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Filing # 111939715 E-Filed 08/17/2020 05:32:31 PM IN THE CIRCUIT COURT FOR THE 11"! JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA GENERAL JURISDICTION DIVISION CASE NO.: BAL HARBOUR SHOPS, LLC, a Delaware limited liability company, Plaintiff, SAKS FIFTH AVENUE LLC, a Massachusetts limited liability company, Defendant. / COMPLAINT FOR EVI |ON, DAMAGES, AND CONSTRUCTIVE TRUST Plaintiff, BAL HARBOUR SHOPS, LLC, a Delaware limited liability company (“Landlord”), sues Defendant, SAKS FIFTH AVENUE LLC, a Massachusetts limited liability company (“Tenant”), for eviction, damages, and constructive trust, and alleges as follows GENERAL ALI |ONS A. Parties, Jurisdiction and Venue: 1. This complaint asserts a cause of action for eviction and possession of commercial real property located in Miami-Dade County, Florida pursuant to Florida Statute §83.21 et seg and pursuant to the Rules of Summary Procedure provided in Florida Statute §51.011 2. This complaint also asserts causes of action for damages and constructive trust in excess of $30,000.00, exclusive of interest, costs and attomeys’ fees, against the Tenant arising out of a breach of a commercial lease agreement. 3. Plaintiff, Landlord, is a limited liability company organized under the laws of the State of Delaware, qualified to do business in the State of Florida, with its principal place of K) KATZ BARRON ‘Y01 Vonce de Leon Hiv 1th Floor Coral Gables. FL STEM trosntye at caw Phone/ 805 456 2.441 Fax/ U5 860 2548 business in Miami-Dade County, Florida, Landlord is the landlord under the lease agreement that is the subject of this action. 4. Defendant, Tenant, is a limited liability company organized under the laws of the State of Massachusetts. Tenant is the tenant under the lease agreement that is the subject of this action 5. Venue is proper in Miami-Dade County, including the Eleventh Judicial Circuit, pursuant to §§47.011 and 34.011, Florida Statutes, because the causes of action accrued in Miami- Dade County, the real property which is the subject of this action is located in Miami-Dade County, and the amount in controversy exceeds the jurisdictional limits of the circuit court, B. The Lease: 6. Landlord is the owner of that certain real property located in the Village of Bal Harbour, Miami-Dade County, Florida and known generally as “Bal Harbour Shops” (“Shopping Center”) 7. On or about June 10, 1974, Landlord’s predecessor-in-interest, Bal Harbour Shops, a Florida general partnership, as landlord, and Tenant's predecessor-in-interest, Saks & Company, a New York corporation (“Original Tenant”), as tenant, entered into that certain lease (“Original Lease”) for certain leased premises more particularly described in the Original Lease (“Original Premises”), in the Shopping Center, for the term therein stated. 8. The Original Lease has been amended by that certain (i) First Modification of Lease dated August 12, 1987, (ii) Second Modification of Lease dated December 28, 1990, (iii) Lease Agreement dated March 5, 1996, (iv) Lease dated April 15, 1997, (v) Declaration of Lease dated March 8, 2007, (vi) 2008 Modification of Main Store Lease dated February 26, 2008, (vii) Amendment to Lease dated as of October 8, 2015, and (viii) Amendment to Lease dated as of October 5, 2018 (collectively, the “Lease Modifications”) Kl KATZ BARRO! 1901 Pouce de eon Blvd. 10th Floor, Coral Gables, FL 33134 J Phone/ 805 N36 2.444 Fax/ 405 S60 2588 9. Pursuant to the Original Lease, together with the Lease Modifications (collectively, the “Lease”), Tenant now leases from Landlord the Original Premises and certain additional premises described in the Lease Modifications (with the Original Premises, collectively, the “Saks Premises”), containing approximately 143,142 square feet of gross leasable area. The Saks Premises includes a three (3) level retail store building on which Tenant operates a retail “brick and mortar” store under the name “Saks Fifth Avenue” (the “Saks Store”). 10. A redacted copy of the Lease is attached hereto and made a part hereof as Composite Exhibit A.’ 11. Pursuant to the Lease, Tenant is now in possession of the Saks Premises. 12. Pursuant to the Lease, as of the date of this Complaint, (a) Tenant is not obligated to pay any “minimum rent” (“Minimum Rent”), (b) Tenant is, however, obligated to pay “percentage rent” in amounts determined by Tenant’s “net sales” made from the Saks Premises (“Percentage Rent”), and (c) Tenant is obligated to pay certain “pass-through” expenses relating to common area expenses, real estate taxes, and marketing fund charges (collectively, “Additional Rent”). Percentage Rent and Additional Rent are due under the Lease, together with sales tax thereon (collectively, “Rent”). c Breach by Saks 13, Tenant breached the Lease by failing to timely pay (a) certain Additional Rent accruing under the Lease in 2019 (collectively, “2019 CAM & Real Estate Taxes”), (b) certain ' The Lease attached hereto is redacted to exclude confidential propriety information, and Tenant is already in possession of the entire unredacted Lease. Also, contemporaneously herewith, Landlord is filing its Notice of Confidential Information within Court Filing and Request to Keep Documents Sealed, attaching to that Notice the unredacted Lease, which Landlord is incorporating as Composite Exhibit A-1 to this Complaint and making a part hereof. In addition, Landlord is filing its Motion to Determine Confidentiality of Court Records. Landlord respectfully requests that the Court grant that Motion, keeping sealed the unredacted Lease. sew Taw Phone/ 805 N36 2.444 Fax/ 405 S60 2588 Kl KATZ BARRON 901 Pouce de Leon Blvd. 10th Floor, Coral Percentage Rent accruing under the Lease respecting the months of February, March and April, 2020 (collectively, “1 Quarter Rent”), and (c) certain other Rent due under the Lease. Tenant has paid no Rent due under the Lease since March 16, 2020. Rent continues to accrue under the Lease thereafier. 14, The Saks Store is open for business. Atal times during which Tenant has refused to pay rent under the Lease, Tenant has generated “net sales” from the Saks Premises. Even during the period when the Saks Store was “closed”? Tenant generated “net sales” therefrom. 15, On or about July 8, 2020, Landlord served Tenant with a written notice, a copy of which is attached hereto and made a part hereof as Exhibit B (the “Default Letter”), advising Tenant that it was in default of the Lease, demanding payment of the Rent due or possession of the Saks Premises, and advising Tenant that failure to comply within thirty (30) days would be an “event of default” under the Lease, Tenant did not timely comply with either demand and has still not complied with either demand. 16. As of July 8, 2020, Tenant owed Landlord the sum of $1,879,054.27 under the Lease, which amounts continue to accrue thereunder. 17. Onorabout August 4, 2020, Tenant served Landlord with a written notice, a copy of which is attached hereto and made a part hereof as Exhibit C (the “Covid Rent Free Letter”), advising Landlord of Tenant’s purported basis for its failure to pay rent. In that letter, Tenant advised Landlord that, due to the Covid-19 pandemic (“Covid”), and despite Tenant’s operation and uninterrupted net sales from the Saks Premises throughout the Covid-19 pandemic, (a) “Tenant's ability to earn profits. . .has been seriously undermined”, and (b) Tenant is not ? Pursuant to Emergency Order #2 of the Village of Bal Harbour, on March 18, 2020, all “non-essential retail” in the Business District of the Village of Bal Harbour were required to close, effective March 19, 2020 (the “Village Closure Order”). Such order was lifted by Amendment to Update #6 Emergency Order of the Village of Bal Harbour, effective May 18, 2020. 4 Kl KATZ BARRON 901 Pouce de Leon Blvd. 10th Floor, Coral sew Taw Phone/ 805 N36 2.444 Fax/ 405 S60 2588 obligated to pay Rent under the Lease until “all governmental restrictions cease” and “business returns (0 pre-COVID-19 levels” [emphasis supplied} 18, Prior to, during and since the lifting of the Village Closure Order, Tenant has been conducting business from the Saks Premises, and generating net sales therefrom. In fact, Tenant's reported sales in June of 2020 actually exceeded Tenant's reported sales in June of 2019. Yet, Tenant continues to refuse to pay rent due under the Lease. 19. Accordingly, on August 17, 2020, Landlord gave Tenant written notice tem ating the Lease (the “Termination Notice”), a copy of which is attached hereto and made a part hereof as Exhibit D. 20. Further, pursuant to the Lease, (a) Landlord agreed to pay Tenant an “Allowance” to reimburse Tenant for costs expended by Tenant in connection with the “Saks Renovation”, (b) on or about January 30, 2020, Landlord advanced to Tenant the sum of $18,500,000 as the “1* Installment” (“Advance Half”) of the Allowance, and (c) Tenant commenced the Saks Renovation, Tenant’s costs incurred to date in connection with the Saks Renovation are substantially less than the Advance Half. 21, All conditions precedent to the filing of this action have been fulfilled, satisfied, waived, or excused, 22. This action for eviction, for damages, and constructive trust does not waive any right of Landlord to pursue any other cause of action arising out of the Lease or Tenant’s tenancy of the Saks Premises. 23. Pursuant to Section 25 and other applicable provisions of the Lease, Landlord is entitled to the award of reasonable attorneys’ fees and costs from Tenant. 24. Landlord has retained the law firm of Katz Barron to prosecute this action and is obligated to pay said firm a reasonable fee for its services sew Taw Phone/ 805 N36 2.444 Fax/ 405 S60 2588 Kl KATZ BARRON 1901 Pouce de eon Blvd. 10th Floor, Coral Gables, FL 33134 . TENAN1 25, Landlord re-alleges all of the General Allegations as if fully set forth herein, 26. This is an action for eviction and possession of commercial real property located in Miami-Dade County, Florida pursuant to Florida Statute §83.21 ef seg. and pursuant to the Rules of Summary Procedure provided in Florida Statute §51.011. 27, Landlord and Tenant are parties to the Lease as stated in the General Allegations, 28. Tenant failed to pay, when due, certain rents due under the Lease, and is in default of the Lease 29. Asset forth in the Default Letter, Landlord made demand upon Tenant for payment of such rents or delivery of possession, but despite such demand, Tenant failed to comply with such demand. 30, Asarresult thereof, Landlord has terminated the Lease pursuant to the Termination Notice. 31. Tenant remains in possession of the Saks Premises, refuses to deliver possession, and (a) has failed to pay rent which is now past due and (b) is failing to pay currently accruing rents, 32. Asa result of Tenant’s failure to comply with the Default Letter and the Lease, Tenant has no further right to possession of the Saks Premises, Landlord is emttled to the evietion of Tenant. 33. Amounts continue to accrue under the Lease, causing further damage to Landlord. WHEREFORE, Plaintiff, BAL HARBOUR SHOPS, LLC, a Delaware limited liability company, demands judgment against Defendant, SAKS FIFTH AVENUE LLC, a Massachusetts limited liability company, for eviction and issuance of a Writ of Possession, plus an award of 6 Kl KATZ BARRON 1901 Pouce de eon Blvd. 10th Floor, Coral Gables, FL 33134 sew Taw Phone/ 805 N36 2.444 Fax/ 405 S60 2588 reasonable attomeys” fees and costs, and such other and further relief as this Court deems just and proper. COUNT II (BREACH OF LEASE AGAINST TENANT-DAMAGES) 34. Landlord re-alleges all of the General Allegations as if fully set forth herein, 35. This is an action for damages arising out of Tenant's breach of the Lease. 36. Tenant failed to pay, when due, certain rents due under the Lease, and is in default of the Lease 37. As set forth in the Demand Letter, Landlord made demand upon Tenant for payment of such rents, but despite such demand, Tenant has failed to pay such rents. As such, Landlord is entitled to any and all remedies available under the Lease and common law. 38, Landlord has been damaged due to the failure of Tenant to pay rents and charges, and/or comply with the terms of the Lease. 39. As of the date of the Default Letter, Tenant owed Landlord the sum of $1,879,054.27 under the Lease. Amounts continue to accrue under the Lease, causing further damage to Landlord. 40. Also, pursuant Section 25.A(4\(i) of the Original Lease, where Landlord has terminated the Lease as a result of Tenant’s event of default, Landlord is entitled to recover from Tenant, among other things, “a sum equal to the amount, if any, by which the then cash value of the rent reserved hereunder for the balance of the term of this lease exceeds the then reasonable cash rental value of the demised premises for the balance of said term” 41, Further, Tenant has not spent a portion of the Advance Half on the Saks Renovation and Landlord is entitled to recover from Tenant all amounts of the Advance Half not expended on the Saks Renovation. sew Taw Phone/ 805 N36 2.444 Fax/ 405 S60 2588 Kl KATZ BARRON 901 Pouce de Leon Blvd. 10th Floor, Coral WHEREFORE, Plaintiff, BAL HARBOUR SHOPS, LLC, a Delaware limited liability company, demands judgment against Defendant, SAKS FIFTH AVENUE LLC, a Massachusetts limited liability company, for rents and charges due in the amount of $1,879,054.27, plus an award of reasonable attorneys’ fees and costs, prejudgment interest, and other amounts that are due, have accrued and/or continue to accrue under the Lease, including but not limited to additional rent payments, all amounts due under Section 25.A.(4)(i) of the Original Lease, and the portion of the Advance Half not spent on the Saks Renovation, and such other and further relief as this Court deems just and proper. COUN (CONSTRUCTIVE TRUST) 42. Landlord re-alleges all of the General Allegations as if fully set forth herein. 43. This is an action for constructive trust. 44, Landlord advanced to Tenant the sum of $18,500,000 as the “Ist Installment” (“Advance Half”) of the Allowance for the Saks Renovation, and Tenant commenced the Saks Renovation, However, Tenant’s costs incurred to date in connection with the Saks Renovation are substantially less than the Advance Half. 45, Given Tenant’s event of default on its obligations under the Lease and the resulting termination of the Lease, it would be inequitable for Tenant to retain any portion of the Advance Half not previously spent on the Saks Renovation, 46. Landlord is, therefore, entitled to a constructive trust over the portion of the Advance Half that Tenant has not previously spent on the Saks Renovation. WHEREFORE, Plaintiff, BAL HARBOUR SHOPS, LLC, a Delaware limited liability company, demands judgment against Defendant, SAKS FIFTH AVENUE LLC, a Massachusetts limited liability company, on this Count for Constructive Trust and respectfully requests that the Court declare and impose a constructive trust over any portion of the Advance Half that Tenant 8 K) KATZ BARRON 101 Pouce de Leon Bl, 10 Hor, Cra sew Taw Phone/ 805 N36 2.444 Fax/ 405 S60 2588 has not to date spent on the Saks Renovation and to award all such sums to Landlord, plus an award of reasonable attorneys’ fees and costs, prejudgment interest, and such other and further relief as this Court deems just and proper. DATED this 17" day of August, 2020. Respectfully submitted, KATZ BARRON Attorneys for Plaintiff 901 Ponce de Leon Blvd., 10" Floor Coral Gables, Florida 33134 Telephone (305) 856-2444 Facsimile (305) 285-9227 By: /s/H, Eugene Lindsey, III, Es H. EUGENE LINDSEY, III Florida Bar No. 0130338 hel@katzbarron.com gmp@katzbarron.com miaefile@katzbarron.com b\docsio2630029pih 1322228 docx srrowwevs at caw Phone/ 805 N36 2.444 Fax/ 405 S60 2588 Kl KATZ BARRO! 1901 Pouce de eon Blvd. 10th Floor, Coral Gables, FL 33134 COMPOSITE EXHIBIT A THE LEASE BUSINESS LEASE between BAL HARBOUR SHOPS Landlord SAKS & COMPANY Tenant bated: gune _/¢ ,'1974 he ‘LEASE BAL HARBOUR SHOPS - SAKS & COMPANY BAL HARBOUR, FLORIDA SECTION PAGE 2 ‘THE DEMISED PREMISES 2 2 TERN 2 3 ‘Rent 3 4 BOOKS AND RECORDS 8 5 CONSTRUCTION AND OPENING OF STORE 9 5-A CONSTRUCTION AND OPERATION OF TENANT'S ROOPTOP PARKING a ‘ ALTERATIONS OF AND IMPROVEMENTS 0 DEMISED PREMISES 13 7 MEMORANDUM; TITLE INSURANCE? CONDITIONS a3 8 USE OF DEMISED PREMISES 18 9 TENANT SIGNS 22 10 vriLiries 22 an POWERS TO EXECUTE LEASE 23 a2 INDEMNIFICATION 23 13, WAIVER OF SUBROGATION 24 a4 LIABILITY INSURANCE TO BE CARRIED BY LANDLORD 24 15 LIABILITY INSURANCE TO BE CARRIED By TENANT 25 16 LANDLORD'S FIRE AND EXTENDED COVERAGE INSURANCE 26 a7 TENANT'S FIRE AND EXTENDED COVERAGE INSURANCE 27 18 DEFINITIONS. 29 19 COMMON AREAS 33 20 COVENANTS OF LANDLORD 38 20-A ADDITIONAL COVENANTS. 39 a. MAINTENANCE, REPAIR AND RESTORATION OF CERTAIN BUILDINGS AND THE COMMON AREAS a2 ‘wenpee peiaoen eerunson arauton m arLiman: MAM REACH: fLONIOR ANS, ORDINANCES 22 23. MAINTENANCE AND REPAIR OF DEMISED PREMISES. 23-A NEW CONSTRUCTION 24 RESTORATION OF DEMISED PREMISES 25°‘ DEFAULTS 26 © ASSTGNMENT AND SUBLETTING 27 REMOVAL, OF PERSONAL PROPERTY 28 SURRENDER OF DEMISED PREMISES 29 qurer ENsovmewr 30 MUTUAL LIABILITY DURING CONSTRUCTION 31 FORCE MAJEURE 32 taKES 33 BROKER'S FEES 34 CONDEMNATION 35 COVENANTS. RUN WETH THE LAND 36 DETERMINATION OF FLOOR AREA AND GROSS LEASEABLE AREA 37 srens 38 MERCHANTS’ ASSOCIATION 39 ARBITRATION 40 Novices 41 MISCELLANEOUS 42 EXPENSE OF COMMON AREAS 43° PINANCING 44 STORM WATER DRAINAGE 45° TENANT'S AND LANDLORD'S RIGHTS 70 Cone DEFAULTS OP OTIIER sExunDITs a LEGAL DESCRIPTION OF FASHION CENTER A-L ‘ BEGAL DESCRIPTION OF DEMISED PREMISES c Questions oF orrut > ARCHITECT'S PLAN OF FASHION CENTER iL 43 45 45 46 a7 50 sh 52 52 53 53 53 55 55 37 58 58 se 60 61 6 66 70 n 2 “ 5 16 n ‘ LEASE THIS LEASE, made and entered into this /oCh day of Une 1974, by and between BAL HARBOUR SHOPS, a part~ nership, (hereinafter called "Landlord”) and SAKS & COMPANY, a New York corporation (hereinafter called "Tenant") WITWESSETH: RECITALS I. Landlord owns in fee that certain real property located in the Village of Bal Harbour, County of Dade, state of Florida, legally described in Exhibit A attached hereto, shown on Exhibit B, and hereinafter called the "Fashicn Center" or "center". IE. Tandlord has constructed within the Fashion Center a portion of a planned multi-level shopping center facility as shown on Exhibit B. IIT. Landlord desires to lease to Tenant and Tenant desires to lease from Landlora the premises within the Fashion Center hereinafter more particularly described, for the business purposes hereinafter specified, which premises, including all buildings and inprovements from time to time located thereon, are hereinafter referred to as the “demised premises". NOW, THEREFORE, it is hereby agreed by and between the parties to this lease as follows: 1, THE DEMISED PREMISES A. Landlord hereby leases the demised premises to ‘Tenant and Tenant hereby leases and hires the demised premises from Landlord for the term, at the rental, upon the terms, cove- nants and agreements and subject to the conditions hereinafter set forth. B. The demised premises consist of that certain parcel of land legally described in Exhibit A-1, shown cross-hatched on Exhibit B and labeled "Saks Fifth Ave.", together with all builé- ings and improvements from time to time iocated thereon. 2. TERM A. Subject to the other provisions of this Section, the term of this lease ("initial term") shall commence on the @ate hereof and extend to a day which is the twentieth anniver- sary of that April 30 which ensues after the date upon which Tenant opens for business in the demised premises. B. If Tenant is not then in default hereunder, Tenant may exercise the option to extend the term hereof for a period of fifteen (15) years commencing upon the expiration of the initial term as set forth in §2A, upon the same terms, covenants, agree- ments and conditions as herein eet forth with respect to the initial term hereof, Tenant shall exercise such option (if at all) by giving notice thereof to Landlord not less than one (2) year and not more than three (3) years prior to the expiration of the said initial term. ©. Tf Tenant is not then in defauit herounder, Tenant may exercise the option to extend the term of this lease for a second option period of fifteen (15) years commencing upon the expiration of the first option period as set forth { 52B, upon the same terms, covenants, agreements and conditions as herein set forth with respect to the initial term. Tenant shall exer~ cise duch second option (if at all) by giving notice thereof to tandlord not less than one (1) year and not more than three (3) years prior to the expiration of the said first option period. D. The exercise of the above options shall not include any further or additional options. rt is agreed that the maximum term possible under this lease and by exercise of all options shall bé fifty (50) years, plus the period from the date of execution fie hereof to that May 1 which ensues after Tonant opens for business in the demised premises. 8. Anything in this §2 to the contrary notwithstanding, if Tenant:shall fail to give notice of exercise of an option within the prescribed time limit, Tenant's right to exercise its option shall nevertheless continue until thirty (30) days after Landlord shall have given Tenant notice of Landlord's election to terminate such option and Tenant may exercise such option at any time until the expiration of s id thirty (30) day period. Upon service of notice of extension in accordance with the foregoing provisions of this $2, the term shall thei upon be extended in accordance with such notice without further act by Landlord or Tenant. F. It ds the intention of the parties to avoid forfeiture of Tenant's rights to extend the tern of this lease vader any of the two options set forth in this §2 through in- advertent failure to give notice of exercise thereof within the time Limits prescribed. Accordingly, if Tenant shal fai) to give notice to Landlord of Tenant's election to extend the tom of this lease for either of the extended periods and if landlord shall fail to give notice to Tenant of Landlord's election to terminate Tenant's right to extend this lease under the option applicable thereto, then and so often as such event shall occur, the term of this lease shall be automatically extended from year to year, upon all of the terms and conditions then in effect, subject to Tenant's right under such option to extend the term of this lease for the renainder of the extended period covered thereby and to Landlord's right to place the thirty (Go) day Limit on such option by # notice in the manner above provided. 2. RENT A. The term "lease year" as used in this lease refers to the period from the date Tenant opens for business in thy gemi ged Be premises to the following January 31; to each successive twelve (12) month period thereafter; and if this lease is terminated on a @ate which is other than January 31, then to the period beginning at the end of the last preceding lease year and ending on the date of such termination. B. Except as expressly provided in this lease, Tenant shall not be obligated to pay "minimum" or "fixed" rent for the Genised premises at any time during the term hereof. c. ‘Tenant shall pay to Landlord as percentage rent (hereinafter called "percentage rent") for each lease year during the term hereof (MMMM (MMB of all “net sales” (hereinafter defined) over and above an amount of net sales for such lease year Which exceeds the product of MMMM) multiplied by the "floor area" (hereinafter defined) of the demised premises) provided that as respects any lease year of less than twelve (12) full calendar months, including the short lease year occurring immediately prior to the expiration of the term hereof, said anount of net sales in excess of which percentage rent is so payable shall be adjusted by multi- plying such product by a fraction, the numerator of which is the number of days in such short lease year, and the denoninator of which ,is 365; and provided further, that if the first lease year 4s less than eight (8) full calendar months ("first short lease year"), then for the purpose of computing percentage rent for the first short lease year (i) the net sales made therein shall be added to the net sales for such number of months following the first short lease year as shall make up twelve (12) months in total, (ii) the aggregate net sales for such twelve (12) month period shall be divided by twelve (12) to determine average monthly net sales, and (iii) such average monthly net sales figure shall be multiplied by the actual number of months in the first short lease year to determine adjusted net sales for the first short lease year. (The net sales for the aforesaid number of months following the first short lease year is fo, be agajn used in determining net sales for the full lease year following the first short lease year.) Percentage rent, if —7 any, payable for the first short lease year shall be paid within| ninety (90) days after the end of the twelve (12) month period peel utilized in computing adjusted net sales as aforesaid. D. Tenant shail, within ninety (90) days after the expiration of each lease year, deliver to bandlord a statement in writing duly signed by Tenant and certified to be correct, setting forth net monthly sales for each month during such lease year. E, Notwithstanding anything to the contrary herein contained, as respects any quarter of any lease year during which quarter Tenant's net sales on a cumulative basis for such lease year shall exceed the aount of net sales in excess of which percentage rent is payable as determined pursuant to the fore- going subsection ¢, Tenant shall within thirty (30) days after the end of such quarter submit to Landlord an unaudited state- ment of net sales through such quarter of such lease year and shall pay the percentage rent indicated to be due on the basis of such statement. Concurrently with the delivery to Landlord of the statement referred to in the preceding subsection Dy ‘Tenant shall pay to Landlord the percentage rent, if any, payable for the lease year in question, taking into consideration any quarterly payments in xespect thereof pursuant to this subsection; provided that if Tenant has overpaid rent properly payable for the entixe lease year Landlord shall make prompt reimbursement to Tenant for the overpayment, failing which, Tenant may deduct the same from any monies thereafter payable to Landlord pursuant to this lease, Tenant shall also deliver to Landlord an unaudited monthly statement of net sales (which may be signed and delivered by the Store manager) which shall be so delivered on or before the 20th day of the month with respect to net sales for she pre- ceding month or fraction thereof. Br F, As used herein the term "net sales” shall refer to the gross amount received by Tenant in cash or from all sales of merchandise and rendition of services arising out of the demised premise: provided, however, withstanding anything to the contrary herein contained, mean and credit upon or that not- the term "net sales" shall not include, and there shall be deducted or excluded therefrom, as the case may be appropriate, each and all of the following: (2) Returns, discounts, trade-ins and allowances made in the usual course of business, including, without Limitation, cash refunds and allowances to customers; (2) Sales of store furniture or fixtures or other property not held for sale in the ordinary course of business; (3) Gift-wrapping cherges: (A) 11 receipts derived from any toilet room operations; (5) the amount of acti sales, use, gross receipts oF excise of luxury tax, of any similar tax, now or here- after levied or imposed by the United states of america or by any state, of any other governmental subdivision, agency or authority; . (6) transfers of merchandise from the denised pren- faex to any other premises of Tenant or transfers from any other prenises of Tenant to the denised premises, and trans~ fer for credit to the factory or other supplier, sums and credite received in the settlenent of clains for loss of or damage to merchandise, and interdepartnental transfers: (7) AlL receipts srom the use of weighing achines, postage stamp vending machines, public telephones and nes where such vending machines are coin-vending mach installed primarily for the purpose of providing services to customers and are not used in the merchandising of goods; (8) Interest, carrying charges and finance charges on sales to customers in respect of customer accounts re~ ceivable of any kind, including, without limitation, re- volving credit accounts and deferred paynent plans of any kind; and premiuns on credit insurance, Life insurance and health and accident insurance issued in connection with customer credit; (9) Charges for delivery and transportation of merchandise to and fron customers, including postage and €.0.D, and *Will-call" fees, but only in the cases and to the extent that such charges are billed separately on the sales slip or invoices and are in addition to the sales price of the merchandise: (10) Gift certificates or Like vouchers until converted to a sale by redemption; (11) Sales, orders for which are taken or received at stores of Tenant other than the demised premises (but shall include sales, orders for which are taken or re~ ceived at the demised premises and delivery thereof made fron other stores of Tenant); (12) Concierge service; . (13) Fixed xent or a percentage of gross receipts received by Tenant from subtenants and concessionaires (but the gross sales of such subtenants ané concession~ aires chall be included in Tenant's net sales (1a) Goods and services donated; and (25) Merchandise sold in job lots to manufacturers, wholesalers or retailers for resale. Sales shall be deemed to have been made when merchandise has been shipped or delivered, and services shall be deemed to have been rendered when completed, or when such sales or services, as the case may be, have been charged against the purchaser or ctistomer on the books of ant, whichever of such events shall (ao be the first to occur. Transactions shall be included whether for cash or on credit and whether the amount thereof is collected or uncollected. the phrase “sold in, upon or from any part of the demised premises", as used herein to modify ‘net sales", shall include such sales as shall be in good faith credited by Tenant in the regular course of sale in, at or in connection with the department or specialty store to be operated by Tenant in the demised premises. Said phrase shall include mail, telephone and other orders received at the denised premises even though filled elsewhere, provided the particular items ordered are ones which are at the time being sold in the regular course of business in the demised premises. ‘Tenant makes no representation or warranty as to the gross sales which it expects to make in the denised premises. 4. BOOKS AND RECORDS Tenant agrees to keep and maintain in its main account- ing office adequate books and records from which net sales made in the demised premises may be determined. Such books and records shal be retained by Tenant end shall be availeble, for inspection and audit by Landlord or Landlord's duly authorized agents at such office during reasonable business hours during a period of one (1) year from and after receipt by Landlord of the certified statement provided in 3D for the lease year to which such books and records pertain. Tf any audit shall disclose an understatenent of net sales of MMMM Io more Tenant shall pay the reasonable costs of such audit, plus the additional percentage rent Gue. Landlord shall keep Tenant's net sales and the results of any such audit confidential, except in case of Litigation between the parties or disclosure in connection with sale or financing of the Center. fa + CONSTRUCTION AND OPENING OF STORE A. Tenant shall construct and install fixtures in the building (hereinafter called the "Stere") to be constructed pur- suant-to §5B, at its sole cost and expense, and shall indemnify and hold harmless Landlord and the denised premises from any liens arising out of such construction, subject, however, to Tenant's right to contest the came as provided by lav, ‘Tenant shall also repair any damage to the parking area and any other damage caused by such construction. B. The Store shall be constructed by Tenent in a good and workmanlike manner, with the use of first-class construction materials and in accordance with all applicable requirements of law and duly constituted authorities, shall be located as chown on Exhibit B, and shall contain not less than 50,000 nor more than 85,000 equare fect of floor area distributed more or less equally over the three floor levels. The quality of construction, including fixturing and decorating, shall be comparable to that of Tenant's Boston, Massachusetts, store. The exterior design concept and specifications and compatibility with the Fashion Center shall be subject to Landlord's reasonable approval. €. In connection with (a) the construction of the Store and the improvements accessory or related thereto and (b) any repairs, replacements, alterations or changes in, of or to the Store and the improvements accessory or related thereto, Landlord phall afford Tenant and its contractors and worknen access between the demised premises and 96th Street and/or collins Avenue, together with suitable areas for construction and material storage. Subject to §31 hereof, Tenant shall commence the construction of the Store (i) on or before April 15, 1975, or (ii) six months after ali approvals, variances and agreements contemplated in §7A have been received, whichever shall be the later, and shall use diligent efforts to open the Store ar -9. fer business within eighteen months after conmencenent of construction. Tenant shall not be required, however, to open / the Store for business between May 1 and October 1 in any year. E, ‘Tenant shall construct and install at its expense all walkways, landscaping and exterior lighting at grade inne- diately adjacent to the store. when constructed, such walkways, landscaping and exterior Lighting shall become a part of the connon areas of the Fashion Center. In order to assure that the Iandscaping and exterior lighting shall be compatible with that of the Center, Tenant agrees to employ as its landscape architect the firm of Bozas, Kettelhut and Pirich, Landscape Architects, and for the design of the exterior lighting the firm of Howard Brandston Lighting Design Incorporated, provided said firms shall agree to perform such services for fees not to exceed each. In the event that the fee of either (or both) of such fixms shall be in excess of such sum, then Tenant shall be obli- gated only to offer to employ such firm as a consultant at a reasonable fee not to exceed SN each. F, Tenant agrees at its sole cost and expense to construct and connect with the Fashion Center Buildings an, exterior stairway in the Mall similar in design and construction to that constructed by Neiman-Marcus, but only if such stairway can count, under the South Florida Building Code, as a required stairway in the manner a similar staizway was utilized by Neiman-Mazcus, ‘The plans and specifications of such exterior stairway shall be prepared by, of approved by, Landlord's architect, whose approval shall not be unreasonably withheld. Provided Tenant employs Herbert !. Johnson and Associates as its architect, Landiord shall furnish to Tenant the plans and specifications of the similar exterior stairway constructed by, Neiman-Harcus, which stairway is to be used as a prototype for Tenant's stairway. After completion, said exterior stair way shall become part of the common areas of the Fashion Cepyor. -10- a G. With respect to any construction which Tenant may, or is required to perform, under this lease, Landlord covenants, that Tenant shall have and enjoy, and hereby grants to Tenant; all necessary or proper easements over, on and/or under portions of the Center a@jacent to the demised premises to place, construct, maintain, operate, repair, replace and otherwise make full use of all building footings and supports and appurtenances théreto necessary or proper for such construc- tion at such locations as Tenant may select after consultation with Landlord or Landlord's architect and which locations shall. be subject to the approval of Landlord, which approval shall not be unreasonably withheld. ‘Throughout the demised term, Tenant may erect outside the demised premises and adjacent thereto, any facility (and the required supports and equipment therefor) which may protect or sexvice the Store as follows: (i) drains, roof and other over~ hangs, awnings, alarm bells and signs (pursuant to §9) attached to the Store, (ii) canopies and marquees attached to the exterior face of the Store, (ili) lights, Lighting devices and flagpoles as shall not interfere with any of the respective businesses in the Center or constitute a hazard to traffic. ‘Tenant may renove any of the foregoing facilities at any time and in such event shall thereupon restore any area of the Center as and to the extent that the same shall have been damaged or otherwise affected by such work. 5-A. CONSTRUCTION AND OPERATION OF TENANT'S ROOFTOP PARKING A. Tenant agrees to design and construct its store so that the roof area of its Store can be utilized with and integrated with the roof top parking proposed to be constructed by Landlord. Tenant, however, may place mechanical equipment on the roof pro- vided the same shall be located so as to offer minimum interfer- eiice with the roof top parking. fe -n- B. In the event Landlord shall construct roof top parking facilities adjacent to the roof of Tenant's Store, Landlord may join such facilities to the roof area of Tenant's Store and integrate both roof areas as part of the Center's parking area consisting of the ground parking area, the parking decks and the roof top parking. In the évent the roof of the Store shall become part of the Center's parking area, Tenant does hereby grant to Landlord an easenent to use such roof area, upon completion of such construction, for the purpose of the parking of automobiles. C. Landlord agrees to consult with Tenant in preparation of plans for the parking layout, traffic circulation, direction signs and pedestrian lanes to be used in connection with the roof top parking on Tenant's Store and all other parking areas immedi ately adjacent to the Store, which plans shall be subject to the approval of Tenant, which approval shall not be unreasonably withheld. "tb, tenant shall be responsible for all structural re~ pairs to the roof of the Store except those caused or made neces~ sary by acts or omissions of Landlord, or the employees and agents of Landlord. Landlord shall be responsible for the maintenance and repair of the parking exea on the roof of the Store and keep and operate sane in a neat, clean, orderly, well lighted, Safe and first class condition as part of the parking area of the Center. Landlord agrees that the roof top parking area of the Store shall be included in all respects as part of the parking area of the center and shall be covered in all of Landlord's insurance applic~ able to the parking area of the Center. E. In the event Tenant shall design and construct its Store so that the roof can be used for the parking of autonobiles but if the roof shall not be so used by Landlord for a period of five years after Tenant shall open its Storé for business, then, upon request by Tenant, Landlord shall pay to Tenant a sum equal to MMMMMfor cach square foot of roof area of Tenant's Store: we provided, that if tandlord shall advise Tenant prior to the com pletion of the store that Landlord will not use the roof of the ‘Store for the parking of autonobiies and if Tenant, by immediately [taking such action as chali be reasonable, shail be able to reduce June cost of the Store and/or the roof, then Landlord shall receive ‘a credit against said [MMM per square foot of such pro rata portion of the extra cost as Tenant shall be able to save. 6. ALTERATIONS OF AND IMPROVEMENTS TO DEMISED PREMISES A. Tenant may (but shall not be obligated to) at any ‘time and from time to time after the completion of construction of the Store without in any instance being required to obtain Jandlora's consent, make such alterations, revisions, renodelings, additions and/or improvements in, to and of the interior of the denised premises as it may elect. No exterior changes shall be made without Landlera's prior approval which shall not be unrea~ sonably withheld. 3B. ‘Tenant shall obtain any and all permits and Licenses required in connection with performance of the work referred to in $6A; and in connection with performance of such work, shall comply with all applicable building codes, laws, ordinances, rules and regulations of governmental” authorities having jurisdiction over the denised premises. . Tenant shall pay any and all items of cost and expense incurred by ‘Tenant in connection with the performance of the work referred to in §6A (subject to Tenant's right to contest the amount and/or validity of any such itens of cost and expense in any manner permitted by law). 7, MEMORANDUM; TITLE INSURANCE; CONDITIONS A, Landlord agrees that it will at its sole cost and expense forthwith obtain from the appropriate parties and govern- mental authorities, as the case may be, the following agreements, as ae approvals or variances, as the case may be, which axe necessary to obtain before the Tenant can construct its Store on the de~ mised premises and before an integrated shopping center and parking decks can'be constructed as shown on Exhibit 3. (a) Variance from the appropriate governmental authorities to allow Tenant to construct a stere on and over the most southerly 7 1/2 feat of the demised premises, all as more particularly shown on Exhibit B. (b) Variance or interpretation, as may be required, from the appropriate governmental authorities that the proposed parking decks on the west side of the shopping center site, as more particularly shown on Exhibit B, can be constructed with- in the present so-called restricted area on the west. (©) Approval in writing from the legal occupant of the Schrafft restaurant building to the north of the demised premises and from any other necessary party permitting the + erection of Tenant's Store as shown on Fxhibit B and waiving the right to a sight line restriction presently included in such occupant's lease, (a) Approval from the appropriate governmental authorities for expansion of the present shopping center facility to the size and extent shown on Exhibit 8, including with such approval evidence of Landloré's compliance with all environmental xequirenente with respect to sewage disposal and other relevant ecological matters. (e) Approval from the appropriate governnental authorities of revised traffic arrangenents and access facilities as more particularly shown on Exhibit B. B, In connection with the agreements, approvals and variances referred to in §7A (herein collectively called "approv- als"), Landlord will at its sole cost and expense, prepare, file with the appropriate private parties and governnental authorities and diligently prosecute to completion, in accordance wih che Jr ae provisions of applicable laws and regulations the appropriate applications or requests for such approvals. The term "prosecute to completion" as used in this lease means instituting and parti: cipating in any and all required proceedings, inciuding appeals from any and all judgments, decrees and orders made by a court or governmental department or authority having final jurisdiction in the matter; provided, however, nothing herein shall require Landlord to prosecute any appeal beyond such point as in the written opinion of Landlord's counsel would not change the judg- - ment, decree or order. . Tenant shall furnish at the expense of Tenant, if required in connection with such applications or requests, eleva tions of its proposed building, renderings thereof, and such other similar data and material as may be reasonably necessary in connection with the preparation and prosecution of any of the aforesaid applications or requests. D. At any time when so requested by Landlord, Tenant shall join in any of the aforesaid applications or requests at its sole cost and expense, as a party thereto and to participate in any and all proceedings relating thereto. E. Upon the final determination of any of the aforesaid applications or requests, if any application or request be denied, this lease and ali of ‘Tenant's obligations hereunder shall at the option of Tenant (which option shall be exercised within thirty days after notice of such adverse final determination has been re- ceived) and in its sole discretion without stated reason, terminate, and Landlord shall forthwith return to Tenant any and all plans, data and other materials which Tenant may have furnished to Land- lord hereunder, and Tenant shall return to Landlord any and al) plans, data and other material which Landlord may have furnished to tenant. Each party shall bear its reapective costs and obli- gations. F. In the event of the failure of Landlord to perforn any of the terms, covenants, conditions or provisions of AY of this lease on Landlord's part to be performed, Tenant shall have the right to perform for and on behalf of Landlord and to do all necessary work, incur any reasonable charge and make any reason able expenditure in connection with such performance, including but not limited to reasonable attorneys’ fees, and the sun so expended by Tenant, together with interest at the rate of @t per annum from the date of each such reasonable expenditure, shall be repaid on demand to Tenant or, at the option of Tenant, nay be applied by Tenant as rent due to Landloré under this lease. G. Upon the final determination of all the aforesaid applications and requests, if ali such applications and requests shall be granted, the terms an@ conditions of this lease shall be deemed to be in full force and effect. TE all such applications and requests shall not have been granted within four (4) months after the execution of this lease, Tenant shall have the option (which ehail be exercised within thirty (30) days after the expiration of such four (4) month period) to terminate this agreement. If all such applications and requests shall not have been granted within sixteen (16) months after the execu- tion of this lease, then this 1 fe agreement shall automatic- ally terminate, unless prior thereto it chal have been ex- tended by mutual written agreement. H. Concurrently with the execution and delivery of this lease, Landlord and Tenant shall execute and deliver a meno- randun of this lease and Tenant shall thereafter cause said meno- randun to be recorded in the office of the Clerk of the Circuit court of Dede Comty, Florida, for the purpose of giving notice to whosoever it may concern of this lease; the cost of such recording Unetuding but not Limited to the amount of any docunentary stamp tax which may be payable in connection with such recording) shall be borne by Tenant. Landlord and Tenant forther agree that their relations shall be governed solely by the provisions of this lease, not by said memorandum. -6- yo I. Landlord warrants and represents that it has every legal right to enter into this lease and to perform as herein stated. J. Landlord, at its expense and within thirty (30) days from the date of the execution of the lease, shall cause to be prepared and delivered to Tenant an abstract of title covering the Gemised property, certified to a date not earlier than the date this lease is executed, showing good and marketable or insurable title to be vested in Landlord, subject to the matters set forth in Exhibit C, attached hereto and made a part hereof. K, After receipt of said abstract, Tenant shall have sixty (60) days to determine that title to the’denised prenises is as herein warranted, If, during said period, Tenant shall find the title to the demised premises not to be as herein warranted, Tenant shall notify Landlord in writing of any objections to the title and Landlord, at its sole cost and expense, shail use all reasonable efforts te xenove such objections ox to otherwise satisfy Tenant in connection therewith, so as to place the title to the denised premises, subject to the conditions set forth in Eyhibit c, ina good and marketable condition under the laws of the State of Florida, o£ in such condition that Lawyers Title Insurance Corpo- ration will issue a policy of title insurance, subject to the matters set forth in Exhibit C, in the amount of $1,000,000.00 or such lesser sum as said Lawyers Title Insurance Corporation shall determine to be the maximum insurable value of Tenant's leasehold estate under this Lease, and conmit for increasing said policy to $4,000,000.00 upon completion of improvenents in an amount not less than $4,000,000.00 (such policy to be further subject to mortgages, liens and other matters placed by Tenant or suffered or permitted by Tenant subsequent to the effective Gate of the original policy). If Landlord shall fail to place the title in the condition as herein required within a period of 120 days after receipt of Tenant's objections, then Tenant shall have the option to terminate this lease agreement,ox to, ade ee accept the title in its then condition. Such acceptance by ‘Tenant shall be in writing and shall be conclusive as to Tenant unless Tenant and Landlord shall both agree in writing to the contrary.” All costs and expenses in connection with the title examination and title insurance shall be paid by Tenant. 8. USE OF DEMISED pReursEs A. Tenant agrees that subject to the provisions of 531 hereof, and eubject to any interruptions due to repair, re~ construction, razing, alterations or replacement of or affecting the demised premises, and subject to the other provisions of this §8, Tenant shall continously operate, or cause to be operated, the Store during normal business days and hours as a retail faci: lity under the trade name “Saks Fifth Avenue” or under any other nane having "Sake Fifth Avenue" in it or under the nane Tenant may from time to time be using for all of its stores in the New York Metropolitan Area which are presently being operated under the name “Saks Fifth Avenue"; provided, however, that such obli- gation to operate may be terminated by Tenant at its election in the event of any default in the performance by Landlord of its covenants set forth in §20B hereof. In connection with sugh operation, Tenant shall carry a reasonably full stock of season- able merchandise and, subject to $21 hereof, employ sufficient personnel reasonably adequate to serve its customers. Tenant may also, in its reasonable discretion, close the Store during periods of riot, civil disorder, fire, hurricane or other dis- aster. Tenant and Landlord acknowledge that the continuous and uninterrupted operation of the Store under the trade name “Saks Fifth Avenue" or such other name as shall be permitted under this §8A is a valuable consideration passing from Tenant to Landlord and without Tenant's unconditional obligation (subject, however, to this $8 and to §31) to operate the Store and every department and part thereof throughout the term of this legse and [~ mu every extension hereof under the trade name "Saks Fifth Avenue" or such other name as shall be permitted under this §8A, Landlord would not have entered into this lease. Landlord and Tenant acknowledge that the continuous and uninterrupted operation by Landlord of the Center as a high-class shopping center under the trade name of "Bal Harbour Shops" is a valuable consideration passing from Landlord to Tenant, without which Tenant would not have entered into this Lease. Landlord recognizes the value of Tenant's trade nane, “Saks Fifth Avenue", and covenants to use sane (or such other name as Tenant shall be using purcuant to this §8A) in all references to Tenant in the Center's advertising and promotion. Tenant recognizes the value of the center's trade name, "Bal Harbour Shops", and covenants to use the same in al2 advertising and promotion of the store. B. Landlord acknowledges that an inducement for Tenant to onter into this lease is the continued operation of a store of not less than 75,000 square feet of floor area under the name of Neiman-Marcus during the initial term and any reneval of the lease between Landloré and Neiman-Marcus, and further that Landloré shall operate the Center as a high quality fashion shopping center of not less than 150,000 square fect of floor area with retail stores offering goods and services consistent with the character of other high quality fashion shopping centers in the United States all intended to attract high quality, fashion oriented or fashion related occupants with a balanced mix of retail stores. If the parties are unable to agree upon the determination as to whether the Center is no longer being operated by the Landlord as a high quality fashion shopping center, the matter shall be aeternined by arbitration as provided in $39. If said arbitration shall determine that the operation of the Center shall not be as hereinabove set forth, then Tenant may use the demised premises for any lawful purpose and if the Store shall not be used as a department store or as a specialty store, then (a) the peypentage (Pe a19- rent payable by Tenant shall be apportioned to the date on which the Store shali cease to be used for either a department store or a specialty store (such date being hereinafter called the "Date") ‘and (b) for and during the period commencing on the Date and con- tinuing (i) to the end of the then current extended period and (ii) if Tenant shall again oxtend this lease, then into and through the next renewal period, but in no event beyond the 30th anniversary of the day preceding the Date, Tenant shall pay to Landlord, in equal monthly installments in advance on or before the First business dey of each and every month, in lieu of percentage rent, a fixed rent (subject to adjustment as hereinafter provided in this subsection B) at the annual rate of a dollar amount equal to the,average of the percentage rent payable by Tenant to Landlord hereof for the three lease years next preceding the Jeane year in which the Date shall happen to fall; provided further that during any period in which Tenant shall use or occupy the Store or permit the same to be used or occupied for any purpose other than @ dopartment store or specialty store, Sandlord shall have the option, exercisable on not less than one year's prior notice to Tenant, to terminate this lease upon the Payment to Tenant of the then fair market value of the Stor, subject to this lease. If the parties shall be unable to agree upon the fair market valve of the Store, the matter shall be determined by arbitration as provided in §39. The fixed rent payable pursuant to this subsection B shall be adjusted pro- spectively each five (5) years so that the fixed rent for each five (5) year period following the first five (5) year period shall be increased or decreased in an anount equal to the per- centage increase or decrease in the Bureau of Labor Statistica Consuner Price Index for the United States (all items, 1967 base) for the first month of such five (5) year period as com pared to the Index for the month in which the Date shall happen to fall. C. Nothing contained in this §B shall be construed or deemed in any way to prevent or limit the assignnent -20- ve 7 transfer of Tenant's interest in this lease and the leasehold estate hereby created as provided in §26 hereof. D. he provisions of this $8 shall be and hereby are expressly made subject and subordinate to the Lien or other security interest of any mortgagee or other lender upon, in oF fo Tenant's leasehold estate in the demised premises and the rights of any purchaser of the denised premises pursuant to sale-and-leaseback financing xeferred to in $43 hereof; provided that any such mortgage or sale-and-leaseback agreement shall specifically provide that Landlord shall be notified in writing at ite last known address of any default by Tenant, and that Aandiord shall have not less than fifteen (15) days from receipt of such notice to renedy any default involving the paynent of money and ‘hot less than thirty (30) days (or such further time as may be reasonably necessary) to remedy any default other than the paynent of money. B. Tenant agrees that without first obtaining the prior written consent of the operator of Schrafft's restaurant, or ike successors or assigns, in the Center it will not, during the remainder of the now unexpized term of the lease of such restau- rant, operate any dining facilities on the first floor of the Store. ’ F. If Landlord shall release, cancel, terminate or lessen the obligations of Neiman-Marcus with respect to the oper- ation of ite store during the term of its lease, then Tenant's obligations with respect to.the operation of the Store as set forth in this section shall be released, cancelled, terminated or lessened to the same extent. 9. TENANT sTGNS Tenant may, at Tenant's cost and expense, erect and install and thereafter maintain on the exterior of the denised premises or any portion or portions thereof such identification sign or signs as Tenant may from time to time elect to a Va in connection with the demised premises; provided, however, that such signs shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld. 20. urtirrres A. Connections to Utilities Landlord shall, at its expense, provide at points on the perimeter of the demised premises as designated by Tenant, appropriately stubbed-up, plugged or capped facilities (each of sufficient capacity to serve the Store) for the supply of electricity, gas, water, sewage and telephone service to, and the removal of drainage water from, the demised premises, ‘Tenant shall, at its expense, connect its Store systems with the facili- ties provided by Landlord as aforesaid. Im the event that Tenant shall be unable in good faith to procure or to cause to be procured any permit, license or other authorization, or permission to install and use any public utility or facility, in connection with the construction of the Store and the improvements accessory or related thereto, then Tenant, at its election, shall have the right upon the giving of notice to Landlord to terminate this lease and all of its gbliga~ tions hereunder thereafter accruing, in which event there shall. be such apportionnent of taxes payable by Tenant under this lease to the date of the giving of such notice as shall be fair and equitable, and the demised premises and any and all improvenents thereon shall thereupon be surrendered to Landlord and this lease shall thereupon terminate. B. Electricity and Telephone Subject to Landlord's obligations under the preceding subsection A, Tenant shall make its own arrangements with the Florida Power and Light Company and with the Southern Bell ‘Telephone and Telegraph Conpany for metering of electric service and activation of telephone service, respectively, and shail Promptly pay all costs and charges in connection therey C. other utilities ana services ‘Tenant shall promptly pay all periodic charges for water and sewage service, garbage and trash collection, and for any other utilities and services used by it and supplied by any municipality or any person, firm, corporation or by Landlord. Whenever Landlord elects ts supply any such utility or service, ‘Tenant shall purchase its requirements therefor from Landlord and shail pay the charges therefor at the applicable rates determined by Landlord from time to time which Landlord agrees shall be reasonable and not in excess of the public utility rates for the sane services, if available. Landlord shall pay the costs ,to Tenant of changing to such utility or service. Im the event that the quality of any such service shall be un- satisfactory, Tenant may discontinue such use, any reasonable expense in connection with the resumption of direct utility supply to be paid by Landlord. 11, POWERS TO EXECUTE LEASE Landlord and ‘Tenant respectively represents and warrants to the other that it has full power, right and authority under all applicable statutes, laws, ordinances, rules and reguia~ tions, and under its organic documents to enter into this lease. 12. INDEMNIFICATION A. ‘Tenant covenants to indemnify and save Landlord harmless from and against any and all loss, cost, expense and damage (including reasonable attorneys' fees) arising out of the death of or injury to any person, or damage to any property occurring upon the denised premises, except if the same shall result from the negligence of Landlord or Landlord's agents, servants, employces or contractors. B. tandlord covenants to indemnify and save Tenant harmless from and against all loss, cost, expense and damages (including reasonable attorney's fees) arising out of the goat! -23- pw of or injury to any person, or damage to any property occurring upon any portion of the Center, other than the demised premises, except if the same shall result from the negligence of Tenant or Tenant's agents, servants, employees or contractors. 13, WAIVER OF SUBROGATION 7 Landlord and Tenant each hereby grants to the other on behalf of any insurer providing fire and extended coverage insurance to either of them covering the Center and the buildings and improvements thereon, the denised premises and the buildings and improvenents thereon or the contents of any such building or improvement, a waiver of any right of subrogation any such insurer of one party may acquire against the other by virtue of payment of any loss under such insurance. Bach party shall pay such additional premium as may be required by its insurer for the granting of such waiver. 14, LIABILITY INSURANCE TO BE CARRIED BY LANDLORD landlord shall at all times during the term hereof maintain in full force and effect the following insurance covering the Center (except the demised premises) in standard form generally in use in the State of Florida with responsible companies authorized to do business in said State, whereunder, as respects occurrences _ in and upon the conmon areas, Tenant is named as an additional insured: (1) Comprehensive public liability insurance in tire apount of at least $509,000 for any accident result- ing in bodily injury to or the death of one person and consequential danages arising therefrom, and in the amount of at least $1,000,000 for any accident result- in in bodily injury to or the death of more than one person and consequential damages arising therefron: (43) Comprehensive property damage insurance cov- ering liability for damage to all property in the amount of at least $100,000; “ jbv / (iii) hat said insurance as required in (i) and/ or (if) above my provide for a deductible feature not in excess of $50,000.00, Landlord shall furnish Tenant with a certificate of said Liability insurance (and of each renewal thereof) executed by the insurer involved, which certificate(s) shall contain in addition to the matters custonariiy set forth in such certificate under standard insurance industzy practices, an undertaking by the insurer to give Tenant ten (10) days prior written notice of any cancellation or change in scope or amount of coverage of such policy. at ail times that the snot worth" (calowlated in accordance with weval accounting principlas) of Landlord shall excesd $20,000,000, iandiora may self-insure the property and Liabilities referred to in this sis. 15. LIABILITY INSURANCE 70 BE CARRIED BY TENANT ‘Tenant agrees to maintain in force and effect with respect to Tenant's use and occupancy of the denised premises, a policy or policies of public liability insurance with limits of not less than $500,000 for the injury to or death of one Person, and $1,000,000 for each occurrence; and property Sanage insurance in an anount not less than $100,000; provided that said Ansurance may provide for a deductible feature not in excess of $50,000.00, ‘Tenant shall furnish handlord with @ certificate of said Liability insur ance (and of each renewal thereof) executed by the insurer involved, which certificate(s) shall contain in addition to the matters customarily set forth in such certificate under standard insurance industry practices, an undertaking by the insurer to give Landlord ten (30) days‘ prior written notice of any cancellation or change in scope or amount of coverage of such policy. Jt is agreed that the aforesaid insurance ma be carried under a blanket policy or policies of insurance covering other property (Jes) or other liability(ies) of Tenant, its parent company or other affiliate(s) of Tenant or of its parent company, in addition to the property and liabilities covered pursuant to the requirements of this $15. At all times that the “net worth" (calculated in accordance with usual accounting principles) of Tenant or its parent company shall exceed $20,000,000, Tenant may self-insure the property and Liabilities referred to in this §15. 16. LANDLORD'S FIRE AND EXTENDED COVERAGE INSURANCE A. At all times during the term of this lease that such insurance is reasonably available from responsible insurance companies authorized to do business in Florida, Landlord shall pay all premiums for and maintain in effect with such an insurance company, @ policy or policies of insurance insuring each and all of the common areas, and the Fashion Center Stores (herein- after in this Section collectively called "insured buildings ana improvements") against loss or damage by fire and other casualties commonly included by the insurance industry within the classifica~ tion *Fire and Extended Coverage Insurance", providing protection to the extent of eighty percent (80%) of the "insurable value" of the insured buildings and improvements (the term "insurable value” being defined as the cost of replacing the insured buildings and improvements [excluding foundation, foctings and excavation costs), less depreciation), or such greater percentage of insurable value as shall prevent Landlord from becoming a co-insurer under the policy. The proceeds of euch insurance over and above $50,000.00 shall be held as a trust fund by Landlord for the purpose of paying the cost and expense of repair or reconstruction of the insured buildings and improvements to be performed by Landiord as provided in §21 hereof. Such insurance may contain deductible provisions (expressed in dollars or as a percentage of the face amount of the policy) if such deductible provisions are at the time customarily required by responsible insurance companies writing the type of coverage required hereunder in order to obtain such coverage without the payment of bonus premium. Notwithstanding the preceding sentence, such policy may, at the election of the insured, include a deductible provision not in excess’ of 7$50,000.00 per occurrence. B. Landlord shall furnish to Tenant a certificate of the insurance referred to in the preceding subsection (and of each 5 roneval thereof) executed by the insurer involved, which certifi- cate(s) shall contain, in addition to the matters customarily set forth in such a certificate under standard insurance industry prac- tices, an undertaking by the insurer to give Tenant ten (10) days! prior written notice of any cancellation or change in scope or amount of coverage of such policy. €. I the event that Landlord shall fail to insure the insured buildings and improvements in accordance with the require~ ments of this Section, Tenant may effect such insurance, pay the premiums therefor, and such suns, together with interest thereon at the rate of eight percent (Bt) per annum, shall be promptly repaid to Tenant upon demand, or Tenant, at its option, may deduct the cost thereof, together with interest thereon at the rate of eight percent (Bt) per annum, from rents thereafter falling due under this lease. D, At all times that the "Net Worth" of Landlord shall exceed $20,000,000, Landlord may self-insure the insured buildings and improvements as provided in this Section. 17. TENAWR'S PIRE AND EXTENDED COVERAGE INSURANCE A, At all times during the term of this lease that such insurance is reasonably available from responsible insurance companies authorized to do business in Florida, Tenant shall pay all premiums for and maintain in effect with such an insurance company, a policy : <2 we or policies of insurance insuring the denised premises against loss or danage by fire and other casualties conmonly included within the classification "Pire and Extended Coverage Insurance” providing protection to at least the extent of eighty percent (808) of the insurable value of the denised premises (the tern "insurable value" being defined as the cost af replacing the insured buildings and improvenents [excluding foundation, footings and excavation costs], less depreciation), or such greater percentage of incurable value as shall prevent Tenant from becoming @ co-insurer under the policy. The proceeds of such insurance over and above $50,000.00 shall be held as a trust fund by Tenant for the purpose of paying the cost and expense of repair or reconstruction of the denised Premises as provided in §24 hereof. Such insurance may contain deductible provisions (expressed in dollars or as a percentage of the face anount of the policy) if such deductible provisions are at the time customarily required by responsible insurance companies writing the type of coverage required hereunder in order to obtain such coverage without the payment of bonus preniun. Notwithstanding the preceding sentence, such policy may, at the election of the insured, include a deductible provision not in excess of $50,000.00 per occurrence. 1B, Tenant shall furnish to Landlord a certificate of the insurance referred to in the preceding subsection (and of each renewal thereof) executed by the insurer involved, which certifi- cate(s) shall contain, in addition to the matters customarily set forth in such a certificate under standard insurance industry prac- tices, an undertaking by the insurer to give Lendlord ten (10) days" prior written notice of any cancellation or change in scope or amount of coverage of such policy. C. the aforesaid insurance may be carried under a blanket policy of policies of insurance covering other property (ies) of Tenant, its parent company or other affiliate(s) of Tenant or of its parent company, in addition to the demised premises. mt [& ~28- all times that the "Net Worth" of Tenant or its parent company shall exceed $20,000,000, Tonant may self-incure the demised premises as provided in this Section. + jD. In the event that Tenant shall fail to insure the domised premises in accordance with the requirements of this Sec- tion, Landlord may effect such insurance and pay the premiums ther for, such premiums, together with interest thereon at the rate of eight percent (88) per annum, to be reimbursed by Tenant to Land- lord as additional rent under this lease. E. As respects insurance to be carried by Landlord under §16 and by Tenant under this §17, each party will comply with all rules and regulations of Rating Bureaus having juris diction as to insurance carried by it and will not do or suffer or permit to be done in or about the insured buildings and improvenents or demised premises, respectively, any act which will increase the cost of any insurance carried by the other party on its improvements in the Center, unless the party res- ponsible for such increase will pay the cost of such increase to the other party. 18. DEFINITIONS As used in this lease the following terms have the following respective meanings: (1) The term “occupant” means any "person" (as here- inafter defined) from time to time entitled to occupy "gross leaseable area” (as hereinafter defined) in the Fashion Center under a "lease" (as hereinafter defined) from or with any person, including Landlord. (11) The term "person and the term “persons” shall both mean and include individuals, partnerships, firms, associations and corporations or any other oy of business entity. a la (ii) the term “lease” means any lease, deed or other instrument or arrangement whereunder each occupant acquires his or its status as such. (iv) The term “conton azeas* means all portions of the Fashion Center which are not held for or appro- priated to the occupancy of occupants, including, with- out Limiting the generality of the foregoing, the park- ing area (hereinafter defined), all entrances and exits from the Fashion Center to adjoining public roads, interior roads, private roads, traffic lanes, Jand~ scaped areas, malls, sidewalks, walkways, any unpaved areas, safety barriers or public service corridors which are required by fire codes or governnental authority for public protection or safety, and all other improvenents or installations provided for the general use and conve nience of Landlord, occupants and persons authorized to use the sane by Landlord and by occupants: excepting, however, (a) the demisea premises and any other buildings constructed by and occupied by an occupant, and (b) the Fashion Center Stores, and (c) those portions of the Fashion Center which nay be from tine to time oscupied by any duly dedicated public street or highway. _(v) The term “parking area" means all interior roads, drives, traffic lanes, vehicular parking spaces and related pedestrian walkways and "parking structures" (hereinafter defined) but shail not include landscaped (vi) The term “floor area” as that term is used in §3 hereof shall refer to and mean and in- clude the total number of square feet of floor space within the Store measured from the exterior faces of the exterior walls: provided, however, that the term "floor area" shall not include: (A) Parapets, clerestory structures, or penthouses or other similar structures located upon roofs serving solely to shelter, enclose and/or conceal mechanical and operating eauip~ ment (B) Surface finishes of and/or architec- tural ornamentation applied to said exterior walls; (c) Roof overhangs ané canopy overhangs: (0) utility and/or mechanical equipment vaults, rooms, penthouses or areas (including, but not by way of limitation, any rooftop area(s), sezzanine area(s), and vaults, whether located within or partially or wholly outside of sa exterior walls): () any service delivery facilities, includ~ ing docks and/or canopies, located outside of said exterior walls; (F) Space occupied by elevators, escalators, stairvays and ramps above ground floor: (G) Show-window projections beyond said exterior walls; (i) Floor space of buildings used exclusively for the maintenance of the conmon areas: (1) Floor space occupied by any truck tunnels and xanps, or truck loading and unloading, truck parking or truck turn-around facilities; (3) The mezzanine level of stock areas. Notwithstanding anything to the contrary contained in this lease, during the period of any damage, destruction, rebuilding, repairing, replacement or reconstruction to, on or of any buildings in the Center, the floor area (in the case of the Store) and "gross leaseable area" -a1- (hereinafter defined) of such buildings (ineluding the Store) shall be deemed to be the same as the floor area and gros leaseuble area of such buildings {nnediately Prior to such period, and upon completion of tha rebuild- ng, repaizing, replacement of reconstruction of such buildings, @ new determination of fleor area and gross leaseable area for such buildings shall be made az pro- vided in 526 hereot. (wis) the term "Fashion Center Stores" means those putldings for retail and conmercial use heretofore con- structed and horeafter to be constructed in the center for occupancy by occupants other than the dentsed prem isos and the building occupied by Neiman-Marcus. (iti) The term "parking structures" shail refer to the parking decks and structures and ali related appurtenances thereto to be constructed by Landlord pursuant to the provi- sions of this Jesse within portions of the Fashion Center. (4x) The term “Conpleted Building(s)" means any building in the Center vhich is ready for use and occupancy by an osct- pant (s)- The issuance of @ temporary or permanent use and occupancy certificate (or the equivalent thereof) with respect to any such building shall be conclusively deened to consti- tute,such bullding as ready for use and occupancy by an occupant. (x) the term "gross leaseable area” means 411 aress constructed for use by occupants (whether or not occupied) , including all mezzanine areas in excess of 2,000 square fet occupied by any single occupant (provided that with reapect to auch excess martanine area ao included in grosa leascable area, each two square fect thereof shall be counted as one square foot for the puspose of §42¢ hereof), expressed in square feet and measured from the center Line of joint parti- tions and from outside wall faces, but such term shall not in- VA ~32- etude (i) space occupied by Landlord as managenent offices, or (44) space not occupied by an occupant on the second and third Floors of the buildings presently in existence in the Fashion center unless and until (a) the upper mall level shall be con- pleted or (b) such space shall be actually occupied by an cccupant, whichever event shall first occur, and upon the occurrence of such event such space shall thereafter be in- cluded in gross leaseable area. 19. COMMON AREAS A, Landlord hereby grants to Tenant and Tenant's officers, directors, employees, agents, subtenants, contractors, subcontractors, concessionaires and licensees, and to the officers, dixectors, employees and agents of Tenant's subtenants, concession aizes end Licensees, and to the customers, patrons and business invitees of Tenant and of Tenant's subtenants, concessionaires and Licensees (hereinafter collectively called "Tenant's permittees") the non-exclusive right to use (without cost or expense to Tenant or Tenant's permittees, except as in this lease expressly provided to the contrary) the common areas of the Fashion Center for the purpose of gaining ingress to and egress fron the demised premises, for the passage and parking of vehicles, and for the passage and acconmodation of pedestrians, such right to be in connon with Landlord and those other occupants of the Fashion Center from time to time authorized by Landlord to use said conmon areas for such purposes. B. Landlord shail maintain, manage and operate, or cause to be maintained, managed and operated, the connon areas (including, but not by way of Limitation, the parking azea) sn good order, condition and repair, and in a first-class and high quality tanner comonsurate with the "fashion" image of the Fash ion Center and of the Store. Landlord's obligation pursuant to the preceding sentence in respect of the maintenance, man- oa Ay agement and operation of the common areas shall include, but not be limited to, the following: (1) Undertaking such maintenance and construction work (including replacements as required) as is necessary to preserve and maintain the utility of the common areas, (2) The care and maintenance of all Fashion Center identification signs and all planters and landscaping. (3) The maintenance of Lighting facilities and ade- quate illumination of the common areas at all tines of darkness Tenant is open for business (plus a period of one hour after Tenant closes for business). (4) The payment prior to delinquency of all real estate and personal property taxes and assessments levied thereon ‘ (8) The removal of dirt and debris and rubbian Gncluding the regular sweeping of the parking area and all sidewalks) - (6) The maintenance of insurance coverage of the character required by the provisions of $14 and §16 hereof. C. Subject to the requirements and limitations here- after set forth, Landlord shall have the right to designate the portions of the connon areas of Fashion Center that shall be used for parking area and separately with respect to each level may from time to time include in or exclude from parking area subterranean, surface and/or elevated parking facilities (parking structures). at all times during the term of this lease Landlord shall maintain the parking area so as to provide a parking index of at least four parking spaces for then standard size automobiles of U.S. make for each 1,000 square feet of gross leaseable area, except that only two (2) such parking spaces shall. be required for each 1,000 square feet of gross leaseable area contained within an office building and devoted to office use. Notwithstanding the foregoing, Landlord may from time to $ime Pe ye request that Tenant consent to a parking index which is lower than 4/1,000 square feet of gross leaseable area. In the event that Landlord and ‘Tenant are unable to agree upon auch lower parking index, then they shall each appoint a nationaliy recognized engin eering firm specializing in shopping center parking to determine the appropriate parking index. If such tvo firms are unable to resolve the matter, then they shall jointly appoint a third engin eering firm similarly specialized to join in such arbitration. The recommendations of a majority of such firms shall be binding and conclusive upon Landlord and Tenant and shall establish the parking index unless and until a new parking index may thereafter be established pursuant to this Section. the fees and expenses of the arbitrator appointed by a party shall be borne by such party: and the fens and expenses of the third arbitrator, if eny, shall be shared by the parties. D. Tt is understood that the index and ratio required by the preceding subsection ¢ is for the benefit of al occupants and the customers, patrons and {avitees of all occupants. In the event that it appears that persons other than those referred to in the preceding sentence are found to be using the parking area s0 as to diminish its practical benefit to such persona, Landlord shall promptly take all appropriate steps to abate such uses, failing which, Tenant, as Landlord's agent for such purpose, may ao so. To the extent that Landlord shall provide enployee parking in the Fashion Center (for which Landlord may charge to such employee @ parking charge), Landlord shall do so on a basis which is non-di'scriminatory as between all employees employed in the Fashion Center, including omployses of Tenant. Tenant shall use reasonable efforts to cause its employees to park only in such areas so provi- ded by Landlord. F. Landlord reserves the right to have the parking area operated and maintained by some other firm or person but Teyant shall ( -35- not, by virtue thereof, be required to pay a management fee greater, or computed on a different basis, than that set forth in §42 hereof: and nothing in this subsection F shall be deemed to Limit or restrict Tenant's rights with respect to the parking area. G. Notwithstanding the foregoing, in the event that the normal mode of transportation for retail shoppers shall be other than the automobile, then Tenant shall not unreasonably withhold its consent to the provision by Landlord of such other means of accommodation of the then normal mode of shopper transportation as may be appropriate in the circumstances, provided that such other means of accommodation are at least as convenient to the shopping public as is the parking area required hereby. "ft. tandiera and Tonant each agree to abide by all governmental fire and safety codes concerning the operation and maintenance of the Center (including without limitation the parking decks) by Landlord and of the demised premises by Tenant. 1, Landlord will accord Tenant treatmest as favorable as that accorded to the Neiman-Marcus store with respect to the time ond manner in which the Center shall be operated, maintained, repaired and/or furnished with any service, including the restora~ tion of any service which may have been interrupted or impaired. J. Landlord agrees that during the term of this lease the area outlined in green on Exhibit B shall be a part of the conmon areas and used for ground level and deck level parking purposes, except that kiosks may be located on each parking level, provided that any such kiosks be in keeping with the high quality of the Fashion Center and do not interfere with parking, Tenant shall have the right to approve the height and appearance of any portion of any such parking imprevenents which exceed two (2) is constructed within parking deck levels above ground level which the green area due east of the demised premises, but such approval shall not be unreasonably withheld. K, In the event that (i) Stanley F. Whitman shall cease to have management control of the Landlord herein named, or (4i) the Landlord shall not be either Bal Harbour Shops oF a successor thereto which shall be under the voting conty -36- Stanley F. Whitman, and Tenant shall, at any time or from time to tine thereafter, be dissatisfied with the performance by Landlord of its obligation to maintain, manage end operate the common areas as provided in thie §19, then Tenant shall have the continuing right (whether before or after Landlord may have re~ assuned said maintenance, management and operation pursuant, to the provisions of this subsection XK) to notify Landlord of the particulars of Tenant's said dissatisfaction and demand that within thirty (30) days after Landlord's receipt of said notice Landlord cure said unsatiafactory performance in the particulars specified. If on or after the thixtieth (30th) day from receipt of said notice Tenant shall still be dissatisfied with said per- formance by landlord, then Tenant shall have the right to submit to arbitration the question whether Landlord is in fact properly performing its said obligations. Tenant acknowledges that Landlord and Neiman-Hareus has advised Tenant that the lease between Land contains a similar provision, and that the remaining provisions of this subsection K can only be exercised by Tenant in cooperation with the exercise by Neiman-Marcus of its rights under its lease. Tf Landlord is found in such proceedings not to be properly perform ing, then Tenant and/or Neiman-Marcus may take over fron Landlord Such maintenance, management and operation and carry out and perform all of Landlord's obligations set forth in this §19 hereof. such take-over shall not relieve Landlord of its obligations to keep, perform and observe any other of the terms, conditions, covenants and provisions in this lease to be kept, performed and observed by Landlord, other than those relating to the maintenance, management and operation of the common areas. In the event that the maintenance, managesent and opera~ tion of the common areas shall be taken over from Landlord as provided in this Section, then any and all sums payable te Land- tora by occupants of the Center in respect of their prorata shares of the cost and cxpense of maintaining, managing and operating the common areas, together with the right to enforce payment of and collect the same, shall (subject to the following prgvipion h7 of this subsection K of this Section) stand assigned to Tenant and/or Neinan-Marcus without the necessity of the execution of any further instrument of assignnent thereof by Landlord other than this lease; and Tenant and/or Neiman-Marcus shall thereafter maintain, manage and operate all of the common areas in a uniform and impartial manner for the benefit of all occupants of the Fashion Center, and carry out and perform all of Landlord's obliga~ tions set forth in this §19 hereof throughout the remainder of the term of this lease unless Landlord shall at any tine or tines thereafter resume the maintenance, management and operation of the common areas pursuant to the following provisions of this subsection K. At any tine or fron tine to tine after the take-over of the maintenance, management and operation of the common areas as provided in the preceding paragraphs of this subsection K, Landlord shall have the right to submit to arbitration the ques- tion whether or not under all circunstances it is reasonable for Landlord to re-assume said maintenance, management and operation: provided, however, that all reasonable expense of arbitration (including the reasonable expense of Tenant and/or Neiman-Naxcus) with respect to any arbitration proceedings instituted by Landlord pursuant to the foreyoing provisions of this paragraph shall be borne by Landlord. 1. Anything to the contrary notwithstanding, Landlord agrees that if a parking structure is required to be built within the Fashion Center in connection with the construction of the Store in oxdbr fo comply with the ruquizements of subsection C of this $19, such structure shall be located approximately in the area designated on Exhibit B as "Parking Deck". 20, COVENANTS OF LANDLORD Landlord covenants, agrees and warrants for itself ang its successors and assigns: A. ‘That subject to the provisions of §7 hereof, the execution of this lease does not and will not violate or breach any zoning or deed restriction, or lease or other agreement with any occupant (s) « B. That subject to the provisions of §31 hereof, and subject to interruptions due to repair, reconstruction or replace~ ment, i¢ will: (4) Continously operate the Center as a high-quality, first-class fashion oriented center; (4) Use all reasonable efforts to cause the Center Stores to be fully occupied by occupants constituting a balanced “mix” of retail stores; ana (484) operate under the name “Bal Harbour Shops" and under no other name which has not firet received Tenant's approval, which shali not be unreasonably withheld. ©. That when and if the upper mall level or levels shall be constructed it or they shall be of a uniform character with the existing mall and shall be connected by the Landlord at each level of the upper mall to the demised premises. |; That no tenant or other occupant shall rent or otherwise occupy any space fronting on any mali within the area outlined in blue on Exhibit B except high fashion retailers of the type and quelity occupying stores in the Center at the date of the execution of this lease, including but not Limited to restaurants, gift stores and service stores. E, That no tenant or other occupant shall rent oF otherwise occupy any space within the Center for a theatre which shall open for business prior to 6 P.tf, except that on Sundays and hotidgys there shall be no such Limitations. tn the event Tenant believes that the parking by theatre patrons is in fact injurious to the business of Tenant, then Tenant nay submit the question to arbitration pursuant to §39 hereof. 20. ADDITIONAL COVENANTS A. The parties recognize that at some future date Landlord may acquire additional property adjacent to thy exiar~ ~39- ing Fashion Center property. In the event of such subsequent acquisition of adjacent property Landlord may at its option by appropriate means incorporate sai@ property within the Fashion center and thereupon such property shall becone subject to all of the terme and conditions of this Lease (except that such additional property may be used as a site for the construction of an office building, theatre or any other lesa purpose) to the sane extent as though the Fashion Center as legally described in Exhibit A included such additional property. Tf such addi- tional property shall be added to the Fashion Center and used by Landlord for commercial purposes (other than parking) then landlord shall be required to provide additional parking as Foltows: (1) Tf used as an office building: two parking spaces for each 1000 square feet of leaseable office space. (2) Uf used as a theatre the need for additional packing spaces shall be determined by mutual agreement, and if the parties shall fail to agree, the matter shall be submitted for determination to a nationally recog- nized firm of traffic engineers and parking consult- ants having a good reputation for professional ability and high integrity who shall take into consideration, among other things: (a) the extent to which the theatre has a multiplier effect on retail parking demands; (b) the interchange of parking spaces between theatre and retail activity; and (c) the influence that: the location of the theatre within the shopping center * ,hnas on parking requirements. (3) Tf used for retail salest same as required under this lease for Tenant's Store. such reasonable (4) If used for any other purpos additional parking spaces as Landlord and Tenant may agree upon. If the parties shall fail to agres, the fe Ts matter shall be submitted for determination to a nation- ally recognized firm of traffic engineers and parking consultants having a good reputation for professional ability and high integrity. (5) Tf the parties shall fail to agree upon the firm of traffic engineers and parking consultants as provided in subsections A(2) and A(4) above, then, in lieu of having the matter determined by such firm, the matter shall be determined by arbitration in the manner pro~ vided in §19¢ hereof. B. Without the prior approval of Tenant, Landlord shall not,!nor shall Landlord at any time permit any tenant or occupant of space in the Center and, without the prior approval of Landlord, Tenant shall not, nor shall Tenant at any time Permit any tenant or occupant of space in the demised premises to: (1) conduct or permit any bankruptcy sale unless di- rected by ofder of a Court of Bankruptcy or of competent jurisdiction or any fictitious fire or ‘going out of business! sales (4i) use, or permit to be used, the malls (including any kiosks therein) or sidewalks adjacent to such space for the sale or display of any merchandise or for any other busi~ ness, occupation or undertaking which is not in the best of. taste; (161) use, or permit to be used, any sound broadensting or amplifying device which can he heard outside of such space, except for non-commercial, uniform, piped music or security announcements; (iv) operate or cause to be operated any “elephant trains" or similar transportation devices. Nothing herein shall prevent the operation of a “sidewalk cafe" in the mall. ©. Landlord agrees with respect to the Center and Tenant agrees as to the denised premises that all portions of water, gas, electricity, sevage and other utility lines which may be located within the respective prenises and not within concealed spaces or the exterior walls of any structure,o) oa a enclosed area, or otherwise generally not in public view, shall be installed wholly underground, unless prohibited by law, except for hydrants, stanépipes, meters, control valves and other similar items customarily required to be erected above ground. D. Landlord shall have the right at any time to sell, transfer and convey the real estate, improvenents and buildings constituting the Fashion Center or any part thereof to any per~ son, firm or corporation whatsoever, subject, however, to this lease. If, in connection with such sale, transfer and conveyance Landlord shail deliver to Tenant the written assumption, in re~ cordable form, by the vendee, transferee or grantee of all of the obligations of Landlord under this lease, together with evi- dence reasonably satisfactory to Landlord of financial capability to perform such obligations by such vendee, transferee or grantee, Landlord shail cease to be liable under any covenant, condition or obligation imposed upon it by this lease or any portion there of with respect to causes of action thereafter accruing; and upon the further condition that the management of the Fashion Center shall always continue in a single legal entity. 21, MAINTENANCE, REPAIR AND RESTORATION OF CERTAIN BUILDINGS AND THE COMMON AREAS 2 A, Subject to the provisions of $31 hereof, Landlord shall at all tines during the term of this lease keep or cause to be kept in good order, condition and repair the Fashion Center Stores. ‘Landlord's obligation pursuant to the preceding sentence in respect of the maintenance and repair of the Fashion Center Stores shall include, but not be limited to, the following: (2) Undertaking such maintenance and construction work (including replacements as required) as is necessary to preserve and maintain the Fashion Center Stores. (2). The care and maintenance of all identification signs and decorative elements in, on or about the Fashion center Stores. (2) the maintenance of Lighting facilities and ade- quate {1lunination of the Fashion Center Stores at all tines of darkness during which Tenant shall be open for business. (4) the payment prior to delinquency of a11 real estate and personal property taxes and assessments levied on the and and buildings comprising the Fashion Center stores. +, (S) the xenoval of dirt, debris and rubbish fron the ‘Fashion Center Stores and the area in, on or about the Fashion Center Stores. (6) The maintenance of insurance coverage of the character reguized by the provisions of $14 and §16 hereof. B. tandlora covenants that in the event of any damage or destzuction occurring during the term to or of (1) the Fachion Centex Stores, ox the common areas, from any cause vhatsvever, Jandlora shall, at ts om expense, restore, repair or rebuild (or cause to be restored, repaired or rebuilt) the sane with all due ailigence, subject only to the provisions of §21 hereof, to the sane or better condition as existed innediately prior to the destruction or danage, and containing at least 908 of the area thereof immediately prior to the destruction or damage. 22. LAWS, ORDINANCES A. Subject to the provisions of §22B hereof, Tenant shall, at Tenant's cost and expense, make such structural and exterior alterations, changes or additions to and of the demised premises as may be required by any prosent or future laws, re~ quizenents, orders, ordinances and regulations of all governments or other lawful authority having jurisdiction over the demised premises. B. Notwithstanding any other provision of this lease, in-the event that there shall exist at any time during the term Pe -43- of this lease any law, ordinance, rule, regulation or order of any competent, duly constituted governmental authority having Jurisdiction, which prevents, #inally and absolutely, the opez~ ation of the Store as a retail store or the operation of the parking facilitics or the common areas and Tenant shall have taken all possible appeals therefrom or shall have made all possible applications to any court, board or other competent, @uly constituted governmental authority having jurisdiction for relief therefrom or no such right of appeal or of application for relief shall exist and all possible legal, equitable and administrative remedies shall have been exhausted, then, and in any such event, Tenant shall have the right (1) for a period of one year thereafter to terminate this lease by giving notice thereof to Landlord and, upon the date during such year as shall be set forth in such notice, this lene shall expire and come to an end with the same force and effect as if said @ate had been originally stated in this lease as the date of expiration of the term of this lease, or (ii) anything in this lease to the contrary notwithstanding, during such year to assign this lease or to sublet the demised premises for any lawful pur- pose consistent with the character of the neighborhood, in, which event ‘tha rental payable hereunder shall, after eny such assign ment or sublease, be calculated independently for each subsequent Jease year and Landlord shall be paid as rent a fixed rent at the annual rate of a dollar amount equal to the average of the percentage rent payable by Tenant te Landlord during the three full lease years immediately preceeding the lease year during which such low, ordinance, rule or order became effective. such fixed rent shall be paid to Landlord in equal monthly installments in advance on or before the first business day of each and every month. Landlord shall have the right, at its sole cost and expense, to join any appeal, appli- cation or suit contemplated by this $228 as a party thereto and to participate in any and all proceedings relating therety atte DY 23. MAINTENANCE AND REPAIR OF DEMISED PREMISES Tenant shall, at its expense, during the term of this lease, keep and maintain the demised premises together with all improvements thereon and the signs therein and thereon in good order, condition and repair. 23-A. NEW CoNsTAUCTION A. Subject to any delays applicable under the provisions of $31 hereof, Landlord and Tenant agree as soon as practical after . the execution of this Lease to establish, by mutual agreement, a coordinated schedule with respect to construction of Tenant's store on the demised premises and the construction by Landlord of such additional parking facilities as shall be required by this Lease. B. All construction of Landlord and Tenant shall be self-supporting and shall not impose any loading or structural stress upon the buildings or structures of the other. The join~ der by Tenant of its store to the existing Fashion Center Stores shail be at the sole cost and expense of Tenant and shall be per~ formed in a manner previously approved. by the architect of Land~ Jord, which approval shall not be unreasonably withheld. Z£ end when Landlord constructs upper level parking decks, the joinder of such pazking decks to Tenant's store shall be at Landlord's sole cost and expense and in accordance with the plans of Landlord's parking decks. The method of connection shall be subject to Tenant's approval, which approval shall not be un- reasonably withheld. Landlord and Tenant each agrees to perform its respective construction work so as not to cause any increase in cost to the other which is not reasonably necessary, and s0 as not un~ reasonably to interfere with any construction work being performed by the other. Each agrees to take such safety measures as may be xéasonably required to protect its property and construction from Mw 45- , injury or damage caused by or xesulting from the performance of work by the other. D. Landlord's and Tenant's construction work to be performed hereunder shall be done in a good and worknanlike manner, with first class materials and in accordance with all. applicable laws, rules, ordinances and regulations and using reasonable safety measures with appropriate and adequate barricades reasonably re~ quired to protect each other's construction, property and personnel from injury or damage caused by or arising fron either's construc- tion work. BE. All of Landlord's and Tenant's construction work shall be done at their respective costs and expenses and shall be free and clear of all mechanics’ liens, and liens of laborers or materialmen. F. Landlord and Tenant each agrees at all times to ine @ennify and hold the other harmless from and against any and all claims, damages, liability, additional insurance cost, loss or expense arising from any injury or damage to persons or property of the other caused by or arising out of construction, maintenance, repair of restoration of its respective buildings, and this agreenent of indemnification shall run with the land and shall obligate sandlord and Tenant and their respective successors and assigns. 24, RESTORATION OF DEMISED PREMISES A. Tenant covenants and agrees that in the event of any damage or destruction occurring during the term hereof (except as hereinafter provided) to or of the demised premises from any cause whatsoever, Tenant shall, at its own expense, restore, re~ pair or rebuild (or cause to be restored, repaired or rebuilt) the denised premises with all due diligence, subject only to the provisions of §31 hereof, and containing at least 90% of the floor area thereof immediately prior to such damage or destruction and maintaining the relative location thereof as shown on Exhibit B. ~46- x B. If such damage or destruction shall occur during the last three (3) years of the initial term or during the last three (3) years of either 15-year extension period and the cost of re~ storation, repairing or robuilding shall exceed 508 of the then replacement cost of the demised premises, then, for a period of Sixty (60) days from the date of such damage or destruction, ‘Tenant shall have the option either (i) at its own expense to commence to restore, rebuild or repair the denised premises with all due diligence; or (ii) to terminate this lease effect- ive as of the date of such damage or destruction; provided that if Tenant shall elect to terminate this lease, it shall pay to Landlord the proceeds of the insurance referred to in §17, ox if Tenant shall then be self-insured, an amount equal to what the proceeds of the insurance would have been if the required insurance had been in force. c. tenant agrees that during any period of reconatrue~ tion, repair or rebuilding of the denised promises after original 1 reason= construction, it will operate its business to the exte rent shall be ably possible. During any such period, percenta based upon the floor area of the Store in which business can be conducted. 25 pErauLTs A. Upon the happening of any of the following events (hereinafter referred to as "events of default"): (1) Tenant's interest in this lease or eny part thereof shall be assigned or transferred, either voluntarily or by opera- tion of law (except if such assignment or transfer shail be permit- ted by the provisions of 526 hereof); or (2) The filing of a petition by or against Tenant under any insolvency ox bankruptcy act, followed by Tenant's failure to have any involuntary assignment set aside or to procure the dismissal of any involuntary bankruptcy proceeding within one OY ig -47- hundred twenty (120) days from the date of such involuntary assign- ment or the commencement of such involuntary bankruptcy proceeding, or Tenant shall make a general assignment for the benefit of its creditors; provided, however, if such insolvency ox bankruptey occurs while Tenant's Store is operated under the name "Saks Fifth Avenue" or under such other nane as Tenant shall be using pursuant to 8A, and while Tenant's Store continues to be oper~ ated under the nane "Saks Fifth Avenue" or under such other name as Tenant shall be using pursuant to §8A, then such solvency or bankruptcy shell not of itselé constitute an event of defauit: (3) Tenant sha1i fai1 for thérty (30) days after notice from Landlord to remedy any default in the paynent, when due, of any sun due to Lanélord wider this lease; or (4) Tenant shall fail to take all reasonable steps to perform any other term, covenant or condition on its part to be perforined: hereunder within sixty (60) days after receipt of written notice from Landlord so to ao (or, if such default cannot be cured within said sixty (Go) day period, then within such additional peried of tine as nay be reasonably required to cure such defauit); then, in any of such events, Landlord may, at ite option: (4) ‘Terminate this lease forthwith by giving written notice thereof to Tenant, and upon such termination may re~ enter the denised premises and eject all persons therefrom Sn the manner provided by law and Landlord shali be entitled uugon such termination to recover from Tenant a sum equal to the amount, ££ any, by which the then cash value of the rent term of this lease reserved hereunder for the balance of th exceeds the then reasonable cash rental value of the demised premises for the balance of said term: or (44) Without terminating this lease, re-enter the dumised premises in the manner provided by law and relet the demised premises or any part or parts thereof as the ~4a- 1 agent and for the account of Tenant upon such terms and conditions as Landlord, in the exercise of reasonable juag- mont, may deem advisable, and receive ané collect the rents therefor, applying such rents first to the reasonable ex- penses of Landlord in connection with recovering possession of the demised premises, together with the cost and expense of such reletting, the collection of rent, and attorney's fees and real estate commissions paid (each of which shall be in a reasonable amount), and applying the sane thereafter toward payment of all sums due or te becone due to Landlord pursuant to the terms hereof. B. For the purposes of the preceding provisions this Section, in computing percentage rent that would have accrued for the balance of the term hereof, the annual amount of the per- centage rent shall be deemed to be an anount equal to the average of the percentage rent paid or payable by Panant for the three (3) lease years next preceding the lease year during whic such compu~ tation is made, or for such lesser period of time as this lease may haye been in effect prior to the making of such computation, "c. The provisions hereof shall not preclude Landlord from proceeding against ‘Tenant to enforce such rights and renedies at Jaw or in equity as Landlord may have in the event of Tenant's breach of its covenant set forth in Sar. D. Notwithstanding anything to the contrary contained in this lease, no termination hereof shall be effective unless Bandlord shall have given notice to the holder of any mortgage or trust deed, the trustee under any indenture or the owner under a sale-and-leaseback transaction upon or affecting the demised prem ises as provided in §43 hereof, as the case may be (of the identity and address of which Landlord shall have been previously notified) of the occurrence and nature of Tenant's default and the person so notified by Landlord shall have failed to cure such default within the applicable grace period (calculated from the giving by Landlord to such person of such notice) set forth in this Section 2. Notwithstanding anything in this §25 contained, no breach of any term, covenant, provision or condition of this lease by Jenant shell constitute a default by Tenant if Tenant shall, upon receipt of any notice of breach, dispute the existence of such breach by promptly commencing an arbitration proceeding to dotermine whether in fact such breach has taken Place (the parties hereby agreeing that such dispute shall be settled by arbitration in the manner provided in §39 hereof); and when and if a decision or award shall be made in such arbitration proceeding to the effect that euch breach did in fact occur, then the Tenant shall be deemed to have received Landlord's notice of such breach for the first time on the date of such decision or award, and Tenant shall have five days from said date to correct the breach or, if more than five days are required to do 90 with reasonable diligence, Tenant shall commence to correct the same within such five days and prosecute the same to completion with reasonable diligence, and if Tenant fails to do so then (and only then) shall-Landlord be entitled to the remedies set forth in this 525. 26 ASsz@uEND aND sumbErsmne A. Except as hereinafter in this 26 proviced, Tenant shail not without in each instance obtaining the prior consent of Landlord assign this lease or sublet the whole or any part of the denized premises. B. Notwithstanding the provisions of the preceding subsection A, Tenant may, without first obtaining the consent of Landlord, from tine to time during the term hereof sublet and/or License the use of departnents (which shall be operated under the same trade name of “Sake Fifth Avenue" oF such other nane as shall be permitted under S6X) within the denised premises or space within such departments; provided, however, that Tenant shall not by virtue of such subletting or licensing be relicved of the obligations to be performed by ‘Tenant hereunder. ~50- Notwithstanding the provisions of the foregaing subsection A of this Section, Tenant may, at any time while this Lease is not in default, without firet obtaining the consent of Landlord: 2. (4) assign this lease and the leasehold estate hereby created, or sublet the demised premices or any portion or portions thereof, to its parent company or to any subsidiary or other affiliate of Tenant or its parent. company; or (44) assign this lease pursuant to any merger, consolidation, or other reorganization of or involving ‘Tenant, or assign this lease pursuant to a sale of all or substantially all of Tenant's assets; and in the event of an assignment of the type referred to in this subdivi- sion (ii), Tenant shall be released from liability under this lease upon the delivery to Landlord of (a) an instru- mont in writing pursuant to which the assignee assumes and agrees to be bound by and to perform the agreements to be performed by Tenant hereunder, including but not Limited to the obligations of Tenant to continuously operate the Store under the trade nane of “Saks Figth Avenue" or under such other nane as shall be permitted in §0R hereof, and (b) evidence reasonable satisfactory to landiora that the assignee has 2 "Ket Worth” of not lees than $20,000,000.00. REMOVAL OF PERSONAL PROPERTY Upon the expiration of the term hereof or within a pariod of not exceeding thirty (30) days thereafter, and if Tenant shal} have complied with al) of its covenants and agreements hore under, Tenant may remove, or at its option may abandon, any and all trade fixtures, furniture, equipment, signs, office equipment, carpeting, cash registers, stock in trade and any and all other -si- We. items of personal property placed in the demised premises by Tenant or by Tenant's subtenants, licensees or concessionaires: provided that any structural damage to the demised premises occa- Sioned by the removal of any such items shall be repaired by Tenant. 28. SURRENDER OF DEMISED PREMISES Subject to the provisions of §24 and §27, upon the termination of this lease Tenant shall surrender to Landlord the Possession of the denised promises in good condition and repair, reasonable wear and tear excepted. 29. QUIET ENJOYMENT Landlord covenants and agrees that Tenant shall at 12 tines during said term have the peaceable and quict enjoyment and possession of said premises without any manner of hindrance from landlord of any persons lawfully claiming through Landlord, not- withstanding the fling by Lendlora of a voluntary petition in bankruptcy, or the adjudication that Landlord is bankrupt or in- solvent, or the filing by Landlord of any petition or answer seoking reorganization, arrangement, composition, readjustment, Liguidation, dissolution or similar relief for itself under ony present or future Federal, state or other statute, law or regulation relating to bankruptey, insolvency or other relief for debtors, or the seeking by Landlord of, or the consent of Landlord to, or the acquiescence by Landlord in the appointment of any trustee, receiver, or liguidater of tandlord or of ali or a substantial part of its properties, or the making by Landlord of any generat assignment for the benefit of creditors, or the admission by landloré in writing of its inability to pay its debts generally ‘as they becone due, or the entering by a court of conpetent jurisdiction of an order, judgnent, or decree approving a petition fled against Landlord seeking reorganization, arrangement, compo- sition, readjustment, liguidation, dissolution or similar relief under any present or future Federal, state or other statute, law or regulation relating to bankruptcy, insolvency or other relief for debtors or the appointment of any trustee, receiver or Liquid ator of Landlord or of all or a substantial part of ite properties, without the consent or acquiescence of Landlord. 30. MUTUAL LIABILITY DURING CONSTRUCTION Tenant shall be responsible to Landlord and to other occupants and Landlord shall be responsible to Tenant for all @amage and injury caused by Tenant or by Landlord, as the case may be, by excavation, pile driving and construction of improve ments by ‘Tenant and Landlord, respectively. 31. FORCE MAJRURE Either party hereto shall be excused from performing any obligation or undertaking provided in this lease in the event and/or so long as the performance of any such obligation is pre~ vented, delayed, retarded or hindered by an Act of God, fire, earthquake, floods, explosion, action of the elenents, war, in- vasion, insurrection, riot, mob violence, sabotage, inability to Procure or general shortage of labor, equipment, facilities, materials or supplies in the open market, failure of transporta- tion, strikes; lockouts, action of labor unions, condennation, requisition, laws, orders of governnent or civil or military or naval authorities, or any other cause, whether similar or dissimilar to the foregoing, not within the reasonable control of such party; and the time within any such obligation shall he required to be performed shall be deemed to be extended to the extent that such delay is occasioned by any of the above-described events. 32. TAXES A. As used in this lease, the term “taxes” means real estate and improvement taxes and special assessments (if “ 1! and the term "taxes applicable to the demised premises" means all taxes levied and assessed against the land and improvements comprising the demised premises and Tenant's pro rata share (as hereinafter defined) of the taxes on the parking area. ‘Tenant's pro rata share of the taxes on the parking area shall be that proportion of the taxes on the parking area which the gross leaseable area in the demised premises bears to the gross leaseable area in the Fashion Center. In no event, however, shail ‘Tenant be required to pay any part of the taxes applicable to or assensed against any portion of the parking area which shall hereafter be improved or added in excess of the minimum additional parking area required pursuant to §19C by reason of the construction of the Store; provided that if any such excess parking area shall be agreed to or requested by Tenant, ‘Tenant shall pay its pro rata share of the taxes applicable to or assessed against such parking area. In the event the demised Premises are not separately assessed but are part of 2 larger parcel for assessment purposes, then the term "taxes applicable to the demised premises" means that portion of the taxes alle cable to the demised premises and Tenant's pro rata share (allocated az set forth above) of the taxes on the parking arca as determined from the assessor's work papers. any dispute as to such allocation shall be determined by arbitration as provided in $39. B. Prior to the date Tenant opens for business in the demised premises, Landlord shall pay al) taxes on the land comprising the demised premises and Tenant shall pay any taxes on partially completed improvements thereon, but no part of any other taxes. C. Conmencing on and subsequent to the date Tenant opens for business in the demised premises, Tenant shall pay 100% of the taxes applicable to the demised premises and its pro rata share of the taxes on the parking area, and Landlord shall pay or cause to be paid all other taxes on the Fashion Conter. All such taxes shall be paid at least thirty (30) days prior to delinguency. D. Tenant shall have the right to contest in any manner provided by law the anount or legality of the taxes gpplic- -54- ([M able to the demised premises, and Landlord agrees to make available all data relevant to such contest (including tax bills covering the Center); and at the request of Tenant to execute or join in the execution of any instrunent or docuent necessary in connection with such contest, and Tenant agrees to pay all costs and expenses reason- ably incurred by Landlord in complying with any such request by ‘Tenant. Payment of any such tax may be deferred pending such contest, provided that such deferral shall not cause the demised Premises or the Center to become subject to a sale by any govern mental authority. Tenant shall have the right to participate at its own expense in any contest brought by Landlord in respect to taxes on the parking area. E, "Taxes" as referred to throughout this Section shall mean the amount of taxes as finally assessed less any statutory discount for early payment. Taxes for the first and last year of the term shall be adjusted on a pro rata basis. 33. BROKER'S FuES tandloré and Tenant each represents to the other that it has not employed, dealt or negotiated with any broker or real estate agent in connection with the execution and delivery hereof. Landlota and Tenant each covenants and agrees to indemnify ‘and hola the other harmless from and against any and all claims, costs, ex- Penses and Liabilities for any broker's or agent's commission or finder's or similar fee arising out of or in connection with the negotiation, execution and delivery of this lease resulting from the act or omission of the covenanting party. 34. CONDEMNATION A, In any of the following events: (1) The entire demised premises shall be taken by condemnation or by purchase in lieu of condemnation (any such taking by condemnation or purchase in lieu of con- demation being hereinafter called “condemnation") « (2). Any of the following described taking(s) by condemnation shall occur and Tenant shall notify Landlord that Tenant elects to terminate this lease: (2) Ten percent (108) or more of the floor area of the demised premises shall be taken by condemnation and’ such taking, in the sole and final judgment of Tenant, shall deprive Tenant of satisfactory use of the demised premises; (44) Ten percent (108) or more of the total parking area of the Center shall be taken by con- demation and Landlord, subject to the provisions of §31 hereof, shall fail or refuse to connence and proceed with due diligence to restore the park- ing ratio within ninety (90) days from the date of the takings or (ii) Ton percent (108) or more of the floor area of the Center (except the donised premises) shall be taken by condemnation and Landlord, subject to the proviaions of $31 hereof, shall tail or refuse to re~ build the Center with due diligence to contain at Least 908 of the Floor area of the Center as then constructed; or ‘ (iv) twenty-f5ve percent: (258) or nore of the area outlined in green on Exhibit B shall be taken by condemnation ané such taking, in the sole and final judgment of tenant, shall deprive Tenant of satisfactory use of the denised premises; then this lease and the tern hereby granted shall cease ana expire upon the date that title to the condemed por tion of the Center shall vest in the condemning authority or when possession of the condemed portion of the Center shall be taken by the condemning authority, whichever date shall first occur. : 56 bY (2) Im the event of any condemnation of the Gemised premises which does not result in a termination of this Jease pursuant to the provisions of the preceding subsection A, Tenant, with all due diligence, subject to the provisions of $31 hereof, and at its own cost and expense, shall restore such part of the denised premises as is not taken to as near its former condition as possible. (2) Im the event of any condemation affecting the common areas or the Fashion Center Stores which does not result in a termination of this lease pursuant to the provisions of the foregoing subsection A, Landlord, with all due diligence, Subject to the provisions of §31, and at its own cost and expense, shall restore such part of the remainder of the conmon areas or the Fashion Center Stores, as the case may be, as is not taken to its former condition or better, aubject to clause (144) of subsection A(2) of this 534. €. Tenant shall have the right to prove and obtain fan avard or awards for loss of or damage to the Store, and Tenant's trade,fixtures and personal property; for damages for loss of use of the demised premises and cessation and/or interruption of ‘wenant's business in the demised premises; and for the value of this lease, including bonus value, if any. Landlord shall’ have the right to prove and obtain an award or awards for damage to its interest in this lease and the value of the fee of the demised premises and for all other loss or damage to the Center. 35. COVENANTS RUN WITH THE LAND It is intended that the agreements of Landlord and ‘Tenant set forth herein shall be construed as covenants and not as conditions, and that to the fullest extent legally possible, all covenants of Landlord shall run with the land or constitute equitable servitudes as between the Center (except the demised Premises) as the servient tenement, and the denised premises as the dominant tenement, and all covenants of Tenant shall run with the land or constitute equitable servitudes as between the domised premises as the servient tenement, and the Center (except the demised promises) as the dominant tenement. 36. DETERMINATION OF FLOOR AREA AND GROSS LEASEABLE AREA In each and every instance in which, pursuant to the provisions of this lease a determination of the floor area and gross leaseable area of any building or improvenent located within the Center (including the Store) or a determination of the ground area occupied by the demised premises shall be re- quired, such determination shall be made pursuant to the mutual agreenent of Landlord and Tenant; provided, however, that if Landlor and Tenant shall be unable to so agree, then such Aispute shall be settled by arbitration as provided in thie lease. The cost and expense of such arbitration proceedings shall be borne equally between Landlord and Tenant and the @ecision of the arbitrator shall be binding and conclusive upon both Landlord and Tenant. 37. stens, Landlord covenants and agrees that it will not at any time hereafter during the term of this lease use or pernit’ the installation and/or use of any signs or other advertising devices on of in the common areas or any part or parte thereof and/or the exterior of any of the Fashion Center Stores or any part or parts ‘thereof which are incompatible with the high-class nature of the Center, and in no event shall Landlord use or permit the use of flashing or movable signs: pylon signs (except for the Center identification sign); or temporary, painted or paper signs. 38. MBRCHANTS* ASSOCIATION A, Landlord agrees to maintain membership in, and cause thd continuous activity at all times during the term of MWY ~58- i this lease, of The Bal Harbour Shops Merchants’ Association (hereinafter called the "Merchants! Association"), which is an organization composed of the various merchants and businesses im the Fashion Center, having for its purpose the promotion and enhancement of the connercial activity of the businesses conducted in the Fashion Center, and to contribute annually to such Nerchants' Association not less than [NM por square foot of gross leaseable area in the denised premises, such annual contribution to be paid in monthly installments. rt is understood that Landlord is also obligated to make similar payments under the terns of its leases with other occupants in the Fashion Center, and Landlord agrees that its total annual contribution to the Merchants’ Association shall be an amount equal to SM per square foot of gross leaseable area of the Center. B, ‘Tenant agrees that it will pay to the Merchants! Association an annual advertising and pronotion contribution of Mller Square foot of gross leascable area of the demised prem- Ases (payable in monthly installments); provided and on condition that such contribution is used for high quality, first-class advertising and promotion of the Fashion Center, and Tenant's business and the business of other occupants, and that a contribu- tion of no less than such rato is paid by Neiman-Marcus and by other tenants occupying at least 75% of the gross leaseable area of the Center but not including the stores of Tenant and Neiman- Mareus. Cc. Landlord shall include in each lease hereafter executed by Landlord with respect to retail stores within the Fashion Center, other than occupants of any office building, an agreement requiring the occupant thereunder to join and at all times during the term of such occupant's lease to maintain menbership in the Merchants' Association and to pay contributions proportionately at least equal to those of ‘Tenant hereunder. D. Neither Landlord nor the Herchant's Association shall publish or otherwise dieseminate any advertising or prong- tional material concerning Tenant's business without first ob- taining the vritten approval of Tenant, which approval shall not be unreasonably withheld. ‘Tenant's approval shall not be required of general advertising of Bal Harbour Shops, or of the Fashion Center, that includes tho name Saks Fifth Avonue to in Alcate that Tenant's Stoze is one of the stores in Bal Harbour Shops, or in the Fashion Center. 39. ARBITRATION In every case (and only in such cases) wherein by the terns of this lease a dispute or controversy, shall or nay be re- solved by arbitration, the following provisions shall apply: A. I€ an agreoment shall not have been reached within thirty (30) daye after notice with respect thereto by either party to the other party hereto, then cither party hereto shall have the Fight at any time after the expiration of such thirty (30) day period to refer the same to arbitration as herein provided, and hoth parties hereto agree to cooperate in obtaining such arbitra~ tion. B. ‘Any such dispute shall be settled by arbitration in bade County, Florida, in accordance with the rules then obtain ing of the American Arbitration Association, or its successor, and Judgment upon the arbitration award eo rendered may thereafter be entered in any court of competent jurisdiction. C. The provisions of this Section shall be subject to the provisions of subsection I of §41 hereof. D. Compliance with the provisions of this Section shall be a condition precedent to the institution of Litigation with respect to any such dispute or controversy. +.B. Except ac expressly provided to the contrary in this lease, the cost and expense of such arbitration shall be borne by the parties hereto in the manner determined in the arbitration proceedings. by ~60- 40. NOTECES A. Any notice, demand, request, consent, approval, or other communication which either party hereto is required or desires to give or make or communicate to the other shall be in writing and shall be given or made or conmunicated by United States registered or certified mail addressed in the case of Landlord to: Bal Harbour Shops 9700 Collins Avenue Bal Harbour, Florida 33154 Attention: ‘stanley F. Whitman and addressed in the case of ‘Tenant to: Saks & Company 611 Fifth Avenue New York, New York 10022 Attention: Chairman of the Board with 4 copy thereof to: Gimbel. Brothers Ine. 1275. Broadway New York, New York 10002 Attention: Chairman of the Board subject to the right of either party to designate a different address by notice similarly given. Any notice, demand, request, consent, approval or other communication so sent shall be doomed to have been given, made or conmunicated, as the case may be, on the date the sane vas deposited in the United states mail ps registered or cortified matter, with postage thereon fully prepaid. All rental payments shall be made payable to the order of Landlord and mailed to such address as may be desig- nated from time to time by Landlord. B. (a) If, at any time, the Pashion Center or the demised premises shall be owned by more than one legal entity, Bandlord, by notice to Tenant, shall designate a legally con- petent individual or corporation having an office and subject to service of process in the State of Florida as Landlord's Agent. All notices, payments and agreements given or made by, with or to such Agent shall be deemed to be given or made by, with or to all of the persons constituting Landlord hereun: “ (f At any tine, by an instrument signed by all of the persons constituting Landlord hereunder, delivered to Tenant, Landlord's Agent may be changed to any legally competent individual or corporation having an office and subject to service of process in the State of Floriga and such Agent shall continue to act fas Landlord's Agent until Tenant shall receive a further in strument changing such Agent. () Tf, at any tine hereafter while Landlord shall consist of more than one person, thera shall, for any reason whatsoever, be no duly designated Landlord's agent, then Tonant my itself, but shall not be required te, designate in landlord's place and stead a corporation or individual having the qualifications set forth in paragraph (a) of this subsection as tandlord's Agent by notice to the last duly designated Landlord's Agent, or if no Landlord's Agent has been designated, to any person then included in the term “Landiora". (0) Any tandlorza's agent designated pursuant to the provisions of this subsection B shall act for and on behalf of Landlord under this lease, with exclusive ené full authority and power to the sane extent as if it were the sole Landlord. ALL acts and omissions of Landlord's Agent done or omitted to be done pursuant to the provisions of this subsection shell. be binding upon Landlosd and inure to the benefit of Tenant as if done or onitted by each and all of the persons comprising Land lord. All charges of Landlord's Agent shall be paid by Landlord. (€) tandiora's Agent shall be the agent for Landlord, hereby irrevocably appointed for such purpose, upon whon service of any process, writ, summons, order or other man- date of any nature of any court, in any action, suit or proceed~ ing arising out of this lease in any court, or of any demand for, or other matter in, an arbitration, may be made, ana service upon Landlord's Agent shall constitute due and proper service upon each and all of the persons comprised within the tey y 62- Z Landlord hereunder, (e) Landlord's Agent, in the performance of or any failure or refusal to perform any matter or thing pursuant to its authority herein conferred, shall, notwithstanding any other provision contained in this subsection, be acting or failing or refusing to act solely in its capacity as agent of Landlord hereunder and not’ in its individual capacity, and shell not be under any personal liability in connection therewith to Tenant or Landlord except with respect to any willful misconduct of Landlord's Agent or any attorney in fact or officer thereof or for gross negligence in the performance of its duties to the detriment; of Tenant or Landlord; provided, however, that while any individual, partnership or corporation comprised within the term Landlord shall be acting as Landlord's Agent it shall not be relieved by the provisions of this subsection of any liability which it shall have as a Landlord. 4. urscaniawsous A. The term "Tenant" as used in this lease so far as covenants or obligations on the part of Tenant are concerted, shall be Limited to mean and include only the omer or ovners at the time in question of the leasehold estate created hereby, e—“‘#eE herein on the part of tenant shall, subject as aforesaid, be binding on Tenant, its successors and assigns only during and in respect of their respective successive periods of omership oo — B. The captions of the Sections of this lease are for convenience only and shall not be considered ox referred to fn resolving questions of interpretation of construction, C. The various rights, options, elections, powers end —T———CS diranted to terminate this lease, shall be construed ax cumulative aiid no one of then shall be exclusive of any of the others, or of _ i any other legal or equitable remedy which either party might other- wise have in the event of breach or default in the terms hereof, and the exercise of one right or remedy by such party shall not impair its right to any other right or remedy until all obligations imposed upon the other party have been fully performed. D. Hach and all of the provisions of this lease shall be binding upon and inure to the benefit of the parties hereto and, except as set forth in subsection A of this §41, and as otherwise specifically provided elsewhere in this lease, their respective heirs, executors, administrators, successors and assigns, subject at all times, nevertheless, to all agreements and restrictions contained elsewhere in this lease. E, Nothing contained in this lease shall be deened or construed by the parties hereto or by any third person to create the relationship of principal and agent or of partnership or of joint venture or of any association between Landlord and tenant, and neither the method of computation of rent nor any other provision contained in this lease nor any acts of the parties hereto shall be deemed to create any relationship be- tween Landlord and Tenant other than the relationship of Landlord and Tenant. No waiver of any default hereunder shall be implied from any omission by either party to take any action on account of such default if such default persists or is repeated, and no express vaiver shall affect any default other than the default specified in the express waiver, and that only for the time and to the extent therein stated. One or more waivers of any breach of any covenant, term or condition of this lease shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. G. This lease contains all covenants and agreements between Landlord and Tenant relating in any manner to the rental, use and occupancy of the demised premises and the other matters set forth in this lease. No prior agreement or understanding pertaining to the: same shall be valid or of any force or effect, and the covenants and agreements of this lease cannot be altered, changed, modified or added to, except in writing signed by Land lord and Tenant. No representation, inducement, understanding or anything of any nature whatsoever made, stated, or represented on the behalf of either Landlord or Tenant, either orally or in writing (except this lease), has indueed the other party to enter into this Lease. H. Any provision or provisions of this lease vhich shall prove to be invalid, void or i12egal, shall in no way affect, impair or invalidate any other provision hereof, ana the renaining provisions hereof shall nevertheless renain in full force and effect. X. Wherever in this lease it is provided that the exercise of a right by, or the performance of an obligation of. landlord shall be subject to the consent or approval of Tenant, and that the consent or approval of Tenent shall not be unreason~ ably withheld, then in any case in which Tenant shall withhold its consent, such determination by Tenant shall be conclusive upon Landlord unless, however, tandlord shall, within thirty (20) days after notice from Tenant of its deternination, elect to have the matter submitted for determination by arbitration as provided in this lease, which such submission to arbitration shall be the sole renedy of Landlord for any such withholding of consent or approval by Tenant. in the event that any hatter shall be submitted to arbitration by Landlord pursuant to the provisions of this subsection Z, the sole issue for ar- bitration shall be the determination as to whether the with- holding of consent or approval by Tenant shall have besn rea sonable or unreasonable, and in the event that @ deternination shall be nade that the withholding of consent oF approval by ‘fénant was unreasonable, then the decision shall annul su: withholding of consent or approval, such annulment being the sole remedy of Landlord, it being the intention of the parties hereto (as to which they are conclusively bound) that in no event shall any such withholding of consent or approval by Tenant, or any decision in arbitration with respect thereto (2) impose any financial Liability upon or result in any damages to Tenant and/or (ii) create any right cognizable or remedy enforceable in favor of Landlord and against Tenant in law or equity or under any special statutory proceeding or at all (except by arbitration as aforesaid); provided, however, that any such decision in arbitration may also provide for an assessment of the costs of the proceeding with respect thereto as between Landlord and Tenant. + ,J, As used in this lease the word "term" means the entire period during which this lease is in effect and is intended to include any and all period(s) of time by which, pursuant to the provisions of this lease, the duration of the same is extended at the option of Tenant. K, Notwithstanding any other provision of this lease, the Store and all equipment and fixtures built, made or installed by Tenant in, on, under or to the Store or elsewhere on the demised premises shall be the sole property of Tenant until the expiration or other termination of the term hereof for any reason whatsoever. ‘The Store and all of said equipment, including air conditioning equipment and fixtures (other than trade fixtures, operating equipment [including but not limited to moveable machinery] and other personal property of Tenant) shall be deemed to be and shall automatically become the property of Landlord, without cost or charge to Landlord, upon the expiration or other termination of the term hereof for any reason whatsoever. 42. EXPENSE OF COMMON AREAS Ay ‘Tenant shall pay Tenant's pro rata charge of the reasonable gross cost and expense to Landlord of maintaining, ~66- managing and operating the conmon areas as roguized by and set forth in the provisions of $190 hereof, plus management fee. to Landlord of not to exceed (NNN (HM of such cost ana expense, excluding from such gross cost and expense only for the purpose of computing said managomont fee any and all taxes and assessments upon the common areas; provided that in no event shail there be included in such gross cost or expense (i) cost of construction of improvements to conson areas properly charge~ able to capital account, (ii) depreciation of the original cost of construction and of replacements properly chargeable to capital account, and (iii) any and all taxes. and assessments upon the parking area, Nothing in thie subsection A shall be Geoned to affect any rights of Landlord with respect to the treatment of taxes and assessments upon the parking area pursuant to 532A o 5428 of this lease. B. In the event that Landloré shall require (which it may do) a parking charge of custoners of the Center, or employees of tenants in the Center or the general public or any combination thereof, in all or any portion or portions of the Center by use of a validation system, parking neters or other similar parking privilege system (which shall be applied on a uniform and non-discriminatory basis as between 12 occupants of the Center [including Tenant}), then during any period in which any such charge is made, the total revenue therefrom (after deducting direct excise and other taxes thereon) received by Landioré may, at Landlord's option, be either (i) credited against the aforesaid reasonable gross cost and expense to Landlord of maintaining, managing end operating the common and in consideration of areas or (ii) be retained by Landlor Landlord retaining such revenue, Landlord shall not include in the oross expense to Landlord of maintaining, managing and operating the conmon areas the cost and expense of maintaining, managing and operating all or any portion or portions of the Ww parking area thereof. -67- €. Tenant's pro rata charge shall commence to accrue upon Tenant's opening for business in the Center and shall be based upon the ratio (calculated as hereinafter provided) of the gross leaseable area of the Store to the gross leascable area of the Conter (calculated upon the first day of each month). For the purpose of determining the pro rata connon areas charge to be paid by Tenant for any fiscal period hereinafter referred to, Tenant's pro rata share of Landlord's such gross cost and expense shall be that proportion of such gross cost and expense which the gross leaseable area in the denised premises bears to the gross leaseable area in the entire Fashion Center; except that for the purpose of the computation each two (2) square feat of gross leaseable area above the ground level shall be counted as one (1) square foot until such time as the upper mall level is completed. upon completion of the upper mall level, all gross leaseable area connecting thereto shall be computed on @ ratio of one (2) to one (1) and each two (2) square fect of gross leaseable area above the upper mall level shail be counted as one (1) square foot. with respect to the period from Tenant's opening for busi- ness until the ensuing October 31 and to each subsequent fiscal period of Novenber 1 to October 31 Landlord shal1, at the begin- ning of each such period, deliver to Tenant a caloulation showing Landlord's estimate of (1) the gross cost and expense of maintain ing, managing and operating the conmon areas (plus the aforesaid management fee) for such period and (ii) Tenant's pro rata charge (computed as aforesaid) with respect thereto. Tenant shall pay such pro rata charge in equal monthly installments in advance on or befdrethe tenth (10th) day of each month included within the period in question. within thirey (30) days after the end of each venish to Tenant 2 annual peried Landlord shall determine (and fi statement showing in reasonable detail) Tenant's actual pro rata charge for such period, and the amount paid during such period by Tenant, and one party shall pay to the other on demand what~ ae -68- ever amount may be indicated so that Tenant shall pay its pro rata charge and no more and no less. ‘Tenant shall have the right for one (1) year following the receipt of Landlord's statement to audit Landlord's books of account upon which such datermination is based to verify its accuracy. D. To the extent that customer and employee parking will not be adversely affected, construction workers, working either in ccnnection with construction of the Store, or any work of maintenance, repair, rebuilding or restoration of the demised premises, may park without charge in designated areas. F. Tt is the mutual intention of the parties that legitimate customers of the Fashion Center shall not be dis- couraged from parking therein because of the amount of the parking charge. Landlord presently charges 25¢ an hour for the first four hours and 50¢ per hour thereafter for parking for customers of occupants in the Fashion Center, and Tenant accepts this charge as being fair and reasonable under the present circumstances. Landlord may from time to time in- crease the amount of the parking charge. Jn the event Tenant shall believe that the increase in the parking charge shall be deteimpntal to its business, Tenant may arbitrate any ques~ tion as to whether or not such increase was justified. In” any such arbitration in arriving at a determination 2s to whe ther or not the increase in the parking charge is justified, there shall be taken into consideration the amount of comparable parking charges made to retail customers in the Greater Miami area. Arbitration pursuant hereto shall be in accordance with $29 of this lease, except that the arbitrators shall each be nationally recognized engineering firms knowledgeable in shopping center parking. If the parties shall fail to agree upon such firms, then, in lieu of having the matter determined by such firms, the matter shall be determined by arbitration pursuant MY to 939 hereof. ~69- 43, Eawawcrnc A, Tenant (without Landlord's consent) may at any time and from time to time mortgage, deed in trust, or subject to an indenture its interest in this lease and in and to the leasetiold estate created hereby, or may enter into sale-and- Jeaseback financing with respect to the demised premises, sub- ject only to the Limitation that no such arrangement shall sur- vive this lease or create an encumbrance or isn upon Landlord's interest in this lease or create an encumbrance or lien upon Landlord's fee simple title to the land encumbered by this lease, and subject further, to the Limitation that any such docunent shall contain a provision that before any legal proceedings can be instituted by reason of any default by Tenant under any such document, Landlord shall be given written notice by the other party to any such decunent at Landlord's address last known to such other party of the occurrence and nature of ‘Tenant's default and Landlord shall have failed to cure such default within the applicable grace period. B. If this lease shall be terminated at any time during the term hereof by reason of default by Tenant, and such default cannot be cured by the payment of money and shall be incurable by the holder of any leasehold mortgage, deed of ‘trust or assignment in the nature of a mortgage, then, provided such holder shall be a bank, insurance company or other institutional lender, Landlord agrees (1) to consent to an assignnent of the remainder of the term of this lease to such holder or to any nominee of such holder (which nominee may have a nominal capital) and the provision contained in §@ hereof respecting the name under which the business being conducted in the Store shall be operated shall not apply to such assignee, or (ii) to pay the indebtedness (including accrued interest and prepayment penalty, if any) and thereupon repossess the demised premises free and clear of this lease and any such leasehold mortgage, deed of trust or ascignuent in the nature of a nortgaue. -10- C4 C, Landlord (without Tenant's consent) may at any time and’ from time to time place one or more mortgages or enter into sale-and-leaseback financing on all or any portion of the Fashion Center, including its interest in the demised premises, and may mortgage and/or pledge Landlord's entire interest as Landlord under this lease, or may mortgage and/or pledge the rent due to be paid by Tenant hereunder; provided no such mort~ gage, purchaser under a sale-and-leaseback, pledgee or assignee shall acquire any right, title or interest in the demised prem- ises greater than that of Landlord hereunder, and the estate, sights, easements and privileges of Tenant shall be in no way abridged, diminished or impaired. 44. STORM WATER DRAINAGE (a) Landlord acknowledges and agrees that Tenant, in order properly to drain and dispose of storm water from the de~ mised prenises, will requize and hereby is granted the right, privildge and license to drain such water on and across the center in accordance with the provisions of this Section. In furtherance thereof, Landlord agrees that Tenant may design, construct and install its storm drainage system so that it will connect with the storm drainage system for the Center. (b) Should it becone advisable or necessary because of injury or threat of injury to the person or property of third parties, or for any other reason, to redirect the flow of storm water from the demised premises other than in the manner conten- plated in subsection (a) hereof or to provide a retention system, Landlord and Tenant agree to cooperate and to attempt diligently to make such changes in Tenant's and Landlord's storm water @rainage systems as may be feasible in order to prevent or solve such problems. In connection therewith, Landlord and Tenant shall jointly select a consulting engineer to study the problens pre- sented and to make appropriate recommendations for solution, in- pyr -n- cluding the fair and equitable division of costs between Landlord and Tenant for all work to be performed or costs to be incurred on the basis of the volune of water flowing from the demised Premises on the one hand compared to the volume of water flowing from the remainder of the Center, through the storm water systen or systems involved, on the other hand. (c) Should any claim be made or suit brought against Landlord and Tenant by any third party for damage alleged to have resulted by reason of the storm water drainage systens contemplated _ by this Section, Landlord and Tenant agree to cooperite in the de- fense of such claim or suit and to adjust between thenselves on an equitable basis any judgment which may be entered against either or both of then in such suit. (4) any controversy or dispute arising under or in connection with this section shall be determined by arbitration in the manner provided for in §39 hereof. 45, TBNAWE'S AN LANDLORD'S RIGHTS TO CURE DEFAULTS OF OTHER A. tn the event of any default by Landlord in the performance of any of the terns or conditions of this lease, Tenant shall have the right to cure such default on behalf of and at the expense of Landlord and to do all necessary work, incur any charge and make any expenditure in connection there~ with, including but not limited to reasonable attorneys' fees. Any sums expended by Tenant, together with interest at the rate of 88 per annum, shall be credited to the account of Tenant and may, at the option of Tenant, be deducted by Tenant from any rent or other payment then or thereafter falling due or shall be repaid to Tenant by Landlord upon demand. B. In the event of any default by Tenant in the performance of any of the terms or conditions of this lease, Landlord ‘shall have the right to cure such default on behalt of and at the expense of Tenant and to do all necessary work, ~2- incur any charge and make any expenditure in connection there- with, including but not limited to reasonable attorney's fees. Any sums expended by Landlord, together with interest at tho’ rate of 8 per annum, shall be charged to the account of Tenant as additional rent and shall be paid by ‘Tenant within ten (10) days after written demand by Landlord, and the failure of Tenant to pay euch sum within ten (10) days after demand shall constitute a default under this lease. IN WITNESS WHEREOF, the parties hereto, as Landlord and Tenant, have executed this lease as of the day and year first above written. Witnessed in the presence of BAL HARBOUR SHOPS lccSt fe bétbace yf. Whithan, Partner Mla, EO etc ee "tandiora® “ SAKS & COMPANY eck Eh -73- f exHIBIT "A" All of the BUSINESS SECTION OF BAL HARBOUR, Plat Book 60, Page 39, Public Records of Dade County, Florida, except Area No. 3 and Area No. 4 as shown on said Plat G4 7 MART 27” ws wey oorsios Coxe Lit fz g. 2 BS As bE Te | a ii . = | Es ga Be I geek Yee |i ¢ | ese ee ies ® ae | apagis f: 5 4 lik | Bo EW 38 3k sg | : . 8g Ris a3 ~ Hf a wy geBURee FP UR £ gs 3t ak ® Ye a3 1 ‘ ee Sg ge y y BE Re eS] ; a oe. df te Bg ute oH qe 23 uk asi a eS Ss =a 5 f aa: 7 be : 5? fre ge ke Bo 34 al & |e a Nia at ; | le | Ay 5 ees Bo gis yi Ae . ic aT RAS : | 8 ge Nia cent} hye fr i a re ine aa ot 22 834 F Sete his ea ee By a8 Yo Save Bs 833 Kae Ca metlenee W. BAL HARBOUR BLVD. SCALE: 1" = 40" DAY: June 10, 1974 SKETCH T0 ACCOMPANY METES AND BOUNDS DESCRIPTION OF LEASE AREA - BAL HARBOUR SHOPS TO SAKS FIFTH AVENUE ‘That portion of the BUSINESS SECTION OF BAL HARBOUR, as shown on the Plat thereof recorded in Plat Book 60 at Page 39 of the Public Records of Dadeounty, Florida, described as follows: Bounded on the South by the Southerly line of said Plat; 1 of Bounded on the Edt by the extension Southerly of the Easterly f/ (she (continued) Page ~75~ Exhibit "A-1" : -2- Datet June 10, 197 LEASE AREA - BAL HARBOUR SHOPS TO SAKS FIFTH AVENUS - (continued from Shoot 1) outside curb line of the existing walkway of the Easterly building of the Fashion Center to the Northerly boundary of 96th Street: Bounded on the North by the Southerly face of the existing buildings the mall. constituting the Fashion Center's stores and a line acro: Joining the Southerly face of said buildings; and 6 Bounded on the West by the extension Southerly of the Westerly outside curb Line of the existing walkway of the Westerly building of the Fashion Center. Boing more particularly described as follows Comnencing at the Point of Intersection of the West line of West id Bel Harbour Boulevard and the North Line of 96th Street point ie shown end designated "P" on tho plat entitled " BUSINESS SECTION OF BAL HARBOUR " recorded in Plat Book 60, Page 39 of the Public Records of Dade County, Florida, run S. 85° 30" 17" W. along the Northerly Line of 96th Street, a distance of 192.65 feet to the Point of Beginning of the LEASE AREA herein desor ibe: From 44 Point of Boginning continue along the last mentioned course a distance of 292.12 feet to a point; thence rum N. oh? 27' 27 -" W., along the extension Southerly of the Westerly out- side curd line of the existing walkway of the Westerly building of the Fashion Center located in Area No. 5 of said recorded plat, & distance of 101.55 feet to a points thence run N. 85° 29'33"E. 2. along the Southerly face of the oxieting buildings constituting the stores and a line across the mall joining the said Fashion Gente: t toe Soutneriy face of said butldings, a atstance of 262.11 1 thence rin 9. 04° 28% 47.00" B., along. the extension Sout- point 27 erly of the Easterly outside curb Line of the existing walkvay of the Easterly building- of the 101.61 feet to the Point of Beginning, containing 29,673: Square 1d Fashion Center, a distance of Feot more or 10: THe abo: doscribed LEASE AREA situate in Bal Harbour Village, Dade County, Florida. Page-75- Exhibit "AI" (Shoot 2 of 2) EXHIBIT "'C" Tenant accepts title to the demised premises subject to the following: 1. Zoning Ordinances of the Village of Bal Harbour, and any amend- ments thereto in force and effect, except, however, that Zoning shall authorize Tenant to construct the store and Landlord to con= struct the parking structures, 2. Restrictions and conditions of record, to-wit: AL Warranty Deed dated December 16, 1953 from Briggs Commercial & Development Company and Prime Securities Corporation, both Michigan corporations, to Robert C. Graham & Sons, a partnership consisting of Robert C, Graham, Robert G. Graham, Jr., Ziba F. Graham, Thomas E. Graham and David B. Graham, filed December 30, 1953 under Clerk's File No. CC-161680 and recorded in Deed Book 2661 at Page 515, of the Public Records of Dade County, Florida. Warranty Deed dated December 11, 1953 from Graham Development Corporation, a Florida corporation, to Robert G. Graham & Sons, a partnership consisting of Robert C, Graham, Robert C, Graham, Jr., Ziba F. Graham, Thomas E. Graham and David B. Graham, filed December 30, 1953, under Clerk's File No. CG-161681, and recorded in Deed Book 3861 at Page 518, of the Public Records of Dade County, Florida. Warranty Deed dated December 15, 1953 made by Robert C. Graham, joined by his wife, Bertha Hack Graham, and Rohert C. Graham, Jr. joined by his wife, Jeanns H. Graham, to Robert C, Graham & Sons, a partnersbip con- sisting of Robert C. Graham, Robert C. Graham, Jr., 2iba F. Graham, Thomas E. Graham and David B, Graham, filed December 30, 1953 under Clerk's File No. CC-161682, and recorded in Deed Book 3861 at Page 521, of the Public Records of Dade County, Florida. Warranty Deed dated April 9, 1954, from Robert C. Graham & Sons, # partnership consiating of Robert C. Graham, Robert C. Graham, Jr., Ziba F. Graham, Thomas E, Graham and David B. Graham, Grantors, by Robert C, Graham joined by his wife, Bertha Hack Graham, Robert C, Graham, Jr., Joined by his wife, Joanne H. Graham, Ziba F. Graham joined by his wife, Winifred H. Graham, Thomas E. Grabam joined by his wife, Jeannette H. Graham, and David B. Graham, a single man, to Robert C. Graham, Robert C, Graham, Jr, Ziba F. Graham, Themae E. Graham and David B, Graham filed April 16, 1954 under Clerk's File No. DD 49026, and recorded in Deed Book 3908 at Page 57, of the Public Records of Dade County, Florida. -16- Warranty Deed dated July 17, 1954 from Robert G. Graham and Bertha Hack Graham, his wife, Robert ©, Graham, Jr. and Jeanne H. Graham, his wife, Ziba F. Graham and Winifred H. Graham, his wife, ‘Thoma E. Graham and Jeannette H. Graham, his wife, and David B, Graham, a single man, to Community Plaza, Inc., a Florida corporation, and filed July 21, 1954 under Clerk's File No. DD-92954, of the Public Records of Dade County, Florida, Warranty Deed dated January 7, 1957 from Sinclair Refining Company, a Maine corporation, to Harbour Square, Inc., a Florida corporation, and filed January 18, 1957 under Clerk's File No. GG-10208, of the Public Records of Dade County, Florida, Special Warranty Deed dated December 26th, 1972 from BP Oil Corporation, a corporation organized and existing under the laws of the State of Delaware, to Stanley F, Whitman, William F. Whitman, and Dudley A. Whitman D/B/A Whitman Properties, filed December 28, 1972 under Clerk's File No. 72R-289529, of the Public Records of Dade County, Florida. Easement of record, to-wit: A. Easement dated April 18th, 1966 from Bal Harbour Shops, Inc. to Florida Power & Light Company, filed June 3, 1966, under Clerk's File No. 662-91299, of the Public Records of Dade County, Florida, Taxes for the year 1974 and subsequent years. Mortgage from Bal Harbour Shops, Inc., to Aid Association For Lutherans dated January 11, 1965 in the original principal amount of $2, 000, 000.00, filed January 11, 1965 under Clerk's File No. 65R4634, and recorded in Deed Book 4434 at Page 13, of the Public Records of Dade County, Florida. Conditional Assignment of Rentals dated January 13, 1965 from Bal Harbour Shops, Inc. to Aid Association for Lutherans, filed January 15, 1965, under Clerk's File No. 6527800, and recorded in Deed Book 4440 at Page 362, of the Public Records of Dade County, Florida, Mortgage dated April 7, 1966 from Bal Harbour Shops, Inc. to Aid Association For Lutherans in the original principal amount of $1,500, 000. 00, filed April 8, 1966 under Clerk's File No. 66R58876, and recorded in Deed Book 5013 at Page 424, of the Public Records of Dade County, Florida. Conditional Assignment of Rentals dated April 7, 1966 from Bal Harbour Shops, Inc. to Aid Association For Lutherans, fled April 8, 1966 under Clerk's File No. 66R58877, and recorded in Deed Book 5013 at Page 429, of the Public Records of Dade County, Florida. -16-A~ 10, ne WAT, 1967 under Clerk's File No. 67R57730, am Agreement dated February 11, 1967 between Bal Harbour Sheps, Ine, and Aid Aseociation for Lutherans modifying the terme of the two mortgages referred to above: said agreement being filed April recorded in Deed } at Page 533, of the Public Records of Dade Gounty, Book 54 Florida, Notice of Memorandum of Lease dated November 18, 1969 between Bal Harbour Shops, Inc. and Neiman-Marcus Company filed January 26, 1971, under Clerk's File No. 71815536 and recorded in Official Records Book 7100 at Page 875, of the Public Records of Dade County, Florida. Agreement of Non-Disturbance and Atonement dated November 18, 1969 between Aid Association For Lutherans and Neiman-Mareus Company, filed February 22, 1971 under Clerk's File No, 71231633, and recorded in Official Records Book 7125 at Page 817, of the Pub- Ue Records of Dade County, Florida. Aifidavit by officer of Aid Association For Lutherans dated October 8, 1971 made and filed for the purpose of extending the priority of the mortgage liens of the Aid Association For Lutherans on the personal property: said Affidavit was filed October 13, 1971, under Clerk's File No. 71R204506, and recorded in Official Records Book 7403 at Page 212, of the Public Records of Dade Gounty, Florida. -76-B- Ne SNVAXxXS of Jet Riis ae nla ae tsetse eS > TS ER ROO 73 RRR ts KO PMO Be ZAM 5 e e@ 6H FIRST MODIFICATION OF LEASE {THis FIRST MODIFICATIPR OF LEASE, is made and entered into as of the 2. fta day of 87, by and between BAL HARBOUR SHOPS,a Florida general partnership ("Landlord ‘a New York corporation ("Tenant"), ‘and SAKS & COMPANY, WHEREAS, Landlord and Tenant are parties, as landlord and tenant, respectively, to’ that certain Business Lease (the "Original Lease") dated June 10, 1974, respecting those certain "demised premises" more particularly described therein, in that certain shopping center known as Bal Harbour Shops (the "Fashion Genter") located in the Village of Bal Harbour, Dade County, Florida, the provisions of which Original Lease being incorporated herein by this reference; and WHEREAS, Landlord and Tenant are desirous of modifying the Original Lease for the purpose of enlarging and expanding the "deinised premises", subject to and in accordance with the terms and conditions hereinafter set forth. NOW, THEREFORE, for and in consideration of the sum of Ten ($10.00) Dears, the mutual promises herein contained, and other good and valuable consideration, the receipt and suffieieney of which are hereby Sscknowiedged, the pares hereto, intending to be legally bound, do hereby agree, as follows: 1, RECITALS: The foregoing recitals are true and correct and are incorporated herein by this reference. EXPANSION OF DEMISED PREMISES: Tenant acknowledges that Landlord has delivered to Tenant possession of that certain real property lying, being and situate in Dade County, Florida, and more particularly described and shown on Exhibit "A", attached hereto and made a part hereof (the "additional lend”). From and after the date hereof and ‘continuing through and Including the expiration or sooner termination of the Original Lease, Lendlord hereby leases to Tenant and Tenant hereby leases and bires from Landlord the "additional land" upon which Tenant shall construct, as hereinafter set forth, the "SFA addition” as depicted on those certain plans (the "SPA addition plans") prepared by Johnson é& ‘Associates, Ine., Architects, dated June 8, 1987 and revised July 7, 1987 fand July 13, 1987, constituting 28,887 square feet, more or less, of "gross fal the rental and upon and subject to the other terms, nts set forth herein and in the Original Lease. ‘A-l of the SFA addition plans is attached to this Agreement and made a part hereof as Exhibit "B", The balance of the SFA addition plans have deen acknowledged by the initialing of Landlord and Tenant and are incorporated herein by this reference. As used herein, the term "SPA ‘addition" shall include the "additional land". Unless the context clearly otherwise requires, any reference to the "Cemised premises" or "Demised Premises" herein or in the Original Lease shall be deemed to include the "SFA addition’. All terms, covenants, conditions end defined terms contained in the Original Lease are applicable hereto except where the more specific provisions hereof govern. 3. RENT AND CHARGES FOR SFA ADDITION: (a) The rents and charges for the "SFA addition” shall be calculated on the terms provided under the Original Lease as applied to the "SEA addition*. Accordingly, commencing on the date Tenant opens for business in the "SFA addition* and continuing through and ineluding the expiration or sooner termination of the Lease, Tenant shall pay to Landlord as the "percentage rent” payable under Paragraph 3C of the Original Lease, together with sales tax thereon, for each "lease year" the dollar amount equal to cf all “net sales" for such "lease year" in excess of the product o ltiplied by the "floor area" of the "SPA addition". For the lease year in which the "SPA addition” opens for Dusiness, the for the "SFA addition” shall be adjusted by prorating the for the number of days on which the "SFA addition" is open for business in such "lease year" and such sum as adjusted will be added to (floor area" credit of the existing Saks Store). Notwithstanding the foregoing, Tenant shall pay to Landlord for the first full "lease yesr” that the "SFA addition" is open or required to be open hereunder as minimum rent for the "demised premises” an amount equal to ‘the percentage rent due by Tenant for the "lease year" immediately preceding the commencement of construction of the "SFA addition”. At the conelusion of such full "lease year", the total "percentage rent” due and paid will be calculated and if the "percentage rent" due and paid is less than the "mifimum reat", then the ice shall be paid by Tenant to Landlord within thirty (30) days from the end of such full “Tease year". (©) Commencing on the date Tenant is required under Paragraph 4 (0) (ii) nereof to open for business, or upon the sooner date of opening, land continuing through and including’ the expiration or sooner termination of the Lease, Tenant shall pay to Landlord all charges attributable, directly of indirectly, to the "SFA addition", including, without limitation, insurance, real estate taxes, merchants! association and expenses of ‘commen areas, together with all sales tax thereon. For the lease year in Which the "SEA addition” is required to open for business, or upon the sooner date of opening, all such charges shall be prorated for the number of days in which the "SFA addition" is open or required to be open. 4. CONSTRUCTION AND OPENING OF SFA ADDITIO (Tenant, at its sole cost and expense, shall, in accordance with the "SFA Addition plans" and the criteria ‘statement attached hereto and made a part hereof as Exhibit "C", (1) construct the building for the "SFA addition and fully equip the "SFA adcition" with all lutity nes and utilities, trade fixtures ana equipment, lighting fixtures, furniture, furnishings and floor coverings, and any other fixtures and equipment and do and perform any and all acts necessary or appropriate for ‘the proper completion and operation of Tenant's business in the "SFA addition", and (2) upon completion of the work contemplated in the foregoing subpart (1), redo the "staging area" (as hereinafter defined) and ‘all other portions of the "Fashion Center" as shown in the drawing identified in the first paragraph of the Criteria Statement (Exhibit "C') such covenant and obligation of restoration to exclude exterior landscaping ‘and to include, without limitation, striping, bumpers, drainage, lighting and repaving the "staging area", and all other acts necessary of appropriate as, reasonably directed by Landlord to cause the "SFA addition" and "staging area" to be compatible in all respects with the high standards of the "Pashion Center" (Coth subparts (1) and (2) hereof being referred to collectively as “additional tenant's work"). If the Tenant fails to complete ‘that portion of the "additional tenant's work" described under Sub-part (2) a2 above within @ reasonable time, Landlord shall have the ays prior written notice, to complete such work and Tenant shall pay the reasonable cost thereof as "additional rent” within thirty (30) days from date of invoice by Landlord. ight, on five (5) (iD The “additional tenant's work" shail be performed in good and workmaniike manner, with the use of first-class ‘construction materials and in strict accordance with the plans and specifications ‘approved by Landlord, as hereinafter set forth, and all applicable laws, codes and regulations. The quality of construction, including, without Umitation, fixturing and decorating, shall be equal’ or better to that existing in the "“demised premises" on the date hereof. (i) It Is expressly understood and agreed that Landlord shall have no construetion obligations whatsoever in respect to the "SFA. addition". Without Limitation, Landlord shall have no obligations in respect to the "SPA addition” arising out of Section 10 of the Original Lease. (©) Time for Completion: Subject to Section 31 (force majeure) of the Origiial Lease, Tenant shall. commence. construction ofthe "additional tenant's work" no later than than sixty (60) days from the date hereof. ‘Tenant shall proceed diligently with the construction of the additional tenant's work" and cause the "SFA addition" to be fully fixtured, stocked and staffed and open for business on or before December 1, 191 fs hereinabove required. if Tenant fails to commence its construction by the date aforesaid by ‘the mobilization of significant men and means, Landlord shall have the absolute right, at its sole option, to cancel and terminate this First Modification of Lease in which ease the parties shall ‘be automatically restored to the status quo ante, (e) “Governmental Approvals" Landlord and Tenant recognize that prior to the commencement of erly "additional tenant's work", the Village and other governmental authorities or utility companies ‘may require certain approvals or permits approving or authorizing the commencement, construction or completion of the "additional tenant's work" (Such approvals and permits being collectively referred to as "governmental approvels"). Landlord and Tenant acknowledge and agree that Tenant solely is and shall be obligated at its sole cost and expense to ‘eotain timely eny and all "governmental spprovals', and Landlord and ‘Tenant shall seek to obtain same, respectively, promptly and with due diligence. Specifically, without limitation, Tenant shall (at no cost to Landlord) cooperate with Florida Power and Light Company to relocate, if cessary, or otherwise alter or affect its existing utility easement, and the facilities, lines and other appurtenances thereof. Landlord agrees, at ‘Tenant's sole cost and expense, to cooperate with Tenant and to execute any and all joinders or consents reasonably necessary to obtain the "governmental approvals". (@ Common Area Construction/Landsesping? In addition to the “additional tenant's work", Tenant shall, at its sole cost and expense, ‘construct and install, in accordance with plans to be provided by Landlord, all walkways as depicted on Exhibit "B" and exterior attached lighting at grade immediately adjacent to the "SPA addition", which when complete shall be and become a part of the "common areas" of the "Pashion Center", Tenant shall, upon the execution and delivery of this First Modification, pay to Landlord the sum of ‘as Tenant's sole contribution in respect to exterior landscaping unger the "SFA addition plans". Landlord shall be responsible for such landscaping in accordance wwith the Criteria Statement attached hereto as Exhibit °C". (e) Easements and Access: Landlord hereby grants to Tenant solely for the purpose of completing the "additional tenant's wo license to use that certain area cross-hatched in red on Exhibit "D™ (the staging area"). This license shall terminate upon the completion of the "additional tenant's work" or sooner immediately upon a default by Tenant lunder the Original Lease, and shall be used by Tenant solely for the purpote of storage of construction materials, contractor parking and other purposes necessary to completa properly the "additional tenant's work". ‘Tenant shall cause its general contractor, its subcontractors and thelr respective ‘employees and all other parties connected with the "additional tenant's work" to keep continuously the “additional land” and "staging area" in a clean, neat and safe condition in accordance with the highest standards of construction practice prevailing in Dade County, Florida. o Tenant shall perform the ‘additional tenani's work” with minimal interference to the "Fashion Center", its “common areas", the entrances and exits and the business of ‘tenants thereof, including, without limitation, the Tiberio's restaurant. The business of Tenant in the "demised premises" (as it exists on the date hereof), shall continue uninterrupted and not materially impaired during the Pendendy of the "additional tenant's work", Tenant shall use its best efforts to cause all construction related workers to be prohibited from, sing any facie of the "Fashion Center* and fo be kept sparate and from the patrons thereof and shall not conduet themselves in any offensive manner. @ Rooftop Parking: Tenant agrees to design and construct the third floor of the "SFA addition’ so that the roof area thereof may be utilized and Integrated with the rooftop parking currently over the "demoed premier Such thd Sout rool area shal be oper sre lighted, curbed, striped and all parking” spac requirement to design and build for roof top parking will apply when and if ‘any portion of the third floor expansion is roofed over. To the extent required (if at all), Tenant (its successors and assigns) does hereby grant fand convey to and in favor of Landlord (its successors and assigns) and the employees (Landlord's and all tenants’) customers and occupants of the "Fashion Center", a perpetual easement and license to use such roof area for the purpose of parking automobiles and other purposes consistent wi the Foof area of the "Fashion Center". ints construction, the "floor ‘area and "gross leasable area" in the "SPA addition" shall be calculated ‘and determined by Landlord's architect. 5. RATIFICATION; The parties hereby acknowledge end agree that the provisions of this Modification of Lease are and shall be construed ‘a5 modifications to the Original Lease and that all obligations of the parties respecting the "demised premises" (existing prior to the "SFA ‘addition") shall Ukewise apply to the "demised premises" (including the °SFA addition"), unless the context clearly otherwise requires, and further, that the Original Lease, as modified by this Modification of Lease, constitutes the ‘entire agreement between the parties with respect to the subject matter hereto, Except as hereby modified, all of the provisions of the Original Lease are hereby ratified and confirmed (ineluding, without imitation, Paragragh 33 in respect to this Modification) and shall be and remain in full force and effect, and same are enforceable in accordance with their terms. eo fa 6. MODIFICATION OF EXTENSION RIGHTS: The parties hereto ‘acknowledge and agree that pursuant to Paragraph 2 of the Original Lease, entitled "Term", the expication date of the "initial term" is on April 30, 1997 and that Tenant thereafter hes two (2) options to extend the term for fifteen (15) years each, thereby totaling thirty (30) years beyond the inttial term. ‘The parties hereto further agree thet the above-described options to renew shall be modified from two fifteen year options to three ten year options, subject to the terms and conditions set forth in said Paragraph 2 of the Origin Lease, and further supjeot to the following terms and (a) Tenant hereby unconditionally exercises the first option to tend tha term for an additional ten (10) year period, and provided Tenant Is not in default at the time such option term will commence, Tenant shall have the option to additionally extend the term of this lease for one (i) ‘additional ten (10) year period (the "Fourth 10 Year Period!) upon the same terms, covenants, agreements and conditions as set forth in the Original Lease, as modified hereby, except that Tenant's obligation to pay, during the Fourth 10 Year Period, an annual advertising and promotion contribution to the Merchants ‘Association as provided in paragraph 38 of the Original Lease (the "Saks Merchant's Contribution") shall be to pay an ‘amount equal, on a per square foot basis, to that which the tenant in the Fashion Center doing business as Nelmar-Marcus or its successor in such premises is obligated to pay during all of the Fourth 10 Year Period or any Portion thereof as to which said tenant's obligations have been determined Jn respect to such Merchants Association advertising and promotion contribution or like charge (the "Neiman Charge"). in no event shall such ‘Saks. Merchant's Contribution in respect to the Fourth 10 Year Period be less than any amount which Tenant is obligated to pay at any time prior to the Fourth 10 Year Period. Upon written request by Tenant during the Notice Period (as hereinafter defined), Landlord shall within thicty (30) days thereafter inform Tenant of the amount of the Neiman Charge or ‘that the Neiman Charge has not then been determined (if such is the case). In the event Tenant is unable to ascertain the amount of the Neiman Charge from the Merchants Association, Landlord shall use its best efforts to obtain for Tenant a certification by an officer of Neiman-Marcus or its successor in the aforesaid premises of the amount of the Neiman Charge. Aas of the date of this Modifieation, the Soks Merchant's Conteibution is equal to (MMH per square foot of gross leasable area, in the event the Neiman Charge is not capable of determination within the time period Landlord is required pursuant to the terms hereof to inform Tenant of the ‘amount of the Saks Merchant's Contribution due during the Fourth 10 Year Period, the Saks Merchant's Contribution during the Fourth 10 Year Period shall be equal to the annual amount which Tenant is required to pay in respect to same for the lease year immediately pricr to the Fourth 10 Year Period, multiplied by a fraction, the numerator of which shall be the ‘amount of the collective Merenants Association contributions ("Fashion Center Merchant Contributions") of all tenants in the entire Fashion Center spon the rth GOMN day following Taunt aes tor the Neiman ‘Charge, and the denominator of which shall be woh is the Fashion Center’ Merchant Contributions upon the date of this Modification. By way of example only, in the event (i) Tenant notifies Landlord on January 1, 2026 that Tenant is desirous of exercising its option for the Fourth 10 Year Period, (i) at no time within the ensuing thirty (30) days is the Neiman Charge capable of determination, and (il t Center Merchant Contributions on January 31, 2026 a: {he Saks Merchants Contribution during the Fourth 10 Ye MH cer square foot of gross leasable ar = fe ‘Tenant's request for the Neiman Charge shall not be construed as of the option for the Fourth 10 Year Period. (©) Tenant shell exercise the option for the Fourth 10 Year Period (if at ali) by giving notice thereof to Landlord not less than one (1) year and not mote than three (3) years prior to the expiration of the option term immediately prior to the Fourth 10 Year Period (the "Notice Period"). It Is agreed that the maximum term possible under the Original Lease, as modified hereby, and through the exercise of all options shall ‘expire no later than April 30, 2037. IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals, as of the day and year first above written. vwrrnss LanoLogn: BAL HAABOUR SHOPS, « Florida ) ) b eneral partnership J) Z me LEE Taney F Managing Parther ‘TENANT: SARS & COMPANY, a New York =- corporation ain Kh (CORPORATE SEAL) | A 2} existine =| oeaks rete “AVE 1 [woe arar'w | gs FieTW avEWEL _y ase as ase a6.ss! | 73} "Abortion Gor 1 3 - ee a a easeuen AREA NO. 24 (PD, 60-039) {ms so-p3b EASEMENT RO. (7.8. 60- P38) | — gvano wangour BO! AT LEGEND ” _--— PROPERTY LINE . EES SAK'S FIFTH AVE ADDITION ® CURVE Ho LECAL vescRtPTion LEASE_AREA SAR'S FIFTH AVENUE ADDITION ‘A portion of the BUSINESS SECTION OF BAL HARBOUR, a8 shown on the Plat thereof recorded in Plat Book 60 at Page 39 of the Public Records of Dade County, Florida, being more particularly described as follove Commencing at the Point of Intersection of the Went Right 4 and the North Rightmof-vay Line of 96th Street at fon the plat eatitled "BUSINESS SECTION 39 of the Public Records of Dade County, the Northerly Right-of-Way Line of 96th to the POINT OF BEGINNING of the LEASE AREA herein POLNT.OF BEGINNING continue 0" 1 feet; thence leaving Gus a7 a7" w, 201135 feats’ suid curee Delngr alto the East boundary Ling the fo the existing bulléir TIfeh Avenue; thence continue GWEOR 27" AI Wy 1,8 Ee 290 ay, 06,35 feet; chance alors 14 PLfth Avenue Addition OF ALGIRNING, containing 8,750 square 1%, 112,63 feet to the POINT Feat ore of le: EXHIBIT A fu alee YN eo yi oO i . AK Oh tee VWXe 663; AK. ffs EXHIBIT "C* CRITERIA STATEMENT Site and parking areas surrounding the expansion shall be constructed in general compliance with Sheet A-1, of the "SFA addition plans". Construction shall match existing mall construction in respect to terrazzo walkways, concrete curbs, paving, drainage, landscaping, site irtigation, and lighting. Design shall meet or exceed good design practices fand governing building codes. Landscaping shall be designed by Sal Harbour Shops landscape architect. Areas damaged or altered during construction shall be brought back and restored to their original condition prior to the start of construction. Existing systems which may be disconnected or altered during the ‘course of construction shall be reinstated to their original operating condition. Existing landscaping may be held and reinstalled in the new construction areas. Borer "D* .$$399¥ NOL INISNOD VI¥Y NOLL INYLSNOD QO Bauer "p" | ss399¥ NOILInISNOD vauy Nousnaisnos [] 2 z 3 a 2 ND ICATION 0} This Amendment to First Modification of Lease entered into this — day of {2-2/7 _, 199., by and between Bal Harbour Shops, a Florida general partnership (hereinafter called the “Landlord") and Saks & Company, a New York corporation (hereinafter called the "Tenant"). WITNESSETH: WHEREAS, Landlord and Tenant are parties, as landlord and tenant, respectively, to that certain Business Lease (the “Original Lease") dated June 10, 1974, respecting those certain demised premises more particularly described therein, in that certain shopping center known as Bal Harbour Shops, located in The Village of Bal Harbour, Dade County, Florida; WHEREAS, Landlord and Tenant have modified the Original Lease pu: suant to that certain First Modification of Lease dated Aucust 12, 1987 (the “First Modification" WHEREAS, Landlord and Tenant desire to amend the legal description of the "additional land" (as defined in the First Modification) demised by the First Modificatio NOW, THEREFORE, for and in consideration of the sum of $10,00 (TEN DOLLARS), the mutual premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows: 1, Modification of Legal Description: The legal description for the “additional land* (as defined in the First Modification) is hereby replaced in its entirety by the legal description in Exhibit A attached hereto and incorporated herein by this reference. 2. Ratification: Except as hereby modified, all of the provisions of the Original Lease, as modified by the First Modification, are hereby ratified and confirmed and shall be and remain in full force and effect, and same are enforceable in accordance with their terms. IN WITNESS WHEREOF, Landlord and Tenant have executed this Second Modification of Lease as of the date first above written. BAL HARBOUR SHOPS, a Florida 7p partngrship WITNESS: ~ Vb u en Dwoay Noe aid ( Wo hdjer lame : ey Li Gee 'itle: General Partner SAKS & COMPANY, WITNESS: a New York corporation ee Mnireas lhe — oy: Arbeit) tolenyr : Name: Rivet 3 Suleno ae 6, WR Titlev. 7 1051P EXHIBIT "A* A portion of the BUSINESS SECTION OF BAL HARBOUR, according to the Plat thereof as recorded in Plat Book 60 at Page 39 of the Public Records of Dade County, Florida, being more particularly described as follows: Commencing at the Point of Intersection of the West Right-of-Way line of West Bal Harbour Boulevard and the North Right-of-Way line of 96th Street as said point is shown and designated "F* on the plat entitled "BUSINESS SECTION OF BAL HARBOUR" recorded in Plat Book 60, Page 39 of the Public Records of Dade County, Florida; thence South 85°30'17" West along the Northerly Right-of-Way line of 96th Street, 106.04 feet to the POINT OF BEGINNING of the LEASE AREA herein described; from said POINT OF BEGINNING continue along the said Right-of-Way line South 85°30'17" West, 86.61 feet; thence leaving said Right-of-Way line North 04°28'47" West, 101.61 feet; said course being also the East boundary line of the lease area to the existing building of Sak‘s Fifth Avenue; thence continue North 04°28'47" West, 11.00 feet; thence North a5°29'33" East, 3.58 feet; thence South 04°29'43" East along the east f2:e of the three story building and its northerly and southerly extensions, a distance of 112.63 feet to the POINT OF BEGINNING, containing 9,752 square feet, more or less. The above described LEASE AREA situate in Bal Harbour Village, Dade County, Florida. NY: 1051P oO ase AGREE THIS LEASE AGREEMENT is made and entered into as of che JS” day of Lehre 1586 [*REfective Dates) by and betwsen BAL HARBOUR EWOES, LD" Florida’ Limited partnerenip ("iandlora"|, aving an addsess of (9700 Coiling Avenue, Bal Harbour, Florida 33154, Attn. Stanley F. whitesn, and SARS & COMPANY. a wieu York corporation (Tenant), having sn address of 12 Bast ath street, New NHEREAS, Landlord is the owner of that certain ehopping center known a8 Bal Harhou® Shope’ ("Shogping Center“), locaced {a the Village Gf Bal Harbour, Dede uenans, ‘Tenant te eae eubtenans, party tn possession and cimer/sperstox of the sGake Pitch Avenue” deparenent score at the shopping center, contesting: spprorinetely. 103,724 square feet Of “gross leasable area" and approximacely 036.7 equare feet of "Elcor area” ("Department store"). The Departwent Gears Ay, See forth on Exhibit sake Lease") and, fensney is oubject to certain agreanente nore particu attached hereto and sade a pare hereot (collectively, the wournnas, Landlord desires to lease to Tenant, and Tenant desires to lease fron Landlord certain additional space in the Shopping center, upea the terme and Conditions herein set forth NON, TuEREFORE, for and in consideration of the sum of TEN (610.00) DOLLARS, "the mitual ‘proniass heresn contained, and ether goed end valuable Consideration, the vedeipt and sufficiency of which are hereby acknowledged, ene parties hereto, incendiag co be legally Bound, do hereby agree ae follows: 1, RECLEALS: The foregoing recitals are true and correct and are sncorporated herein by this reference 2. parse: Landlord herewith demises and lets to Tenant, and Tenant herewith leases and takes fron Landlord those certain prenises located on th Floor of Busiaing. sa in the Shopping Center containing sppeaxinately Square fect of "gross leasable area" and approximately 2,700 square fet of “Eloor area" (tDanieed Prentaea), a nore particularly ‘show on Bxhinit 8 attached hereto and made @ pest herest. The exterior walls and the roof of the Dentaed Premises and the ares beneath the Preniess are not denised hereunder, and the use therest, together with tha Tight co locate, both vertically” and horizontally, install, waintain, use, repaiz and replace pipes, utility lines, ‘conduits, flues, reerigefant iines, drains, sprinkter mains and valves, , Wives and atructusal clenent’s Leading through the Premises serving Gther parts of the Shopping ceacer, is hereby expressly veserved unto Landlord In connection with the exercise of its rights pursuant to the foregoing ‘gentence, Landlord agrees to (£) use commercially reascnable effocts to miniaize ‘vith fenane’s operation of business in the. Senined Premis practicable under che circunstances, and (ii) pay for any damage to Tenant's Personal property caused by Landlord or Landlord's agents (eubject to the "waiver Ee gubrogutiont), Eandlord furcher agrees that the sxtericr walls of the Deniged Premises shall be waintained by Landlord in a manner compatible with the Salntesance of the exterior walls of the balance of the Shopping Center, and Landlord shail not ‘erect any signe upon the exterior walle of Che Denised ERA: The commencement date of the tem of this Lease chall be the venivery pate as defines an Section 4(A) hereof). The term of this Lease shall Sepire cr sooner. terminate simsltaneously with ‘the explication or sooner ECraization ‘of ‘the ‘Saka “Lease In the event the term of the sake Lease ie Gxtanded (pursuant to renewal options or otheruise), the term of this Lease shall be so extended (and any references herein to the "erm of this Lease” shall refer £0 the term of thie isase, as 0 extended) 4, SQNSTRUGTON OF DBOGSED PREMISES/THIRD PLOOR REFURBISHING: (A) Construction by Landlord: Landlord, at ite expense, shall denolish the existing east exterior wall within the Dontaed Prenives, construct new exterior wall along the Denised Preniges to the east of the existing eost Sail'as shown on auhibir hand venove the existing storage lockers currently in the Deniged Prenises (collectively, *bandlord’s Mork") Landlord asrees tou Eetsonable affores to conglete Landiord'« Work and deliver broos clean possession of the Desised Preniges Co Tenant on or before the date which ca forty-five, (4s) Gays after the Effective Date. The date that Landlord completes Landlord’ Work, and delivers possession of the Denieed Premigcs to Tenant shall be the “Delivery, Dater. xcept as aforesaid, Landlord shall deliver end Tenant shall accept che Denise Prenisas in an tas is" and “wimuz is" condition (i.e. a5 of the Bffective Date) “Landiora makes no warranties, rapreaentations or guaranties of sny Kindy () Gonstruction by Zanast: Tenant hereby covenants and agrees, at Ste sole cost and expense, ts construct, fixture and equip the Denised sremisee and fo renovate and Tefurbish che third floor of the Departuent Store. (4ncluding the Denised Prenises), in accordance with chose certain pians ané specifications