such default within such notice period, or not terminate this Lease
as a result of the default of Tenant. If Tenant must fail to surrender the Premises upon such
termination, Landlord may thereupon, reenter the Premises, or any part thereof, and expel or
remove therefrom Tenant and any other persons occupying the same, using such means
provided by law;
b. without terminating this Lease, Landlord may evict Tenant (by any means
provided by law) and let or relet the Premises or any or all parts thereof for the whole or any
part of the remainder of the Term hereof, or for a period of time in excess of the remainder
of the Term hereof, and out of any rent so collected or received, Landlord must first pay to
itself the expense of the cost of retaking and repossessing the Premises and the expense of
removing all persons and property therefrom, and must, second, pay to itself any costs or
expenses sustained in securing any new tenant or tenants (provided that such amount must
not include any amounts incurred to restore the Premises to more than the condition
originally delivered to Tenant), and must third, pay to itself any balance remaining, and apply
the whole thereof or so much thereof as may be required toward payment of the liability of
Tenant to Landlord then or thereafter unpaid by Tenant; or
C. pursue such other remedies as are available at law or in equity.
(b) Landlord Default. Should Landlord default in the performance of any covenant, provision,
warranty, condition or agreement herein, or if any of Landlord's representations and warranties made
under this Lease are determined to be untrue, either when made or at any time during the Term, and
such default in the case of any failure by Landlord to pay any sum required to be paid to Tenant
hereunder, continues for ten (10) business days after notice thereof from Tenant, or in case of any
non -monetary default, continues for thirty (30) days after receipt by Landlord of written notice
thereof from Tenant (except as otherwise provided herein), or if the default of Landlord is of a type
which is not reasonably possible to cure within thirty (30) days, if Landlord has not commenced to
cure said default within said thirty (30) day period and does not thereafter diligently prosecute the
curing of said default to completion (except as otherwise provided herein), Tenant in addition to any
and all other remedies which it may have at law and/or in equity including the right to seek injunctive
relief without posting a bond or the obligation to prove irreparable harm, may pay or perform any
obligations of Landlord hereunder and deduct the cost thereof from each installment of annual Fixed
Minimum Rent payable pursuant to the terms of this Lease; provided, however, in no event must the
amount of any such deduction exceed ten percent (10%) of the Fixed Minimum Rent payable on a
monthly basis; provided, further, Tenant must not have the right to terminate this Lease except as
expressly permitted herein.
19. SIGNS
Tenant may apply for signage (temporary and permanent signage) for the exterior and interior of
the Premises, at its own expense, in order to conduct the business of Tenant. Tenant acknowledges
that there are limitations from the City of Evanston Municipal Code of 2012, as amended, and the
16
Code governs the application process and the details regarding size, type, and number of signs and
Tenant agrees to be bound by such ordinances. Landlord cannot make representations in a lease
agreement that Tenant must be entitled additional signage, a certain number of signs and/or
dimensions of proposed signage, because the Tenant must make an application to the Sign Review
Board, as provided by Code, but Landlord will not withhold, condition or delay its consent to a
sign over the new entrance to the Premises which complies with applicable laws.
20. REPRESENTATIONS AND WARRANTIES
(a) Landlord represents, warrants and covenants to Tenant that, to Landlord's knowledge, the
following is true as of the Effective Date:
(i) all of the Premises is zoned and fit for commercial purposes, and the Permitted Use is
permitted under the applicable zoning designation, and that the Premises and Property are
presently properly subdivided in conformity with all applicable laws and suitable for the
Permitted Use;
(ii) Landlord is the fee simple owner of the Premises;
(iii) the Premises is subject to no restrictions or continuing regulations of any kind or nature
whatsoever incompatible with the Permitted Use and that there are no restrictions in any
agreement by which Landlord is bound (including, but not limited to, Landlord's insurance
policies) which would adversely affect Tenant's right to use the Premises for the Permitted
Use during the Term;
(iv) the Premises are in good working order and condition, the roof is watertight and all utility
systems are functional;
(v) there are no exceptions to title with respect to and/or encumbrances on the Premises which
would interfere with Tenants proposed use of the Premises;
(vi) Landlord has no notice of any proposed Assessments other than as reflected on the current
tax bill;
(vii) Landlord has no knowledge of any condition that would preclude Tenant from obtaining all
Tenant's permits and licenses necessary for Tenant to open for business and operate for the
Permitted Use;
(ix) if Landlord is a corporation, limited liability company, partnership or trust, Landlord
covenants that it is duly constituted under the laws of the state of its organization, and that
its officer, member, manager, partner or trustee who is acting as its signatory in this Lease is
duly authorized and empowered to act for and on behalf of the entity or trust; and
(x) there are no judicial, quasi-judicial, administrative or other orders, injunctions, moratoria or
pending proceedings against Landlord or the Property which preclude or interfere with, or
would preclude or interfere with, the construction contemplated herein or the occupancy
and use of the Premises by Tenant for the purposes herein contemplated.
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(xi) no third party has the right to object to Tenant's tenancy hereunder, prohibit the selling of
any products sold by Tenant or the uses allowed herein or the right to consent to any feature
of the Premises or Tenant's signage.
(xii) there are no mortgages, prime leases, deeds to secure debt, deeds of trust, or other
instruments in the nature thereof, affecting Landlord or its interest in the Premises.
(xiii) The Property is leased to Tenant "AS IS" and "WHERE IS" without representation or
warranty by Landlord. Tenant further acknowledges that (i) Tenant has had an adequate
opportunity to make such legal, factual and other inquiries and investigation as Tenant
deemed necessary, desirable or appropriate with respect to the Property, including, but not
limited to, compliance of the Property with Environmental Laws (as hereafter defined) and
whether the Hazardous Substances (as hereafter defined) are migrating towards or from the
Property or are on, in, under or above the Property, and (ii) neither Landlord, nor anyone
acting for or on its behalf, has made any representation, warranty, promise or statement,
express or implied, to Tenant, or to anyone acting for or on behalf of Tenant, concerning
the Property or the condition, use or development thereof. Tenant represents that, in
entering into this Lease, Tenant has not relied on any representation, warranty, promise or
statement, express or implied, of Lessee Landlord, or anyone acting for or on its behalf,
other than as expressly set forth in this Lease, and that Tenant enters into this Lease based
upon Tenant's own prior investigation and examination of the Property. Further, to the
extent that Landlord has provided (or may hereafter provide) to Tenant information from
any inspection, engineering or environmental reports concerning any Hazardous Substances
or the condition of the Property, Landlord makes no representations or warranties with
respect to the accuracy or completeness, methodology of preparation or otherwise
concerning the contents of such reports. Tenant acknowledges that Landlord has requested
that Tenant inspect the Premises fully and carefully and investigate all matters relevant
thereto and that Tenant relies solely upon the results of Tenant's own inspections or other
information obtained or otherwise available to Tenant, rather than any information that may
have been provided (or may hereafter be provided) by Landlord to Tenant. Tenant's election
to enter into this Lease is be made at Tenant's sole and absolute discretion, in reliance solely
upon the tests, analyses, inspections and investigations that Tenant makes, or had the right
to make and opted not, or otherwise failed, to make, and not in reliance upon any alleged
representation made by Landlord, or anyone acting for or on their behalf.
(b) All representations and warranties, covenants and indemnities contained in this Lease must
survive the expiration or earlier termination of this Lease.
(c) Landlord may perform water testing on the Property during the Term with reasonable notice
and provided it does not interfere with Tenant's business operations.
(d) Deliveries. Subject to governmental regulations, Tenant must have the right to accept
deliveries and unload merchandise in its designated loading area adjacent to the front of the
Premises, during 9:00 a.m. to 6:00 p.m. seven (7) days a week. As previously stated, all deliveries
and trucks exiting the property must use Oakton and McCormick.
21. HOLDING OVER. END OF TERM
In
(a) If Tenant must hold possession of the Premises after the expiration or termination of this Lease,
at Landlord's option (i) Tenant must be deemed to be occupying the Premises as a tenant from month -
to -month at one hundred fifty percent (150%) of the Fixed Minimum Rent in effect upon the expiration
or termination of the immediately preceding term or (ii) Landlord may exercise any other remedies it has
under this Lease or at law or in equity including an action for wrongfully holding over.
(b) Upon the expiration or sooner termination of this Lease, Tenant must surrender the Premises to
Landlord in as good order, condition and repair as when received by Tenant; ordinary wear and tear,
casualty and condemnation excepted. This provision must expressly survive the termination or expiration
of this Lease.
(c) Any property, equipment, or product remaining in the Premises upon expiration of this
Lease must be considered abandoned and property of the Landlord. Any abandoned medical
cannabis or infused products must be turned over to the proper law enforcement authorities for
destruction.
22. EXPENSES OF ENFORCEMENT
The Parties must bear its own costs, charges, expenses and attorney's fees, and any other fees
incurred in the event of a dispute between the Parties.
23. SUCCESSORS IN INTEREST
All of the covenants, agreements, obligations, conditions and provisions of this Lease must inure to
the benefit of and must bind the successors and permitted assigns of the respective parties hereto.
24. REMEDIES ARE CUMULATIVE
Remedies conferred by this Lease upon the respective parties are not intended to be exclusive, but
are cumulative and in addition to remedies otherwise afforded by the law.
25. OUIET POSSESSION
Upon payment by the Tenant of the minimum, percentage and additional rent and all other sums
due hereunder and upon the observance and performance of all covenants, terms and conditions on
Tenant's part to be observed and performed, Tenant must peaceably and quietly hold and enjoy the
Premises for the Term of this Lease without hindrance or interruption by Landlord or any other
person or persons lawfully or equitably claiming by, through or under the Landlord, subject
nevertheless, to the terms and conditions of this Lease.
26. ALTERATION
(a) Changes Required by Law. Any structural changes, alterations or additions in or to the
Premises which may be necessary or required by reason of any law, rule, regulation or order
promulgated by competent governmental authority must be made at the sole cost and expense of
Landlord, including but not limited to asbestos removal and disposal and interior and exterior
compliance with the Americans with Disabilities Act (ADA) etc. Notwithstanding the foregoing, if
any such changes, alterations or additions are required as a result of improvements made by Tenant
19
during the Term hereof or due to Tenant's use of the Premises, such changes, alterations or
additions must be made at the sole cost and expense of Tenant. Tenant may contest the validity of
any such law, rule, regulation or order, but must indemnify and save Landlord harmless against the
consequences of continued violation thereof by Tenant pending such contest.
(b) Alterations During Term. Tenant must be permitted to perform interior, nonstructural
alterations to the Premises and to revise the interior layout of the Premises; provided that the
alterations are in conformance the security plans approved by the State of Illinois, any regulations
under the Medical Cannabis Act, and any additional regulatory authority provisions governing the
Permitted Use. Tenant must obtain Landlord's written consent to any other alterations or
construction which affects the structural nature of the Premises, which consent must not be
unreasonably withheld, conditioned or delayed.
27. HAZARDOUS SUBSTANCES
(a) Tenant agrees that, except as herein set forth, it must not generate, use, store, handle or
dispose of on or transport over the Premises any Hazardous Substances (defined below) in violation
of any Environmental Laws (defined below), except as such incidental amounts of Hazardous
Substances as may be required for Tenant to conduct the Permitted Use, but in no instance shall
Tenant dispose of Hazardous Substances on the Premises in violation of Environmental Laws.
(b) If any time during the Term, Hazardous Substances are found in the Premises or on adjacent
property and such Hazardous Substances are not the result of Tenant's use of or work on the
Premises, then, in such event, Tenant must have the immediate right to terminate this Lease upon
written notice to Landlord. Under no circumstances must Tenant be responsible for remediation or
cleanup of any Hazardous Substances on the Premises or adjacent property that were not caused by
Tenant, or Tenant's subcontractors, agents or employees. Furthermore, with regard to any
Hazardous Substances caused by Tenant or its agents, contractors or employees, Tenant must
remove same, in compliance with applicable Environmental Laws, at Tenant's sole cost and expense.
Tenant must defend, indemnify, and hold Landlord harmless from and against any and all costs,
damages, expenses and/or liabilities (including reasonable attorneys' fees) which Landlord may
suffer as a result of any written demand (whether or not a suit), claim, suit or action regarding any
such Hazardous Substances (whether alleged or real) present due to Tenant and/or regarding the
removal and clean-up of same or resulting from the presence of such Hazardous Substances. The
representation, warranty and indemnity of Tenant described in this subsection shall survive the
termination or expiration of this Lease or purchase of the Property as provided herein. Other than
Hazardous Substances caused by Tenant or its agents, contractors or employees, Tenant shall have
no duty whatsoever to remove any Hazardous Substances from the Property.
(c) In the event that during the Term of this Lease, Tenant is prevented from performing
Tenant's Work and/or Tenant must be unable to operate for a period of thirty (30) days or more for
the Permitted Use at the Premises and ceases operating at the Premises as a result of remediation of
Hazardous Substances not caused by Tenant or its agents, contractors or employees, and Tenant does
not terminate the Lease as provided for in Section 27(b) above, then Fixed Minimum Rent, Additional
Rent and all other charges due hereunder must equitably abate until such time as Tenant is able to
resume the performance of Tenant's Work and/or the operation of its business in the Premises.
(d) Tenant, for itself and its successors in interest, waives and releases Landlord from any and all
20
past, present and future claims and causes of action arising from or relating to the presence or alleged
presence of Hazardous Substances in, on, under, about or emanating from the Property, including
without limitation any claims for cost recovery, contribution, natural resources damages, property
damage, consequential damages, personal or bodily injury (including death) or otherwise, under or on
account of any violation, or arising under, Environmental Law.
(e) The term "Hazardous Substance" includes, without limitation, any material or substance
(regardless of whether discarded, recyclable or recoverable) to which liability or standards of conduct
are imposed pursuant to Environmental Laws, including, but not limited to (i) any defined,
characteristic or listed "hazardous waste", "extremely hazardous waste", "restrictive hazardous
waste", "hazardous substance", "hazardous material", "regulated substance", "pollutant",
"contaminant" or waste, (ii) petroleum (including crude oil or any fraction thereof, natural gas,
liquefied natural gas, synthetic gas or mixtures of natural gas and synthetic gas), (iii) asbestos and any
asbestos containing materials, (iv) substances known to cause cancer and/or reproductive toxicity,
(v) polychlorinated biphenyls (PCBs) and (vi) radioactive material. The term "Environmental Law"
means any federal, state or local law, statute, ordinance, rule, regulation, order, consent, decree,
judgment or common-law doctrine, interpretation thereof, and provisions and conditions of permits,
licenses, plans, approvals and other operating authorizations whether currently in force or hereafter
enacted relating to health, industrial hygiene or the environmental conditions on, under or about the
Premises or the Property, as such laws are amended and the regulations and administrative codes
applicable thereto, including, by way of example and without limitation, the following: the Illinois
Environmental Protection Act; Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"); the Resource Conservation and Recovery Act ("RCRA"); the Clean Air
Act; the Clean Water Act; the Safe Water Drinking Act ("SDWA"); the Toxic Substances Control
Act; and all state and local counterparts thereto; and any common or civil law obligations including,
without limitation, nuisance or trespass. It is the intent of the parties hereto to construe the terms
"Hazardous Substance" and "Environmental Law" in their broadest sense.
28. GENERAL CONDITIONS
(a) Time is of the essence of this Lease. Any deadlines in this Lease which cannot be met
because of delays caused by governmental regulations, inability to procure labor or materials,
strikes, acts of God, or other causes (other than financial), beyond the control of Landlord or
Tenant ("Force Majeure") must be extended by the amount of time caused by such delays;
provided, however, the payment of rent must not be excused. Notwithstanding anything herein to
the contrary, the failure by Landlord to construct the Premises according to building code and/or
to receive timely inspections by the necessary authorities due solely to the negligence, misconduct
or financial inability of Landlord or Landlord's contractors, employees or representatives must not
constitute Force Majeure. In order for Landlord to claim the occurrence of Force Majeure,
Landlord must have notified Tenant in writing of such occurrence within twenty (20) business
days after the initial occurrence.
(b) No waiver of any breach of the covenants, agreements, obligations and conditions of this
Lease to be kept or performed by either party hereto must be construed to be a waiver of any
succeeding breach of the same or any other covenant, agreement, obligation, condition or provision
hereof.
(c) Tenant must not be responsible for the payment of any commissions in relation to the leasing
21
transaction represented by this Lease. Landlord and Tenant each covenant that they have not dealt
with any real estate broker or finder with respect to this Lease (herein collectively "Brokers"). Each
party must hold the other party harmless from all damages, claims, liabilities or expenses, including
reasonable and actual attorneys' fees (through all levels of proceedings), resulting from any claims
that may be asserted against the other party by any real estate broker or finder with whom the
indemnifying party either has or is purported to have dealt, except for the Brokers.
(d) The use herein of any gender or number must not be deemed to make inapplicable the
provision should the gender or number be inappropriate to the party referenced. All section headings,
titles or captions contained in this Lease are for convenience only and must not be deemed part of
this Lease and must not in any way limit or amplify the terms and provisions of this Lease.
(e) Landlord and Tenant have negotiated this Lease, have had the opportunity to be advised
respecting the provisions contained herein and have had the right to approve each and every
provision hereof; therefore, this Lease must not be construed against either Landlord or Tenant as a
result of the preparation of this Lease by or on behalf of either party.
(f) If any clause, sentence or other portion of this Lease must become invalid or unenforceable,
the remaining portions thereof must remain in full force and effect.
(g) Wherever in this Lease Landlord or Tenant is required to give consent, such consent must not
be unreasonably withheld, conditioned or delayed except to the extent otherwise expressly provided
herein.
(h) If the time for performance of any obligation or taking any action under this Lease expires
on a Saturday, Sunday or legal holiday, the time for such performance or taking such action must
be extended to the next succeeding day which is not a Saturday, Sunday or legal holiday. If the day
on which rent or any other payment due hereunder is payable falls on a Saturday, Sunday or on a
legal holiday, it must be payable on the next succeeding day which is not a Saturday, Sunday or legal
holiday.
(i) Landlord hereby agrees that it must maintain all confidentiality with regard to entering into
this Lease, the opening for business by Tenant in the Premises and any financial information
contained hereunder or obtained from Tenant during the Term of this Lease, other than disclosures
to necessary third parties and Landlord must not release any material whatsoever to the press or any
news media without the prior written approval of Tenant, which approval may be withheld in
Tenant's sole discretion.
0) Each covenant hereunder of Landlord, whether affirmative or negative in nature, is intended
to and must bind the Landlord and each successive owner of the Premises and their respective heirs,
successors and assigns.
(k) There must be no personal liability on Landlord, its elected officials, officers, employees, agents,
or any successor in interest with respect to any provisions of this Lease, or amendments, modifications
or renewals hereof. Tenant must look solely to the then owner's interest in the Premises (including but
not limited to any insurance proceeds, rents, or judgments) for the satisfaction of any remedies of
Tenant in the event of a breach by Landlord of any of its obligations hereunder.
22
(1) Landlord hereunder must have the right to assign, sell or transfer Landlord's interest in this
Lease or the Premises with consent of Tenant, which must not be unreasonably withheld. In the
event of any such transfer, the transferor must be automatically relieved of any and all obligations on
the part of Landlord accruing, from and after the date of such transfer.
(m) Tenant acknowledges that it will seek to hire qualified Evanston residents for employment in
the Tenant's business located at the Premises.
(n) The parties agree the this Lease must be governed by and interpreted in accordance with the
laws of the State of Illinois and that venue for any disputes must be in the Circuit Court of Cook
County, Illinois.
(o) This Lease must become effective on the day that this Lease must be executed by the last of
the parties hereto to execute this Lease (herein "Effective Date").
(p) There are no oral agreements between the parties hereto affecting this Lease, and this Lease
supersedes and cancels any and all previous negotiations, arrangements, letters of intent, lease
proposals, brochures, agreements, representations, promises, warranties and understandings between
the parties hereto or displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof must be used to interpret or construe this Lease. This Lease cannot be changed or
terminated except by a written instrument subsequently executed by the parties hereto.
[REMAINDER OF THE PAGE LEFT INTENTIONALLY BLANK]
23
IN WITNESS WHEREOF, the respective parties hereto have executed this Lease by officers
or agents thereunto duly authorized.
Landlord:
CITY OF EVANSTON,
an Illinois municipal corporation
By:
Name: Wally Bobkiewicz
Title: City Manager
Tenant:
SMYLIE BROTHERS DRAFT & PACKAGE
LLC
an Illinois limited liability company
By:
Name: Michael Smylie, Manager
24
EXHIBIT A
LEGAL DESCRIPTION
LOT 2 IN EVANSTON'S RESUBDIVISION OF LOTS 2 AND 3 IN WILLIAM B.
JOHNSON'S SUBDIVISION OF THE EAST 650 FEET OF THE WEST 1075 FEET OF THE
SOUTH 150 FEET OF THE NORTH 197 FEET OF THE NORTHWEST 1/4 OF THE
NORTHWEST 1/4 OF SECTION 25, TOWNSHIP 41 NORTH, RANGE 13, EAST OF THE
THIRD PRINCIPAL MERIDIAN, IN COOK COUNTY, ILLINOIS.
PIN: 10-25-100-023-0000
25
EXHIBIT B
PLAT OF RESUBDIVISION
26
LEGEND
A
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ST.
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CHRISTOPHER B. BURKE ENGINEERING. LTD. EVANSTON'S FIESUBDIVISION OF LOTS 'IN WILLIAM &JOHNSON'S SUBDIVISION
9 75 West Higgins Road. Suite 600 IN
Ew. I—E.00...
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Rosemont, llli� Is 60018 �,VQF EVANSTON, ILLINOIS C.D. "L' of
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SCALE IN FEET
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EXHIBIT C
INTERIOR SITE PLAN
27
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EXHIBIT D
SITE PLAN
28
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