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Lease Summary
2776 V ` LANDLORD.: City of. Miami Beach 1700 Convention Center Drive Miami Beach, Florida 33139 v and Miami Beach Redevelopment Agency 1700 Convention Center. Drive Miami Beach, Florida 33139 TENANT: Penn 17 LLC DATE OF EXECUTION: - !�' , 2011 1661 PENNSYLVANIA AVENUE RETAIL LEASE LEASE SUMMARY The Following is a summary of basic lease provisions with respect to the Lease. It is an integral part of the Lease, and terms defined or dollar amounts specified in this Summary shall have the meanings or amounts as stated, unless expanded upon in the text of the Lease and its Exhibits, which are attached to and made a part of this Summay: Date of Lease Execution 2011 2. " Landlord " City of Miami Beach and Miami'Beach Redevelopment Agency Landlord 's Address City of Miami Beach and Miami Beach Redevelopment Agency y 1700 Convention Center 'Drive Miami Beach, Florida 33139 Attention: Asset Manager with a copy to: City of Miami Beach and Miami Beach Redevelopment Agency 1700 Convention Center Drive Miami Beach, Florida 33139 Attention: Legal Department 4. " ": Penn 17 LLC 5. ' Tenant's Address 1661 Pennsylvania Avenue, Suite 6 Miami Beach, Florida 33139 6. Premises (Section 1.1) 1661 Pennsylvania Avenue, Suite G . (Section 3.11) Miami Beach, Florida 33139 (As shown on Exhibit "B "; and which may also be referred to herein and in the Lease as the "Restaurant Space" or the "Restaurant Portion") and Additional Area (Storage Space) (As described in Section 3.11, and as also shown on Exhibit "B -1 7. Retail Space.(Section 1.1) 1661 Pennsylvania Ave, Suite G (Section 3.11) Miami Beach, Florida 33139 (As shown on. Exhibit "B''; and which may also be referred to herein and as the "Restaurant Space" or the "Restaurant Portion ") x and Additional Area (Dry Storage, Space) (As described in Section 3.11., and as also shown on Exhibit "13-1 "). 8. Gross Rentable Area of Premises /Retail Space (Section 1.1) Approximately 7,807 rentable square feet (in Suite (Section 3.11) G, as also shown' in Exhibit "B ")' plus 2,230 square for Additional Area (Exhibit "B -1 9. Permitted Use of Premises /Retail Space (Section. 3.1) The main /primary use of the Restaurant (Section 3.11) . Space, as also described in Exhibit "B," shall be for the operation of a first- class, high quality restaurant, similar in price /menu /service to -Gigi Restaurant,' located at 3470 North Miami Avenue, Miami, Florida; as well as secondary ancillary. uses for a high quality bakery, small bar /cafe, and book & gift shop (which may also, without limitation, . be permitted to - sell food items and merchandise with the "Gigi's ". logo); and all to be further subject to the prohibited uses described in Section 3.6 of a the Lease: Tenant's, portion of the Additional Area described in Exhibit "B -1" shall be used solely and exclusively for e storage (and shall also be subject to the prohibited uses in_ Section 3.6, of the Lease). 10. Term of Lease (Section 1.1 Nine (9) years and three hundred and sixty four (364) days. " Lease Commencement Date ": The earlier of: (i) end of the six (6) month term of the Pre -Lease Agreement executed between Landlord and Tenant, dated May :17, 2011 (which is attached and incorporated as Exhibit "C" hereto), or October 13, 2011; or (ii) issuance by the City of a Full Building. Permit "Rent Commencement Date ": The earlier of: (i) 180 days -from. the Lease Commencement Date; or (ii) 90 . days from the issuance by the City of a Temporary Certificate of Occupancy (TCO) or Tenant opening for business, whichever is earlier. "Expiration :Date ": Nine 9 ears and three hundred and . Oy . sixty four (364) days after the "Lease Commencement Date. "Renewal. Options N /A. 11'. " Minimum Rent (Section 2.2) MONTHLY PAYMENT LEASE YEAR ANNUAL MINIMUM RENT* (PLUS SALES TAX) — 1 -2 $585,525 $48,794 3 -10 See Note ( *) See Note ( *) Note_(*) Commencing on the third anniversary of the Lease Commencement Date, and at the beginning f each succeeding year thereafter during the Term of the Lease, the Minimum Rent shall be increased a n ually in increments of three (3 %) percent per year: 12. Additional Rent See Item 18 hereof, entitled "Cost Pass - Throughs ". Percentage Rental (Section 2.3) 2% of gross sales (as defined in Section 2.3) in excess of $8,000,000; plus 3% of gross sales in excess of $9,000,000. ' 14. Prepaid Rent One month's Minimum Rent, due upon Lease execution. 15. First Month's Rent See Item 10 hereof, "Rent Commencement Date ". 16. Security Deposit (Section 2.7) Three (3) months' Minimum Rent, . due upon Lease execution.. 17. Construction Deposit (Section 5.1 (n).) $ 1. million to be deposited in -- .Escrow Account to be held as .security for Tenant's construction obligations, and to be deposited, distributed' and otherwise governed' in accordance with the terms and conditions of the Escrow Agreement executed between Landlord and Tenant, and attached and incorporated as Exhibit "F" to the Lease. 18. Cost Pass- Throughs (Section 2.4 Tenant's proport ionate share of:Common Area Maintenance (CAM) which also includes, without limitation, Tenant's proportionate share of Property Taxes and Insurance COMMON AREA MAINTENANCE (CAM) LEASE YEAR COST-PER SQUARE FOOT* MONTHLY /ANNUAL PAYMENT $10.00 /sq.ft $8,364/mo - $10,3700/yr 2-10 See Note ( *) See Note ( *) Note Q *) Beginning on the second anniversary of the Lease Commencement Date, and at the beginning of each succeeding year thereafter during the Term of the Lease, the CAM rate shall be adjusted to reflect the actual pro- rata share of Property Taxes and Insurance costs incurred by the Landlord during the previous calendar year. 19. Option Period(s) Rent N/A 20. Comprehensive General Liability_Insurance (Section 6.1). $1,000,000.00 21. Monthly Promotional Charge Secti 13.1) N/A (iv) 22. Broker(s) (Section 14.12) Koniver Stern Group and City Realty Group International 23. Estimated Completion Date for Tenant's Work (Exhibit . F " Escrow Agreement Article I, Section 5): June 1, 2012 24.. Trade*Name (Section 3.1) Penn 17 25. Tenant's Parking (Section 3.13) Tenant shall be permitted to purchase up to fourteen (14) parking spaces (the "Tenant Spaces ") on the ground floor of the Garage at $70 month /per space, to be used by Tenant solely for the purpose of providing parking for its employees. The location of the Tenant Spaces shall be determined by ,the City's Parking Director, at his sole discretion. Tenant will pay a $100.00 (refundable) deposit for a hand -held exit verifier to be used for validating tickets for delivery vehicles entering the Garage on Tenant's behalf. Delivery vehicles entering the Garage would have their tickets validated with this device. Tenant's delivery vehicles would have up to thirty (30) minutes to make deliveries at no charge; any time over the thirty (30) minute time limit would be automatically charged at the - City's then - established self - parking hourly rate (which is $1.00 /hr, as of the Lease execution date). Tenant will establish a pre -paid account with an initial deposit of $500.00, against which any deliveries exceeding the thirty (30). minute limit will be charged. THIS. LEASE (the Lease dated the 1 day is made b ,. y and among the City of Miami Beach, Florida, a municipal corporation, and the Miami Beach Redevelopment Agency, a public body • corporate and politic (collectively referred to as the "Landlord"),, and Penn 17 LLC (the "Tenant'). RECITALS A. The Landlord is the fee simple owner of a certain facility (the "Facility ") containing a municipal parking garage and appurtenances containing approximately five hundred fifty (550) parking spaces (the "Garage ") - and certain retail space (the "Premises /Retail Space ") located in an area bounded by Pennsylvania Avenue and 17 Street, City of Miami Beach, Miami-Dade Florida, as more particularly described in Exhibit "A," attached hereto and made a part hereof (the Land , � ): The Landlord is the fee simple owner of the Land and the Facility. B. Landlord and Tenant desire to enter into this Lease for the Premises /Retail Space, as defined in Sections 6 and 7 of the Lease Summary, and Exhibits "B" and "B -1" attached hereto and made a part hereof, on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the - mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows: ARTICLE I TERM 1:1 Grant; Term In consideration of the performance by Tenant of its obligations under this Lease, Landlord leases to Tenant, and Tenant leases from Landlord, for the Term, the Premises /Retail Space. A site plan showing the .description and location of the Premises /Retail Space within the. Facility,, is attached hereto and made a part hereof as Exhibits "B" and "13-1," respectively. The "Term" of the Lease is the period from :the Lease Commencement Date specified in' the Lease Summary, through the Expiration Date, as specified in the Lease Summary: 1.2. Landlord's Work Tenant acknowledges and agrees- that 'it is accepting possession of the Premises /Retail Space in their AS -1S WHERE -IS condition and that, exceptaas otherwise expressly hereinafter set forth in Exhibit "13-2," attached hereto and made a part hereof, Landlord has no other. obligation to furnish; render, or supply any money, work, labor, material, fixture, equipment, or decoration with respect to 'the Premises /Retail Space. Tenant is responsible for any and all utility impact fees and connection fees, charges, and /or deposits as ' may be required in connection with Tenant's Work, as hereinafter defined. Upon the expiration of five (5) business days following • the Lease Commencement Date, the Premises/Retail Space shall be conclusively deemed to be accepted by Tenant unless Tenant shall have given Landlord written notice of any contended defects in the Premises /Retail Space. ARTICLE II RENT '2 Covenant to Pay Tenant shall pay to Landlord all sums due hereunder from time to time from the Rent Commencement Date without prior demand, together with all applicable Florida sales tax thereon; however, unless otherwise provided in this Lease, payments• other than Tenant's regular monthly payments of Minimum Rent shall be payable by Tenant to Landlord within five (5) days following demand. All rent ' other charges that are required- to be paid 'by Tenant to Landlord shall be payable at Landlord's address indicated on the Lease Summary. Minimum Rent and additional rent (which is all sums payable to Landlord other than Minimum Rent) for any" Lease Year' consisting of less than twelve (12) months shall be prorated on a per diem basis, based upon a period of 365 days. "Lease Year" means the twelve (12) full calendar months commencing on the Lease Commencement Date. However, the final Lease Year may contain less than twelve (12) months due to expiration or sooner termination of the Term. Tenant agrees that its covenant to pay rent and all other sums under this Lease is an independent covenant and that all such amounts are payable without counterclaim, set -off, deduction, abatement, or reduction whatsoever, except as expressly provided for in this Lease. 2.2 Minimum Rent Subject to any escalation which may be provided for in this Lease, Tenant shall pay Minimum Rent for' the Term in the initial amount specified in the Lease Summary, which, except for the first installment, .shall be payable throughout the.Term in equal monthly installments in advance on the first day of each .calendar month of each year of the Term, such monthly °installments to be in the amounts (subject to escalation) specified in the Lease Summary. The first monthly installment of Minimum Rent shall be due on the date specified in Item 10 of the Lease Summary. The Minimum Rent described above shall be adjusted during the Term of this Lease as provided in the Lease Summary. It is also agreed and understood that the applicable Florida State Sales and Use Tax shall be added to Tenant's payment of Minimum Rent and forwarded to Landlord as part of said payments. It is the intent of Landlord that it is to receive Minimum Rent, and any other additional rental amounts due, as net, free and clear of all costs and charges arising from, or relating to, the Premises /Retail Space. 2.3. Percentage Rent Tenant shall pay the Landlord annual percentage rent for each Lease Year'(the "Percentage Rent ") during the Term in an amount equal to two (2 %) percent of gross sales (for each Lease Year) . in excess of $8,000,000. Should gross sales exceed $9,000,000, the ercentage Rent shall increase to three (3 %) of gross sales in excess of this amount. Tenant shall pay the full amount of .Percentage Rent due in annual installments, in arrears, within sixty (60). days after the end of each Lease Year for the preceding Lease'Year. The term "gross sales" as used herein shall include all receipts, whether collected or accrued, derived by.Tenant (or any Licensee, concessionaire, or sub - tenant of Tenant), from all business conducted upon or from the Premises /Retail Space including, without limitation, receipts from the sale of food, beverage, alcoholic beverages, merchandise, rental of space, or from any other source whatsoever; provided; however, that gross . sales,shall not include gratuities (tips) and taxes. 2.4 Common Area Maintenance. (CAM) Subject to escalation which may be provided for ' in this Lease Tenant shall remit, together with regular monthly payments of Minimum Rent, its proportionate share of Common Area Maintenance! (CAM) payments in the initial amount specified in the Lease Summary. The CAM 1 shall be adjusted during the Term of this Lease as provided in the Lease Summary. 2.5 Payment of Personal Property Taxes Sales Tax Reports Tenant shall pay, when due, all taxes attributable to the personal .property, trade fixtures, business, occupancy, or sales of Tenant or any other occupant of the Premises /Retail Space and to the use of the Premises /Retail Space by Tenant or such other occupant. `Tenant shall provide Landlord with copies of Tenant's sales tax reports provided to the State of Florida, as and when such reports are provided to the State.. 2.6 Rent Past Due If any payment due from Tenant shall be overdue more than five (5) days, a late charge of five (5 %) percent of the delinquent sum may be charged by Landlord. 'If any payment due from Tenant shall remain overdue for more than fifteen (15) days, an additional late charge in an amount equal to the lesser of the highest rate permitted by law or one and one- half'(1 1/2 %) percent per - month eighteen (18 %) percent per annum) of the delinquent amount -may be. charged by Landlord, such charge to be computed for the entire period for which the amount is overdue and which shall be in addition to and not in 'lieu of the five (5 %) percent `late charge or any other remedy available to Landlord. 2.7 Security Deposit Landlord acknowledges receipt of a security deposit in the amount specified on the ,Lease Summary to be held by Landlord, without any liability for l interest thereon, as security for; the performance by Tenant of all its obligations under this Lease., Landlord shall be entitled to commingle the security deposit with Landlord's other funds. If Tenant defaults .in any of its obligations -under this Lease, Landlord may at its- option, but.without prejudice to any other rights which Landlord may have, apply all or part of the security deposit to compensate Landlord for any loss, damage,..or expense sustained by Landlord as a result of such default: If all or any part of the security deposit is so applied; Tenant shall restore the security deposit to its original amount on demand of Landlord. Within thirty (30) days following termination of this Lease, if Tenant is not then in 2 default, the security deposit will be returned by Landlord to Tenant. Notwithstanding the foregoing, for purposes of the security deposit described in the Lease Summary' and the above paragraph, Tenant, at its option, shall have the right to post an irrevocable, unconditional, and transferable Letter of Credit, in such form as shall reasonably be approved by Landlord's City Manager. If Tenant delivers the Letter of Credit to Landlord, and provided Landlord's City Manager approves the form of such Letter of Credit, then Landlord will return the cash security deposit promptly after Landlord's receipt of the Letter of Credit. 2.8 Landlord's Lien To secure the payment of all rent and other sums of money due and to become due hereunder and the faithful performance of this Lease by Tenant, Tenant hereby gives to Landlord an express first and prior contract lien and security interest on all property now or hereafter acquired (including fixtures, equipment, chattels, and merchandise) which may be placed in the Premises and also upon all proceeds ofzany insurance which may accrue to Tenant by reason of destruction of or damage to any such property. Such property shall not be removed therefrom without the written consent of Landlord's City Manager until all arrearages in rental and other sums of money then due to Landlord hereunder shall first have been paid; provided, Tenant may operate its business in the ordinary course and the removal of merchandise from the Premises by customers of Tenant shall not be a default under this section. All exemption laws are hereby waived in favor of said lien and security interest. This lien and security interest is given in addition to Landlord's statutory lien and shall be cumulative thereto. Landlord shall, in addition to all of its rights hereunder, also have all of the rights and remedies of a secured party under the Uniform Commercial Code as adopted in the State in which the Premises are located. To the extent permitted by law, this Lease shall constitute a security agreement under Article 9 of the Florida Uniform Commercial Code. ARTICLE III USE OF PREMISES /RETAIL SPACE 3.1 Permitted Use(s) The Premises /Retail Space shall be used and occupied solely and exclusively for the purposes specified in the Lease Summary. The business of Tenant in the Premises %Retail Space shall be carried on under the name specified in the Lease Summary and under no other name unless first approved by Landlord's City Manager in writing. Tenant shall carry on its business on the Premises /Retail Space in a reputable manner and shall not do, omit, permit, or suffer to be done or exist upon the Premises /Retail Space anything which shall result in a nuisance, hazard, or bring about a breach of any provision of this Lease or any applicable municipal or other _ (i.e. federal, State, or County) governmental law or regulation, or would otherwise be inconsistent with a first -class retail center. Tenant shall observe all reasonable rules and. regulations established by Landlord from time to .time for the Premises /Retail Space. The rules and regulations in effect as of the date hereof are attached to and made a part of this Lease as Exhibit "D." Landlord will provide a copy of. amendments to the rules and regulations at least seven (7) days prior to the effective date of any such amendments. Tenant shall display such name as Landlord may from timer to time designate for the Facility in its stationery used upon the Premises /Retail Space, and in material which is given, visible, or available to customers of Tenant. Tenant shall promote such name in any advertisements or promotional material published or initiated by Tenant in regard to its business from the Premises /Retail Space.. The names for the Premises /Retail Space{'and the Facility (of which the Retail Space is a part) which Landlord may from time to time adopt, and every name or mark adopted by Landlord in connection with the Facility shall be used by Tenant only in association with` business carried on in the Premises /Retail Space during the Term and Tenant's use thereof shall be subject to such reasonable regulation as Landlord may from time to time impose. 3.2 Compliance with Laws The Premises /Retail Space shall be. used and occupied in a safe, careful, and proper manner so as not to contravene any present or future laws, rules, regulations, constitutions, orders, ordinances, charters, statutes, codes, executive orders, and requirements of all governmental authorities having jurisdiction over the Premises /Retail Space, or any street; road, avenue, or sidewalk comprising a part of, or lying in front of, the Premises /Retail Space, or any vault in or under the Premises /Retail Space (including, without limitation, any of the foregoing relating to handicapped access or parking, the local building codes, and the laws, rules, regulations, orders, ordinances, statutes, codes, and requirements of any applicable. Fire Rating Bureau or other body exercising similar functions), the temporary and /or permanent Certificates of Occupancy issued for the Premises /Retail Space as then in force, and any and all provisions and requirements of any property, casualty, or 3 other insurance policy required to be carried by Tenant under this Lease. If due ' to Tenant's use of the Premises /Retail Space, repairs, improvements, or alterations are necessary to comply with any of the foregoing, Tenant shall pay the_ entire cost thereof. 3.3 Signs Tenant, at Tenant's expense, shall erect and maintain- identification signage upon3 the storefront of the Premises /Retail Space. The design and specification of such signage shall be subject to Landlord's sign criteria as adopted from time to time and such design and specification (including camera -ready artwork) shall be submitted for Landlord's prior approval. Except with the prior written consent of Landlord's City • Manager, Tenant shall .not erect, install display, inscribe, paint, or affix any signs, lettering, or advertising medium upon or above any exterior portion of the Premises /Retail Space or in or on Tenant's storefront or storefront window. Landlord's signage criteria is attached hereto and made a part hereof as Exhibit "E." 3.4 Environmental Provisions (a) Tenant shall not knowingly incorporate into, use, or otherwise place or dispose of -at the Premises /Retail Space (or allow others to incorporate into, use, or otherwise place or dispose of at the Premises /Retail Space) any Hazardous Materials, as hereinafter defined, unless (i) such Hazardous Materials are fo.r,use in the ordinary course of business. (i.e., as with office or cleaning supplies), (ii) notice of and a copy of the current material safety data sheet is provided to Landlord for each such Hazardous Material (except for Hazardous Materials used by Tenant in the ordinary course of business (i.e., as with office or cleaning supplies)), and (iii) such materials are handled and disposed, of in accordance with all applicable governmental laws, rules, and regulations. If Landlord or Tenant ever has knowledge of the presence at the Premises /Retail Space of Hazardous Materials which affect the Premises /Retail Space, and /or the Facility, such party shall notify the other thereof in writing promptly after obtaining such knowledge. For purposes of this Lease, "Hazardous Materials" shall .mean: (a) petroleum and its constituents; (b) radon gas, asbestos in any form which is or could become friable, urea formaldehyde foam insulation, transformers or other equipment which contain dielectric fluid containing levels of polychlorinated biphenyls in excess of federal, state or local safety guidelines, whichever are more stringent; (c) any substance, gas, material or chemical which is or may hereafter be defined as or included in the "hazardous definition of substances, hazardous materials, hazardous wastes • pollutants or contaminants," "solid wastes;`' or words of similar import under any applicable governmental laws, rules, and regulations including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. § 9061 et seq.; the Hazardous Materials Transportation Act; as amended, 49 U:;S.C. § 1801, et see; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. '§ 6901, et seq.; the ;Federal Water Pollution Control Act; as amended, 33 U.S.C. § 1251, et seq.; and Florida Statutes, Chapters 376 and 403; and (d) any other chemical, material, gas, or substance, the exposure to or release of which is regulated by any governmental or quasi- governmental entity having jurisdiction over the Premises, the Retail Space, and /or the Facility, or, the operations thereon. . (b) If Tenant or its employees, agents, contractors, or assigns shall ever violate the provisions of subsection (a), above, then Tenant shall clean -up, remove,. and dispose of the Hazardous Material causing the. violation, in compliance with all applicable governmental standards, laws, rules, and regulations and repair any damage to the Premises /Retail Space within such period of time as may be reasonable' under the circumstances after written notice by Landlord, provided that such work shall commence not later than thirty (30) days from such notice and be diligently and continuously carried to completion by Tenant or Tenant's designated contractors. Tenant shall notify Landlord of its method, .time, and procedure for any clean -up or removal of Hazardous Materials under this provision; and Landlord shall have the right to require reasonable changes in such Method, .time, or procedure or to require the same to be done after normal business hours or, when the Premises /Retail Space is otherwise closed (i.e., holidays) if reasonably required for the protection of other tenants or- occupants of the Facility. (c) Tenant agrees to defend, indemnify 'and hold. harmless Landlord against any and all claims, costs, expenses, damages, liability, and the like, which Landlord may hereafter be liable for, suffer, incur, or pay arising under any applicable environmental laws, rules, and regulations and resulting from or arising out of any breach of the covenants contained in this Section 3.4, or out of any act activity, or violation of any applicable • 4- 4 environmental laws, rules, and regulations on the part of Tenant, its employees, agents, contractors, or assigns. Tenant's liability under this Section 3.4 shall survive the expiration or any termination of this Lease. 3.5 _ Hours; Continued Occupancy During the Term, Tenant shall conduct its business in and on the Premises /Retail Space, at a minimum, on all days and during all hours established by Landlord's City Manager from time to time. However, Tenant shall open for business no later than 11 AM and shall close no later than 3 AM on weekdays, and shall be permitted to be open 24 hours on weekends.Tenant shall open the whole of the Premises /Retail Space for business to the public, fully fixtured, stocked, and staffed on the Completion Date set forth in Item 23 of the Lease Summary, and shall continuously, actively, and diligently carry on the business specified in Section 3.1 on the whole of the Premises /Retail Space during the Term, during such hours and upon such days as are herein required, except when prevented from doing so by force majeure (as the term is described in Section 14.1). Tenant acknowledges that its continued occupancy of the Premises /Retail Space and the regular conduct of its business therein are of utmost importance to Landlord. Tenant acknowledges *that Landlord is executing this Lease in reliance thereupon and that the same is a material element inducing Landlord to execute this Lease. Tenant shall not keep or display any merchandise on or otherwise obstruct the common areas and shall not sell, advertise, conduct, or solicit business anywhere within the Facility other than in and on the Premises /Retail Space. Tenant shall ship and receive supplies, fixtures, equipment, furnishings, wares, ;and merchandise only through the appropriate service and delivery facilities provided by Landlord; and shall not park its* trucks or other delivery vehicles or allow suppliers or others making deliveries to or receiving shipments from the Premises /Retail Space to park in the parking areas, except in those parts thereof as may from time to time be allocated by Landlord for such purpose. Tenant shall .maintain available a substantial stock of goods, wares, Viand merchandise adequate to ensure successful operation of Tenant's business, and shall employ and maintain sales and other personnel sufficient at all times for proper service to customers. In recognition of Tenant's monetary contribution to Landlord (in the form of rent), Tenant agrees that, exept for Tenant's Bond Street Restaurant at the Townhouse Hotel,' located at 150 20th Miami Beach, Florida restaurant was operating prior to the Lease Commencement Date), during the Term neither Tenant, or any guarantor or affiliate, parent, or subsidiary of Tenant, will own, lease, or operate another restaurant, bakery,, or bar /cafe; or any other structure or site for retail business conducting any of the same businesses and /or operations as described in Item 9 of the Lease Summary within one (1) miles of any point in the Facility. 3.6 Prohibited Uses The restrictive covenants contained in paragraphs (A).— (FF) of this Section 3.6 are intended and designed to bind Landlord and Tenant and their respective successors and assigns, and be binding and run with the Premises /Retail Space throughout the Term. Notwithstanding any other provisions' of this Lease, Tenant shall not use the Premises /Retail Space nor permit them to be used for any of the following purposes ( "Prohibited Uses "): (A) for the sale by Tenant, as its principal business purpose, of any merchandise which Tenant, in the course of its normal business practice, purchases at manufacturers' clearances or purchases of ends -of -runs, bankruptcy stock, seconds, or other similar merchandise; (B) for the sale of second -hand goods, war surplus articles, insurance salvage stock, fire sale stock, merchandise damaged by or held out to be damaged by fire, except merchandise damaged by fire or smoke occurring in the Retail Space, and then only for thirty (30) days after the date of any such damage; . (C) as an auction or flea market; (D) for - a bankruptcy sale or going- out -of- business sale or liquidation sale or.any similar sale, unless Tenant is in fact in bankruptcy or is going out of business- or is in liquidation, in which case such sale shall . not continue beyond thirty (30) days; (E) a business primarily used for an order office, mail order or catalogue store; (F) any business in which Tenant ,is engaged in intentionally deceptive or fraudulent advertising or selling practices or any other act or business practice contrary to honest retail practices; (G) amusement centers (as defined in § 33.1 of the Code of Miami- } Dade Count or its successor County provision); (H) coinbox entertainment (pinball, video games, moving pictures operated by coins); (1) casino gambling or games of change or reward (provided, however, that the sale of State of Florida lottery - tickets shall not be prohibited); (J) any unlawful or illegal business, use or purpose, or for-,"any business, use or purpose which is immoral or disreputable (including "adult entertainment establishments" `and "adult ". bookstores) or extra - hazardous, or in such manner .as to constitute a nuisance of any kind (public or private), or for any purpose or in any way in violation of Tenant's Certificates) of Occupancy (or other similar approvals of applicable governmental authorities); (K) movie theatre; (L) medical facilities and offices; (M) check' cashing facilities; (N) pawn shops; (0) the sale of firearms; (P) tatoo parlors,. fortune tellers, psychics, palm readers, body piercing shops; (Q) printing or duplicating other than as an incidence to the operation of some - other business; (R) the sale of religious artifacts and books; (S) places, of worship; (T) political offices; (U) military recruiting; (V) consular, legation or any other offices of foreign governments; (W) tire sales; (X) the sale of animals or birds of any kind and /or products of a nature typically sold in pet shops; (Y) offices for the practice of veterinary medicine; (Z) the sale of major appliances as a primary business; (AA) housing.or sleeping quarters; (BB) grocery stores (other than specialty gourmet shops); (CC) second hand stores; (DD) any theatre or performing arts acitivity; or (EE) dinner theatre; and /or (FF) in any manner that will violate any .Certificate of Occupancy or Certificate '.of Use for the Premises /Retail Space, or which will violate any laws, ordinances, or other rules or regulations applicable to.the Premises /Retail Space.? Immediately upon its discovery of any Prohibited Use, Tenant shall take all reasonable necessary steps, legal and equitable, to compel discontinuance of such business or use including, if necessary, the removal from the Premises /Retail Space of any subtenants, licensees, invitees or concessionaires. 3.7 Exclusive Use So long as Tenant is in actual occupancy of the Premises /Retail Space and using the Premises /Retail Space for the permitted use(s) set forth in the Lease Summary, Landlord agrees not to enter into any leases for space in the Facility with persons or entities whose primary business would be as a restaurant operation. .3.8 Outdoor Seating Subject to City approval and (if approved) Tenant's compliance with all. applicable laws, ordinances, rules, and regulations including, without limitation, the City's Sidewalk Cafe Ordinance (as same may be amended from time to time), Tenant shall be entitled to use an outside area adjacent to and fronting the portion of the Premises /Retail Space described in Exhibit "B" hereto.(and as further determined by the City's Public Works Director, and not including any frontage associated the Additional Area /Dry Storage described in Section 3.11 and Exhibit B -1 hereof) for use as an outdoor sidewalk cafe. Tenant acknowledges that any such outdoor seating area. must be approved, and subject to annual renewal (for purposes of seating for and serving of Tenant's customers) by the City pursuant to the City's Sidewalk Cafe Permit procedures, and shall not be as a matter of right under the Lease. Further, any such Sidewalk Cafe Permit will be issued as a revocable license consistent with other sidewalk cafe permits in the City, 'and there will be the standard fees and costs associated with that Permit (in addition to the rent.and other charges described in this Lease). The installation and: maintenance of the outdoor seating area shall be subject to the obligations imposed upon Tenant in. this Lease with respect to Tenant's use and occupancy of the Premises /Retail Space, including, but not limited to, Articles V and VI of the Lease. 3.9 Intentionally omitted. 3.10 Intentionally omitted. 3.11 Additional Area ( Storage Space) Tenant has identified. an additional un -used space underneath the garage ramp of the Facility as possible space 'for storage"' (the Additional Area, as delineated in Exhibit "B -1" attached hereto). Tenant, at Tenant's sole cost and expense, shall build -out the entire Additional Area in order to make said Area usable for its intended purpose, which will include, without limitation, installing li htin electricity, safety s i s re door' access, sprinklers) required b Y : the City, dooraccess , , and p ourin g floor in g. 'Tg g� Y� Y Y stems ) as he square footage for Tenant's portion of the Additional Area shall be included (as additional square footage) in the Premises /Retail. space, and shall also be included for. purposes of 'calculating Tenant's payment of any Additional Rent (on that additional square footage), but not for purposes of calculating (additional) Minimum Rent. In consideration .of this, the Tenant shall be permitted to use 2,230 square feet, and shall allow the balance to be used by the Landlord, at no charge to Landlord. 3.12 Flood Panels Tenant acknowledges that in the event that Landlord's City Manager determines, in his /her sole and. reasonable discretion, that a condition arises that requires the installation of flood panels on the Premises /Retail. Space, then Tenant will assume sole and immediate responsibility for installation of same. Once Landlord's City Manager determines (also in his /her sole and reasonable. discretion) that the condition .necessitating the installation has passed, Tenant shall also assume sole and immediate responsibility for removal and storage of the flood panels. 6 i= 3.13 Tenant's Parking Tenant shall be permitted to purchase u to fourteen 14 P ( )parking spaces (the "Tenant Spaces ") on the ground floor of the Garage at $70 month /per space, to be used exclusively by Tenant for the purpose of providing parking for its employees. T* he location of the ;Tenant Spaces shall be determined b the City's Parking Director, at his sole discretion. y Tenant will pay a $100.00 (refundable) deposit for a hand -held exit verifier to be used for validating tickets for delivery vehicles entering the Garage on Tenant's behalf. Delivery vehicles entering the Garage would have their tickets validated with this device. Tenant's delivery vehicles would have up to thirty (30) minutes to make deliveries at no charge; any time over the thirty.(30) minute time limit would be automatically charged at the City's then - established self - parking hourly rate (which is $1.00 /hr as of the Lease execution date). Tenant will establish a pre -paid account with an initial deposit of $500.00, against which any deliveries exceeding the thirty (30) minute limit will be charged. ARTICLE IV ACCESS AND ENTRY 4.1 Right of Examination Landlord, through its City Manager and /or such other individuals as he /she may designate, in his /her reasonable discretion, from time to time, shall be entitled at all reasonable times and upon reasonable notice (but no notice is required in emergencies) to enter the Premises /Retail Space to examine them if Landlord reasonably believes that Tenant is not complying with any of its obligations hereunder; to make such repairs, alterations, or improvements thereto as Landlord considers necessary or reasonably desirable; to have access to underfloor facilities and access panels to mechanical shafts and to check, calibrate, adjust, and balance controls and other parts of the heating, air conditioning, ventilating, and climate control systems. Landlord reserves to itself (and others acting on behalf of Landlord including, without limitation, Landlord's City Manager and /or such individuals as he /she may designate, in his /her reasonable discretion, from time to time) the right to install, maintain, use, and repair pipes, ducts, conduits, vents, wires, and :other installations leading in, through, over, or under the Premises /Retail Space and for this purpose, Landlord may take all material into and upon *;the Premises /Retail Space which is required therefor: Tenant shall not unduly obstruct any pipes, conduits; or mechanical or other electrical equipment so as to prevent reasonable access thereto. Landlord reserves the right to use all exterior walls and roof area. Landlord shall exercise its rights under this section, to the extent possible in the circumstances, in such manner so as to minimize interference with Tenant's use and enjoyment of .the Premises /Retail Space. 4.2 Right to Show Premises /Retail Space Landlord . and its agents (including, without limitation, Landlord's City Manager and such other individuals as he /she may designate, in his /her reasonable discretion, from time to time) shall have the right to enter the Premises /Retail Space at all reasonable times and upon reasonable notice to show them to prospective purchasers, lenders, or anyone having a prospective interest in the Premises /Retail Space and, during the last six (6) months of the Term, to show them to prospective tenants. Landlord shall exercise its rights under this section, to the extent possible in the circumstances, in such manner so as to minimize interference with Tenant's use and enjoyment of the Premises /Retail Space. ARTICLE V . CONSTRUCTION, MAINTENANCE REPAIRS AND ALTERATIONS. 5.1 Tenant Investment As an added inducement .to have City enter into this Lease, Tenant covenants and agrees that it will invest, or cause to be invested, no less than $1,200,000 in hard construction costs on /to the Premises /Retail Space including, without limitation, the following fixed, non - removable improvements to the Restaurant Portion: grease trap; HVAC units and distribution; plumbing installed and distributed for kitchen and bathrooms; completed bathrooms for not less than 200 patrons;. and electrical system installed with distribution. As a condition of the City of Miami Beach's issuance of a Temporary Certificate: of Occupancy (TCO) for the Premises /Retail Space, Tenant shall first certify, in writing, to Landlord that it has, in fact, expended not less than the required aforestated amount(s) for'hard construction costs. r • 3 7 5.2 Tenant's Construction. Obligations (a) Subject. to the provisions hereof, Tenant shall, at its sole cost. and! expense, cause the construction and installation of any and all improvements,. alterations and /or repairs to the Premises /Retail Space in accordance with Tenant's Plans, as hereinafter defined, and as necessary to.permit Tenant to occupy same and conduct normal business operations (such improvements being referred to herein as "Tenant's Work "). (b) Tenant, at Tenant's expense, agrees to furnish to Landlord's 'City Manager 'or his /her designee, who, for purposes of this Article, shall be the City's Asset Manager, a preliminary schedule of finishes and values, as well as a conceptual plan for any improvements and /or alterations to the Premises /Retail Space. The preliminary schedule of finishes,and values, as well as the conceptual plan shall be subject to Landlord's; City . Manager's review and approval, not"to be unreasonably withheld'or delayed. Landlord's City Manager. (or his /her designee) shall notify Tenant in writing of its acceptance or of its objections to the preliminary schedule of finishes and conceptual plan within ten (10) business days after such preliminary schedule has been provided to him %her. Should Tenant fail to submit the preliminary schedule of finishes and conceptual plan within the time period set forth above, or should Tenant fail to make any reasonable modifications Landlord' City Manager (or his/her designee) may require, within five (5) business days of notice thereof, then either such event shall be deemed to be a default under this Lease. } (c) Tenant, at Tenant's expense, agrees to furn.ish to Landlord' City Manager (or his /her designee) . a set of schematic drawings (including an initial space plan) plan for any improvements and /or alterations to the Premises /Retail Space, which shall also include as an attachment a schedule of finishes and' Tenant's proposed construction budget (the "Schematic Drawings ") for Tenant's Work. The construction budget - shall include detailed descriptions of the scope of work and provide for a minimum expenditure for Tenant's Work. The Schematic Drawings shall be subject to Landlord's City Manager's (or his /her designee) review and approval, not to' be unreasonably withheld or delayed. Landlord's City. Manager (or his /her designee)shall notify Tenant in , writing of its acceptance or, of its objections to the Schematic Drawings. Should Tenant -fail to submit the Schematic Drawings within the time period set forth above, or should Tenant fail to make any reasonable modifications Landlord may require within five (5) business days of notice thereof, then either such event shall be deemed to- be a default under this Lease. Tenant acknowledges that submission of satisfactory Schematic Drawings is a condition to Landlord's entering into this Lease with Tenant and that if' Tenant fails to furnish Schematic Drawings acceptable to Landlord within the time periods set forth herein, .then, in such event, Tenant shall be in default under this Lease, and Landlord shall have the option to declare this Lease null and void. The Schematic Drawings, as approved by Landlord's City Manager (or his /her designee), shall be incorporated herein by reference and made part of this Lease. (d) .Within ten (10) business days after the date Landlord's City Manager. (or his /her designee) has approved the Schematic Drawings, Tenant, at Tenant's expense, agrees ,to furnish to Landlord's City Manager (or- his /her designee) a complete, detailed set of plans and specifications through the design development stage ( "Tenant's Plans ") for Tenant's Work, which shall include, without limitation, all working , drawings, elevations, finish selections, and signage schematics, along with a separate schedule detailing_ Tenant's" - estimated expenditures in connection with Tenant's Work (based on the construction budget described above as r. supplemented to reflect the approved Schematic Drawings) and a list of the proposed architect and engineer(s), . interior design team, general contractor, and subcontractors. Tenant's Plans shall be based on the approved Schematic' Drawings and shall be in a form sufficient to obtain a building' permit from the City of Miami Beach. T'enant's Plans shall be prepared by Tenant's architect and,engineer(s), which architect and engineer(s) shall be subject to Landlord's City Manager's (or his /her'designee's) prior- written approval, not to be unreasonably withheld or delayed. Tenant's Plans shall be subject to Landlord's City Manager's (or his /her designee's) reasonable review and approval, which approval shall not be unreasonably withheld or delayed. L'andlord's City Manager - (or his /her designee) shall notify Tenant in writing . of its -acceptance or of , its objections to Tenant's Plans within ten. (10) .. business days after the Tenant's Plans have been provided to Landlord. . Should Tenant fail to submit Tenant's (Plans within the time period set forth above, or'should Tenant fail to make any reasonable modifications Landlord may require within five (5) business days of notice thereof, then either such event shall be deemed to be a default 8 under this lease. Notwithstanding Landlord's City Manager's (or his /her designee's) review-and approval of Tenant's Plans, Landlord assumes no responsibility whatsoever, and shall not be liable, for the. manufacturer's architect's, or engineer's design or performance of any structural, mechanical, electrical, or plumbing systems or equipment of Tenant. (e) Once Landlord approves Tenant's Plans, Tenant shall, within five (5) ' business d"a s; provide Landlord's City Manager (or his /her designee) with two (2) sets of Tenant's Plans (and any chap l l to Tenant's Plans and /or the approved construction budget shall be made only by written addendum signed by 'both parties). Tenant's Plans, as approved by Landlord's City 'Manager (or his /her designee); shall be incorporated ~ herein by reference and made part of this Lease. (f) Within ten (10) business days after the date ;Landlord's City Manager (or his /her designee) has approved Tenant's Plans, Tenant, at Tenant's expense, agrees to furnish to Landlord's City Manager (or. his /her designee) a complete and detailed set of 'construction documents in AIA form, including al exhibits ( "Tenant's Construction Documents ") for Tenant's Work, which shall be prepared by Tenant's architects. Tenant's Construction Documents shall be subject to Landlord's City Manager's (or his /her designee's prior written approval, which approval shall not be unreasonably withheld or delayed, and Tenant shall receive written notification of Landlord's approval or objections toTenant's Construction Documents. Should Tenant fail to submit Tenant's Construction Documents with the period set forth above or should Tenant fail to make any reasonable modifications, Landlord may request within five (5) business days of notice hereof, then either such event shall be deemed a default under this Lease. Notwithstanding Landlord's review of Tenant's Construction Documents, . Landlord assumes no responsibility whatsoever and shall not be liable with respect to any item contained therein. (g) Once Landlord's City Manager (or his /her designee) approves Tenant's Construction Documents, Tenant shall, within five (5) days, provide Landlord's City Manager (or his /her designee's) with two 2 sets of Tenant's Construction Documents (and any changes to Tenant's Construction Documents and /or he approved construction budget shall be made only by written addendum signed by both parties). (h) Tenant shall use only licensed contractors and subcontractors approved in writing", , b y Landlord's City Manager (or his /her designee) to complete the construction and installation of Tenant's Work, which approval shall not be unreasonably withheld'or delayed. Within ten (10) business days after the date hereof, Tenant shall provide to Landlord's City Manager (or his /her designee) certificates of insurance evidencing that . Tenant has- the required comprehensive general liability insurance required of ..Tenant under the Lease F In addition, Tenant shall provide to Landlord's City Manager (or his /her designee) certificate's of insurance evidencing that Tenant's general contractor has in effect. (and shall maintain at all ` imes during the course of the work hereunder) workers' compensation insurance to cover full liability under workers' compensation laws of the State of Florida with employers' liability coverage; comprehensive general liability and builder's risk insurance forIthe hazards of operations, independent contractors, products and completed o erations for two 2 ' P : p ( ()years after; the date of acceptance of the work by Landlord and Tenant); and contractual liability specifically covering the indemnification provision in the construction contract, such comprehensive general liability to include broad form property damage and afford coverage for explosion, collapse and underground hazards, and `'personal injury" liability insurance and an endorsement providing that the insurance afforded under the contractor's policy is . primary insurance as respects Landlord and Tenant and that any -other insurance maintained by Landlord (if any) or Tenant 'is excess and non - contributing with the insurance required hereunder, provided that such insurance may be written through primary or umbrella insurance policies with a minimum policy limit of $1,000,000.00. Landlord and Tenant are to be included as an additional insured for, insurance coverages required of the general contractor. Tenant shall inform its contractor, subcontractors, and material suppliers that Landlord's interest in the Premises /Retail Space shall not be subject to any lien to secure payment for work done or materials supplied to the. Premises /Retail Space on Tenant's behalf. All inspections and approvals pprovals necessary and .appropriate to complete Tenant's Work in accordance with Tenant's Plans and as necessary to obtain a certificate of use and occupancy as hereinafter provided are the responsibility of Tenant and its general contractor. Tenant shall arrange a meeting prior to the commencement of construction between Landlord and Tenant's contractors for the purpose of organizing and coordinating the completion of Tenant's Work. . 5 j a (i) . Once Tenant's Plans have been approved by ' Landlord's City Manager (or his /her designee), Tenant shall diligently pursue the issuance of a full building permit therefor. Tenant shall commenc Tenant's Work (and shall be required 'to diligently e g y pursue same) upon receipt of the full. building permit. If Tenant has not achieved Substantial Completion of Tenant's Work in accordance_ with Tenant's Plans, as approved by Landlord's City Manager (or his /her designee), by the date set forth in the Lease Summary, then, in such event Tenant shall be in default under this `Lease, and Landlord shall have the option to declare this Lease null and void . and exercise any remedies available under this Lease. Should this Lease be declared null and void pursuant 'to this paragraph, Tenant shall forfeit all rights to any deposits, advance rent, and any other payments. made under this Lease, and Landlord shall have no further liability to Tenant under this Lease. "Substantial Completion" of Tenant's Work shall mean that Tenant's Work has been completed in accordance with the approved Tenant's Plans and that the Premises are approved for use and occupancy by the appropriate governmental authorities and are in suitable condition for the operation of Tenant's business: (j) All of Tenant's Work shall be completed in a good and .workmanlike manner and shall be in, conformity with the City's building codes and the Florida Building Code, and in accordance with Landlord's construction rules and regulations pertaining to contractors. Upon completion of Tenant's Work, Tenant shall furnish Landlord's City Manager (or his /her designee): (1) a certificate of use and /or occupancy issued by the City and other. evidence ' satisfactory to Landlord's - City Manager (or his /her designee) that Tenant has obtained the a overnmental necessary to permit occupancy; and g approvals, (2) a notarized affidavit from Tenant's contractor(s) that all amounts due for work done and materials furnished in completing Tenant's Work have been paid; and (3) releases of lien from any subcontractor. or material supplier that has given Landlord a Notice to Owner pursuant to Florida law; and (4) as built drawings of the Premises /Retail Space, with a list and description of all work performed by the contractors, subcontractors, and material suppliers. (k) Any damage to the existing finishes of the Premises /Retail Space, and /or the Facility shall be patched and repaired by Tenant, at its expense, and all such work shall be done to Landlord's satisfaction. If any patched and painted area does not match the original surface, then the entire surface shall be repainted at Tenant's expense. Tenant agrees to indemnify and hold harmless Landlord, its employees, contractors, and agents, from and against any and all costs, expenses, damage, loss, or' liability, including, but not limited to, reasonable attorneys' fees and costs, which arise out of, is occasioned by, or is in any way attributable to the build- out of the Premises /Retail Space or any subsequent improvements .or alterations by Tenant pursuant to this Lease. Tenant, at its expense, shall be responsible for the maintenance, repair, and replacement of any and all items constructed by Tenant's contractor. (1) Tenant shall not alter the existing fire alarm system in the Premises /Retail Space, and /or the Facility. Tenants Plans shall include detailed drawings and specifications for the design and installation of Tenant's fire alarm (and security) system(s) for the Premises /Retail Space. Such system(s) shall meet all appropriate building code - requirements, and the fire alarm system shall, at Tenant's expense, be integrated into Landlord's fire alarm system -for the Facility. (Landlord is not required to rovide an security p y system.) Landlord's electrical contractor and /or fire alarm contractor shall, at Tenant's expense, make all final connections between Tenant's and Landlord's fire alarm systems. Tenant shall insure that all work performed on the -fire alarm system shall be coordinated at the job site with the Landlord's representative. } (m) the above requirements for submission of plans and the use of specific contractors shall not apply to maintenance or repairs which do not exceed $1,500.00, provided that the work is not structural, and provided that it is permitted by applicable law. 10 (n) - Construction Deposit: Landlord has requested, and Tenant has agreed, to secure Tenant's construction obligations under this Lease in an amount and upon. the terms and conditions hereinafter set forth. On or before the Lease Commencement Date, Tenant shall deposit with its attorney as Escrow Agent ( "Escrow Agent"), a cash construction deposit in sum of One Million Dollars ($1,000;000) ("Construction Deposit "). The Construction Deposit shall be deposited as follows: $500,000 upon execution by the Parties of the Escrow Agreement referenced below . and attached and incorporated as Exhibit "F" hereto; and the remaining $500,000 to be deposited within forty five (45) calendar days from execution. Tenant's failure to deposit the Construction Deposit within the aforestated time periods shall be deemed a default by Tenant under this Lease. The Construction Deposit shall be held as security for Tenant's construction obligations under this Lease including, but not limited to, Tenant's obligation to commence and complete construction of the Tenant's Work within the time and ins the manner herein set forth. The Construction Deposit shall be deposited, distributed and otherwise governed pursuant to this paragraph (n) and the terms and conditions of the Escrow Agreement executed between Landlord and Tenant (and attached and incorporated as Exhibit "F". hereto). Tenant shall only, use a licensed and insured general contractor. Tenant shall have the right to draw against the Construction Deposit for hard construction costs only, based upon draw requests executed by Tenant's architect and certifying to Landlord that the work set forth in the draw request has substantially The draw request shall be accompanied by lien waivers or releases of 1ien from the persons or entities performing the work or furnishing the materials referred to therein. In no event shall the Construction Deposit be reduced to less than 1.$50,000 until such time as the Tenant' Work has been substantially completed, as determined by Landlord, in its sole and reasonable discretion .The Construction Deposit shall be released upon issuance by the City of a final Certificate of Occupancy (CO), with proof that all permits have been closed, together with final lien waivers and contractor's affidavit reflecting that all contractors, subcontractors, laborers and materialmen have been paid in full In the event Tenant fails to substantially complete Tenant's Work in accordance with the final plans and as required herein, such failure shall constitute a default. In the event of default and in addition to any and all other rights. of the Landlord hereunder, Escrow Agent shall deliver the Construction Deposit to the Landlord who shall.have the right, in addition to and not in limitation of any and all rights of Landlord hereunder, to retain such Construction Deposit in -the same manner as in the case of the Security Deposit. Further, in the event Tenant fails or refuses to deliver to Escrow Agent, the Construction Deposit simultaneously with the delivery of possession of the Premises, Tenant shall be deemed in default hereunder and in addition to all other rights and remedies of Landlord hereunder, In such event, Tenant r ., shall notR entitled to retain possession of the Premises and Landlord shall retain the Security Deposit as partial consideration for the damages sustained by Landlord resulting from such default. The parties agree and acknowledge that the foregoing conditions are intended to be conditions subsequent to Landlord's approval of this Lease. Accordingly, in the event that Tenant does not satisfy the aforestated, then Landlord's City Manager may immediately, without further demand or notice, terminate this Lease without being prejudiced as to any remedies which may be available to him /her for breach of contract. 5.2 Maintenance and Repairs by Landlord It is hereby acknowledged and agreed that Landlord is solely - responsible to maintain and repair certain portions of the Facility. Landlord shall use all reasonable efforts to fulfill its maintenance and repair obligations. Tenant will notify Landlord in writing of any necessary repairs that Iare the obligation of Landlord.. Landlord shall not be responsible for any damages caused to Tenant by reason of failure of any equipment or facilities serving the Premises /Retail Space, or the Facility or delays in .the performance of any work for which the Landlord is responsible to perform pursuant to this Lease. Notwithstanding any other provisions of this Lease, if any- part of .the Premises /Retail Space, or the Facility is damaged or destroyed or requires repair, replacement, or alteration as a result of the act or omission of Tenant, its employees, agents, invitees, licensees, or contractors, Landlord shall have the right to perform same and the cost of such repairs, replacement, or alterations shall be paid by Tenant to Landlord upon demand. In addition, if, in an emergency, it shall become necessary to make promptly any repairs or replacements required to be made by Tenant, Landlord may re -enter the Premises /Retail Space and proceed forthwith to have the repairs or replacements made and pay the costs thereof. Within ten (10) days after written demand, Tenant shall reimburse Landlord for the cost of making the repairs. 5.3 Maintenance and Repairs by Tenant Tenant shall, at its sole cost, repair and maintain the Premises /Retail Space, exclusive of base building mechanical and electrical systems, all to a standard consistent with a first class retail center, with the exception only of those repairs which are the obligation of the Landlord 11 pursuant to this Lease. Without limiting the generality of the foregoing, Tenant is specifically re uir and make repairs to (i) the portion of an pipes, lines, - Y q ed to maintain Premises /Retail Space; (ii) windows, plate glass, a an ucfix t Wires, or conduits contained within: the (including, without limitation, interior and exterior washing of windows and plate glass enaac Tenan Posed of glass heating or' air conditioning equipment serving the Premises /Retail Space;( "HVAC" which shat t s sign; (iv):aany limitation, � a preventive . maintenance HVAC service contract. Such service contract shall I i include; without limitation, preventive HVAC maintenance no less than quarterly � nclude, without ) when repairs to the same are necessitated by any act or omission of Tenant, or the failure it Space, t the Facility obligations under this Lease; and ( y (vi) all or an of Tenant to perform its portion of Tenant's Work including, without limitation, an materials, machinery, finishings, fixtures, and equipment related thereto. All repair and maintenan y Tenant shall be performed by contractors or workmen desi hated or a ce performed by g pproved by Landlord's City Manager, which approval shall not be unreasonably withheld or delayed. At the expiration or earlier termination of the Term,- Tenant shall surrender the Premises /Retail Space to Landlord in as good condition and repair as Tenant is required to: maintain the Premises /Retail Space throughout the Term, reasonable wear and tear exce to shall also furnish, maintain, and replace all electric light bulbs, tubes, and tube casings located d Tenant the Premises /Retail Space and. Tenant's signage, all at Tenant's sole cost and expense. within or serving responsible -for all trash removal for its business operations; including, without limitation, that Tena be l Wet garbage under refrigeration. t shall kee 5.4 Approval of Tenant's Alterations No alterations (including, without . limitation im rove additions, or modifications to the Premises /Retail Space) shall be made by Tenant to the Premise p meats; without Landlord's prior , written approval, which, � s /Retail. Space pp as to exterior or. structural alterations may be withheld in Landlord's -sole discretion. Any alterations by Tenant shall be performed at'the sole cost of Tenant b co and workmen approved by Landlord's City Manager, which a shall Y eld delayed, ' in a good and workmanlike manner, and in accordance appli able laws withheld or Notwithstanding the foregoing, interior, nonstructural alterations which do not require a building egulations. made without Landlord's City Manager's consent, but Tenant shall notify Landlord's City Manager pwritint may to making any such alterations. 9 p 5::5 Removal of Improvements and Fixtures All leasehold improvements and fixtures unattached, movable trade fixtures which can be removed without damage to the Premises /Retail Space) shat a the expiration or earlier termination of this Lease become Landlord's property. Tenant may, 9 the Te , durin t 7 erm, in ; the usual course of its business, remove its trade fixtures, provided that Tenant is not in default under this Lease; ' Tenant shall, at the expiration or earlier termination of the Term, at its sole cost, remove such of and improvements (except for improvements if any installed by Landlord prior to the Lease Commencement Date) an . trade fixtures in the Premises /Retail Space as Landlord shall require to be removed and re o :Premises /Retail Space to the condition existing prior to such removal. Tenant shall at its own expense repair an damage caused to the Premises /Retail Space, or the Facility by such removal If Tenant does not re Y n , trade fixtures at the expiration or earlier termination of the Term, the trade fixtures shall, at the option of La its become the property of Landlord and may be removed from the Premises /Retail Space and sold or disposed of b , Landlord in such manner as :it deems advisable without any accounting to Tenant. spose of by 5.6 Liens Tenant shall promptly pay for all materials supplied and work one in res ec Premises /Retail 9 Space by, through, or under Tenant so as to ensure that no,lien is recorded against any t trti the the Premises /Retail Space, or the Facility, or against Landlord's or Tenant's respective interest therein poon of so recorde Tenant shall discharge it prom t1 a lien is p y b y payment or bonding. If any such lien against the Premises /Retail Space, or the Facility is recorded and not discharged by Tenant as above required within fifteen (15) days following written notice to Tenant, Landlord shall have the right to remove such lien by bondi payment and the cost thereof shall be paid immediately from Tenant to Landlord. Landlord and Tenant expressly o r agree and acknowledge that no interest of Landlord in the Premises /Retail Space or the Facility shall be subject to any. lien for improvements made by Tenant in or for the Premises and /or .Retail Space, and Landlord shall n liable for any lien_ for any improvements made by Tenant, such liability being ex ressl of be Y 9 p y prohibited by the terms of this Lease. Tenant hereby agrees to info all contractors and material suppliers performin work in or for supplying materials to the Premises /Retail Space of the requirements of this Secti on. g or 12 5.7. • U tilities . Tenant shall pay to Landlord, or as Landlord directs, all gas, electricity, water, and other utility charges applicable to the Premises /ketail Space, as separately metered. In addition, Tenant's electrical equipment and lighting shall be restricted to that equipment and lighting which individually does not have a rated capacity and /or design load greater than the rated capacity and /or design load of the Premises /Retail Space. • If Tenant's consumption of electrical 'services exceeds either the rated capacity and /or- design load of the Premises /Retail Space, then Tenant' shall remove the equipment and /or lighting to` achieve compliance within ten (10) days after receiving written notice from Landlord, or such equipment and /or lighting may remain in the Premises /Retail Space; so long as (a) Tenant shall pay for all costs of installation and maintenance of submeters, wiring, air- conditioning, and other items required by Landlord, in Landlord's City Manager's reasonable discretion, to accommodate Tenant's excess design loads and capacities; and (b) Tenant shall pay to Landlord, within thirty (30) days after rendition of a bill, the cost of the excess consumption of electrical service at the rates charged to Landlord by Florida Power & Light, which shall be in accordance with any applicable laws. ARTICLE VI INSURANCE AND INDEMNITY 6.1 Tenant's Insurance Tenant shall throughout the Term - (and any other period when Tenant is in possession, of the Premises /Retail Space), maintain at its sole cost the following insurance: (A) All risks property insurance, containing a waiver of subrogation rights which Tenant's insurers may have against Landlord and against those for whom Landlord is in law.responsible including, without limitation,. its directors, officers, agents, and employees, and (except- with respect to Tenant's chattels) incorporating_ a standard Florida mortgagee endorsement (without contribution). Such insurance shall insure property of every kind owned by Tenant in an amount not less than the •fuil replacement cost thereof (new), with .such cost to be adjusted no less than annually. Such policy shall include Landlord as an additional insured. (B) Comprehensive general liability insurance. Such policy.shall contain inclusive limits ;per occurrence of not less than the amount specified in the Lease Summary; provide for severability of interests; and include Landlord as an additional insured. (C) Worker's compensation and employer's liability insurance in compliance with applicable legal requirements. (D) Business interruption insurance, sufficient to insure Tenant for no less than one (1) full year of loss of business, with the Landlord named thereon as loss payee to the extent permitted by applicable law. (E) Any other form of insurance which Landlord, acting reasonably, requires from time to time in form, in amounts, and for risks against which a prudent. tenant would insure, but in any event not less than that carried by comparable restaurant establishments in Miami -Dade County, Florida. All policies referred to above shall: (i) be taken out with insurers licensed to do business in Florida and reasonably acceptable to Landlord's City Manager; (ii) be in a form reasonably satisfactory to Landlord's' City Manager; (iii) be non - contributing with, and shall apply only as primary and not as excess to any other insurance available to Landlord; (iv) contain an undertaking by.the insurers to notify Landlord by certified mail not less than thirty (30) days prior to any material change, cancellation, or termination, and (v) with respect to subsection (A), contain replacement cost, demolition cost,. and increased cost' of construction endorsements. Certificates' of insurance on Landlord's standard form or, if required by Landlord's City Manager, copies of such insurance policies certified by an authorized officer of Tenant's insurer. as being complete and current, shall be delivered to Landlord's City Manager promptly upon request. 'If Tenant fails' to take out or to keep in force any insurance referred to in this Section 6. 1, or should any such insurance not be approved by Landlord, and Tenant does not commence and continue to diligently cure such default within two (2) business days after written ' notice by Landlord to Tenant specifying the nature of such default, then Landlord "has the right, without assuming any obligation in connection therewith, to effect such insurance at the sole cost Hof Tenant and all outlays by Landlord shall be paid by Tenant to Landlord as additional rent without prejudice to any other rights or remedies of Landlord under this Lease. Tenant shall not keep or use in the Premises /Retail Space any article which may be prohibited. 13 . by any fire or casualty insurance policy in force from time to time covering the Premises /Retail Space, or the Facility. 6.2 Loss or Damage Tenant acknowledges that the Landlord will be performing any maintenance'and repairs required of Landlord hereunder. Landlord shall not. be. liable for any death or injury arising from or out of any occurrence in, upon, at, or relating to the Premises /Retail Space, or damage to property of Tenant or of others located in the Premises /Retail Space, nor shall it be responsible for any loss of or damage to any property of -Tenant'or others from any cause, -unless such death, injury, loss, or damage results from the gross negligence or willful misconduct of Landlord. Without limiting the generality of the foregoing, Landlord shall not be liable for any injury or damage to persons or property resulting from fire, explosion, falling plaster, failing ceiling tile, falling fixtures, steam, gas, electricity, water, rain, flood, or leaks from any part of ;the Premises /Retail Space or from the pipes, sprinklers, appliances, plumbing works, roof, windows, or subsurface of any floor or ceiling of the Facility, or from the street or other place or by dampness, or by any other cause; whatsoever, unless resulting from the gross negligence or willful misconduct of Landlord. Tenant agrees to indemnify Landlord and hold it harmless from and against any and all loss (including loss of Minimum Rent and additional rent payable in respect to the Premises /Retail Space); claims, actions, damages, liability, and expense of any kind whatsoever (including attorneys' fees and costs at all tribunal levels), unless caused by the gross negligence or willful misconduct of Landlord, arising from any occurrence in, upon, or at the Premises /Retail Space; or the Facility, or the occupancy, use, or improvement. by Tenant or its agents or invitees of. the Premises /Retail Space, or the Facility, or occasioned wholly or in part by any act or omission of Tenant its - agents, employees, and invitees or by anyone permitted to be in the Premises /Retail Space by Tenant. 6:3 Waiver of Subrogation Landlord and Tenant each hereby waives on behalf of itself and its insurers (none of which shall ever be assigned any such claim or be entitled thereto , due to :subrogation or otherwise) any and all rights of recovery, claim, action, or cause of action, against the other, its agents, officers, or employees, for any loss. or damage that may occur to the Premises /Retail Space, or any improvements thereto or the Facility, or any improvements to any of, the aforestated; or any personal property of such party therein, by reason of fire the elements, or any other causes which are, or could or should be insured against under the terms of the standard fire and extended coverage insurance policies referred to in this Lease, regardless of whether such insurance is actually maintained and regardless of the cause or origin of the damage. involved, including negligence of the - other party hereto, its agents, officers, or� employees. Tenant shall obtain from its insurers, under, all policies of fire; theft, public liability, worker's compensation, and other insurance maintained by it at any time during the Term hereof insuring or covering the Premises /Retail Space or an y po thereof or, operations therein, a waiver of all rights of subrogation which the insurer of Tenant have against the Landlord, and Tenant shall indemnify; defend, and hold harmless Landlord against loss or expense, including. reasonable attorneys'. fees (appellate or otherwise) resulting from the failure to obtain such waiver. ;. ARTICLE VII DAMAGE AND DESTRUCTION 7.1 Damage to Premises /Retail Space Tenant acknowledges . that if the Premises /Retail Space are partially or totally destroyed due to fire or other casualty, any repairs. to or rebuilding of the damaged. portions of the Premises /Retail Space will be performed by Landlord but, in any event, only to the extent that Landlord is requiretl to repair or rebuild the .Retail Space to the condition Landlord was required to turn over the Premises /Retail Space to Tenant. as of the Lease Commencement Date. If Landlord repairs or rebuilds, Minimum Rent shall abate - proportionately to the portion of the Premises /Retail Space, if any, rendered untenantable from the date of destruction or damage until the repairs have been substantially completed., Upon being notified that the repairs have been substantially completed, Tenant shall diligently perform all other work required to fully restore the Premises /Retail Space for use in Tenant's business, in every case at Tenant's cost and without any contribution to such cost by Landlord. Tenant agrees that during any ,period of reconstruction or repair of the Premises /Retail Space, it will continue the operation of 'its business within the Premises/Retail-Space to the extent practicable. If all or any part of the Premises /Retail Space shall be damaged by fire or other casualty and the fire or other casualty is caused by fault or neglect of Tenant or Tenant's employees, contractors, agents, guest, or invitees, rent and all other charges shall not abate. 14 7.2 Termination for Damage Notwithstanding Section 7.1, if damage or destruction which 'has occurred to the Premises /Retail Space is such that, in the sole reasonable opinion of Landlord's City Manager, - such, reconstruction or repair cannot be completed within one 'hundred twenty (120) days of the happening of the damage or destruction, Landlord may, at its sole option, terminate this Lease on notice to Tenant given within thirty (30), after such damage or destruction and Tenant shall immediately deliver vacant possession of-, the Premises /Retail Space in accordance with the terms of this Lease. 4 - In addition, if Landlord undertakes the reconstruction or repair,' and does not complete same within nine (9) months after the date of the fire or other casualty (subject to the time required to prepare plans for reconstruction, to obtain building permits, to receive distribution of insurance proceeds, and to complete the likely contract bidding process and all other relevant factors, but not to exceed an additional ninety (90) days), then Tenant shall have the right to terminate this Lease by written notice to Landlord's City Manager delivered within thirty (3 0) days. after the expiration of such nine (9) month period (or as extended), whereupon both parties shall be relieved of all further obligations hereunder, except as otherwise expressly set forth herein. ARTICLE VIII , ASSIGNMENT, LEASES, AND TRANSFERS 8.1 Transfer by Tenant Tenant shall not enter into, consent to, or permit any Transfer, as hereinafter defined, without the' prior written consent of Landlord in each instance, which consent may be granted or withheld in Landlord's sole and absolute discretion for any reason or for no reason. For purposes of this Lease, "Transfer" means an assignment of this Lease in whole or in part; a sublease of all or any part of the Premises /Retail Space; any transaction whereby the rights of Tenant under this Lease or to the Premises /Retail' Space are transferred to another; any mortgage or encumbrance of this Lease or the Premises /Retail Space or an - p y part thereof or other . arrangement under which either this Lease or the Premises /Retail Space become security for any indebtedness or . other obligations; and if Tenant is a corporation or a partnership, the transfer of a controlling interest in the stock of the corporation, or partnership interests, as applicable. If there is a- permitted Transfer, Landlord may collect ;rent or other payments from the transferee and apply the net amount collected to the rent or other payments required to be paid pursuant to this Lease but no acceptance by Landlord of any payments by a transferee shall be deemed a waiver of any provisions hereof regarding enant. Notwithstanding any Transfer, Tenant shall not be released from any of its obligations under this Lease. Landlord's consent to any Transfer shall be subject to the further condition that if the Minimum Rent and additional rent pursuant to such Transfer exceeds the Minimum Rent,and additional rent payable under this Lease, the amount of such excess shall' be paid to Landlord. If, pursuant to a permitted Transfer, Tenant receives from the transferee, either directly or indirectly, any consideration other than Minimum Rent and additional rent for such Transfer., either in the form of cash, goods, or services, Tenant shall, upon receipt thereof, pay to Landlord an amount equivalent to such consideration. In addition, Tenant shall not grant any purchase money security interest in its furniture; fixtures, and equipment in the Premises /Retail Space, without prior written consent of the Landlord's City Manager. ARTICLE 1X DEFAULT 9.1 Defaults A default by .Tenant shall. be' deemed to have occurred hereunder,, if and whenever: (i) any Minimum Rent is not paid when due whether or not any` notice or demand for payment has been made by Landlord; (ii) any other additional rent is in arrears and is not paid within five (5) days after written demand by - Landlord; (iii) Tenant has breached any of its obligations in this Lease (other than the payment of rent) and Tenant fails to remedy such, breach within thirty (30) days (or such shorter period as may be provided in this Lease), or if such breach cannot reasonably be remedied within thirty (30) days, (or such shorter period), then if Tenant fails to immediately, commence to remedy and thereafter proceed diligently to remedy such breach, in each case after notice in writing from Landlord; (iv) Tenant becomes bankrupt or insolvent; (v) any of. Landlord's policies of insurance (if any) with respect to the Facility are canceled or adversely changed as a result of Tenant's use or occupancy of the Premises /Retail Space; or (vi) the business operated. by Tenant in the Premises /Retail Space. shall be closed by governmental or court order for any reason. 15 :ra 9.2 Remedies In the .event *of any :default hereunder by Tenant, then without prejudice to any other rights which it has.pursuant.to this Lease or at law or in equity, Landlord through its City Manager, shall have the . following rights and remedies, which are cumulative and not alternative: (A) landlord may cancel this 'Lease by notice to Tenant and retake possession of the Premises /Retail Space for Landlord's account, or may terminate Tenant's :right to possession of the Premises /Retail Space without terminating this Lease.. In either event; Tenant shall then quit and surrender the Premises /Retail Space to Landlord. If Landlord terminates Tenant's right to possession of the Premises /Retail Space without terminating this Lease, Tenant's liability under, all of the provisions of this Lease shall continue notwithstanding any expiration and surrender, or any re= entry, repossession, or disposition hereunder. (B) Landlord may enter the Premises /Retail Space as agent of Tenant to take possession of any property of Tenant on the Premises /Retail Space, to store such property at the expense and risk of Tenant or to sell or otherwise dispose of such property in such manner as Landlord may see fit without notice to Tenant. .Re -entry and removal may be effectuated. by summary dispossess proceedings, by any suitable actions or proceeding, or otherwise. Landlord shall not r be liable in any way, in connection with its actions. pursuant to 'this section, to the extent that its actions are in accordance with law. } (C) If Landlord terminates Tenant's right to possession of the Premises /Retail Space without terminating this Lease under subsection (A)' above, Tenant shall remain liable (in addition to accrued liabilities) to the extent legally permissible for all rent and all of the charges Tenant would have been required to pay until °;the date this Lease would have expired had such cancellation not occurred. Tenant's liability for rent shall continue notwithstanding re -entry or repossession of the:Premises /Retail Space by Landlord: In addition to the foregoing, Tenant shall 'pay to Landlord such. sums as the court which has jurisdiction thereover may adjudge as reasonable attorneys' fees with respect to any successful lawsuit or.action instituted by Landlord to enforce the provisions of this Lease. (D) Landlord may relet all or any y part of the Premises /Retail Space for. all or . any part of the expired portion of the Term of this Lease or for any longer period, and may accept any rent then attainable; grant any concessions of rent, and agree to paint or make any special repairs, alterations, and decorations for.any new tenant as it may deem advisable, in its sole and absolute discretion. Landlord shall be under no obligation to reletor to attempt to relet the Premises /Retail Space, except as expressly set forth below. . (E) If Landlord terminates Tenant's right to possession of the Premises /Retail Space without 'terminating this Lease under subsection (A) above, and Landlord so elects, the rent hereunder shall be accelerated and Tenant shall pay Landlord damages in the amount of any and all sums which would have been due for .the remainder of the Term (reduced to present value using a discount factor equal to the stated prime lending rate on the date. of Tenant's. default by Landlord's then existing mortgagee or, if there is no mortgagee, by Citibank, N.A.; New York). Prior to or following payment in full by Tenant of such discounted sum promptly upon demand, Landlord shall use good faith efforts to relet the Premises /Retail Space. If Landlord receives consideration as a result of a reletting of the Premises /Retail Space,relating to the same time period for which . Tenant has paid accelerated rent, such consideration actually received by Landlord, less any and all of Landlord 's cost of repairs, alterations, additions, redecorating, and other expenses in connection with such reletting of the Premises /Retail Space, shall be a credit against such discounted sum, and such discounted sum shall be reduced if not yet paid by Tenant as called for herein, or if .Tenant has paid such discounted sum, such credited amount shall be repaid to Tenant by Landlord (provided said credit shall not exceed the accelerated amount). (F) Landlord may remedy or attempt to. remedy any default of Tenant under this Lease for the account of Tenant and to enter upon the Premises /Retail Space for such purposes. No notice of Landlord's intention to perform such covenants need be given Tenant unless expressly required by this Lease. Landlord shall not be liable to Tenant for any loss or' damage caused by the reasonable acts of Landlord in remedying or Y 9 attempting to remedy such default and Tenant shall pay to Landlord all', expenses incurred by Landlord in connection with remedying or attempting to remedy such default. Any expenses incurred by Landlord shall accrue interest from the dateof payment by Landlord until - repaid by Tenant at the highest rate per bylaw. 16 9.3 Costs ._Tenant shall pay to Landlord on demand all costs incurred by Landlord, including attorneys' fees and costs at all tribunal levels, incurred by Landlord in enforcing any of the obligations of Tenant under this Lease. , In addition, upon any default by Tenant Tenant shall be also liable to Landlord for the expenses to which Landlord may be -put in re- entering the Premises /Retail Space; repossessing the Premises /Retail Space; painting, altering, or dividing the Premises /Retail Space; re= configuring the Premises /Retail Space (including, without limitation, subdividing the Premises /Retail Space) for any new tenant; putting the Premises /Retail Space in proper repair; protecting and preserving the Premises /Retail Space by placing watchmen and caretakers therein; reletting the Premises /Retail Space (including attorneys' fees and disbursements, marshall's fees, and brokerage fees, in so doing); and any other expenses reasonably incurred by Landlord. �a 9.4 Additional Remedies; Waiver The rights and remedies of Landlord set forth herein shall be in. addition to any other right and remedy now and hereinafter provided by flaw.' All rights and remedies shall be cumulative and non- exclusive of each other. No .delay or omission by Landlord in exercising a right or remedy shall exhaust or impair the same or constitute a waiver of, or acquiescence .to a default. - 9.5 Default by Landlord In the event of any default by Landlord, Tenant's exclusive remedy shall be an action for damages or injunction, but prior to any such action Tenant will give Landlord's City Manager written notice specifying such default with particularity, and Landlord shall have a period of thirty (30) days following the date of such notice in which to cure such default (provided, however, that if such default reasonably requires more than: thirty (30)' days to cure, Landlord shall have a reasonable time to cure such default, provided Landlord commences to cure within such thirty (30) day period and thereafter diligently prosecutes such cure to completion). Notwithstanding any provision of this Lease, Landlord shall not'at any time have any personal liability under this Lease. In the event of any breach or default by Landlord of any term or provision of this Lease, Tenant agrees to look solely to the equity or interest then -owned by Landlord in the Premises /Retail Space, and .in no event shall any deficiency judgment be sought or obtained against Landlord. It is expressly understood that the obligations of Landlord under this Lease are solely corporate obligations and that, except for conversion, fraud, or willful misconduct, no personal liability will attach to, or is or shall be incurred by, the officers, directors, or employees, as. such, of the Landlord, or of any successor.corporation, or any of them, under or by reason of the obligations, covenants, or agreements of Landlord contained in this .Lease or implied therefrom; and, except for conversion, fraud, or willful misconduct, that any and, all such personal liability, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such officer, director, or employee, as such, or under or by reason of the obligations, covenants or agreements `contained in this Lease or implied therefrom are expressly waived and released as a condition of, and as a consideration for', the execution of this Lease. ARTICLE X ESTOPPEL CERTIFICATE, SUBORDINATION 10.1 Estoppel Certificate Within ten (10) days after written request by Landlord's City Manager, Tenant shall deliver in a form supplied by Landlord, an estoppel certificate to Landlord as to the status of, this Lease, including whether this Lease is unmodified and in full force. and effect (or, if there have been modifications, that this Lease .is in full force and effect as modified and identifying the modification agreements); the amount of Minimum Rent and additional rent then being paid and the' dates to whichl'same have been paid; whether or' not there is any existing or alleged default by either party. with respect to whicha - notice of default has been served or .any facts . exist which, with the passing of time or giving of notice, would constitute a default and, if there is any such default or facts, specifying the nature and extent thereof; and any other matters pertaining to this Lease as to which Landlord shall .request such certificate. Landlord, and any prospective purchaser, lender, or ground lessor shall have the right to rely on such certificate. 10.2. Subordination; Attornment. This Lease and all rights of Tenant shall be subject and subordinate to any and all mortgages, security agreements, or like instruments resulting from any financing, refinancing or collateral financing (including renewals or extensions thereof), and to any and all ground leases, made or arranged Y by Landlord of its interests in all or any part of the Premises /Retail Space, from time to time in existence against the. Premises /Retail Space, whether now existing or hereafter created. Such subordination shall not require any 17 - I . further instrument to evidence such subordination. However, on request, Tenant shall further evidence its agreement to subordinate this Lease and its rights under this Lease to any and all documents and to all advances made under -such documents.' The form of such subordination shall be; made as required by Landlord's `Cit Manager. Tenant shall, if requested by Landlord, or. a mortgagee,, owner, or urchaser, or b an . son Y P y y per succeeding to the interest of such mortgagee, owner, or purchaser, ass` the result of the enforcement of5 the remedies provided by law or the applicable instrument held by Landlord, such mortgagee, owner, or purchaser, automatically attorn to and become the tenant of Landlord or any such mortgagee, owner, purchaser, or successor -in- interest, without any change in the terms or other provisions of this Lease; provided, however, that Landlord, said mortgagee, owner purchaser or successor shall, not be bound by (a) any payment of rent or additional rent for more than one (1) month in advance, or (b) any security deposit or the like not actually received by Landlord, such, mortgagee, owner, or purchaser,' or successor, or (c) any amendment or modification in this Lease made without the consent of Landlord, such mortgagee, owner, purchaser, or successor, or (d) any construction obligation, free rent, or other concession or monetary allowance, or (e) any set -off, counterclaim, or the like otherwise available against Landlord, or (f) any act or omission of any prior landlord (including Landlord Upon request by Landlord, said mortgagee, owner, or, purchaser, or successor, .Tenant shall execute and deliver an instrument or instruments confirming its attornment. Notwithstanding the foregoing, any such. subordination of this Lease shall be conditioned on the Landlord. obtaining a nondisturbance agreement in favor of Tenant from all - mort a ees and g 9 ground lessors (if any) regarding any financings or overleases entered into by Landlord with respect to the Premises /Retail Space, and no - subordination shall be effective without a corresponding nondisturbance agreement. ARTICLE LL CONTROL OF FACILITY BY LANDLORD. 11.1 Use and Maintenance of Common Areas. Tenant and those doing business with Tenant,,for purposes associated with Tenant's business on the Premises /Retail Space, shall have a non- exclusive license to use the common areas for their intended purposes during normal business hours in common with others entitled thereto and subject to any rules and regulations imposed by Landlord. Landlord shall use reasonable efforts to keep the, common areas in good repair and condition and shall clean the common.areas when necessary. Tenant acknowledges that any common areas of the Premises /Retail Space, and the Facility, shall at all times be under the exclusive control and management of Landlord. For purposes of .this, Lease, "common areas" shall mean those areas, facilities, utilities, improvements, equipment, and installations'. of the Premises /Retail Space, or the Facility, which are not designated or intended by Landlord to be leased, frorri time to time, or which are provided or designated from time to time by Landlord for the benefit or use of all patrons in the Facility, their employees, customers, and invitees, in common with others entitled to the use or benefit of same. Tenant acknowledges that, except for Tenant's portion of the Additional Area (as described in Section 3.11 of this Lease), the Garage portion of.the Facility is not a part of the Premises /Retail Space, and that Tenant has no right. or license to use the Garage pursuant to this Lease. Any use by Tenant or its invitees of the Garage is subject to the rules and regulation's in connection therewith imposed by Landlord and /or the operator of the Garage. Landlord shall not be liable for any damage to automobiles of any. nature whatsoever,to, or any theft of, automobiles or other vehicles or the contents thereof, while in or about the Garage. 1.1.2 Alterations by Landlord. Landlord may (but shall not be obligated to)' (i) alter, add to, subtract from, construct improvements on, re- arrange, and construct additional facilities- in, adjoining, or proximate to the Premises /Retail Space;.. (ii) relocate the facilities and improvements in or comprising the Premises /Retail Space or erected on the Land; (iii)'do such things on or in the Premises /Retail. Space as required to comply with any laws, by -laws, regulations, orders, or directives affecting the Land or any part of the Premises /Retail Space; and (iv) do such other things on or in the Premises /Retail Space as Landlord, in the use of good business judgment determines to be advisable, provided that notwithstanding anything contained in this Section .11'.2, access to the Premises /Retail Space shall be available at'all times. Landlord shall not be in breach of its covenants for quiet enjoyment or liable for any loss, costs, or damages, whether direct or indirect, incurred by Tenant due to any of the foregoing; provided, Landlord shall exercise its rights under this section in a` manner so as to minimize any disruption or interference with the operation of Tenant's business.and property. 18 ARTICLE XII CONDEMNATION 12.1 Total or Partial Taking If the whole of the Premises /Retail Space, or such portion thereof as will make the Premises /Retail Space unusable for the purposes - leased hereunder, shall be taken . by any public authority under the power of eminent domain or sold to public authority under threat or in lieu of such taking, the Term shall cease as of the day possession or title shall be taken by such public authority, whichever is earlier ( "Taking Date "), whereupon the rent and all. other charges shall be paid up to the Taking Date with a proportionate refund by Landlord of any rent and all other charges paid for a period subsequent to the Taking Date. If less than - the whole of the Premises /Retail Space, or less than such portion thereof as will make the Premises /Retail Space unusable for the purposes leased, hereunder, the Term shall cease only as to the part so taken as of the .Taking Date, and Tenant shall pay 'rent and .other charges.up to the Taking Date, with appropriate credit by Landlord (toward the next installment of rent due from Tenant) of any rent or charges paid for a period subsequent to the Faking Date. Minimum Rent and other charges payable to Landlord shall be reduced in proportion to the amount of the Premises taken. 12.2 Award All compensation awarded or paid upon a total or partial taking of the Premises /Retail Space.including the value of the leasehold estate created hereby shall belong to and be the property of Landlord without any participation by Tenant; Tenant shall have no claim to any such award based 'on Tenant's leasehold interest. However, nothing contained herein shall be construed to preclude Tenant, at its cost, from independerntly prosecuting any claim directly against the condemning authority in such' condemnation proceeding for damage to, or cost of removal stock, trade fixtures, furniture, and other personal property belonging to Tenant and: for Tenant's moving expenses; provided, however, that no such claim shall diminish or otherwise adversely affect Landlord's award or the award of any mortgagee and Tenant may not prosecute any claim for leasehold value: ARTICLE XIII PROMOTION 13.1 Intentionally Omitted. ARTICLE XIV GENERAL PROVISIONS 14.1 Delay Whenever a period of time is herein prescribed for the taking of any action b Landlord or Tenant, as applicable, Landlord or Tenant, as applicable, shall not be liable or responsible for, and there shall be . from the computation of such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, or governmental laws, regulations, or- restrictions in the nature of a prohibition -or moratorium, or any bona fide delay beyond the reasonable control of Landlord or Tenant, as applicable. The foregoing shall not apply to any payments of money due under this Lease. 14.2 Holding Over If Tenant remains in possession of the Premises /Retail Space after the end of the - Term without having executed and delivered a . new lease or an.agreement extending the Term, there shall be no tacit renewal of this Lease or the Term, and Tenant shall be deemed to be occupying the Premises /Retail Space as a Tenant from month to month at a monthly Minimum Rent payable in advance on the first day of each month equal to twice the monthly amount of Minimum Rent payable during the last month of the Term, and otherwise upon the same terms as are set forth in this Lease, so far as they are applicable to a monthly tenancy. 14.3 Waiver, Partial Invalidity If Landlord excuses or condones any default by Tenant of any obligation under this Lease, this shall not be a waiver -of such obligation-in respect of,any continuing or subsequent default and no such waiver shall be implied. All of the provisions of this Lease are to be construed as covenants even though not expressed as such. If any provision of this Lease is held or rendered. illegal or unenforceable it shall ; be considered separate and severable from this Lease and the remaining provisions of this Lease shall remainn,, in force and, bind the parties as though the illegal or unenforceable provision had never been included in this Lease: 14.4 Recordinq Neither Tenant, nor anyone claiming under Tenant shall record this Lease or any, memorandum hereof in any public records without the prior written consent of Landlord. 19 14.5 Notices Any notice, consent, or other instrument required or permitted to .be given under this Lease shall be in - writing and shall be delivered in person, or sent by certified mail, return receipt requested, or overnight express mail courier, postage prepaid, addressed (i) if Landlord, at the address:.set forth in the Lease Summary; and (ii) if ' to Tenant, at' the Premises /Retail Space or, .. p , .prior to Tenant's occupancy of the Premises /Retail Space, at the address set forth_ on the Lease Summary. Any such notice or other instruments shall be deemed to have been given and received on the day upon which personal delivery is made or, if mailed, then forty-eight 48 hours following the date of mailin Either a ma y Y 9 ( ) 9 g party y give notice to the other of an change of address and after the giving of� such notice, the address therein specified,' is deemed to be the address of such party. for the giving of notices. If postal service is interrupted or substantially delayed, all notices or other instruments shall be delivered in person or.. by overnight express mail courier.' t 14.6 Successors; Joint and Several Liability The, rights and liabilities created by this Lease extend to and bind the successors and assigns of Landlord and the heirs, executors, administrators, and permitted successors and assigns of .Tenant. No rights, however, shall inure to the, benefit of any transferee unless such Transfer complies with the provisions of Article VIII. If there is at anytime more than one Tenant or more than one person constituting Tenant, their covenants shall, be considered to be joint and several and shall apply to each and every one of them. 14.7 Captions and Section Numbers The captions, section numbers, article numbers, and table of contents appearing in this Lease are inserted only as a matter of convenience and in no way affect the substance of this Lease. 14.8 ' Extended. Meanings The words hereof, hereto, hereunder, and similar expressions used in this Lease relate to the whole of this Lease and not only to the provisions in which such expressions'appear. This Lease shall be read with all changes in number and gender as may be .appropriate or required by the context. Any reference to Tenant includes, when the context allows, the employees, agents, invitees, and licensees of Tenant and all others over whom Tenant might ,reasonably be, expected to exercise control. This Lease has been fully reviewed and negotiated by each party and their. counsel and shall not be more strictly construed against either. patty 14.9 Entire Agreement Governing Law; Time This Lease and the Exhibits and Riders, if any, attached hereto. are incorporated herein and set. forth the entire agreement between Landlord 'and Tenant concerning Premises and there -are no other agreements or understandings between them. This Lease and its Exhibit s'and Riders may not be modified except by agreement in writing executed by Landlord and Tenant: This Lease shall be construed in accordance with and governed by the laws of the State of Florida. Time is of the essence of Lease. 14.10 No Partnership The parties hereby acknowledge that it is' not their intention under this Lease to create :between themselves a partnership, joint venture, tenancy -in- common, joint tenancy, co- ownership;, or agency relationship. Accordingly, notwithstanding any. - expressions or provisions contained herein, nothing in "this 'Lease, whether based on the calculation of rental, or otherwise, shall .be. construed or deemed to create, or to express an intent to create,; a partnership, joint venture, tenancy -in- common, joint tenancy, co- ownership or agency relationship of any kind or nature whatsoever between the parties hereto. The provisions of this section shall survive expiration of the Term. 14.11 Quiet Enjoyment If Tenant pays rent and other charges and fully observes and performs all of its obligations under this Lease, Tenant shall. be entitled to peaceful and quiet enjoyment of the Premises /Retail Space for:the Term without interruption or interference by Landlord or any person claiming through Landlord. 14.12 Brokerage Landlord and - Tenant each represent' and warrant one to the other that except as set forth in the Lease Summary, neither of them has employed any broker in connection with .the negotiations of the terms of. this Lease or the execution thereof. Landlord and Tenant hereby agree to indemnify and to hold each other harmless against any loss, expense, or liability with respect to any claims for commissions or brokerage fees arising from - or out of any breach of the foregoing representation and warranty. Landlord recognizes the broker(s) k, specified in the Lease Summary as the sole broker(s) with whom Landlord ,has dealt in this .transaction and agrees to pay any commissions determined to be due said broker(s). s 14.13 Radon Notice Chapter 88 -285, Laws of Florida, requires , 'the following notice to be provided; with respect,to the contract for sale and purchase of any building, or a rental, agreement for any building: "RADON GAS: Radon is a naturally occurring radioactive gas that, when it has accumulated in a building 'in sufficient quantities, may present health risks to persons who are exposed to it over time. 'Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county public health unit." 14.14 Intentionally Omitted. - 14.:15 Execution This Lease has been submitted for discussion purposes only ,and shall not be deemed an offer. by either party to the other to enter into this Lease unless and until this Lease shall have been executed by both parties, indicating their acceptance of the.-terms and conditions contained herein. 14.16 TRIAL BY JURY LANDLORD AND TENANT HEREBY KNOWINGLY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING THAT THE CITY AND TENANT MAY HEREIN AFTER INSTITUTE AGAINST EACH OTHER WITH RESPECT TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT. 14.17 Reference to "Approvals" or "Consent," etc Except when expressly, provided otherwise, all references in this Lease to the terms "approval," "consent," and words of similar import shall mean "reasonable written approval" or "reasonable written consent. "' { [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 21 — ' a EXECU as St d year first above written. WIT ESSES: LANDLORD: ity of Miami Beach / Mi i Beach Redevelopment Agency • pPT� : y: xlame: _ CH Title.: Mayor /Chairperson TENANT: 1 Penn 17, L'LC By: 114 IV Cc IV, AA G a Name: Title: EXHIBITS: Exhibit "A' : Legal Description Exhibit "B ": Site Plan and Location of "Suite G" (Restaurant Space) Exhibit" B-1 ":Site Plan and Location of Additional Area (Storage Space) Exhibit "B -2 "; Description of Landlord's Work Exhibit "C ": Pre Lease Agreement Exhibit "D ": Landlord's Signage Criteria Exhibit °E ": Rules and Regulations Exhibit "F: Construction Escrow Agreement APPROVED AS TO FORM & LANGUAGE I FOR ;EXECUTION r r Date torn ' Y , e� F:WTTO\AGUR\AGREEMENT\Gigi Restaurant Lease Agreement (Final 8- 24- 11).doc EXHIBIT "A11 Legal Description ' LEGAL DESCRIPTION o , b. A PARCEL OF.'LAND BEING OF PORTION OF. -THE NORTHEAST ONE - QUARTER ( NE 9/4 ) OF SECTION 34 TOWNSHIP 53 SOUTH, RANGE 42 EAST BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS; COMMENCE AT THE NORTHEAST CORNER OF LOT 7, BLOCK 3, AS SHOWN OF THE PLAT OF LINCOLN ROAD SUBDIVISION A, ACCORDING TO THE PLAT THEREOF, AS RECORDED IN PLAT BOOK 34 AT PAGE 66 OF PUBLIC RECORDS OF MIAMI -DADE COUNTY, FLORIDA; THENCE _WESTERLY, ALONG THE SOUTH RIGHT OF WAY LINE OF LINCOLN LANE, AS SHOWN ON SAID PLAT OF LINCOLN ROAD SUBDIVISION A, FOR 573.05 FEET TO A POINT; THENCE DEFLECTING TO THE RIGHT, 89 DEGREES 59 MINUTES 25 SECONDS EAST, FOR 69.92 FEET TO THE POINT OF BEGINNING; THENCE CONTINUE NORTHERLY, ALONG THE LAST DESCRIBED COURSE, FOR 305.80 FEET TO A POINT; THENCE DEFLECTING TO THE LEFT, 90 DEGREES 00 MINUTES 00 SECONDS EAST, FOR 933.50 FEET TO A POINT; THENCE DEFLECTING TO THE LEFT,00'DEGREES 00 MINUTES 00 SECONDS EAST FOR 305.80 FEET TO A POINT; THENCE DEFLECTING TO THE LEFT 90 DEGREES .00 MINUTES 00 SECONDS EAST FOR 133.50 FEET TO THE POINT OF BEGINNING .LYING AND BEING IN SECTION 34, TOWNSHIP 53 SOUTH, RANGE 42 EAST, CITY OF MIAMI BEACH, MIAMI -DADE COUNTY, FLORIDA, CONTAINING 40,824 SQUARE FEET. ©Q © D 9 aaC1 rn Q� nnnnn PLAN VIEW SUIDING LOCATION ; N.T.S. PENN AVE. 59.08' r NO 30 5.80' 65.32' i i�FOUND NAIL DISC SET. dcD 10.00 0. 0' 10.00' E LB / 87 3 .00' 35.00' y W J LLJ... J II J f{ o k1 6 viva .1 0' _P.O.B. NORTHERLY 305.80NO THERLY .29' EXHIBIT „B„ Site flan of Retail Space /Premises and Location of Restaurant Space within the Retail Space /Premises { 1 �. L.1I �N �\M J ,- r % -- {{ . I IJ C 1211 R t� rl � r rti ' � � , `' `• � i -- _L1__I L._L S * ** NT SPACE * ** I I N 220,_9„ � \ Ili RETAIL SPACE SITE PLAN ;f , SCALE 3/64": 1'0" 4 t. c._ ..u:+' _ _ ..•:> .. .. �.�y5 i �_ r. .:, t . 4_L ,� 3 f 7 1. �. / � 1 S � r t �I RETAIL SPACE WEST ELEVATION SCALE 3/64": 1'0" EXHIBIT "B -1 Site Plan and Location of Additional Area (Storage Space). To Be Included PIN CONC SPACE a -a 314" 1I� p D � 3 { 5:03/4 V) r v n z --I ---1 p 0� �Cp D ?t C) p l dw m rn m I F - n I i �' i 29 �- -n 3. i O D _ r -1 148 s p m z `a,` I \7 sl 0 O 7 o c v �/��i � IiTTTTTTT D C) r) m -m T- e`r�na• �`�� Liououonmuou�ihFiP� TO m G - 1 - -- —� — a n - n 1 1 I i 3- -u ... _.... .. _ 8:- 5'3/8 \ ._. ..__ :' T�_ ... _... i ^ - rn m vii ' --irn p pm m �a r T °`CFn C) 2I + i4' - n m is mate Fn h \ l -iii iim4a_ a14 =�=� f f i i t l t I' I , EXHIBIT "13-2" Description of Landlord's Work TENANT AGREES AND ACKNOWLEDGES THAT IT IS EXPRESSLY ACCEPTING POSSESSION OF THE RETAIL SPACE AND THE PREMISES IN ITS "AS IS" "WHERE :IS" CONDITION EXCEPT FOR THE FOLLOWING IMPROVEMENTS ( "LANDLORD'S WORK "), which are existing on the Restaurant Portion of the Premises /Retail Space as of the Lease Commencement Date: Vanilla Shell Retail Space. shall mean a construction space delivered by the Landlord which shall include (i) i concrete 9 . slab floor broom swept, (ii) weathertight space including all storefront, lass windows , ,insulated exterior_ walls and concrete ceiling - slab, (iii) no demising wails between retail spaces or partitions shall be. installed, (iv)' one exterior door per retail space, (v) central electrical room with one retail electrical service, (vi) one 3" empty electrical conduit .from the demising line of each retail space to the central fire alarm room, (viii) fire protection main line installed above the typical ceiling elevation of each retail space and .capped, (ix) a.2" diameter domestic water line with shut -off valve installed above the typical ceiling elevation of each. retail space, (x) a 4" capped sanitary , sewer stub -out in. one location to each retail space, (xi) a dedicated location in the Garage for retail tenants' HVAG condenser units and. an obstruction -free path from this dedicated location to each retail space for tenants' installation of HVAC piping for this equipment, (xii) no gas service shall be brough to any retail space, (xiii) no grease trap shall be provided fo any retail space(xiv) normal fresh air and exhaust air grilles shall be designed for each retail space with blank -off plates, (xv) no large kitchen exhaust duct or path shall be provided from any retail space:to the exterior of the Garage. EXHIBIT «C„ Pre -Lease Agreement , ji l r OFFICE OF THE CITY ATTORNEY F L 0 R I D A JOSE SMIT]H( Telephone: (305), City Attorney facsimile: (305) 6737002 May 17, 2011 Amir Ben -Zion Penn 17, LLC 5700 Collins Ave. PH A Miami Beach, FL 33140 Re: Pennsylvania Avenue Garage 1661 Pennsylvania Avenue Miami Beach, Florida 33139 (Property) PRE -LEASE AGREEMENT BETWEEN CITY OF MIAMI BEACH, FLORIDA AND PENN 17, LLC Dear Mr. Ben -Zion: The following Letter Agreement (which may also be referred to herein as the Pre -Lease Agreement) shall confirm and memorialize the understanding between the City of Miami Beach , Florida (hereinafter City or Landlord) and Penn 17, LLC (hereinafter Gigi or Tenant), with regard to the Pre -Lease Due Diligence Period agreed to between the parties pursuant to that certain Letter of Intent, dated April 4, 2011 , as executed by Tenant on April 5, 2011, and approved by the Mayor and City Commission on April 13, 2011, pursuant to Resolution No. 2011 -27647 (the LOI). A copy of the LOI is attached and incorporated as Exhibit "A" to this Agreement. Commencing retroactively from the date of approval of the LOI by the City, or April 13, 2011, and continuing until 5:00 PM Eastern Standard time on October 13, 2011 (the Due Diligence Period), Tenant and its agents shall make reasonable, diligent, good faith efforts to obtain a Building Permit for the intended Use of the Premises (as such terms - "Use" and "Premises " -- are defined in the LOI) by no later than the expiration of the Due Diligence Period (or 5:00 PM EST on October 13, 2011; such date hereinafter referred to as the Expiration Date). For purposes of this Letter Agreement, a "Building Permit" shall mean a "Full Building Permit," as defined. in the City's Land Development Regulations;, issued by the City's Building Department; and which allows building or structures to be erected, constructed, altered, moved, converted, extended, enlarged, or used for any purpose, in conformity with applicable codes and ordinances, n In consideration of the City's granting of the aforestated Due Diligence Period, Tenant shall,` concurrent with its execution of this Letter Agreement, tender to City a Pre -Lease Deposit, in the ' 1700 Convention Centex Drive -- Fourth Floor -- Miami Beach, Floridan 33139 y i amount of $25,000, which will only be refunded to Tenant if, after making reasonable, diligent, good faith efforts, Tenant is unable to obtain a Building Permit for the Premises by the Expiration Date. Tenant shall be deemed 'to have made "reasonable, diligent, good faith efforts " under this Agreement if it satisfies the following conditions during the Due Diligence Period (and further, where provided below, during the express timeline within such Period): 1. Tenant shall enter into a contract with a Florida certified and licensed architect /engineer (the A/E Contract) which shall include, at a minimum, services for the preparation of detailed plans and. specifications (including any layouts, architectural, mechanical, structural, and other plans, drawings, and /or construction documents which may be reasonably required by the City's Building Department in order to process and review Tenant's Building Permit application) for any and all proposed improvements and /or alterations to the Premises for Tenant's proposed Use (including, without limitation, those certain improvements /alterations specified as part of Tenant's Investment, as such term is defined in the LOI). Tenant shall provide the City Manager with a fully executed copy of the A/E contract as evidence of satisfaction of this condition. 2. Following execution of the A/E Contract, Tenant shall (i) submit a complete application fora Building Permit to the City's Building Department (which application shall include, without limitation, any required plans, drawings and /or other construction documents referenced in subsection (1) above); AND, concurrent therewith, (ii) obtain a Building Permit Process Number from the City's Building Department, no later than four (4) months from the commencement date of the Due Diligence Period (i.e. no later than August 13, 2011). Tenant shall provide the City Manager with the Building Permit Process Number'as evidence of satisfaction of this condition. In the event that Tenant satisfies the requirements in subsections (1)' and (2) above, but is unable to obtain a Building Permit by the Expiration Date, then Tenant shall be deemed to have made reasonable, diligent, good faith efforts under this Agreement to obtain such Building Permit and, upon written request to the City Manager, shall be entitled to return of its Pre -Lease Deposit. Upon return of the Pre -Lease Deposit by the City, this Agreement shall automatically terminate and be of no further force and effect, and Tenant shall not be obligated to enter into the Lease for the Premises. In the event that Tenant does not satisfy either or both of the aforestated conditions in subsections (1) and (2), within the time period(s) provided herein, then Tenant shall be deemed NOT to have complied with its obligation to make reasonable, diligent, good faith efforts under this Agreement to obtain its Building Permit and, accordingly, the City shall be entitled to retain Tenant's Pre -Lease Deposit as liquidated damages, without further notice, demand, and /or any other action required. In such event, this Agreement shall automatically terminate and be of no further force and effect, and Tenant shall not be obligated to enter into the Lease; provided, however, that upon written notice to the City Manager (Tenant's Election Notice)- -which notice must be delivered to the Manager no later than five (5) business days from the automatic termination of the Pre -Lease Agreement or the Expiration Date, whichever is earlier -- Tenant may elect to proceed to enter into the Lease (upon the same terms and conditions as set forth in the L01) and, in such event, the Pre -Lease Deposit shall be credited toward Tenant's Minimum Security Deposit (as such term is defined in the LO1). Notwithstanding the preceding, or Tenant's timely Election Notice, if Tenant does not execute the Lease within seven (7) calendar days from the date of Tenant's Election Notice, then Tenant's election shall terminate and be of no further force and effect; neither party shall be obligated to enter into the Lease; and the City shall be. entitled to retain the Pre -Lease Deposit as liquidated damages. 2 OFFICE OF THE CITY ATTORNEY - 1700 CONVENTION CENTER DRIVE -MIAMI BEACH,, FLORIDA 33139 In the event that Tenant obtains its Building Permit on or before the Expiration Date, then this Agreement shall automatically terminate and the parties shall proceed to enter into and execute the Lease. In that case, the Lease Commencement Date (as such term is defined in the LOI) shall be the date of issuance of the Building Permit, and the Pre -Lease Deposit shall be credited toward Tenant's Minimum Security Deposit. Notwithstanding the preceding, if Tenant does not execute the Lease within seven (7) calendar days from the date of issuance of the Building Permit, then the City shall be entitled to retain the Pre -Lease Deposit as liquidated damages. In Tenant's pursuit of its Building Permit, and upon reasonable prior written notice to the City Manager requesting same, the City, at Tenant's sole cost and expense shall sign (within a . reasonable period of time), all documents that are required of it under applicable law as Landlord and owner of the Premises (including, without limitation, owner's affidavits, etc.). Further, in recognition of Tenant's commitment to diligently pursue its Building Permit, and Tenant's anticipated expense of funds in pursuit thereof, the City agrees during the term of this Agreement or the Due Diligence Period, whichever expires earlier, to accept only back -up offers for leases) for all or.a portion of the Premises, and will, in good faith, continue to negotiate the final terms of the Lease for the Premises with Tenant (consistent with those terms and conditions set forth in the LOI). If the .aforestated meets with your approval, please acknowledge and execute same in the space provided below. Upon execution by the City Manager (on behalf of the City), we will forward a fully executed copy to you for your records, - uly yo Raul J. Aguila Chief Deputy ity Attorney 1 have read this letter agreement and fully understanding same, agree to be bound by the terms and conditions contained h - rein. Tenant/Pen, LL Landlord /City of Miami Beach 1. By. ey. Tenant jg`g'. ure ore . G za Cit Ma er Print Name Date Date RJA/ed c; Hilda Fernandez, Assistant City Manager Jorge Gomez, Assistant City Manager Anna Parekh, Real Estate, Housing and Comm. Dev. Director 3 OFFICE OF THE CITY ATTORNEY - 1700 CONVENTION CENTER DRIVE - MIAMI BEACH, FLORIDA 33139 i t GROUP RETAIL REAL ESTATE & BROKERAGE April 4, 2011 Amir Ben -Zion Pennsylvania 17 LLC 5700 Collins Ave. PH A Miami Beach, FL 33140 Re: Pennsylvania Avenue Garage 1661 Pennsylvania Avenue Miami Beach, FL 33139 (the Property) Dear Amir: On behalf of the City of Miami Beach (City), as owner of the above referenced Property, I am pleased to present the following Letter of Intent (LOI), setting forth the substantive business terms under which the City would enter into a lease agreement (the Lease) with Pennsylvania 17 LLC (Tenant), for the Premises (as described below). Notwithstanding the preceding, this LOI is subject to and conditioned upon the following: 1. approval of the LOI by the Mayor and City Commission, 2. approval of the Pre -Lease Due Diligence Review Period Agreement (as described below) by the Mayor and City Commission, and execution of same by Tenant and the City; and 3. approval, in substantial form, of the Lease by the Mayor and City Commission, and execution of the final negotiated Lease by Tenant and the City. Property: Pennsylvania Avenue Garage, 1661 Pennsylvania Avenue, Miami Beach, Florida. Premises: Approximately 7,000 sq ft of ground floor retail space on the Property, to be leased in "AS IS" "WHERE IS" condition. Tenant: Pennsylvania Avenue LLC, DBA Gigi. Use: The main /primary use of the Premises shall be for the operation of a high quality restaurant, similar in menu /service to Gigi Restaurant (located at 3470 North Miami Avenue, Miami, Florida), as well as secondary ancillary uses for a high quality bakery, small bar /cafe, and book & gift shop. 1665 Washington Avenue, Penthouse, Miami Beach, Florida 33139 Telephone (305) 532 -6100 Fax (305) 532 -6101 Additional Area (Dry Storage): Tenant has identified an additional unused space underneath the garage ramp of the Property as possible space for dry storage (the Additional Area). Tenant, at Tenant's sole cost and expense, shall build -out the entire Additional Area in order to make said Area usable for its intended purpose, which will include, without limitation, installing door access and pouring flooring. The square footage for Tenant's portion of the Additional Area shall be included (as additional square footage) in the Premises above, and shall also be included for purposes of calculating Tenant's payment of any additional real estate taxes and insurance charges (on that additional square footage), but not for purposes of calculating (additional) Base Rent. In consideration of this, the Tenant shall utilize fifty (50 %) percent of the Additional Area (a minimum of 500 SF), and shall allow the balance to be used by the City, at no charge to City. Outdoor Seating (Sidewalk Cafe): Subject to City approval and (if approved) Tenant's compliance with all applicable government requirements including, without limitation, the City's Sidewalk Cafe Ordinance (as same may be amended from time to time), Tenant shall be entitled to use an outside area adjacent to and fronting the Premises (as further determined by the City's Public Works Director) for use as an outdoor sidewalk cafe. Tenant acknowledges that any such outdoor seating area must be approved, and subject to annual renewal, by the City pursuant to the City's Sidewalk Cafe Permit procedures, and shall not be as a matter of right under the Lease. Further, any such Sidewalk Cafe Permit will be issued as a revocable license consistent with other sidewalk cafe permits in the. City, and there will be the standard fees and costs associated with that Permit (in addition to the Rent and other charges described in this LOI). Flood Panels: Tenant acknowledges that. in the event the City determines, in its sole and reasonable discretion, that a condition arises that requires. the installation of flood panels on the Premises, then Tenant will assume sole and immediate responsibility for installation of same. Once the City determines (also in its sole and reasonable discretion) that the condition necessitating the installation has passed, Tenant shall also assume sole and . immediate responsibility for removal and storage of the flood panels. Tenant Investment: As an added inducement to have City enter into the Lease, Tenant covenants and agrees that it will invest, or cause to be invested, no less than $1,200,000 in hard construction costs on /to the Premises �4 including, without limitation, the following fixed, non - removable improvements: grease trap; HVAC units and distribution; plumbing installed and distributed for kitchen and bathrooms; completed bathrooms for not less than 200 patrons; and electrical system installed with distribution. As a condition of issuance of the Temporary Certificate of Occupancy (TCO) for the Premises, Tenant shall first certify to the City that it has, in fact, expended not less than the required aforestated amount(s) for hard construction costs. Construction Escrow and Guaranties: Following Lease execution, and issuance by the City of Tenant's Full Building Permit, and prior to commencement of construction, Tenant shall deposit, in cash or through a Letter of Credit (in a form reasonably acceptable to and approved by the City), construction funds, in the amount of the cost of the work (as such amount is set forth in the construction contract between Tenant and its General Contractor) for the build -out of the Premises for the intended Use(s), which will be deposited into Tenant's attorney's escrow account to guarantee the diligent and timely prosecution of construction. At its sole discretion, the City may also require that Tenant's General Contractor (G.C.) furnish the City with a Construction Completion Guaranty, and /or require Tenant's G.C. to furnish a Payment and Performance Bond (in a form reasonably acceptable to and approved by the City), guaranteeing the performance of the G.C. under the construction contract. The City shall be named as a dual obligee under such Bond. Term: Nine (9) years and 364 days. Initial Base Rent. Year 1: $75.00 psf. .Increases: Three (3 %) percent, per year commencing with Year 3 of the Lease. Additional Rent: Tenant shall pay ' its proportionate share of Common Area Maintenance share of (CAM), real estate taxes, and insurance for the Property (which is projected to be $10.00 psf for Year 1 of the Lease). Percentage Rent: In addition to the annual Base Rent and Additional Rent, Tenant shall also pay an annual Percentage Rent of two percent (2 %) of gross sales in excess of $8,000,000. Should sales exceed $9,000,000, the Percentage Rent shall increase to three (3 %) Y\1 percent above $9,000,000. Tenant shall report sales annually on the anniversary date of the Rent Commencement Date. Lease Commencement Date: The earlier of: (1) end of the six (6) month term of the Pre -Lease Agreement (as set forth below), (ii) or issuance by the City of a Full Building Permit. Rent Commencement Date: The earlier of: (1) 180 days from the Lease Commencement Date or; (ii) 90 days from the issuance of a Temporary Certificate of Occupancy (TCO) or Tenant's opening for business, whichever is earlier. Prepaid Rent: One month of Base Rent ($43,750), due upon Lease execution Minimum Security Deposit: Three (3) months Base Rent ($131,250), due upon Lease execution. Pre -Lease Due Diligence Review Period. It is the intent of Landlord and Tenant for Tenant to be granted a Pre -Lease Due Diligence Period based upon the following terms, which will be memorialized in a written agreement (the Pre -Lease Agreement) to be entered into between the parties, following approval of this LOI by the Mayor and City Commission: • As a condition of the City's approval and execution of the Pre -Lease Agreement, and 'concurrent therewith, Tenant shall tender to the City a $25,000 deposit, which will only be refundable if, after good- faith, diligent efforts, Tenant is unable to obtain a Full Building Permit for the Premises by the end of the term of said Agreement (as set forth below). In that event, Tenant shall not be obligated to enter into the Lease; provided, however, that Tenant may elect to waive the aforestated condition and proceed to enter into the Lease, in which case the $25,000 security for the Pre -Lease Agreement shall be credited toward Tenant's Minimum Security Deposit. • The Pre -Lease Agreement shall be for a maximum term of six (6) months, which shall commence (following approval of this LOI by the Mayor and City Commission) upon execution of the Agreement by the parties hereto; provided, however, that in the event Tenant obtains its Full Building Permit prior to the end of the maximum six (6) month term, then the Pre - Lease Agreement shall automatically terminate and the parties shall proceed to execute the Lease ; the Lease Commencement Date shall be deemed to have commenced as of the date of issuance of the Full Building Permit. • Tenant shall be deemed to have made its "good faith, due diligence efforts" under the Pre -Lease Agreement if it satisfies the following conditions during the term of the Agreement, or with the timeline expressly provided therein: (i) contract with a Florida certified and licensed architect /engineer to prepare any and all required plans and specifications for the proposed Uses on the Premises including, without limitation, such construction documents as required by the City's Building Department in order to process and review Tenant's Building Permit application; and (ii) submit a complete application (including the required plans, drawings, and construction documents) for a Building Permit, and obtain a Building Permit process number from the City's Building Department no later than four (4) months from the commencement of the term of the Pre- Lease Agreement. • City shall agree to sign within a reasonable period of time, all documents that are required of it as Landlord /Owner in Tenant's pursuit of a Building Permit. • Time is of the essence and it shall be a requirement of the Tenant to notify the City if for any reason it deems that it cannot construct its proposed facility. • In consideration of Tenant's diligent pursuit of a Full Building Permit for the Premises and the expense of funds anticipated by Tenant in said pursuit, City agrees to accept only back -up contracts during the term of the Pre -Lease Agreement, and will, in good faith, continue to negotiate the Lease anticipated in this LOI. Sole Broker(s): Koniver Stern Group and City Realty Group International (Jon Jacobs, Realtor). Contingency: The terms of this LOI shall be subject to approval by the City Commission. Good Faith Negotiations: This L01 represents some of our undertakings regarding a possible future Lease and is not intended to create a' legally binding obligation on either party. Such an obligation will be created only when a proposed Lease is approved by the Mayor and City Commission and both parties execute the final Lease, covering all of the rights and obligations of the parties, which is then delivered by and between us. If the Lease is not approved by the Mayor and City Commission, and /or not executed by the parties, then neither party will be liable to the other under this document or as a result of any preliminary negotiation; provided, however, that in the event of Tenant's non - compliance with the conditions of the Pre -Lease Agreement, the City shall be entitled to retain Tenant's $25,000 deposit. The foregoing 1_01. is also predicated upon receipt of acceptable personal and corporate financial and business background information. Please sign in the space indicated below, if you are in agreement with the terms stated herein, provide the required financial information, and I will forward the City's draft Lease for your review upon final approval of the LOI by the Mayor and City Commission. If you should have any questions, please do not hesitate to contact me at 305-532 - 6100. Thank you. Lyle Stern Koniver Stern Group AGREED AND ACCEPTED BY TENANT /PENN 17 LLC: By: Sig � STEVEN E. MCNEFF * * Notary Public - State of Florida Print Name/Title ;N9r oar My Comm. Expires Oct 17, 2014 OF C!Tdiission # EE 3023 Date: r' i EXHIBIT "D" Rules and Regulations 1. Security Landlord may from time to time adopt appropriate systems and procedures for the security or safety of the Facility, any persons occupying,' using, or entering the same, or any equipment, furnishings, or contents thereof, and Tenant shall comply with Landlord's reasonable requirements relative thereto. 2. Return of Keys At the end of the Term, . Tenant shall promptly return to Landlord all keys for the Retail Space and Premises which are in the possession of Tenant. In the event any Tenant fails to return keys, Landlord may retain $100.00 of Tenant's security deposit for locksmith work and administration. 3. Repair, Maintenance Alterations and Improvements Tenant shall carry out Tenant's repair, maintenance, alterations, and improvements in the Premises /Retail Space only during times agreed to in advance by Landlord and in a manner which will not interfere with the rights of other patron to the Facility. 4. Water Fixtures Tenant shall not use water fixtures for' any purpose for which they are; not intended, nor shall water be wasted by - tampering with such fixtures. Any cost or damage resulting from such misuse by Tenant shall be paid for by Tenant. 5. Personal Use of Premises /Retail Space The Premises /Retail Space shall not be used or permitted to be used for residential, lodging, or sleeping purposes or for the storage of personal effects or property not required for business purposes. 6. Heavy Articles Tenant shall not place in or move about the Premises /Retail Space without Landlord's prior written consent any safe or other heavy article which in Landlord's reasonable opinion may damage the Premises /Retail Space, and Landlord may designate the location of any such heavy articles in theFacility. 7. Bicycles, Animals Tenant shall not bring any animals or birds into the Facility, and shall not permit bicycles or other vehicles inside or on the sidewalks outside the Premises /Retail Space except in areas dE�signated from time to time by Landlord for such purposes. 8. Deliveries Tenant shall ensure that deliveries of supplies, fixtures, equipment, furnishings, wares, and merchandise to the Premises /Retail Space are made through such entrances, elevators,_ and corridors and at such times as may from time to time be designated by Landlord, and shall promptly pay or cause to be paid to Landlord the cost of repairing any damage in the Premises /Retail Space, or the Facility, caused by any person making improper deliveries. 9. Solicitations Landlord reserves the right to restrict or prohibit canvassing, soliciting, or peddling in the Facility. 10. Refuse Tenant shall place all refuse in proper receptacles provided by Tenant at its expense in the Premises /Retail Space or in receptacles (if any) provided by Landlord for the Premises /Retail Space, and shall keep sidewalks and driveways outside the Premises /Retail Space, and lobbies, corridors, stairwells, ducts, and shafts of the Premises /Retail Space, free of all refuse. 11. Obstructions Tenant shall not obstruct or place anything in or on the sidewalks or driveways outside: the .Premises /Retail Space or in the lobbies, corridors, stairwells,-or other common areas or use 'such. y purpose p p Y locations for an ur ose exce t access to and exit from the Premises /Retail Space without Landlord' s .:prior Written consent. Landlord may remove at Tenants expense any such obstruction or thing caused or placed by Tenant (and unauthorized by Landlord) without notice or obligation to Tenant. 12. Proper Conduct Tenant shall not conduct itself in any manner which is inconsistent with the . character of the - Premies /Retail Space . as a first quality retail center, or which will impair the. comfort and convenience of other patrons in the Facility. 13. Employees, Agents, and Invitees In these Rules and Regulations, 'Tenant" includes the • employees, agents, invitees, and, licensees of Tenant and others- permitted by Tenant to use or occupy the Premises /Retail Space. 14. Pest. Control In order to maintain satisfactory and uniform pest control throughout the "Facility, Tenant shall engage for the Premises /Retail Space and at its sole cost, .a qualified pest extermination contractor either designated or approved by Landlord, who shall perform pest controls and extermination services in the Premises /Retail Space at such intervals as reasonably required or as may be directed by Landlord: EXHIBIT "E.' Landlord's Signage Criteria All building - signage -shall be consistent in type, composed of flush mounted non- plastic, individual letters and shall'. require a separate permit. `Based on the design of the building and its lighting scheme, signage : should- be located in the window transom at the ground level of the structure, in ,a manner to be reviewed and approved by the City's Planning Department. EXHIBIT T" Construction Escrow Agreement :r s i r WORK LETTER AND ESCROW AGREEMENT THIS WORK LETTER AND ESCROW AGREEMENT (this "Work Letter ") is attach5o to and made a part of that certain Lease (the "Lease "), dated this ��day of 2011, by and between CITY OF MIAMI BEACH, a Florida municipal corporatioh and MIAMI BEACH REDEVELOPMENT AGENCY, a public body corporate and politic (collectively, "Landlord "), and PENN 17 LLC, a Florida limited liability company ( "Tenant ") and MITRANI, RYNOR, ADAMSKY, & TOLAND, P.A. ( "Escrow Agent "). The terms and provisions of the Lease are hereby incorporated into this Work Letter by reference. In the event of any inconsistencies between this Work Letter and the Lease, the provisions of this Work Letter shall control. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Lease. The term "Landlord" as used herein, refers to the City of Miami Beach, Florida and Miami Beach Redevelopment Agency, acting in their proprietary capacities as owners and landlords and not in their governmental capacities. In consideration of the execution of the Lease, the mutual covenants and conditions hereinafter set forth, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Landlord, Tenant and Escrow Agent agree as follows: I. CONSTRUCTION OF TENANT'S WORK; TENANT DEPOSIT: 1. Building Shell; Construction of Tenant's Work The terms of the Lease contemplate that Landlord shall construct the shell of the Building in compliance with the Lease, (the "Building Shell "). Landlord shall deliver the Building Shell to Tenant and, subject to the terms, covenants and conditions set forth in this Work Letter, Tenant shall build -out, construct and /or install, at Tenant's sole cost and expense, such walls, partitions, fixtures and other improvements in and to the Premises as Tenant deems necessary or desirable in order to make the Premises suitable for Tenant's intended use (the "Tenant's Work "). This Work Letter sets forth the agreement of Landlord and Tenant with respect to the construction and /or installation of the Tenant's Work, and all ancillary matters connected therewith and Tenant's deposit into escrow of certain funds, the disbursement of which is governed hereby. 2. Tenant Deposit Simultaneously with execution of this Work Letter, Tenant shall deposit with Escrow Agent the sum of One Million Dollars ($1,00,000.00) (the "Tenant Construction Fund ") to be paid as follows: (a) $500,000 simultaneously with execution hereof, receipt of which Escrow Agent hereby acknowledges, and (b) $500,000 to be deposited with Escrow Agent on or before forty five (45) days after the date hereof, time being of the essence. Escrow Agent shall give written notice to landlord promptly after receipt of the payment required by subparagraph (b. Failure of Tenant to make the deposit required by subparagraph (b) on or before the date when due shall constitute a default by Tenant under this Work Letter and di dl er the Lease and shall entitle Landlord to exercise all remedies available thereunder or at law 'o n equity for Tenant's default. The Tenant Construction Fund shall be held and disbursed Escrow Agent in accordance with the terms of this Work Letter to pay actual Hard Costs -,pf constructing the Tenant's Work. In no event, however, shall any portion of the Tenant r° Construction Fund be used to pay any "Soft Costs." As used herein, "Hard Costs" shall m a'` MIAML557449.5 CO A L direct contractor costs of labor, material, equipment, services, contractor overhead and profit. As used herein, "Soft Costs" shall mean all costs of the Tenant's Work other than Hard Costs. Soft Costs include, without limitation, architectural, engineering and legal fees; costs of financing, insurance, bonding, and security; impact fees; utility hook -up fees; costs of permits; pre - construction and post- construction expenses, and all other costs that are not direct costs of construction. All Soft Costs shall be paid as and when due from Tenant's own funds other than the Tenant Construction Fund. 3. No Unused Tenant Construction Fund Upon final completion of the Tenant's Work, and payment of the unpaid hard costs for such Tenant's Work, Tenant shall have no right to receive any unused portion of the Tenant Construction Fund, if any. Any unused portion of the Tenant Construction Fund after completion of the Tenant's Work shall be deemed forfeited to Landlord as Additional Rent. Tenant recognizes and agrees that Tenant has committed to expend not less than One Million Two Hundred Thousand Dollars ($1,200,000.00) towards Hard Costs of construction of the Tenant's Work. Tenant's failure to do so shall (a) constitute a default by Tenant under the Lease and entitle Landlord to exercise all remedies available under the Lease or this Work Letter or at law for Tenant's default; and (b) result in forfeiture to Landlord of any unexpended portion of the Tenant Construction Fund as Additional Rent under the Lease. 4. Services; Landlord's Inspection During build -out of the Tenant's Work, Tenant shall be responsible for procuring, at its own cost and expense, any and all utilities or services necessary in connection therewith. Tenant shall be responsible for the cost of any additional security which may be required as a result of Tenant's construction of the Tenant's Work, which costs are Soft Costs and may not be paid out of the Tenant Construction Fund. 5. Delay in Substantial Completion Tenant shall not commence construction of Tenant's Work until the date specified by Landlord ( "Start Date ") to Tenant in written notice. Tenant shall use its best efforts to Substantially Complete the Tenant's Work in accordance with the Tenant's Construction Drawings (as hereinafter defined), not later than the Estimated Completion Date. The "Estimated Completion Date" shall be June 1, 2012. "Substantial Completion" shall mean the date that (i) a final Certificate of Occupancy has been issued for the Premises and (ii) the Tenant's Work is sufficiently complete so as to allow Tenant to occupy the Premises for the purpose of conducting its business therein. In the event that the Substantial Completion is delayed past the Estimated Completion Date for any reason whatsoever, Tenant shall still commence to pay Rent under the Lease as of the Rent Commencement Date (as such term is defined in Item 10 of the Lease Summary), notwithstanding the fact that Substantial Completion has not occurred. 6. Landlord's - Disclaimer Notwithstanding the issuance of any approvals or consents by the Landlord, Landlord has no obligation or responsibility whatsoever for the adequacy, form or content of the Tenant's Construction Drawings, any contract, any change order, or any other matter incident to the Premises or the construction of the Tenant's Work. Any inspection of the Premises or the Tenant's Work shall be for Landlord's protection only and shall not constitute any assumption of responsibility to Tenant or anyone else with regard to the condition, construction, maintenance or operation of the Premises or the Tenant's Work or relieve Tenant of any of Tenant's obligations. Tenant shall select all surveyors, architects, 2 MIAMI:557449.5 engineers, contractors, materialmen and all other persons or entities furnishing services or materials to the Premises. Landlord has no duty to supervise or to inspect the Premises or the construction of the Tenant's Work nor any duty of care to Tenant or any other person to protect against, or inform Tenant or any other person of, the existence of negligent, faulty, inadequate or defective design or construction of the Tenant's Work. Landlord shall not be liable or responsible for any defect in the Premises or the Tenant's Work, the performance or default of Tenant, Tenant's Architect or Engineer, Contractor, or any other party, or for any failure to construct, complete, protect or insure the Tenant's Work, or for the payment of costs of labor, materials or services supplied for the construction of the Tenant's Work, or for the performance of any obligation of Tenant whatsoever. Nothing, including acceptance of any document or instrument, shall be construed as a representation or warranty, express or implied, to any party by Landlord. Inspection shall not constitute an acknowledgment or representation by Landlord that there has been or will be compliance with the Tenant's Construction Drawings or applicable laws and governmental requirements or that the construction is free from defective materials or workmanship. Inspection whether or not followed by notice of default shall not constitute a waiver of any default then existing, or a waiver of Landlord's right thereafter to insist that the Tenant's Work be constructed - in accordance with the Tenant's Construction Drawings, applicable laws, and governmental requirements. Landlord's failure to inspect shall not constitute a waiver of any of Landlord's rights under the Lease or Work Letter or at law or in equity. Tenant agrees that it shall be solely responsible for supervising the construction of the Tenant's Work, and Landlord shall have no obligation to provide any such administrative or management services. II. TENANT'S CONSTRUCTION DRAWINGS; BUDGET; DISBURSEMENT OF TENANT'S CONTRIBUTION FUND: 1. Contents of Tenant's Construction Drawings. The Tenant's Work shall be completed in accordance with Tenant's Plans and Tenant's Construction Drawings as approved by Landlord pursuant to Article V of the Lease. 2. Tenant's Architect; Tenant's Engineers Tenant shall employ a licensed architect approved by Landlord ( "Tenant's Architect ") in preparation of the Tenant Plans and Tenant's Construction Drawings, which shall be prepared and sealed in such a manner as may be required for the issuance of a building permit. All engineering drawings (the "Engineering Drawings "), shall be prepared by engineer(s) approved by Landlord ( "Tenant's Engineers "). 3. Modification of Tenant's Construction Drawings Once approved, except as provided in Article IV, Section 8 hereof, no changes in, or revisions or additions to, the Tenant's Plans and Tenant's Construction Drawings may be made without the prior written approval of Landlord. Tenant shall provide Landlord with computerized architectural drawings ( "CAD ") of the Tenant's Plans and Tenant's Construction Drawings on disk. Upon completion of the Tenant's Work, Tenant shall provide Landlord with "as- built" plans both in blue print form and in CAD form. 4. Construction Budget Tenant shall cause Contractor to prepare a detailed budget setting forth the total cost and expenses for construction of the Tenant's Work in accordance with the Tenant's Construction Drawings, which budget shall reflect actual Hard Costs of J MIAM1:557449.5 construction of not less than $1,200,000 and shall be subject to the approval of Landlord (the "Budget "). In the event that, at any time during construction of the Tenant's Work, the amount remaining in Tenant Construction Fund is not, in the opinion of Landlord, sufficient to complete the Hard Costs of the Tenant's Work, Tenant agrees to contribute a sum equal to the deficiency ( "Tenant's. Excess ") into the Tenant Construction Fund. The Escrow Agent shall not be entitled to disburse any portion of the Tenant Construction Fund until Tenant shall have deposited the Tenant's Excess into the Tenant Construction Fund. 5. Disbursement of Tenant Construction Fund Tenant agrees that in connection with any request for disbursement of the Tenant Construction Fund, Tenant shall comply with each of the requirements set forth in Article V hereof. Tenant further agrees to provide Landlord and Escrow Agent with proof of compliance prior to disbursement of any portion of the Tenant Construction Fund. III. CONTRACTOR; CONSTRUCTION CONTRACT; PERFORMANCE BOND; BUILDING PERMITS: 1. Contractor The Contractor employed by Tenant shall be subject to Landlord's approval, which shall not unreasonably. be. withheld ( .'Contractor ") and shall enter into a construction contract with Tenant ( "Construction Contract "). The Contractor shall be responsible for obtaining all necessary permits and approvals, which expense shall be a Soft Cost and shall not be paid for out of the Tenant Construction Fund. All construction performed by the Contractor shall be done in accordance with, and subject to, each of the terms, covenants and conditions set forth herein. In addition thereto, Tenant shall advise the Contractor, and all subcontractors, materialmen and suppliers that no interest of Landlord in the Premises, the Building or the Project shall be subject to liens to secure payment of any amount due for work performed or materials installed in the Premises. 2. Building Permits Prior to commencing any work, Tenant shall obtain, at its sole cost and expense, and shall furnish copies to Landlord, all building and other permits required to construct the Tenant's Work. The cost for such building and other permits are Soft Costs and may not be paid out of the Tenant Construction Fund. 3. Performance Bond Tenant shall require its Contractor to provide unconditional performance and payment bonds covering the total value of the Tenant's Work issued by a surety acceptable to Landlord. Said bonds shall be issued for each subcontractor, contractor or materialman furnishing material or providing labor or services to the Premises and shall (i) name Landlord as an additional obligee, (ii) be in an amount, in form and content, and issued by sureties, satisfactory to Landlord and (iii) be in compliance with all applicable laws. The cost of the performance and payment bond premiums are Soft Costs and may not be paid from the Tenant Construction Fund. ,y IV. TENANT'S COVENANTS WITH RESPECT TO CONSTRUCTION OF THE TENANT'S WORK: Tenant hereby covenants and agrees with Landlord as follows: 4 MIAML557449.5 I . Construction (i) Prior to the commencement of construction of the Tenant's Work, to record a Notice of Commencement in the Public Records of Miami -Dade County, Florida, and to post a certified copy thereof in the Premises, in accordance with the requirements of Florida Statutes, Chapter 713, and to designate Landlord as one of the parties to receive a copy of all notices to owner, (ii) to cause the Tenant's Work to be constructed in accordance with the Tenant's Construction Drawings and all applicable Laws (as defined in Article IV, Section 13 hereof), (iii) to do no act that would relieve Contractor from its obligations to construct the Tenant's Work according to the Tenant's Construction Drawings, and (iv) to make no amendments, other than modifications or change orders as may be permitted hereunder, to the Tenant's Construction Drawings without the prior written consent of Landlord. 2. Agreement of Contractor to Complete Construction; Agreement of Tenant's Architect To promptly furnish Landlord with the written agreement of Contractor, acceptable to Landlord, that, in the event of a default by Tenant hereunder or under the Lease or under the terms of the construction contract between Tenant and its Contractor (the "Construction Contract "), Contractor will, at the written request of Landlord, continue performance pursuant to the Construction Contract, until completion of construction of the Tenant's Work, provided Contractor is reimbursed for all work done subsequent to Landlord's request for Contractor to complete construction. Tenant shall also furnish Landlord with the written agreement of Tenant'- s Architect and Tenant's Engineer, that, following a default by Tenant hereunder or under the Lease, (i) Landlord shall be entitled to the use and benefit of the Tenant's Construction Drawings 'and (ii) Tenant's Architect and Engineer will continue performance under its agreement with Tenant, for the benefit of Landlord, upon request therefor by Landlord, provided that Landlord pays Tenant's Architect and Tenant's Engineer for. all services rendered by Tenant's Architect and Tenant's Engineer after Landlord's request. Landlord, at its sole option, shall be entitled to use the Tenant Construction Fund to pay amounts owed to Contractor, Tenant's Architect and /or Tenant's Engineer pursuant to this paragraph, and Escrow Agent shall promptly disburse the funds to Landlord upon Landlord's request. 3. Insurance To obtain and deliver to Landlord prior to the commencement of construction of the Tenant's Work, all insurance or evidence of all insurance required under the Lease and, in addition thereto; the following (all of which are Soft Costs and may not be paid for out of the Tenant Construction Fund): (a) Builder's Risk Insurance Builder's risk insurance, with a deductible of not I more than $5,000, with standard subrogation clauses that shall (i) name Landlord, as an additional insured, (ii) provide coverage equal to the highest insurable value of the Tenant's Work (but in no event less than the contract price under Construction Contract), and (iii) be in such form and issued by such companies as shall be approved by Landlord. The originals or certified copies of such policies, together with appropriate endorsements thereto, including, but not limited to, the written agreement by the insurer or insurers therein to give Landlord thirty (30) days prior written notice of intention to cancel or amend, shall be promptly delivered to Landlord; said insurance coverage to be kept in full force and effect at all times during construction of the Tenant's Work. (b) Statutory Employer Liability and Workman's Compensation Insurance A certificate or certificates from an insurance company reasonably acceptable to Landlord, 5 MIAMI:557449.5 confirming that Tenant and Contractor have obtained statutory worker's compensation and employer's liability coverage in an amount not less than required by law, without allowance for any exemption thereunder. (c) Automobile Insurance Business and Automobile Liability with minimum limits of One Million and No /100 Dollars ($1,000,000.00) per occurrence combined single limit for Bodily Injury Liability and Property Damage Liability. Coverage must be afforded on a form no more restrictive than the latest edition of the Business Automobile Liability Policy, without restrictive endorsements, as filed by the Insurance Services Office and must include: (1) Owned Vehicles, (2) Hired and Non -Owned Vehicles; and (3) Employers' Non - Ownership. Any policy of insurance herein required shall contain a contractual liability endorsement covering indemnity and defense obligations of Tenant and such other coverage as may reasonably be required by Landlord. Such policy will among other things, make specific reference to the Lease and Work Letter. Any policy obtained by Tenant insuring against loss by physical damage to any portion of the Tenant's Work or to materials to be incorporated in the Tenant's Work or covering Tenant's or its contractor's tools, supplies, machinery or equipment shall contain an endorsement providing that the insurer waives its rights of subrogation against Landlord and any other named or additional insured. Nothing in this Section shall give or create in any third party any claim or right against Landlord, except that which may exist irrespective of this Section. The insurance required hereunder may be contained in one or more policies. Prior to commencement of any construction, Tenant shall furnish to Landlord certificates or copies of policies showing that the insurance is in force and that the premiums due thereunder shall have been paid and that the subcontractors of Contractor, and such other persons as .Tenant may direct are named as insured persons jointly with Contractor in respect of any loss covered. The certificates or policies shall provide that the insurance may not be canceled, terminated or modified without thirty (30) days advance written notice thereof to Landlord. In the event of any failure of Tenant to furnish and maintain insurance required hereunder, Landlord, at its option and without waiving the default of Tenant, shall have the right to obtain such insurance for, and in the name of, Tenant. In such event Tenant shall pay the cost thereof upon demand and shall furnish all information required by the insurance carrier. In addition to the foregoing insurance, Tenant shall, prior to commencement of construction, provide or cause to be provided to Landlord from each subcontractor performing services or furnishing labor at the Premises (1) general liability insurance, with limits of One Million and No /100 Dollars ($1,000,000.00) per occurrence and Two Million and No /100 Dollars ($2,000,000.00) in the aggregate and (2) automobile insurance in form and content and in such amount as Landlord may require. 4. Insurance Cooperation To cooperate with Landlord in obtaining for Landlord the benefits of any insurance policy or other proceeds lawfully or equitably payable to it in connection with the transactions contemplated hereby and the collection of any indebtedness or obligation of Tenant to Landlord incurred hereunder. 6 MIAMI-.557449.5 5. Commencement and Completion of Construction Tenant shall. diligently pursue construction to completion, in accordance with (i) the Tenant's Construction Drawings, (ii) all applicable Laws, and (iii) such reasonable rules and regulations as Landlord may impose from time to time to ensure the orderly construction of the Tenant's Work and to minimize disruption. Tenant shall pay all Soft Costs from Tenant's own funds and not from the Tenant Construction Fund and supply such sums of money and perform such duties as may be reasonably necessary to complete the construction of the Tenant's Work on or before the EstimatedCompletion Date pursuant to the Tenant's Construction Drawings and in full compliance with all of the terms, covenants and conditions of this Agreement (the "Completion Date "). Tenant shall satisfy all liens, claims, or assessments (actual or contingent) asserted against the Premises, the_ Building or the Project, for any material, labor, or other items furnished in connection with the construction of the Tenant's Work, and shall comply with the Florida Mechanics.' Lien Law, Chapter 713, Florida Statutes. In connection with the construction of the Tenant's Work, Tenant shall comply or cause Tenant's Contractor to comply with all construction, use, building, zoning, and other similar requirements of any governmental authority having or asserting jurisdiction over the Premises, or the Project. Upon request by Landlord, Tenant will provide evidence of satisfactory compliance with all of the foregoing to Landlord. In the event any lien shall be filed (whether properly or improperly) against the Premises, or the Project, it shall be removed, satisfied or transferred to bond by Tenant within ten (10) days. Tenant's failure to do so within the ten (10) day period shall be a default hereunder and under the Lease, and (i) Escrow Agent shall have no further right to make any disbursement to Tenant hereunder from the Tenant Construction Fund, and (ii) Landlord shall be entitled to avail itself of all rights and remedies provided for hereunder or under the Lease. 6. Right of Landlord to Inspect Premises To permit Landlord, and Landlord's employees and Landlord's consultants, if any, and their representatives and agents, to enter upon the Premises and to inspect the Tenant's Work and all materials to be used in the construction thereof; and to cooperate and cause Contractor to cooperate with Landlord and its employees, representatives and agents during those inspections; provided, however, that this provision shall not be deemed to impose upon Landlord any obligation to undertake such inspections. 7. Correction of Defects To promptly correct any material defect in the Tenant's Work, or any departure from the Tenant's Construction Drawings not approved by Landlord or permitted hereunder. The advance of any portion of the Tenant Construction Fund shall not constitute a waiver of Landlord's right to require compliance with this covenant. 8. Approval of Change To permit no deviations in excess of $1,000.00 per change or $5,000.00 in the aggregate, from the Tenant's Construction Drawings, without the prior written approval of Landlord. No change(s) shall be permitted unless and until such change(s) shall have been approved in writing by the Landlord in accordance with Article II, Section 3 hereof. 9. Notification of Claims by Subcontractors and Materialmen To advise Landlord monthly and in writing, if Tenant receives any Notice to Owner, written or oral, from any laborer, subcontractor, or materialman in connection with any labor or materials furnished in the construction of the Tenant's Work. MIAMI:557449.5 10. Further Acts To do and execute all and such further lawful and reasonable acts, documents, and assurances for the better and more effective carrying out of the intent and purpose of this Agreement, as Landlord shall reasonably require from time to time. I 1. Architect's Opinion To furnish to Landlord upon request, the written opinion of Tenant's Architect, in form and content reasonably satisfactory to Landlord, certifying, that, based on inter alia, (i) Architect's preparation of the Tenant's Construction Drawings, (ii) Architect's supervision and inspection of construction of the Tenant's Work, (iii) all applicable Laws, and (iv) Architect's professional knowledge and judgment: that (a) the Tenant's Work has been constructed in accordance with the Tenant's Construction Drawings, and in compliance with all Laws, (b) the proposed Tenant's Work can ' be constructed in accordance with the Tenant's Construction Drawings for a cost that does not exceed the price 'set forth in the Construction Contract; and (c) the amount remaining in the Tenant Construction Fund is sufficient to pay for all unpaid Hard Costs of Construction. 12. Certificate of Occupancy To obtain and furnish to Landlord a copy of a final certificate of occupancy, or such other certificate or approval required by any governmental agency to insure that the Tenant's Work has been finally completed and that Tenant can occupy the Premises. 13. Florida Building Laws Tenant and Contractor shall comply with all applicable provision of the Florida Building Codes Act, as amended from time to time, 'the Miami -Dade County Building and Zoning Code, as amended from time to time, and all other applicable laws, rules, ordinances and building or zoning codes (collectively, the "Laws "). 14. Smoke, Alcohol, Drugs and Arms Free Site Tenant acknowledges that the Premises and the Project shall be designated as a smoke, alcohol, drug and arms free site , (the "Project Designation "). Tenant covenants to observe said Project Designation and to cause Contractor and all other contractors, subcontractors and materialmen employed in the construction of the Tenant's Work to comply with said restrictions. Violation of the Project Designation by Tenant, Contractor or any contractor, subcontractor or materialman employed in the construction of the Tenant's Work shall constitute a breach of the Lease. In addition to all other rights and remedies of Landlord hereunder, in the event of a violation of the Project Designation by any contractor, subcontractor or materialman,- Landlord shall have the right to cause Tenant to terminate the contractor, subcontractor or materialman causing such violation. In order to facilitate the enforcement of this provision, Tenant agrees to include language in its contract with Contractor, and any other third party, provisions (i) requiring the Contractor and third party and any of their contractors, subcontractors and materialmen to observe said Project Designation and (ii) permitting the Tenant to terminate any contractor, subcontractor or materialman who fails to observe said Project Designation. Tenant agrees to immediately advise Landlord of any violation of the Project Designation. 15. Parking Location of Construction Dumpsters and Storage Trailers; Temporary Bathroom Facilities Landlord shall have the right to specify the location for the placement of construction dumpsters and storage trailers used by Tenant and /or its Contractor in the construction of the Tenant's Work. Landlord shall also have the right to specify the parking spaces used by Contractor and all other contractors, subcontractors and materialmen. However, 8 MIAMI:557449.5 unless Landlord otherwise agrees, Contractor shall be solely responsible for arranging parking for all workers at an off -site location (not within the Project). Tenant shall, at its own cost and expense (which shall be part of Soft Costs), provide temporary bathroom facilities and off -site parking for the contractors, subcontractors and materialmen engaged in the construction of the Tenant's Work. 16. Maintenance of Premises during Construction Tenant agrees to undertake the removal of construction related trash on or about the Premises on a daily basis. In the event that Tenant fails to comply with the foregoing, Landlord shall have the right, but not the obligation, to undertake such trash removal and any expenses incurred by 'Landlord' in connection therewith shall be payable by Tenant (as Soft Costs) within five (5) days after receipt of an invoice from Landlord. V. DISBURSEMENT OF TENANT CONSTRUCTION FUND: Subject to compliance with and fulfillment of each and every of the terms, covenants and conditions set forth herein, Escrow Agent shall make disbursements out of the Tenant Construction Fund, up to the full amount of the Tenant Construction Fund, in accordance with this Work Letter and the following procedures: 1. Request for Payment At such time as Tenant shall desire to obtain a disbursement of any portion of the Tenant Construction Fund for Hard Costs of Tenant Improvement costs, Tenant shall complete, execute and deliver to Escrow Agent and Landlord a request for an advance on a form of draw request approved by Landlord. Such draw request shall include, but not be limited to, the following information: (a) a reasonably detailed breakdown of the total amount then being requested, identifying each contractor, subcontractor, supplier or materialman to be paid, the amount to be paid to -each such contractor, subcontractor, supplier or materialman, and the work done by each such person or entity for which payment is being requested; (b) a copy of all bills, invoices or statements for which payment is being requested must be attached to the draw request; (c) waivers or releases or liens for all work performed to the date of the draw request, from each contractor, subcontractor, materialman or supplier performing work or supplying materials to the Premises, must be attached to the draw request;. (d) a statement by Tenant that Tenant or Tenant's Architect has inspected all work for which payment is being requested, that, based upon Tenant's Architect's inspection of the work, such work complies in all material respects with the Tenant's Construction Drawings and applicable Laws (subject to minor "punch list" items set forth on such certificate), and that Tenant authorizes and approves the payment to each contractor, subcontractor, supplier or materialman shown on the draw request, in the amount set forth in such draw request; (e) a certification by Tenant that: 9 MIAMI:5 57449.5 (i) all outstanding claims for labor, materials and fixtures in connection with the Tenant's Work have been paid in full as of the date of the draw request, or will be paid in full from the proceeds of the draw then being requested; (ii) there are no mechanics, materialmen or other liens filed in the public records against the Premises, the Building or the Project, arising from or out of the construction of the Tenant's Work; (111) Tenant has complied with all of Tenant's obligations, and is not in default; as of the date thereof, under the Lease, the Work Letter or the Construction Contract; (iv) all insurance policies required hereunder and under the Lease are in full force and effect; (v) all funds previously disbursed by Landlord from the Tenant Construction Fund have been applied in accordance with the prior draw request; (vi) the undisbursed portion of the Tenant Construction Fund is sufficient to complete construction of the Tenant's Work in accordance with the Budget, the Construction Contract, the Tenant's Construction Drawings, and applicable Laws; and (vii) there have. been no changes in the Tenant's Construction Drawings other than those made pursuant to change orders permitted hereunder or those changes that are less than the required amount to receive approval. (f) such other and further information as Landlord may reasonably request. 2. Architect's Certification Each draw request for Tenant's Work costs shall be accompanied by the written certification of Tenant's Architect, certifying that, based on (i) Architect's preparation of the Tenant's Construction Drawings, (ii) Architect's supervision and inspection of construction of the Tenant's Work, (iii) all applicable Laws, and (iv) Architect's professional knowledge and judgment: (a) all Tenant's Work constructed as of the date of the draw request have been constructed in accordance with the Tenant's Construction Drawin s and in accordance with all applicable Laws (subject only to minor "punch list" items set forth such certificate); (b) (i) neither Tenant nor Tenant's Contractor is in default under the Construction Contract (but such statement shall not be deemed a waiver of any claim Tenant may have or assert against Contractor), and (ii) each contractor, subcontractor, materialman or supplier performing work on or supplying materials to the Premises in connection with the Tenant's Work has been paid in full for all work done or materials supplied, up to the date of 1p MIAMI:557449.5 Tenant's Architect's certification, except for amounts to be paid from the draw then being requested; (c) all work for which Tenant is seeking disbursement from the Tenant Construction Fund, as reflected in the draw request, has been incorporated into the Premises; and (d) the funds remaining in the Tenant Construction Fund are sufficient to pay for all Hard Costs required to complete the Tenant's Work. 3. Conditions Precedent to Each' Disbursement At no time and in no event shall Escrow Agent be obligated or permitted to disburse funds from the Tenant Construction Fund: (a) if any default or Event of Default hereunder or under the Lease or Construction Contract shall have occurred and remain uncured; or (b) if the Premises shall have been damaged by fire or other casualty and Landlord shall not have received insurance proceeds, sufficient in the reasonable judgment of Landlord, to effect the restoration of the Tenant's Work in accordance with the Tenant's Construction Drawings (and Tenant has failed to make arrangements satisfactory to Landlord for the payment of such insurance insufficiency); or (c) if there shall be any mechanics' liens or other liens in connection with construction of the Tenant's Work, filed in the public records against the Premises, the Building or the Project which have not been released or transferred to bond; or (d) if the warranties and representations of Tenant set forth herein, and, if f applicable, in the Lease or in the Construction Contract, are false or untrue in any material respect as of the date of such advance; or (e) if Tenant shall have failed to comply with and perform all of its obligations under this Work Letter or shall have failed to deliver to Landlord all documentation required hereunder; or (f) if a Notice of Commencement has not been filed and posted as required by Article IV, Section 1 hereof, or (g) if the funds remaining in the Tenant Construction Fund are insufficient to pay all Hard Costs to complete the Tenant's Work in accordance with the Tenant's Construction Drawings and all Laws. 4. Retainage All disbursements from the Tenant Construction Fund shall be subject to the following retainages: (a) Ten percent (10 %) of that portion of each draw, or such lesser percent as may be approved by Landlord, which is applicable to payments to be made under the Construction Contract, unless such retainage has already been deducted from the draw request. Retainage relating to amounts due under subcontracts shall be released by Escrow Agent for each 11 MIAMI:557449.5 subcontractor when the subcontractor has completed its contract to the satisfaction of the Contractor and Landlord. (b) The final construction disbursement shall be withheld by Escrow Agent, and shall be disbursed along with all other retainages under this Section, only upon compliance with the following requirements (in addition to the requirements for all other disbursements): (i) Receipt by Landlord and Escrow Agent of satisfactory evidence of final completion of the Tenant's Work, substantially in accordance with the Tenant's Construction Drawings, and the approval of such completion by - local - governmental authorities, including, but not limited to, a final certificate of occupancy issued by the appropriate governmental authority. (ii) Receipt by Landlord of satisfactory "as- built" plans reflecting the completed Tenant's Work. (iii) Receipt by Landlord of the Contractor's Affidavit for Final Payment which shall include waivers of lien from Contractor and all subcontractors, . materialmen and suppliers employed by Contractor or Tenant. Said documents shall be in form and substance reasonably satisfactory to Landlord. (iv) The written certification from Tenant's Architect that the Tenant's Work has been Substantially Completed in accordance with the Tenant's Construction Drawings and all applicable Laws, specifying in detail any outstanding, minor "punch list" items to be completed. 4. Notice, Frequency and Place of Disbursements All draw requests for work performed or materials supplied to the Premises (for which payment has not theretofore been made), together with Tenant's Architect's Certificate and all other information and documentation required under this Work Letter, shall be submitted to Landlord and Escrow Agent by Tenant not later than the twenty fifth (25th) day of the month. Provided that (a) Tenant has complied with all of the terms, covenants and conditions set forth in this Work Letter, and (b) the Architect's Certificate and Tenant's draw request are true and correct in all material respects, and (c) Landlord has not objected in writing to the proposed disbursement, Escrow Agent shall disburse the funds requested in the draw request (or such portion thereof as permitted by this Work Letter) not more than ten (10) Business Days after receipt of the draw request and supporting documentation from Tenant. Unless otherwise approved by Landlord, Escrow Agent shall only be permitted to disburse funds from the Tenant Construction Fund one (1) time each calendar month; provided, however, that Landlord shall not unreasonably withhold its approval of a request by Tenant that Escrow Agent disburse funds from the Tenant Construction Fund at times other than as set forth hereinabove in this Section 4, in the event of a bona fide emergency (such as, by way of illustration, but not limitation, to avert a possible work stoppage by the Contractor or a subcontractor), provided that (i) such disbursement request otherwise complies 12 MIAMI:557449.5 with all of the requirements of this Work Letter, and (ii) no more than four (4) such emergency requests need be considered by Landlord. 5. Disbursements Landlord shall have the right, but not the obligation, to require Escrow Agent to make all disbursements from the Tenant Construction Fund (i) directly to Tenant, or (ii) jointly to Tenant and Contractor. VI. DEFAULT: 1. Defaults In addition to the Events of Default set forth in the Lease, the following shall also be deemed to be Events of Default under the Lease: (a) If there is any default or Event of Default under the Construction Contract that arises by reason of the failure of Tenant to pay any sum of money due under the Construction Contract, and such default is not cured within five (5) days following receipt by Tenant of written notice alleging such default; or (b) If Tenant shall fail to make, not later than thirty (30) days prior to the date when due, the payment of premiums on any policy of insurance required hereunder, and such failure is not cured within five (5) days of receipt by Tenant of written notice alleging such failure; or (c) Any other defaults hereunder, or under the Construction Contract or the Lease, involving the failure of Tenant to pay monetary sums hereunder or thereunder (including payment of all Soft Costs), and such failure continues for five (5) days after receipt by Tenant of written demand therefor by Landlord; provided, however, that a good faith, bona fide dispute between Tenant and the Contractor or other payee for amounts allegedly due under the Construction Contract or other contract shall not, by itself, be considered an Event of Default hereunder, so long as Tenant is diligent and in good faith attempting to resolve such dispute. (d) If any lien for labor, material, taxes or otherwise shall be filed against the Premises, the Building or the Project, on account of Tenant's work, and such lien is not removed, satisfied or transferred to bond as required under Article IV, Section 5 of this Work Letter. (e) If construction of the Tenant's Work shall be abandoned and not be resumed at such time as may be reasonably necessary to complete construction by the Estimated Commencement Date, unless such cessation is due to acts of God, strike or unavailability of materials; (f) Any other default under this Work Letter that is not cured within thirty (30) days after Tenant's receipt of notice of default from Landlord; provided, however, in the event such default cannot reasonably be cured within the thirty (30) day period, said period shall be extended for such additional period as may be reasonably required in order to cure such default (not to exceed an additional 30 days), so long as Tenant acts with reasonable diligence during and after the thirty (30) day period in attempting to cure the default; or (g) If the total amount paid by Tenant for Hard Costs of constructing the Tenant's Work is less than $1,200,000.00. 13 MIAMI:557449.5 l VII. REMEDIES OF LANDLORD: Upon the occurrence of any one or more of the Events of Default set out in Section VI hereof, or any default or Events of Default under the Lease, Landlord shall at its option be entitled, in addition to and not in lieu of the remedies provided for in the Lease, exercise any of the following remedies: 1. Default Constitutes Default Under Lease. Tenant agrees that the occurrence of such Event of Default shall constitute a Default under the Lease, thereby entitling Landlord (i) to exercise any of the various rights and remedies provided, including, but not limited to, the acceleration of all rents, payments and - other amounts due under the Lease, and (ii) cumulatively to exercise all other rights, remedies, options and privileges provided by law or in equity (unless stipulated to the contrary in the Lease). 2. Right of Landlord to Assume Possession and Complete Construction Tenant agrees, upon the request of Landlord, to vacate the Premises and permit Landlord: (a) to enter into possession; (b) to perform or cause to be performed any and all work and labor necessary to complete the Tenant's Work in accordance with the Tenant's Construction Drawings, or in such other manner as Landlord may elect in its sole discretion; (c) to employ security watchmen to protect the Premises; and (d) to receive from Escrow Agent immediately upon demand that portion of the Tenant Construction Fund not previously disbursed (including any retainage) to be applied first to the extent necessary to complete construction of the Tenant's Work in accordance with the Tenant's Construction Drawings, or in such other manner as Landlord may elect, and if the completion requires a larger sum than the remaining undisbursed portion of the Tenant Construction Fund, to disburse such additional funds, all of which funds so disbursed to Landlord shall be deemed to have been disbursed to Tenant. If Landlord proceeds under this subparagraph (d), all portions of the Tenant Construction Fund that are not used to pay for completion of construction shall not be retained by Landlord as Additional Rent. Landlord, shall have the right, but not the obligation, to take all actions necessary in connection therewith, including, but not limited to, the following: To use any funds of Tenant which may be held in deposit and any funds which may remain unadvanced hereunder for the purpose of completing the Tenant's Work in the manner called for by the Tenant's Construction Drawings, or in such other manner as Landlord may elect; to make such additions and changes and corrections in the Tenant's Construction Drawings which shall be necessary or desirable to complete the Tenant's Work in a manner acceptable to Landlord; to employ such contractors, subcontractors, agents, engineers, architects, and inspectors as shall be required for said purposes; to pay, settle, or compromise all existing or future bills and claims which are or may be liens against said Premises; to execute all applications and certificates in the name of Tenant which may be required by any construction contract and to do any and every act with respect to the construction of the Tenant's Work which Tenant may do in its own behalf. Landlord shall also have power to prosecute and defend all actions or proceedings in connection with the construction of the 14 MIAML557449.5 s Tenant's Work and to take such action and require such performance as it deems necessary. In accordance therewith, Tenant hereby assigns and quit = claims to Landlord all sums to be advanced hereunder, including any remaining Tenant Allowance and any retainage and any sums paid hereunder to Landlord. 3. Additional Remedy In lieu of exercising its rights under paragraph 2, Landlord may receive from Escrow Agent immediately upon demand all funds remaining in the Tenant Construction Account and apply them towards Landlord's damages for Tenant's breach of the Lease. VIII. ESCROW AGENT PERFORMANCE OF DUTIES: 1. Escrow Agent agrees to perform the duties of Escrow Agent under this Work Letter and to hold and disburse the Tenant Construction Fund strictly in accordance with the provisions hereof. 2. In performing any of its duties under this Agreement, or upon the claimed failure to perform its duties hereunder; Escrow Agent shall not be liable to anyone for damages, losses or expenses which may occur as a result of Escrow Agent's so acting, or failing to act; except, however, Escrow Agent shall be liable for damages arising out of its willful default or gross negligence under this Agreement. Accordingly, Escrow Agent shall not incur any such liability with respect to (i) any good faith act or omission upon advice of counsel given with respect to any questions relating to the duties and responsibilities of Escrow Agent hereunder, or (ii) any good faith act or omission in reliance upon any document, including any written notice or instructions provided for in the Agreement, not only as to its due execution and to the validity and effectiveness of its provisions but also as to the truth and accuracy of any information .contained therein, which Escrow Agent shall in good faith believe to be genuine, to have been signed or presented by the proper person or persons and to conform with the provisions of this Agreement. 3. The Escrow Agent shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution or validity of any written instructions delivered to it, nor as to the identity, authority or. rights of any person executing same. The duties of the Escrow Agent shall be limited to compliance with the written terms of this Agreement or to disbursement of the funds received hereunder in accordance with the written instruction described above. The Escrow Agent undertakes to perform only such duties as are expressly set forth herein, and no implied duties or obligations shall be read into this Agreement against the Escrow Agent. Upon the Escrow Agent's disbursing the Escrow Funds in accordance with the provisions hereof, the escrow shall terminate as regards such Escrow Funds, and Escrow Agent shall thereafter be released and relieved of and from any and all liability and obligation hereunder in connection therewith. 4. If any dispute or difference arises between the Landlord, the Tenant, the Escrow Agent, or any person, or if any conflicting demand shall be made upon the Escrow Agent, Escrow Agent may file a suit in interpleader in the Circuit Court of Dade County, Florida for the purpose of having the respective rights of the parties adjudicated and deposit with the Court any or all Rinds held hereunder. Upon the institution of such interpleader suit or other action and the deposit of such funds with the Court and the giving of notice thereof to the parties thereto by personal service or in 15 MIAMI:557449.5 accordance with the order of the Court, Escrow Agent shall be fully released and discharged from all further obligations hereunder with respect to the funds so deposited. Tenant agrees to pay to Escrow Agent, on demand, any and all costs and reasonable attorneys' fees incurred by Escrow Agent in connection with such interpleader or other action and to indemnify and hold and save Escrow Agent harmless from any and all loss, costs, damage or liability hereunder not arising from willful misconduct or gross negligence of the Escrow Agent. 5. In connection with any litigation arising out of this Agreement, the prevailing parties in such litigation shall be entitled to recover from the defeated parties all costs incurred, including reasonable attorneys' fees, and all costs and attorneys' fees on appeal including costs and attorneys' fees it is required to pay'the Escrow Agent pursuant to this Agreement. 6. In the event of any dispute or litigation between Landlord and Tenant, the parties agree to waive any conflict of interest claim and allow Escrow Agent to represent Tenant in any such dispute and/or litigation. IN WITNESS WHEREOF, the Work Letter has been made and executed as of the date set forth below. Dated: As set forth above g E LANDLORD: Attest: CITY OF MIAMI BEACH, FLORIDA Name: .�R..........• _ CH 2 Title Mayor Attest: MIAMI BEACH REDEVELOPMENT AGENCY y B S 4 �1 _ Name ` s n R Title: Chairperson APPROVED AS TO FORM & LANGUAGE FOR EXECUTION 16 MIAMI:557449.5 ,- rn Date R _ TENANT: PENN 17 LLC, a lo r' a limited liability �. �- company Print Na e i 2- By: Name: 604 1 (2 --- P. • f o �- Print � e Title: ESCROW AGENT: MITRANI, RYNOR ADAMSKY & TOLAND, P.A. Print Name VUE71LIAA Zy. B Name: Title: r c"a ,s .�yw .cox -�t 17 MIAMI:557449.5