AR Banquet and Concessions Management Agreement

117 Pages·2017·2.28 MB·English

by  Djenne Clayton

DocuSign Envelope ID: 4B34C561-C0C6-470E-985F-6CD740146C82

AMENDED AND RESTATED BANQUET AND CONCESSIONS MANAGEMENT
AGREEMENT
for
McCORMICK PLACE CONVENTION CENTER, CHICAGO, ILLINOIS
between the
METROPOLITAN PIER AND EXPOSITION AUTHORITY
and
SMG FOOD AND BEVERAGE, LLC
d/b/a
SAVOR
DATED: December 29, 2017
DocuSign Envelope ID: 4B34C561-C0C6-470E-985F-6CD740146C82

TABLE OF CONTENTS [UPDATE]
ARTICLE I - INCORPORATION OF RECITALS, DEFINITIONS AND
INTERPRETATION............................................................................................................2
1.1 Incorporation of Recitals..........................................................................................2
1.2 Exhibits. ...................................................................................................................2
1.3 Definitions................................................................................................................2
1.4 Interpretation. .........................................................................................................10
1.5 Conflicting Provisions. ..........................................................................................10
ARTICLE II - ENGAGEMENT OF MANAGER; SCOPE OF SERVICES; RIGHTS AND
RESPONSIBILITIES ........................................................................................................11
2.1 Engagement............................................................................................................11

ARTICLE III - Use of the Food Service Areas; Certain Restrictions on Use ...............................12
3.1 Use of the Food Service Areas...............................................................................12
3.2 Grant of Right to Use Certain Office Space, Equipment and other Facilities
at McCormick Place. ..............................................................................................13
3.3 Right to Use Certain McCormick Place Parking Spaces. ......................................14
ARTICLE IV - TERM, REVIEWS AND OPERATING HOURS ...............................................14
4.1 Term and Term Extensions. ...................................................................................14
4.2 Commencement of Services. .................................................................................14
4.3 Review of Performance..........................................................................................14
4.4 Review of Economic Performance. .......................................................................15
4.5 Hours of Operation. ...............................................................................................15
ARTICLE V - CERTAIN LICENSES ..........................................................................................15
5.1 Licenses for the Performance of Food and Beverage Services. .............................15
ARTICLE VI - PERFORMANCE BOND REQUIREMENTS ....................................................16
6.1 Performance Bond. ................................................................................................16
ARTICLE VII - FINANCIAL ARRANGEMENTS .....................................................................17
7.1 Fees. .......................................................................................................................17
7.2 Qualifications to Receive Incentive Fee Payments ................................................18
7.3 Miscellaneous Revenue and Fees ..........................................................................19
7.4 Food Service Operating and Revenue Accounts ...................................................21
7.5 Operating Funding, ................................................................................................21
7.6 Financial Management Services ............................................................................22
7.7 Reserve Fund. ........................................................................................................22
7.8 Manager Payments .................................................................................................23
ARTICLE VIII - RECORDKEEPING AND ACCOUNTING .....................................................24
8.1 Books and Records. ...............................................................................................24
8.2 Reporting Requirements. .......................................................................................25
i
DocuSign Envelope ID: 4B34C561-C0C6-470E-985F-6CD740146C82

8.3 Audits. ....................................................................................................................27
ARTICLE IX - STANDARDS OF PERFORMANCE .................................................................28
9.1 Representation as to Performance. .........................................................................28
9.2 Food Service to the Public. ....................................................................................28
9.3 Food Service to the Authority. ...............................................................................29
9.4 Cash Handling and Security...................................................................................29
9.5 Maximization of Business......................................................................................29
9.6 Performance of the Services. .................................................................................30
ARTICLE X - PRICING ...............................................................................................................32
10.1 Pricing in General. .................................................................................................32
10.2 Value Pricing. ........................................................................................................32
10.3 Pricing Related to Authority Sponsored Events. ...................................................32
10.4 Conducting of Surveys. ..........................................................................................33
ARTICLE XI - MANAGEMENT, OTHER KEY PERSONNEL AND STAFFING
REQUIREMENTS .............................................................................................................33
11.1 Manager’s General Manager and Other Key Personnel. .......................................33
11.2 Staffing. ..................................................................................................................34
11.3 Employee Salaries. .................................................................................................35
11.4 Management Responsibilities. ...............................................................................35
11.5 Meetings. ................................................................................................................35
ARTICLE XII - MANAGER PROMOTIONS..............................................................................35
12.1 Examination and Approval. ...................................................................................35
12.2 Permitted Signage. .................................................................................................36
12.3 Advertising and Marketing. ...................................................................................36
12.4 Surveys and Research. ...........................................................................................37
12.5 Banquet and Concession Web Site. .......................................................................37
ARTICLE XIII - SUBCONTRACTORS ......................................................................................37
13.1 Subcontractors........................................................................................................37
13.2 Subcontractor / Subcontractor Certifications. ........................................................37
ARTICLE XIV - REPRESENTATIONS AND WARRANTIES OF THE PARTIES .................38
14.1 Manager’s Representations and Warranties. ..........................................................38
14.2 Representations and Warranties of the Authority. .................................................40
ARTICLE XV - - CERTAIN COVENANTS AND OTHER OBLIGATIONS ............................41
15.1 Negative Covenants of Manager. ...........................................................................41
15.2 Certain Rights and Obligations of the Authority. ..................................................42
ARTICLE XVI - INDEMNITY, FORCE MAJEURE AND INSURANCE .................................45
16.1 Indemnification by Manager. .................................................................................45
16.2 Force Majeure. .......................................................................................................46
16.3 Insurance. ...............................................................................................................47
ii
DocuSign Envelope ID: 4B34C561-C0C6-470E-985F-6CD740146C82

ARTICLE XVII - DEFAULT, REMEDIES, TERMINATION, LIQUIDATED
DAMAGES ........................................................................................................................49
17.1 Manager Event of Default. The following events shall constitute an “Event
of Default” by Manager under this Agreement: ....................................................49
17.2 Remedies of the Authority Upon Default by Manager. .........................................51
17.3 Authority Event of Default. ...................................................................................52
17.4 Manager Remedies Upon Authority Default. ........................................................52
17.5 Termination for Convenience. ...............................................................................53
17.6 Liquidated Damages. .............................................................................................53
ARTICLE XVIII - MBE/WBE REQUIREMENTS; NON-DISCRIMINATION .........................55
18.1 Special Conditions Regarding Minority Business Enterprise and Women
Business Enterprise Commitments. .......................................................................55
18.2 Non-Discrimination. ..............................................................................................56
ARTICLE XIX - CONFIDENTIALITY .......................................................................................57
19.1 Statement of Confidentiality. .................................................................................57
ARTICLE XX - COMPLETION OF CERTAIN DOCUMENTS ................................................58
20.1 Statement of Business Organization. .....................................................................58
20.2 Proof of Authority to do Business in Illinois. ........................................................58
ARTICLE XXI - - ASSIGNMENT ...............................................................................................58
21.1 Limitation Upon Manager’s Right to Assign this Agreement. ..............................58
21.2 Authority Right to Assign. .....................................................................................60
ARTICLE XXII - NOTICES .........................................................................................................60
22.1 Notices. ..................................................................................................................60
ARTICLE XXIII - DISPUTE RESOLUTION ..............................................................................62
23.1 Step Negotiations. ..................................................................................................62
23.2 Mediation. ..............................................................................................................62
ARTICLE XXIV - GENERAL PROVISIONS .............................................................................62
24.1 Bookings. ...............................................................................................................62
24.2 Counterparts. ..........................................................................................................62
24.3 Amendments. .........................................................................................................63
24.4 Compliance with All Laws. ...................................................................................63
24.5 Governing Law. .....................................................................................................63
24.6 Severability. ...........................................................................................................64
24.7 Contract Only. ........................................................................................................64
24.8 Approval. ...............................................................................................................64
24.9 Successors and Assigns; No Third-Party Beneficiaries. ........................................64
24.10 Entire Agreement. ..................................................................................................64
24.11 Drug and Alcohol Policy. ......................................................................................65
24.12 Waiver. ...................................................................................................................65
24.13 Authority of the Authority’s Director. ...................................................................66
iii
DocuSign Envelope ID: 4B34C561-C0C6-470E-985F-6CD740146C82

24.14 Public Announcements. .........................................................................................66
24.15 Non-Interference with Operation of McCormick Place.........................................66
24.16 Cooperation with Sucessor Consultants.................................................................66
24.17 Relationship of Parties. ..........................................................................................66
24.18 No Personal Liability. ............................................................................................66
24.19 Joint and Several Liability. ....................................................................................67
24.20 Survival. .................................................................................................................67
24.21 Materiality of Terms and Provisions of Agreement. .............................................67
24.22 Offsets and Credits. ................................................................................................67

iv
DocuSign Envelope ID: 4B34C561-C0C6-470E-985F-6CD740146C82

AMENDED AND RESTATED
BANQUET AND CONCESSIONS MANAGEMENT AGREEMENT
THIS AMENDED AND RESTATED BANQUET AND CONCESSIONS
MANAGEMENT AGREEMENT (the “Agreement”) is made and entered into this 29th day of
December 2017, by and between the METROPOLITAN PIER AND EXPOSITION
AUTHORITY, a municipal corporation, body politic and unit of local government created and
existing under the laws of the State of Illinois (“Authority”), and SMG FOOD AND BEVERAGE
d/b/a SAVOR, an LLC duly organized and existing under the laws of the State of Delaware
(“Manager”) and amends and restates in its entirety the Banquet and Concessions Management
Agreement, dated August 22, 2011 (the “Original Management Agreement”).
RECITALS
WHEREAS, the Authority owns and operates hotels and a public convention, conference
and meeting complex located in Cook County, Chicago, Illinois 60616, and known as
“McCormick Place Convention Center” which includes the Lakeside Center, the North Building,
the South Building, the West Building, the Corporate Center, and Wintrust Arena;
WHEREAS, McCormick Place accommodates various Events including, but not limited
to, public and private trade shows, expositions, theatrical performances, meetings, conferences,
cultural, educational, trade and scientific exhibits, and a wide variety of other shows and exhibits;
WHEREAS, the Authority’s statutory mandate is to attract the highest possible number of
public and private Events to McCormick Place;
WHEREAS, the provision of first-class food and beverage services is instrumental to the
Authority’s ability to attract Events to McCormick Place;
WHEREAS, the Authority issued a Request For Proposals (“RFP”) dated March 2, 2011,
in order to identify firms that are capable of providing first-class foodservice management services
to McCormick Place and to award a contract to one such firm pursuant to the terms of the RFP;
WHEREAS, the Authority evaluated all of the proposals submitted in response to the RFP
and identified Manager as the firm with best combination of experience, expertise, staff and pricing
for the Authority’s purposes, and the Authority and the Manager entered into the Original
Management Agreement for a term of September 28, 2011 to June 30, 2016;

WHEREAS, effective as of July 1, 2016 the Authority and the Manager, exercised the
extension option pursuant to Section 4.1.2. of the Original Management Agreement to extend the
Original Management Agreement through December 31, 2017.
WHEREAS, the Authority and Manager now desire to further exercise the extension
option pursuant to Section 4.1.2. of the Original Management Agreement and to incorporate the
additional negotiated terms and conditions set forth herein.
DocuSign Envelope ID: 4B34C561-C0C6-470E-985F-6CD740146C82

WHEREAS, Manager states that it is ready, willing and able to perform in accordance
with the terms and conditions of the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
undertakings set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the undersigned, the parties hereto agree as
follows:
ARTICLE I - INCORPORATION OF RECITALS, DEFINITIONS AND
INTERPRETATION
1.1 Incorporation of Recitals.
The foregoing Recitals are hereby incorporated into this Agreement and made a part hereof.
1.2 Exhibits.
The following Exhibits are attached hereto and made of part of this Agreement.
1.2.1 Exhibit A – Food Service Areas [Maps from Original Management Agreement
are incorporated by reference]
1.2.2 Exhibit B – Scope of Services
1.2.3 Exhibit C – Sanitation Review Criteria
1.2.4 Exhibit D - Menus [attachments from Original Management Agreement are
incorporated by reference]
1.2.5 Exhibit E - MBE and WBE Special Conditions [compliance plan from Original
Management Agreement are incorporated by reference]
1.2.6 Exhibit F – Statement of Business Organization
1.2.7 Exhibit G – Insurance Requirements

1.3 Definitions.
Certain terms used in this Agreement and in the Exhibits attached, each of which is capitalized,
shall have the meanings ascribed to them in this Agreement, including the following:
1.3.1 “The Act” shall mean Illinois Public Acts 096-0898 and 096-0899, passed in May
2010, and which authorized a dramatic restructuring of the Authority including
Food and Beverage operations at McCormick Place.
1.3.2 “Affiliate” means: (a) any individual, corporation, partnership, trustee,
administrator, executor or other legal entity that, directly or indirectly, owns or
2
DocuSign Envelope ID: 4B34C561-C0C6-470E-985F-6CD740146C82

controls, or is owned or controlled by, or is under common ownership or control
with Manager; or (b) any legal entity in which Manager or any shareholder
owning greater than twenty percent (20%) of the voting shares of Manager, or
partner with a twenty percent (20%) or greater interest in Manager, has an
ownership interest that is greater than twenty percent (20%).
1.3.3 “Agreement” shall mean this document and all Exhibits and other material
incorporated by reference which comprise the Banquet and Concessions
Management Agreement.
1.3.4 “Authority” shall mean the Metropolitan Pier and Exposition Authority, the
owner of McCormick Place.
1.3.5 “Authority’s Representative” shall mean any individual or company legally
authorized by the Authority to manage the operations of McCormick Place or to
represent the Authority.
1.3.6 “Authority Sponsored Event” shall mean an event for which the Director has
directed Manager to provide Services for such Authority Sponsored Event at the
actual cost to Manager for those Services. Events and functions to be charged in
this manner shall be invoiced either to Manager or a third party at the direction
of the Director.
1.3.7 “Banquet Operations” shall mean the furnishing of hosted catering, pre-ordered,
and special event food and beverage Services to Events at McCormick Place.
1.3.8 “Base Reserve Fund Payment” shall mean an amount equal to ten percent (10%)
of Gross Receipts which amount is to be deposited into the Reserve Fund on a
monthly basis.
1.3.9 “BEO” shall mean Banquet Event Order.
1.3.10 “Client” shall mean the firm, individual, corporation, partnership, joint venture
or other entity that has scheduled an Event at McCormick Place.
1.3.11 “Concessions” or “Concession Operations” shall mean the furnishing of food,
goods and/or services to the public at retail prices, which such food, goods and/or
services are customarily provided in commercial retail centers including, but not
limited to, stores, restaurants, bars, push carts and food courts.
1.3.12 “Contract Year” shall mean the twelve-month period that commences on July
1st and ends on June 30th of each year of the Term.
1.3.13 “Day(s)” or “day(s)” shall mean every day of the year, including Saturdays and
Sundays.
1.3.14 “Direct Operating Costs” shall mean the sum of the following:
3
DocuSign Envelope ID: 4B34C561-C0C6-470E-985F-6CD740146C82

a. cost of sales, calculated according to the Uniform System of Accounts for
Restaurants, as adopted by the National Restaurant Association, 1996
(“USAR”);
b. payroll, service charge distributions, reserves for bonuses and vacation pay,
employee benefits, and employee meals, all as calculated according to
USAR;
c. those expenses relating to the licenses necessary to perform the Services
including, but not limited to, the cost of the Authority provided electrical
and utility services and fees payable to the appropriate regulatory agency
for alcoholic beverage and food purveyor or dispenser licenses, all
calculated according to generally accepted accounting principles;
d. fees and other costs and expenditures required to permit the Manager to
operate a Franchise;
e. certain interest and depreciation expenses, subject to the prior written
approval of the Authority;
f. all other costs and expenses identified elsewhere in the Agreement as Direct
Operating Costs;
g. such other expenses as may be agreed upon in writing by the Authority and
the Manager;
h. the facility operational expenses including Food and Beverage Related
Utility Expenses, Utility Installation Expenses and Room Conversion Fees
as provided herein; and
i. the Management Fee, Incentive Fee and Retail Food Licensee Fee payable
to Manager under this Agreement.
The following are not included in the calculation of Direct Operating Costs:
j. the Manager’s Federal, state or local income taxes and any other taxes not
identified elsewhere in or contemplated under the Agreement, provided,
however, that federal, state, municipal or other governmental excise, use
and sales taxes shall be a Direct Operating Cost hereunder;
k. those actual costs incurred by Manager for Authority Sponsored Events
pursuant to section 10.3;
l. corporate general and administrative overhead expenses including, but not
limited to, the payroll burden for Manager’s owners, officers, directors, and
corporate and administrative staff; however, the reasonable costs of travel
by Manager’s corporate or regional personnel incurred after the
4
DocuSign Envelope ID: 4B34C561-C0C6-470E-985F-6CD740146C82

commencement of the Term hereunder in connection with overseeing the
performance of the Services hereunder shall be a Direct Operating Cost;
m. the cost of outside consulting services or professional services, e.g.,
recruitment services, unless specifically approved in advance and in writing
by the Authority;
n. the costs of parking, subject to Section 3.3;
o. the Manager’s costs in connection with obtaining the Performance Bond
required by this Agreement;
p. the Manager’s legal fees, whether provided by in-house or outside counsel,
except as approved in advance by the General Counsel of the Authority in
relation to (i) labor negotiations for labor contracts at McCormick Place and
(ii) other matters relating to Manager’s operations hereunder; and
q. expenses incurred by Retail Food Licensees that provide direct sales of
Services to Clients and users of McCormick Place.
1.3.15 “Director” shall mean the representative of the Authority named by the
Authority’s Chief Executive Officer, which representative shall have the
authority to give all approvals and consents and take all necessary action on
behalf of Authority while administering this Agreement, with the exception of
items which, in the judgment of the Chief Executive Officer of the Authority,
require approval by the Authority’s Chief Executive Officer or the Chief
Financial Officer or the Board. The Authority reserves the right to engage a third
party consultant to review the Manager’s performance, and advise and
recommend improvements to practices, policies, and procedures.
1.3.16 “Equipment” means all foodservice and retail equipment used by and in the
control of Manager during the term of the Agreement. Equipment purchased
using reserve funds shall be recorded and incorporated into a planned repair,
maintenance, and replacement program. .
1.3.17 “Event” shall mean, without limitation, a public or private trade show,
exposition, theatrical performance, meeting, conference, cultural, educational,
trade or scientific exhibit or related exhibits, including any associated move-in or
move-out periods.
1.3.18 “Executive Chef” shall mean the Manager’s chief chef.
1.3.19 “Fiscal Year” shall mean the twelve-month period that commences on July 1 of
each calendar year and ends on June 30 of the subsequent calendar year.
1.3.20 “Food Service Areas” shall mean those areas as identified on Exhibit A – Food
Service Areas.
5