View the PDF version Google Docs PDF Viewer
WATCH Agenda Item Review Form us _ GO Muskegon City Commission Commission Meeting Date: March 8, 2022 Ti.tie: Arena Participation Agreements Submitted By: Frank Peterson Department: City Manager Brief Summary: Staff is seeking approval of the attached participation agreements. Detailed Summary. We have been working with the LCC to convert the arena liquor license from a Civic Center License to a DOC license. This has been a cumbersome process, but was necessary to properly operate Rad Dad's and Carlisle's in the space. We are in the home stretch. As part of the change, we were required to covert the existing leases into participation agreements - this is the appropriate term inology to match the activities at the arena. We are seeking approval. Amount Requested : Amount Budgeted: Fund(s) or Account(s): Fund(s) or Account(s): N/A Recommended Motion: Approve the participation agreements for Rad Dad's Tacos and Tequila and Carlisle's Goods and Leisure. Agreement for Management of a Portion of a Licensed Premises Pursuant to Participation Agreement THIS AGREEMENT is made and executed as of between the M<Yv~ 3 , 2022 City of Muskegon a Michigan municipal corporation 933 Terrace St. Muskegon,Ml49440 (hereinafter "City of Muskegon"), and Rad Dads', L.L.C. a Michigan limited liability company 470 W. Western Avenue, Muskegon, Michigan 49440 Spring Lake, Ml 49456 ("Rad Dads"') RECITALS A. The City of Muskegon owns the Mercy Health Arena located at 470 W. Western Avenue , Muskegon, Michigan 49440 ("Arena"). The City of Muskegon is responsible for operation, maintenance and improvements for the Arena. B. The City of Muskegon has the authority to authorize use of portions of the Arena on an exclusive and non-exclusive basis. C. The City of Muskegon has applied for a Class C liquor license and related permits issued by the Michigan Liquor Control Commission ("MLCC") for providing a restaurant, concessions, bar and bar service throughout the Arena premises (collectively the "License"). D. The City of Muskegon proposes entering into a Participation Agreement with Rad Dads' pursuant to Rule 436.1401 to permit the limited use of the license, subject to and only upon the approval of the MLCC, upon the terms and conditions of this Agreement. E. In connection with this Agreement, the City of Muskegon is willing to grant to Rad Dads', and Rad Dads' desires to receive from the City of Muskegon, the exclusive right to use and manage that portion of the Arena to be known as the Rad Dads' Area (See attached Exhibit A) for the operation of a certain restaurant and bar business commonly known as the "Rad Dads' Tacos and Tequila Bar", subject to and in accordance with the terms and conditions of this Agreement. In consideration of the premises and the mutual promises set forth herein, the parties agree as follows: 1. RAD DADS' PARTICIPATION AGREEMENT. Upon execution of this Agreement, the parties agree to act in good faith and to utilize their best efforts to make application to the MLCC for a Participation Agreement/Participation Permit Application pursuant to Rule 436.1041. Rad Dads' will operate a full-service restaurant, bar and bar service within the Rad Dads' Space as hereinafter defined. The parties acknowledge that this Agreement is contingent upon and shall only become effective upon approval of the MLCC of the Participation Agreement/Participation Permit Application. 2. DESCRIPTION OF RAD DADS' SPACE. Rad Dads' will have the right to use and manage the Rad Dads' Space and fixtures as follows: a. The exclusive right to use and manage the Rad Dads' Space (depicted on the attached Exhibit A) and the Outdoor Service Area, and a non-exclusive right of access for Rad Dads' employees, patrons and suppliers to and from the Restaurant Space across other portions of the Arena. Subject to City of Muskegon approval of architectural plans, Rad Dads' has the right to construct, at their sole cost, an outdoor deck above their outdoor patio area. b. The limited nonexclusive right to use other areas in the Arena that would not interfere with the management and operation of the Arena by the City of Muskegon, excluding only the area identified as the "Rad Dads' Space" in the Agreement for Management of a Portion of a Licensed Premises Pursuant to Participation Agreement between the City of Muskegon and Rad Dads', LLC (depicted on Exhibit B). c. Notwithstanding the foregoing, during events held at the Arena when it is open to the public, the term exclusive use shall be construed to allow patrons to enter and leave the Rad Dads' Space and all areas of the Arena licensed by the MLCC. 3. TERM. This Agreement shall become effective upon execution with the contingencies provided for herein. The initial term of this Agreement shall be for a period of five (5) years commencing with the approval of the MLCC of the Participation Agreement/Participation Permit Application with a term extension equal to the time from such approval to the date a certificate of occupancy is issued by the City of Muskegon, a license is issued by the Muskegon County Department of Health or the MLCC has approved the licensed space identified on Exhibit A, whichever date is latest. If Rad Dads' is forced to close for more than ten (10) days, the City of Muskegon will reimburse or credit Rad Dads' $1,500 per day, for every day of such closer. The monthly Use Payment shall commence on the first day of the month following such approval. In addition, Rad Dads' shall have three (3) additional five (5) year options. In the absence of any 2 other provision herein, Rad Dads' shall be provided written notice of any default and afforded not less than sixty (60) days to cure the default. Provided that Rad Dads' is not in material default of this Agreement at the time of expiration of the initial term or any option term, Rad Dads' shall provide the City of Muskegon with written notice of its intent to renew this Agreement in writing no later than sixty (60) days prior to the expiration of the initial term and any renewal term provided, however, that said sixty (60) days shall not begin to toll until sixty (60) days after the City of Muskegon has provided Rad Dads' with written notice of the expiration of the initial term or any renewal term. 4. CONSTRUCTION AND IMPROVEMENTS: USAGE. The City of Muskegon has completed significant investments to create existing restaurant space that Rad Dads' will occupy. Rad Dads' agrees to accept this space in "as is" condition. In exchange for accepting the Rad Dads' space, Rad Dads' shall imediately pay $50,000 to the City of Muskegon. Rad Dads' further agrees to pay the City of Muskegon an additional-$4,940.53 on the 15th of each calander month, beginning January 15, 2022, and continuing through December 15, 2031. Rad Dads' has the right to pay down the principal at any point during the term of this agreement in payments of at least $10,000. The debt shall be amortizated as follows: Date Interest Principal Balance Jan,2022 $1,627 $3,314 $484,663 Feb,2022 $1,616 $3,325 $481,338 Mar, 2022 $1,604 $3,336 $478,002 Apr, 2022 $1,593 $3,347 $474,655 May, 2022 $1,582 $3,358 $471,296 Jun,2022 $1,571 $3,370 $467,927 Jul, 2022 $1,560 $3,381 $464,546 Aug, 2022 $1,548 $3,392 $461,154 Sep,2022 $1,537 $3,403 $457,751 Oct, 2022 $1,526 $3,415 $454,336 Nov, 2022 $1,514 $3,426 $450,910 Dec, 2022 $1,503 $3,437 $447,472 2022 $18,782 $40,505 $447,472 Jan,2023 $1,492 $3,449 $444,024 Feb,2023 $1,480 $3,460 $440,563 Mar, 2023 $1,469 $3,472 $437,091 3 Date Interest Principal Balance Apr, 2023 $1,457 $3,484 $433,608 May, 2023 $1,445 $3,495 $430,112 Jun,2023 $1,434 $3,507 $426,606 Jul, 2023 $1,422 $3,519 $423,087 Aug,2023 $1,410 $3,530 $419,557 Sep,2023 $1,399 $3,542 $416,015 Oct, 2023 $1,387 $3,554 $412,461 Nov, 2023 $1,375 $3,566 $408,895 Dec, 2023 $1,363 $3,578 $405,318 2023 $17,132 $42,155 $405,318 Jan,2024 $1,351 $3,589 $401,728 Feb,2024 $1,339 $3,601 $398,127 Mar, 2024 $1,327 $3,613 · $394,513 Apr, 2024 $1,315 $3,625 $390,888 May, 2024 $1,303 $3,638 $387,250 Jun,2024 $1,291 $3,650 $383,601 Jul, 2024 $1,279 $3,662 $379,939 Aug,2024 $1,266 $3,674 $376,265 Sep,2024 $1,254 $3,686 $372,578 Oct, 2024 $1,242 $3,699 $368,880 Nov, 2024 $1,230 $3,711 $365,169 Dec, 2024 $1,217 $3,723 $361,446 2024 $15,414 $43,872 $361,446 Jan,2025 $1,205 $3,736 $357,710 Feb,2025 $1,192 $3,748 $353,962 Mar, 2025 $1,180 $3,761 $350,201 Apr, 2025 $1,167 $3,773 $346,428 May, 2025 $1,155 $3,786 $342,642 4 Date Interest Principal Balance Jun,2025 $1,142 $3,798 $338,844 Jul, 2025 $1,129 $3,811 $335,033 Aug,2025 $1,117 $3,824 $331,209 Sep,2025 $1,104 $3,837 $327,372 Oct, 2025 $1,091 $3,849 $323,523 Nov, 2025 $1,078 $3,862 $319,661 Dec, 2025 $1,066 $3,875 $315,786 2025 $13,627 $45,660 $315,786 Jan,2026 $1,053 $3,888 $311,898 Feb,2026 $1,040 $3,901 $307,997 Mar, 2026 $1,027 $3,914 $304,083 Apr, 2026 $1,014 $3,927 $300,156 May, 2026 $1,001 $3,940 $296,216 Jun,2026 $987 $3,953 $292,263 Jul, 2026 $974 $3,966 $288,297 Aug,2026 $961 $3,980 $284,317 Sep,2026 $948 $3,993 $280,325 Oct, 2026 $934 $4,006 $276,319 Nov, 2026 $921 $4,019 $272,299 Dec, 2026 $908 $4,033 $268,266 2026 $11,767 $47,520 $268,266 Jan,2027 $894 $4,046 $264,220 Feb,2027 $881 $4,060 $260,160 Mar, 2027 $867 $4,073 $256,087 Apr, 2027 $854 $4,087 $252,000 May, 2027 $840 $4,101 $247,899 Jun, 2027 $826 $4,114 $243,785 Jul, 2027 $813 $4,128 $239,657 5 Date Interest Principal Balance Aug,2027 $799 $4,142 $235,516 Sep,2027 $785 $4,155 $231,360 Oct, 2027 $771 $4,169 $227,191 Nov,2027 $757 $4,183 $223,007 Dec, 2027 $743 $4,197 $218,810 2027 $9,830 $49,456 $218,810 Jan,2028 $729 $4,211 $214,599 Feb,2028 $715 $4,225 $210,374 Mar, 2028 $701 $4,239 $206,135 Apr, 2028 $687 $4,253 $201,881 May, 2028 $673 $4,268 $197,614 Jun,2028 $659 $4,282 $193,332 Jul, 2028 $644 $4,296 $189,036 Aug,2028 $630 $4,310 $184,725 Sep,2028 $616 $4,325 $180,401 Oct, 2028 $601 $4,339 $176,061 Nov, 2028 $587 $4,354 $171,708 Dec, 2028 $572 $4,368 $167,340 2028 $7,816 $51,471 $167,340 Jan,2029 $558 $4,383 $162,957 Feb,2029 $543 $4,397 $158,559 Mar, 2029 $529 $4,412 $154,147 Apr, 2029 $514 $4,427 $149,721 May, 2029 $499 $4,441 $145,279 Jun,2029 $484 $4,456 $140,823 Jul, 2029 $469 $4,471 $136,352 Aug,2029 $455 $4,486 $131,866 Sep,2029 $440 $4,501 $127,365 6 Date Interest Principal Balance Oct, 2029 $425 $4,516 $122,849 Nov,2029 $409 $4,531 $118,318 Dec, 2029 $394 $4,546 $113)72 2029 $5,719 $53,568 $113,772 Jan,2030 $379 $4,561 $109,210 Feb,2030 $364 $4,576 $104,634 Mar, 2030 $349 $4,592 $100,042 Apr, 2030 $333 $4,607 $95,435 May, 2030 $318 $4,622 $90,813 Jun,2030 $303 $4,638 $86,175 Jul, 2030 $287 $4,653 $81,522 Aug,2030 $272 $4,669 $76,853 Sep, 2030 $256 $4,684 $72,169 Oct, 2030 $241 $4JOO $67,469 Nov, 2030 $225 $4)16 $62,753 Dec, 2030 $209 $4)31 $58,022 2030 $3,536 $55,750 $58,022 Jan,2031 $193 $4)47 $53,274 Feb, 2031 $178 $4,763 $48,511 Mar, 2031 $162 $4)79 $43,733 Apr, 2031 $146 $4,795 $38,938 May, 2031 $130 $4,811 $34,127 Jun, 2031 $114 $4,827 $29,300 Jul, 2031 $98 $4,843 $24,458 Aug,2031 $82 $4,859 $19,599 Sep, 2031 $65 $4,875 $14,723 Oct, 2031 $49 $4,891 $9,832 Nov,2031 $33 $4,908 $4,924 7 Date Interest Principal Balance Dec, 2031 $16 $4,924 $0 2031 $1,265 $58,022 $0 Subject to further MLCC approval, Rad Dads' may increase the dimensions of the outdoor service area to further extend the space along the exterior of the Rad Dads' space. Rad Dads' would be responsible for any costs associated with such expansion, and such expansion would have no impact of the calculation of monthly use payment. Rad Dads' shall use and manage the Rad Dads' Space for purposes of operating a sports bar and restaurant operation, including food and beverage service preparation ("Restaurant"). 5. RAD DADS' COMPENSATION. In consideration for the management and operation of the Restaurant and the Rad Dads' Space, Rad Dads' shall retain 100% of the net profits generated from the operation of the Restaurant, including the sale of alcoholic beverages under the License, non-alcoholic beverages, food, merchandise and cover charges and other goods and services which would not constitute a violation of MLCC rules. The term "net profits" as used in this Agreement shall mean all revenue derived from the operation of the Restaurant less all expenses related to the operation of the Restaurant. During the term of this Agreement, at the request of the City of Muskegon, Rad Dads' shall deliver to the City of Muskegon an income statement certified by an officer or manager of Rad Dads' setting forth its net profits. In the event the City of Muskegon, in its sole discretion, needs additional information to clarify information, Rad Dads' will grant to the City of Muskegon the right to have access to all books, accounts, records and reports, that may be kept by Rad Dads' showing all financial information related to the operation of the Restaurant. If a review discloses any discrepancy in the net profits, the parties shall mutually agree on a Certified Public Accountant to review the financial statements and records of Rad Dads' and determine the net profits. Such determination shall be binding on the parties. City agrees that any financial information provided will be directed to the City Attorney and not shared with any other City employees unless as absolutely necessary. In further consideration for the management and operation of the Restaurant and the Rad Dads' Space, Rad Dads' shall have the ability to host special events in the the Arena. The events shall follow the City of Muskegon's established policy for hosting a third-party event, with the exception that Rad Dads' will not pay a facility rental fee and their event attendees will not pay a ticketing fee unless the event charges attendees in excess of $15 per attendee. Rad Dads' will pay for all labor and expenses necessary for hosting any third-party event. Rad Dads' 8 ability to host a third-party event shall be limited to availability of the Arena. Availability shall be at the discretion of the City of Muskegon. Rad Dads' is limited to hosting three one-day third-party events in a calander year. 6. CALCULATION OF MONTHLY USE PAYMENT; CREDIT. In consideration of this Agreement, Rad Dads' shall pay monthly Use Payment to the City of Muskegon in an amount equal to 4,750; provided, however, that beginning with the sixth year, the base use payment will increase to $5,000, and beginning with the 11 th year, the base use payment will increase to $5,250, and and beginning with the 16th year, the base use payment will increase to $5,500. The City of Muskegon agrees to host a minimum of 40 game days in a calander year. A single regular season or post-season professional sports game shall constitute a game day. Additionally, an amateur sports tournament consisting of a minimum of six (6) amateur games in a day shall consititue a game day. In the event the Arena hosts less than 30 game days in a calander year, Rad Dads' shall have the option to cancel this Agreement with 30 days' notice to the City of Muskegon. The City of Muskegon may host events that require the temporary closure of Rad Dads'. In the event that Arena events require the closure of Rad Dads' for non- ticketed events in excess of 20 hours in a calander year, Rad Dads' shall receive a Use Payment credit of $250 for each hour of closure in excess of 20 hours. In the event that Arena requires the closure of Rad Dad's for ticketed events such as concerts and other shows, Rad Dad's may request that the City reimburse Rad Dads' with $1.00 per ticket from the ticket service fees. City will add the $1.00 per ticket fee to any ticket sold for such event. 7. ADJUSTMENT OF MONTHLY USE PAYMENT. The monthly Use Payment shall be adjusted upon the following events and upon the following terms: i. Professional Hockey, Football, and Soccer Games. Rad Dads' will work with the Arena's professional hockey, football, and soccer tenants, at its sole discretion, to compensate the tenants for partnerships during their ticketed events. In the event that Rad Dads' is unable to reach partnership agreement with one or more of the these tenants, the additional monthly use payments \Viii be implemented as follows: on days when professional hockey,football, or soccer games take place in the Arena, the Use Payment shall be increased and adjusted in the amount of $500 per Hockey event day and $400 per Football and Soccer event day. Rad Dads will purchase 25 sets of season tickets from the Muskegon Lumberjacks per season. Rad Dads' will pay the West Michigan lronmen $500 per home game in the form of a gift card in exchange for hosting the official after party at Rad Dad's on game days. Rad Dads' will purchase$200 worth of game tickets from the Muskegon Risers per home game. 9 ii. Suspension of Liquor License. In the event that the License issued by the MLCC shall be suspended for reasons other than rule violations by Rad Dad's or its patrons, Use Payments shall be suspended pro rata during such suspension term. 8. CONTRIBUTION TO OVERHEAD AND MAINTENANCE. Rad Dads' shall also pay to the City of Muskegon a contribution for overhead common utilities and maintenance an amount equal to $1,500.00 per month. This contribution shall be paid in the form of a Use Credit identified in Paragraph 6 herein until such time as the Use Credit is fully amortized. 9. UTILITY COSTS. As part of the Contribution to Overhead and Maintenance identified in Section 8 of this agreement, the City of Muskegon shall pay all charges for metered gas, electricity, water, power, cable television, and internet service rendered or supplied upon or in connection with the Rad Dads' Space. Rad Dads' shall pay all charges for telephone service used in connection with the Rad Dads' Space. 10. ASSIGNMENT. Rad Dads' shall not assign this Agreement without prior written consent of the City of Muskegon and the MLCC. Such approval and consent shall not unreasonably be withheld by the City of Muskegon and shall be subject to the rules and regulations of the MLCC. 11. OBLIGATIONS OF THE CITY OF MUSKEGON. To the extent required by MLCC rules, the City of Muskegon shall purchase all alcoholic and food inventory to be used by the Restaurant. The City of Muskegon shall furnish "janitorial services" for the exterior of the building and in lobby areas and restrooms used by the public, exclusive of those areas used and managed by Rad Dads'. The City of Muskegon agrees to maintain in satisfactory working order, all public ways and structures of the Arena, including plate glass, roof, and outer walls and heating, electrical and plumbing supply sites, air conditioning and hot water supply units. The City of Muskegon agrees to allow use of its dumpsters by Rad Dads', and the cost of such service shall be included in Section 8 of this Agreement. The City of Muskegon agrees to be responsible for any structural repairs, replacements or changes in the Arena which affect the Rad Dads' Space. 12. OBLIGATIONS OF RAD DADS'. Rad Dads' shall reimburse the City of Muskegon for all alcoholic and food inventory purchased by the City of Muskegon for the Restaurant within 30 days of receipt of an invoice from the City of Muskegon. Rad Dads' agrees that it will pay all expenses in connection with the use and management of the Rad Dads' Space and fixtures, including, but not limited to, all rights and privileges granted, including all metered utility services (e.g. electrical, water and sewer service) and all taxes, permits, fees, license fees and assessments lawfully levied or assessed upon Rad Dads' personal property or upon its use of possession of the Rad Dads' Space and fixtures. Except for 10 the License, Rad Dads' agrees to secure all permits and licenses required related to its use of the Rad Dads' Space. Rad Dads' agrees that it will at all times maintain the Rad Dads' Space and fixtures in a neat, clean, safe, sanitary and orderly condition, and shall provide janitorial services with respect thereto. Rad Dads' shall provide for the sanitary handling and disposal of trash and other refuse from its operation in a manner satisfactory to the City of Muskegon. Rad Dads' will make no structural changes or additions to the Rad Dads' Space without first obtaining written approval from the City of Muskegon. Rad Dads' agrees to provide and pay for any and all decorations to the Rad Dads' Space. Rad Dads' shall provide the following services from the Rad Dads' Space at all times during the term of this Agreement at its sole cost and expense: a. Rad Dads' shall furnish, at its expense, all service equipment of every sort (such as silverware, linen, glassware, crockery, utensils, pots and pans, and additional equipment), which may be required for use in Rad Dads' operation and which is not already presently located in the Rad Dads' Space. b. Rad Dads' shall undertake to comply with all MLCC rules. c. Rad Dads' shall cooperate with the City of Muskegon in securing all permits and licenses required by any public agency, including the License issued by the MLCC in connection with the operation of the Arena as a sports and entertainment venue. d. Rad Dads' shall carry workers compensation insurance in the amounts required by state law for all employees hired by Rad Dads' to work in the Rad Dads' Space. 13. ORDINANCES AND STATUTES. Rad Dads' shall comply with all statutes, ordinances and requirements of all municipal, state and federal authorities now in force or which may be in force, pertaining to the premises, occasioned by or affecting the use there of by Rad Dads'. The commencement or pendency of any state or federal court abatement proceeding affecting the use of the Rad Dads' Space shall, at the option of the City of Muskegon, be deemed a breach hereof. The City of Muskegon represents and warrants that the Arena shall be in compliance with the Americans with Disabilities Act, and its regulation, as of the commencement of this Agreement. 14. MAINTENANCE, REPAIRS, ALTERATIONS. Rad Dads' shall, at its expense and at all times, maintain the Rad Dads' Space in good and safe condition, including plate glass, electrical wiring, plumbing and heating installations. Rad Dads' shall also maintain in good condition such portions adjacent to the Arena within the Rad Dads' Space, such as sidewalks, driveways, lawns and shrubbery. 11 15. ENTRY AND INSPECTION. Rad Dads' shall permit the City of Muskegon or the City of Muskegon's agents to enter upon the Rad Dads' Space at reasonable times for the purpose of performing maintenance and making repairs and replacement in any case where the City of Muskegon is obligated, and in any other case where the City of Muskegon determined that it was necessary to do so in order to preserve the structural safety of the Rad Dads' Space to correct any condition likely to cause injuries or damages to persons or property. 16. DAMAGE OR DESTRUCTION OF PREMISES. If by reason of any cause the Rad Dads' Space is damaged to such an extent that the Rad Dads' Space is unusable in whole or in substantial part, then: a. If the repairs and rebuilding necessary to restore the Rad Dads' Space to its condition prior to the occurrence or the damage can be in the reasonable judgment of Rad Dads' be completed within ninety (90) days from the date on which the damage occurred, Rad Dads' shall so notify the City of Muskegon in writing and shall proceed promptly with such repairs and rebuilding, and in such event the use of said premises shall be abated for the period from the date of the occurrence of such damage to the date upon which such repairs and rebuilding are completed; and b. If such repairs and rebuilding cannot, in the reasonable judgment of Rad Dads', be completed within ninety (90) days, the City of Muskegon and Rad Dads' can mutually agree either to: • Have Rad Dads' proceed promptly with said repairs and rebuilding, in which event the said use shall be abated; or • To terminate this Agreement. 17. RISK OF LOSS. During the term of this agreement, and any extension or renewal thereof, the risk of loss with respect to all risks insurable under a fire and extended coverage insurance policy meeting the requirements of the laws of the State of Michigan, together with the risk of loss with respect to all uninsurable losses to the premises which are subject to the control or prevention by Rad Dads', shall rest upon Rad Dads'. 18. SUBROGATION. Rad Dads', its officers, agents or employees shall not be liable for damage to the Rad Dads' Space or for interruption of Use Fees resulting from any of the perils covered by fire and extended coverage insurance, or which would be covered if such insurance were in force, and the City of Muskegon agrees not to sue for such damage and that every applicable policy of insurance will contain or be endorsed with the standard waiver of subrogation clause. The City of Muskegon shall not be liable for damage to the property or business of Rad Dads' in or on the Rad Dads' Space resulting from any of the perils covered 12 1 if such insurance were in force) and Rad Dads agrees not to sue for such damage and that every applicable policy of insurance will contain or be endorsed with the standard waiver of subrogation clause. 19. INSURANCE. Rad Dads>, at its expense shall maintain general liability 1 insurance insuring the City of Muskegon and Rad Dads' with minimum coverage as follows: $1,000,000.00. Rad Dads' shall provide the City of Muskegon with a Certificate of Insurance showing the City of Muskegon as additional insured. The Certificate shall provide for a thirty (30) day written notice to the City of Muskegon in the event of cancellation or material change of coverage. To the maximum extent permitted by insurance policies, which may be owned by the City of Muskegon or Rad Dads' Rad Dads' and the City of Muskegon for the 1 1 benefit of each other, waive any and all rights of subrogation, which might otherwise exist. The City of Muskegon agrees to notify Rad Dads' in writing as soon as practicable of any claim, demand or action arising out of an occurrence 1 covered, and to cooperate with Rad Dads in the investigation and defense of 1 such claim. Rad Dads and the City of Muskegon agree that each insurance policy shall provide for a minimum of thirty (30) days written notice of cancellation to the City of Muskegon. Rad Dads 1 shall also be responsible for a portion of the cost of the liquor liability insurance purchased by the City of Muskegon for the Arena. Rad Dads' cost is estimated at $1,500 annually, and is incorporated as a cost to overhead and maintenance in Section 8 of this agreement. 20. SIGNS. The City of Muskegon and Rad Dads' shall cooperate to secure maximum signage area for Rad Dads' which shall be reasonable commensurate with its exclusive space. All signage shall be in conformance with applicable 1 laws and statutes and Rad Dads shall not construct the signage without the prior written consent of the City of Muskegon which consent shall not unreasonably be withheld or delayed. Rad Dads' agrees that no signage will be added to the Rad Dads' space that specifically advertises any third-party to the non-exclusive areas of the Arena as identified in Section 2(b) of this Agreement. 21. ABANDONMENT OF RAD DADS' SPACE. If Rad Dads' shall abandon or vacate the Rad Dads' Space, or be dispossessed by process of law, or otherwise, the City of Muskegon shall have the right to declare this Agreement is terminated. In such event, any personal property belonging to Rad Dads' left within the Rad Dads' Space shall be deemed to be abandoned, and the City of Muskegon shall be permitted to dispose of such personal property as it deems appropriate. 22. INSOLVENCY. In the event that a receiver shall be appointed to take over the Rad Dads' business, and such receivership is not dismissed within sixty (60) days or in the event that the Rad Dads' shall make a general assignment for the benefit of creditors, or Rad Dads' shall take or suffer any action under any insolvency or bankruptcy act, the same shall constitute breach of this Agreement by Rad Dads'. 13 23. TERMINATION OF AGREEMENT. Subject to the provisions in Paragraph 25, The City of Muskegon, at its option, may declare this Agreement terminated in its entirety upon the happening of any one or more of the following events: a. If the any expenses, fees, charges, and/or other money payments for which Rad Dads' is financially responsible, shall be unpaid thirty (30) days from the date that they become due; b. If Rad Dads' abandons the Rad Dads' Space for a period of thirty (30) days at any one time, except when such abandonment and cessation is due to fire, earthquake, governmental action, default of the City of Muskegon, or other cause beyond it control; c. If Rad Dads' shall use or permit the use of the Rad Dads' Space at any time for any purpose for which the use was not authorized by this Agreement or by a subsequent written agreement between the parties after written notice and opportunity to cure; and d. If Rad Dads' shall use or permit the use of the Rad Dads' Space in violation of any law, rule or regulation to which Rad Dads' had agreed in this Agreement to conform after written notice and opportunity to cure. 24. REMEDIES OF OWNER ON DEFAULT. In the event of any material breach of this Agreement by Rad Dads', the City of Muskegon may, at its option, terminate this Agreement and recover from Rad Dads': (a) the worth at the time of award of the unpaid monthly Use Payment which would have been earned at the time of termination; (b) the worth at the time of award of the amount by which the unpaid monthly Use Payment which would have been earned after termination until the time of the award exceeds the amount of such loss of use that the Rad Dads' proves could have been reasonably avoided; (c) the worth at the time of award of the amount by which the unpaid monthly Use Payment for the balance of the term after the time of award exceeds the amount of such loss of use that Rad Dads' proves could be reasonably avoided. The City of Muskegon may, in the alternative, continue this Agreement in effect, as long as the City of Muskegon does not terminate Rad Dads' right to use and management, and the City of Muskegon may enforce all his rights and remedies under this Agreement, including the right to recover the monthly Use Payment under this Agreement, if said breach continues, the City of Muskegon may at any time thereafter, elect to terminate this Agreement. Nothing contained herein shall be deemed to limit any other rights or remedies which the City of Muskegon may have. 25. RIGHT TO CURE. In addition to the rights herein before set forth, Rad Dads' shall have the right to contest any allegation of material breach in the appropriate court in Muskegon County, Michigan. In the event of an adjudication of a 14 material default of this agreement by such court, the relief shall provide that Rad Dads' shall have 30 days from the date of such adjudication to cure the default. 26. RESERVATION OF RIGHTS BY THE CITY OF MUSKEGON. a. The City of Muskegon reserves the right to further develop or improve the Arena as it sees fits, regardless of the desires or view of Rad Dads', so long as the improvements do not encroach into the existing footprint or operations of Rad Dads'. b. The City of Muskegon reserves the right to adopt, from time to time, reasonable rules and regulations for the operation of the Arena which are not inconsistent with the provisions of this Agreement. Rad Dads' and its agents, employees, invitees, and licenses shall comply with all those rules and regulations. 27. SURRENDER AND HOLDING OVER. Rad Dads' agrees that at the expiration or termination of this Agreement, it will quit and surrender the Rad Dads' Space in good state and condition, reasonable wear and tear excepted, and also excepting damage arising from acts, events or conditions beyond the control of Rad Dads', and that Rad Dads' shall forthwith remove all equipment trade fixtures and personal property belonging to it. Rad Dads' shall give the City of Muskegon the first right of refusal to purchase any equipment or trade fixtures purchased by Rad Dads'. Rad Dads' further agrees that all structures and improvements on the Rad Dads' Space and all fixtures in Exhibit B are the property of the City of Muskegon, shall remain upon the Rad Dads' Space, and shall be in good usable order and condition, with allowance for reasonable wear and tear and damage by the elements, and also excepting damage arising from acts, events and conditions beyond the control of Rad Dads'. The City of Muskegon shall have the right upon such expiration or termination to enter upon and take possession of such property. 28. GENERAL PROVISIONS. a. Governing Law. This Agreement is executed in accordance with, shall be governed by, and construed and interpreted in accordance with the laws of the State of Michigan. b. Entire Agreement. This Agreement shall constitute the entire agreement, and shall supersede any other agreements, written or oral, dated prior to the execution of this Agreement, and any contemporaneous or prior negotiations and representations that may have been made or entered into, by and between the parties with respect to the subject matter of this Agreement and shall not be modified or amended except in a subsequent writing signed by the party against whom enforcement is sought. 15 c. Binding Effect. This Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the parties and their respective legal representatives, permitted successors and assigns. d. Counterparts. This Agreement may be executed in counterparts, and each set of duly delivered identical counterparts which includes all signatories shall be deemed to be one original document. e. Full Execution. This Agreement requires the signature of both parties. Until fully executed, on a single copy or in counterparts, this Agreement is of no binding force or effect and if not fully executed, this Agreement is void. f. Non-Waiver. No waiver by any party of any provision of this Agreement shall constitute a waiver by such party of such provision on any other occasion or a waiver by such party of any other provision of this Agreement. g. Severability. Should any one or more of the provisions of this Agreement be determined to be invalid, unlawful, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be impaired or affected. h. Assignment or Delegation. Except as otherwise specifically set forth in this Agreement, neither party shall assign all or any portion of its rights and obligations contained in this Agreement without the express prior written approval of the other party, which approval may not be unreasonably withheld. i. Venue. The parties agree that for purposes of any dispute in connection with this agreement, the Muskegon County Circuit Court shall have exclusive personal and subject matter jurisdiction and venue. j. Terms. Nouns and pronouns will be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the person or persons, firm or corporation may in the context require. k. Fax Signatures. The parties have agreed that fax copies of the signed Agreement shall constitute a valid, enforceable agreement. Each party will mail originals to the respective party upon their execution of this Agreement. I. Notices. Any notice which either party may or is required to give, shall be given by mailing the same, postage prepaid, to Rad Dads' at the address shown above, or the City of Muskegon at the address shown above, or at other such places as may be designated by the parties from time to time. Notice shall be sent by regular first-class mail or by registered or certified mail, return receipt requested. 16 THE CITY OF ~ By: Name: r~ /~ Pt11'J bf) Title: C.l1 7 Mc-v-c..~ Date: Mw r \A J , 2022 ' RAD DADS' TACOS AND TEQUILA, LLC By: ~~ '---= ~ Name: Matt Gongalski - Title: Managing Member Date: ,-,,,,t~ :314' , 2022 17 Exhibit A Rad Dads' Space '1'\ BLACK ANODIZEDAUJMINUM AND GLASS ~ ENTRY DOOR MEDIUM STILES, 3"-0-WX T--1."H ©- TASTING ROOM-LIGHT GRIND EXISTING Fl.DOR, EXPOSED CONC. CEIUNG, CORRUGATED METAL WALL PANEL SOUTH © BLACKENED STEEL EXPANDED MESH IN STEEL FRAME MOUNTED ON OECK48" HIGH 90- LONG ~ FRONT BAR- BLACK STAINED CONCRETE TOP, ~ CEMENT BO FRONT WITH STEEL FOOT REST/BASE © DARK GREY COMPOSITE DECKING ITREXl ON NON-COMB ® WALL r,;'\ \!;/ BLAC~ STEEL HANDRAIL Z-X 2" SQUARE TUBING ON ANO LEO ACCENT LIGHTING AND 18" HIGH GLASS SNEEZE GUARD FRAMING.10"HIGHABOVECONCOURSEWITH BLACKENED CUSTOMSTEELAND GLASS DOORS IN 9"--1."HX 16"-0"L POSTS !i-0 O.C. MOUNTED TO DECK '131ss RlOD PREP COUNTER, 3?(10' PASS THRU © STEEL EDGE PLATEANO DECORATIVE LEO LIGHTING BELOW. © OPENING. ® TACO ASSEMBLY HALL- CLEAN AND POLISH EXlSTING ~ OPENING IN BACK WALL BLACKENED STEEL EXPANDED MESH IN STEEL FRAME. OPTION A-FOLDING "HANGAR" STYLE DOOR WITH GLASS TERRAZZO Fl.OCR. CORRUGATED METAL WALL PANEL '14\SS BACK COUNTER, EXPAtroED METAL MESH FROM DECK TO UNDERSIDEOFROOF-10--trHX IZ--0" LONG. OPTION B-GLASSANO AUJMINUM OH SECTIONAL DOOR. SOUTH AND EAST WALL, "POLAROID" LEO CHANDELIER 'I::;/ LIQOUR DISPLAY SHELVING WITH ACCENT LIGH'IS GLASS VESTIBULE BEHIND AT ENTRY. @ 9"--1."H X 16"-II" L EXISTING BRICK VENEER WALL CLEAN AND POINT AS ® FRONT BAR· BLACKSTAINED CONCRETE TOP, CEMENT @ EXHAUST HOOD AND FAN COORDINATE WITH =T~:~~~EEL FOOT REST/BASEAND LED RlOD SERVICE EQUIPMENT NECESSARY r,;:,, OFFICE- PAINTED GYP WALLS EXlSTING CEILNG, ,.r ····~-·-····fDJ···~ - [ ] ◊°<:-·•-. \!::, GLASS DOOR AND SIDE LIGHT <>;}::.>> @ WALK-IN COOLER/FREEZER ·- . ' - <VI~ . '>>,.:~ ·-:' >. f.iill TOILET ROOMS - EXISTING CONC FLOOR LIGHT \!::, POLISH, PORCELAIN TILE AT WET WALLS, PROVIDE EXAUST i ! \~?»- >~: '.:··· EXlSTIN~- • . @ STEEL AND EXPANDED METAL GATE ~ "t.JVEWAU: CILANTRO GARDEN ON EXISTING V◊ ◊"◊ s° /4·• ~ WALL r--,1_8,----! ~-0-V:> \./ , • CONCOURSE MAINTAIN 10· -.-······-··-------········-,.-- . ........ - .---- , -----".' ·-··,·-·-:i------ . .... _.,_ . . +; <~ . M LJ _ _l_;_____:_@ fAPEWALL MOSAIC -·ART 'iNs'TAL.LATION FO . . : : I: • i tJ :rl.IJ, \_, 9.). CLEARWIDTH , , . i . ;-- MULT17°LOR~CASSETT~TA,P ~ , . . , , 7. I , : I I I' ~ (Y-◊ :I ID ·B ' : ' ~~~:} ,. _ g:? I I U I 5. l i :: ; ~ : : ~ i □~ ~ ~,',..,◊. >. :i ! e ,.q'AS}lf:JG ):_ TA,CO ASSEMaBLY Hfl1L .,ROOWV\.} ___ ! : f: ! : t : : : : q_ er ~ <>•-.... ~~r. I U I ~ I I I I : : p· <!<? y<> ! ; : : I : ; I ' '-L ~ - _.,J-' ~ LJ <)«> L - - - (;v::) O,<_,) @) ;::~ ov6 I s ARENA ~I ~ · -" - - ENTRY 0~ BARCADE "1 ~ (>-0 c_ .. " r-7 r-,r-1 r-,r-1 r-1 0◊ 3 L__D__JL_Il_JL_Il..J <)v(> OFF. .- -. - -. -·. ~ e ~ 0-0 ,o,<_) ... , KITCHEN •-------" ~ • N ·~-- ••--,., ···•-• . -·- r . •. ,:~ c. I '~~--i- -· -·-· . -:---r-- :·-'~J~~=~= l FLOOR PLAN :I 1 '.. : 18 (I) (.) <( cu .... C. :a .c: "'cu C 0\ ~ ~ <( Agreement for Management of a Portion of a Licensed Premises Pursuant to Participating Agreement THIS AGREEMENT is made and executed as of between the _Jl/\,::,,_y __) _6 \ ~ 2022 City of Muskegon a Michigan municipal corporation 933 Terrace St. Muskegon, Ml49440 (hereinafter "City of Muskegon"), and Carlisle's Goods & Leisure, LLC a Michigan limited liability company 14716 Leonard Rd. Spring Lake, Ml 49456 (hereinafter "Carlisle") RECITALS A. The City of Muskegon owns the Mercy Health Arena located at 470 W. Western Avenue, Muskegon, Michigan 49440 ("Arena"). The City of Muskegon is responsible for operation, maintenance and improvements for the Arena. B. The City of Muskegon has the authority to authorize use of portions of the Arena on an exclusive and non-exclusive basis. C. The City of Muskegon has applied for a Class C liquor license and related permits issued by the Michigan Liquor Control Commission ("MLCC") for providing a restaurant, concessions, bar and bar service throughout the Arena (collectively the "License"). D. The City of Muskegon proposes entering into a Participating Agreement with Carlisle pursuant to Rule 436.1401 to permit the limited use of the license, subject to and only upon the approval of the MLCC, upon the terms and conditions of this Agreement. E. In connection with this Agreement, the City of Muskegon is willing to grant to Carlisle, and Carlisle desires to receive from the City of Muskegon, the exclusive right to use and manage that portion of the Arena to be known as the Carlisle Area (See attached Exhibit A) for the operation of a certain restaurant and bar business commonly known as the "Carlisle's Goods & Leisure", subject to and in accordance with the terms and conditions of this Agreement. In consideration of the premises and the mutual promises set forth herein, the parties agree as follows: 1. CARLISLE PARTICIPATING AGREEMENT. Upon execution of this Agreement, the parties agree to act in good faith and to utilize their best efforts to make application to the MLCC for a Participating Agreement/Participation Permit Application pursuant to Rule 436.1041. Carlisle will operate a full-service restaurant, bar and bar service within the Carlisle Space as hereinafter defined. The parties acknowledge that this Agreement is contingent upon and shall only become effective upon approval of the MLCC of the Participating Agreement/Participation Permit Application. 2. DESCRIPTION OF CARLISLE SPACE. Carlisle will have the right to use and manage the Carlisle Space and fixtures as follows: a. The exclusive right to use and manage the Carlisle Space (depicted on the attached Exhibit A) and the Outdoor Sidewalk Patio, and a non-exclusive right of access for Carlisle's employees, patrons and suppliers to and from the Restaurant Space across other portions of the Arena. b. The limited nonexclusive right to use other areas in the Arena that would not interfere with the management and operation of the Arena by the City of Muskegon, excluding only the area identified as the "Rad Dad's Space" in the Agreement for Management of a Portion of a Licensed Premises Pursuant to Participating Agreement between the City of Muskegon and Rad Dad's, LLC (depicted on Exhibit B). c. Notwithstanding the foregoing, during events held at the Arena when it is open to the public, the term exclusive use shall be construed to allow patrons to enter and leave the Carlisle Space and all areas of the Arena licensed by the MLCC. 3. TERM. This Agreement shall become effective upon execution with the contingencies provided for herein. The initial term of this Agreement shall be for a period of five (5) years commencing with the approval of the MLCC of the Participating Agreement/Participation Permit Application with a term extension equal to the time from such approval to the date a certificate of occupancy is issued by the City of Muskegon, a license is issued by the Muskegon County Department of Health or the MLCC has approved the licensed space identified on Exhibit A, whichever date is latest. The monthly Use Payment shall commence on the first day of the month following such approval. In addition, Carlisle shall have six additional five (5) year options. In the absence of any other provision herein, Carlisle shall be provided written notice of any default and afforded not less than sixty (60) days to cure the default. Provided that Carlisle is not in material default of this Agreement at the time of expiration of the initial term or any option term, Carlisle shall provide the City of Muskegon with written notice 2 of its intent to renew this Agreement in writing no later than sixty (60) days prior to the expiration of the initial term and any renewal term provided, however, that said sixty (60) days shall not begin to toll until sixty (60) days after the City of Muskegon has provided Carlisle with written notice of the expiration of the initial term or any renewal term. 4. CONSTRUCTION AND IMPROVEMENTS: USAGE. Upon approval by the MLCC of the Participating Agreement, the City of Muskegon, at its sole cost and expense, will undertake construction of Carlisle Space improvements substantially in accordance with the plans, specifications and costs identified and attached hereto as Exhibit B. The City of Muskegon agrees to proceed in good faith and in a reasonable manner in order to complete the work and obtain all regulatory approvals and signoffs within 60 days of this agreement provided that an additional term of 120 days will be allowed for completion. Carlisle will repay the City of Muskegon the actual costs of the improvements within 90 days following the completion of the construction and issuance approval of the License, whichever occurs later. Upon completion of the construction, the City of Muskegon shall provide Carlisle with written confirmation of the amounts expended by the City of Muskegon under this Section 4. The total Cost of Improvements shall not exceed $650,000 unless mutually agreed to between the parties and, once repayment is made by Carlisle as set forth above, shall be credited against the Use Payments provided for in Paragraph 6. Carlisle shall use and manage the Carlisle Space for purposes of operating a sports bar and restaurant operation, including food and beverage service preparation ("Restaurant"). 5. CARLISLE'S COMPENSATION. In consideration for the management and operation of the Restaurant and the Carlisle Space, Carlisle shall retain 100% of the net profits generated from the operation of the Restaurant, including the sale of alcoholic beverages under the License, non-alcoholic beverages, food, merchandise and cover charges and other goods and services which would not constitute a violation of MLCC rules. The term "net profits" as used in this Agreement shall mean all revenue derived from the operation of the Restaurant less all expenses related to the operation of the Restaurant. During the term of this Agreement, Carlisle will deliver to the City of Muskegon by the 15th day of the end of each month an income statement certified by an officer or manager of Carlisle setting forth its net profits. Carlisle grants to the City of Muskegon the right at all reasonable times to have access to all books, accounts, records and reports, that may be kept by Carlisle showing all financial information related to the operation of the Restaurant. If a review discloses any discrepancy in the net profits, the parties shall mutually agree on a Certified Public Accountant to review the financial statements and records of Carlisle and determine the net profits. Such determination shall be binding on the parties. 3 6. MONTHLY USE PAYMENT. In consideration of this Agreement, Carlisle shall pay monthly Use Payment to the City of Muskegon in an amount equal to $3,645.83 during the initial Term. Provided, each subsequent five-year renewal option thereafter, the applicable monthly Use Payment will be adjusted as follows: a. Option #1 $4,229.17 b. Option #2 $4,666.67 C. Option #3 $4,958.33 d. Option #4 $5,250.00 e. Option #5 $5,541.67 f. Option #6 $5,833.33 Construction costs paid by Carlisle and/or reimbursed to the City of Muskegon, up to $650,000 as set forth in paragraph 4, will result in a use credit to Carlisle at the rate of $7.00 per month for each $1,000 of construction costs incurred together with interest on the unreimbursed construction costs calculated at the rate of 5% per annum. Any unused credit for the month shall roll over and be added to the total available use credit in subsequent months. These credits shall continue monthly for the term of this Agreement and any extensions thereof to and until such time as the use credit is fully utilized and amortized. 7. ADJUSTMENT OF MONTHLY USE PAYMENT. The monthly Use Payment shall be adjusted upon the following events and upon the following terms: i. Professional Hockey, Football 1 and Soccer Games. The amount of monthly use fee shall periodically increase during months when there occur in the Arena USHL hockey, professional football, and/or professional soccer games. The amount of such increase shall be the sum of $500 per USHL hockey event day, $400 per professional football event day and $400 per professional soccer event day that takes place at the Arena during a given month, and shall be paid with the payment of the following month's use payment. For example, if during the term of this Agreement there are five hockey events and two football events at the Arena during the month of January, Carlisle's use fee for the month of February would be increased by $3,300 ($500 x five hockey events ($2,500) + $400 x two football events ($800) = $3,300). Carlisle shall have no further obligation to provide financial support or sponsorship to any event using the Mercy Health Arena. If Carlisle can reasonably demonstrate that events held in the Arena other than USHL hockey, professional football, and professional soccer, negatively impact the gross sale of Carlisle, Carlisle shall not be obligated to pay a temporary rent increase for any such other events. ii. Suspension of Liquor License. In the event that the License issued by the MLCC shall be suspended, Use Payments shall be suspended pro rata during such suspension term. 4 8. CONTRIBUTION TO OVERHEAD AND MAINTENANCE. Carlisle shall also pay to the City of Muskegon a contribution for overhead utilities not separately metered and maintenance an amount equal to $1,750 per month during the initial Term. 9. UTILITY COSTS. City shall pay all charges for gas, electricity, water, power, telephone, cable television and internet service used, rendered or supplied upon or in connection with the Carlisle Space. City shall have the discretion to set the level of cable service provided within the Carlisle Space. Carlisle may request that the City upgrade such services, with the additional associated costs added to Carlisle's contribution to overhead and maintenance as outlined in Section 8 of this Agreement. 10. ASSIGNMENT. Carlisle shall not assign this Agreement without prior written consent of the City of Muskegon and the MLCC. Such approval and consent shall not unreasonably be withheld by the City of Muskegon and shall be subject to the rules and regulations of the MLCC. 11. OBLIGATIONS OF THE CITY OF MUSKEGON. The City of Muskegon shall purchase all alcoholic and food inventory to be used by the Restaurant. The City of Muskegon shall furnish "janitorial services" for the exterior of the building and in lobby areas and restrooms used by the public, exclusive of those areas used and managed by Carlisle. The City of Muskegon agrees to maintain in satisfactory working order, all public ways and structures of the Arena, including plate glass, roof, and outer walls and heating, electrical and plumbing supply sites, air conditioning and hot water supply units. The City of Muskegon agrees to allow use of its dumpsters by Carlisle, and the cost of such service shall be shared between The City of Muskegon and Carlisle. The City of Muskegon agrees to be responsible for any structural repairs, replacements or changes in the Arena which affect the Carlisle Space for its intended purpose. 12. OBLIGATIONS OF CARLISLE. Carlisle shall reimburse the City of Muskegon for all alcoholic and food inventory purchased by the City of Muskegon for the Restaurant within 15 days of receipt of an invoice from the City of Muskegon. Carlisle agrees that it will pay all expenses in connection with the use and management of the Carlisle Space and fixtures, including, but not limited to, all rights and privileges granted, including all taxes, permits, fees, license fees and assessments lawfully levied or assessed upon Carlisle's personal property or upon its use of possession of the Carlisle Space and fixtures. Except for the License, Carlisle agrees to secure all permits and licenses required related to its use of the Carlisle Space, including any other metered utility services provided to the Carlisle Space. Carlisle agrees that it will at all times maintain the Carlisle Space and fixtures in a neat, clean, safe, sanitary and orderly condition, and shall provide janitorial services with respect thereto. Carlisle shall provide for the sanitary handling and 5 disposal of trash and other refuse from its operation in a manner satisfactory to the City of Muskegon. Carlisle will make no structural changes or additions to the Carlisle Space without first obtaining written approval from the City of Muskegon. Carlisle agrees to provide and pay for any and all decorations to the Carlisle Space. Carlisle shall provide the following services from the Carlisle Space at all times during the term of this Agreement at its sole cost and expense: a. Carlisle shall furnish, at its expense, all service equipment of every sort (such as silverware, linen, glassware, crockery, utensils, pots and pans, and additional equipment), which may be required for use in Carlisle's operation and which is not already presently located in the Carlisle Space. b. Carlisle shall undertake to comply with all MLCC rules and shall not allow entertainment. c. Carlisle shall cooperate with the City of Muskegon in securing all permits and licenses required by any public agency, including the License issued by the MLCC in connection with the operation of the Arena as a sports and entertainment venue. d. Carlisle shall carry workers compensation insurance in the amounts required by state law for all employees hired by Carlisle to work in the Carlisle Space. 13. ORDINANCES AND STATUTES. Carlisle shall comply with all statutes, ordinances and requirements of all municipal, state and federal authorities now in force or which may be in force, pertaining to the premises, occasioned by or affecting the use there of by Carlisle. The commencement or pendency of any state or federal court abatement proceeding affecting the use of the Carlisle Space shall, at the option of the City of Muskegon, be deemed a breach hereof. The City of Muskegon represents and warrants that the Arena shall be in compliance with the Americans with Disabilities Act, and its regulation, as of the commencement of this Agreement. 14. MAINTENANCE, REPAIRS, ALTERATIONS. Carlisle shall, at its expense and at all times, maintain the Carlisle Space in good and safe condition, including plate glass, electrical wiring, plumbing and heating installations. Carlisle shall also maintain in good condition such portions adjacent to the Arena within the Carlisle Space, such as sidewalks, driveways, lawns and shrubbery. 15. ENTRY AND INSPECTION. Carlisle shall permit the City of Muskegon or the City of Muskegon's agents to enter upon the Carlisle Space at reasonable times for the purpose of performing maintenance and making repairs and replacement in any case where the City of Muskegon is obligated, and in any other case 6 where the City of Muskegon determined that it was necessary to do so in order to preserve the structural safety of the Carlisle Space to correct any condition likely to cause injuries or damages to persons or property. 16. DAMAGE OR DESTRUCTION OF PREMISES. If by reason of any cause the Carlisle Space is damaged to such an extent that the Carlisle Space is unusable in whole or in substantial part, then: a. If the repairs and rebuilding necessary to restore the Carlisle Space to its condition prior to the occurrence or the damage can be in the reasonable judgment of Carlisle be completed within ninety (90) days from the date on which the damage occurred, Carlisle shall so notify the City of Muskegon in writing and shall proceed promptly with such repairs and rebuilding, and in such event the use of said premises shall be abated for the period from the date of the occurrence of such damage to the date upon which such repairs and rebuilding are completed; and b. If such repairs and rebuilding cannot, in the reasonable judgment of Carlisle, be completed within ninety (90) days, the City of Muskegon and Carlisle can mutually agree either to: • Have Carlisle proceed promptly with said repairs and rebuilding, in which event the said use shall be abated; or • To terminate this Agreement. 17. RISK OF LOSS. During the term of this lease, and any extension or renewal thereof, the risk of loss with respect to all risks insurable under a fire and extended coverage insurance policy meeting the requirements of the laws of the State of Michigan, together with the risk of loss with respect to all uninsurable losses to the premises which are subject to the control or prevention by Carlisle, shall rest upon Carlisle. 18. SUBROGATION. Carisle, its officers, agents or employees shall not be liable for damage to the Leased Premises or for interruption of rent resulting from any of the perils covered by fire and extended coverage insurance, or which would be covered if such insurance were in force, and the City of Muskegon agrees not to sue for such damage and that every applicable policy of insurance will contain or be endorsed with the standard waiver of subrogation clause. The City of Muskegon shall not be liable for damage to the property or business of Carlisle in or on the Carlisle Space resulting from any of the perils covered if such insurance were in force, and Carlisle agrees not to sue for such damage and that every applicable policy of insurance will contain or be endorsed with the standard waiver of subrogation clause. 7 19. INSURANCE. Carlisle, at its expense, shall maintain general liability insurance insuring the City of Muskegon and Carlisle with minimum coverage as follows: $1,000,000.00. Carlisle shall provide the City of Muskegon with a Certificate of Insurance showing the City of Muskegon and CFMC as additional insureds. The Certificate shall provide for a thirty (30) day written notice to the City of Muskegon and CFMC in the event of cancellation or material change of coverage. To the maximum extent permitted by insurance policies, which may be owned by the City of Muskegon or Carlisle, Carlisle and the City of Muskegon, for the benefit of each other, waive any and all rights of subrogation, which might otherwise exist. The City of Muskegon agrees to notify Carlisle in writing as soon as practicable of any claim, demand or action arising out of an occurrence covered, and to cooperate with Carlisle in the investigation and defense of such claim. Carlisle and the City of Muskegon agree that each insurance policy shall provide for a minimum of thirty (30) days written notice of cancellation to the City of Muskegon. Carlisle shall also be responsible for a portion of the cost of the liquor liability insurance purchased by the City of Muskegon for the Arena. Carlisle agrees that the amount of the liquor liability premium equal to the percent that Carlisle's alcohol sales bear to total sales under the License during the measured period of time shall be added to the monthly Use Payment on an estimated prorated basis, with any necessary adjustments being made within 30 days after the end of a calendar quarter. 20. SIGNS. The City of Muskegon and Carlisle shall cooperate to secure maximum signage area for Carlisle which shall be reasonable commensurate with its exclusive space. All signage shall be in conformance with applicable laws and statutes and Carlisle shall not construct the signage without the prior written consent of the City of Muskegon which consent shall not unreasonably be withheld or delayed. 21. ABANDONMENT OF CARLISLE SPACE. If Carlisle shall abandon or vacate the Carlisle Space, or be dispossessed by process of law, or otherwise, the City of Muskegon shall have the right to declare this Agreement is terminated. In such event, any personal property belonging to Carlisle left within the Carlisle Space shall be deemed to be abandoned, and the City of Muskegon shall be permitted to dispose of such personal property as it deems appropriate. 22. INSOLVENCY. In the event that a receiver shall be appointed to take over the Carlisle's business, and such receivership is not dismissed within sixty (60) days or in the event that the Carlisle shall make a general assignment for the benefit of creditors, or Carlisle shall take or suffer any action under any insolvency or bankruptcy act, the same shall constitute breach of this Agreement by Carlisle. 23. TERMINATION OF AGREEMENT. Subject to the provisions in Paragraph 25, The City of Muskegon, at its option, may declare this Agreement terminated in its entirety upon the happening of any one or more of the following events: 8 a. If the any expenses, fees, charges, and/or other money payments for which Carlisle is financially responsible, shall be unpaid thirty (30) days from the date that they become due; b. If Carlisle abandons the Carlisle Space for a period of thirty (30) days at any one time, except when such abandonment and cessation is due to fire, earthquake, governmental action, default of the City of Muskegon, or other cause beyond it control; c. If Carlisle shall use or permit the use of the Carlisle Space at any time for any purpose for which the use was not authorized by this Agreement or by a subsequent written agreement between the parties after written notice and opportunity to cure; and d. If Carlisle shall use or permit the use of the Carlisle Space in violation of any law, rule or regulation to which Carlisle had agreed in this Agreement to conform after written notice and opportunity to cure. 24. REMEDIES OF OWNER ON DEFAULT. In the event of any material breach of this Agreement by Carlisle, the City of Muskegon may, at its option, terminate this Agreement and recover from Carlisle: (a) the worth at the time of award of the unpaid monthly Use Payment which would have been earned at the time of termination; (b) the worth at the time of award of the amount by which the unpaid monthly Use Payment which would have been earned after termination until the time of the award exceeds the amount of such loss of use that the Carlisle proves could have been reasonably avoided; (c) the worth at the time of award of the amount by which the unpaid monthly Use Payment for the balance of the term after the time of award exceeds the amount of such loss of use that Carlisle proves could be reasonably avoided. The City of Muskegon may, in the alternative, continue this Agreement in effect, as long as the City of Muskegon does not terminate Carlisle's right to use and management, and the City of Muskegon may enforce all his rights and remedies under this Agreement, including the right to recover the monthly Use Payment under this Agreement, if said breach continues, the City of Muskegon may at any time thereafter, elect to terminate this Agreement. Nothing contained herein shall be deemed to limit any other rights or remedies which the City of Muskegon may have. 25. RIGHT TO CURE. In addition to the rights herein before set forth, Carlisle shall have the right to contest any allegation of material breach in the appropriate court in Muskegon County, Michigan. In the event of an adjudication of a material default of this agreement by such court, the relief shall provide that Carlisle shall have 30 days from the date of such adjudication to cure the default. 26. RESERVATION OF RIGHTS BY THE CITY OF MUSKEGON, 9 a. The City of Muskegon reserves the right to further develop or improve the Arena as it sees fits, regardless of the desires or view of Carlisle. b. The City of Muskegon reserves the right to adopt, from time to time, reasonable rules and regulations for the operation of the Arena which are not inconsistent with the provisions of this Agreement. Carlisle and its agents, employees, invitees, and licenses shall comply with all those rules and regulations. 27. SURRENDER AND HOLDING OVER. Carlisle agrees that at the expiration or termination of this Agreement, it will quit and surrender the Carlisle Space in good state and condition, reasonable wear and tear excepted, and also excepting damage arising from acts, events or conditions beyond the control of Carlisle, and that Carlisle shall forthwith remove all equipment trade fixtures and personal property belonging to it. Carlisle shall give the City of Muskegon the first right of refusal to purchase any equipment or trade fixtures purchased by Carlisle. Carlisle further agrees that all structures and improvements on the Carlisle Space and all fixtures in Exhibit B are the property of the City of Muskegon, shall remain upon the Carlisle Space, and shall be in good usable order and condition, with allowance for reasonable wear and tear and damage by the elements, and also excepting damage arising from acts, events and conditions beyond the control of Carlisle. The City of Muskegon shall have the right upon such expiration or termination to enter upon and take possession of such property. 28. GENERAL PROVISIONS. a. Governing Law. This Agreement is executed in accordance with, shall be governed by, and construed and interpreted in accordance with the laws of the State of Michigan. b. Entire Agreement. This Agreement shall constitute the entire agreement, and shall supersede any other agreements, written or oral, and any contemporaneous or prior negotiations and representations that may have been made or entered into, by and between the parties with respect to the subject matter of this Agreement and shall not be modified or amended except in a subsequent writing signed by the party against whom enforcement is sought. c. Binding Effect. This Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the parties and their respective legal representatives, permitted successors and assigns. d. Counterparts. This Agreement may be executed in counterparts, and each set of duly delivered identical counterparts which includes all signatories shall be deemed to be one original document. 10 e. Full Execution. This Agreement requires the signature of both parties. Until fully executed, on a single copy or in counterparts, this Agreement is of no binding force or effect and if not fully executed, this Agreement is void. f. Non-Waiver. No waiver by any party of any provision of this Agreement shall constitute a waiver by such party of such provision on any other occasion or a waiver by such party of any other provision of this Agreement. g. Severability. Should any one or more of the provisions of this Agreement be determined to be invalid, unlawful, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be impaired or affected. h. Assignment or Delegation. Except as otherwise specifically set forth in this Agreement, neither party shall assign all or any portion of its rights and obligations contained in this Agreement without the express prior written approval of the other party, which approval may not be unreasonably withheld. i. Venue. The parties agree that for purposes of any dispute in connection with this agreement, the Muskegon County Circuit Court shall have exclusive personal and subject matter jurisdiction and venue. j. Terms. Nouns and pronouns will be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the person or persons, firm or corporation may in the context require. k. Fax Signatures. The parties have agreed that fax copies of the signed Agreement shall constitute a valid, enforceable agreement. Each party will mail originals to the respective party upon their execution of this Agreement. I. Notices. Any notice which either party may or is required to give, shall be given by mailing the same, postage prepaid, to Carlisle at the address shown above, or the City of Muskegon at the address shown above, or at other such places as may be designated by the parties from time to time. Notice shall be sent by regular first-class mail or by registered or certified mail, return receipt requested. II THE CITY OF MUSKEGON By~ ~-ttUStr-."\ Name: Title: Pre~, Date: 3 4' l ,f, /11"""0-" Z-ol.... t , 2022 CARLISLE'S GOODS & LEISURE, LLC By: Name: 6£.._~ Title: Member Date: .S/6/'l.,d-.. I , 2022 12 Exhibit A Carlisle Space 13 Exhibit B Carlisle Plans, Specifications and Fixtures (attached) 14
Sign up for City of Muskegon Emails