Document:

Exhibit 10.3

 

 

WARWICK MALL
VITAMIN WORLD LSE

 

WARWICK MALL

Warwick, Rhode
Island

 

Lease to

 

VITAMIN WORLD

 

FROM THE OFFICE
OF:

 

Goulston &
Storrs

400 Atlantic
Avenue

Boston,
Massachusetts 02110-3333

 

1

 

WARWICK MALL

 

INDEX TO LEASE

 

	
  Article

  	
   

  	
  Caption

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  BASIC
  DATA

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  PREMISES

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  TERM
  OF LEASE

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  MINIMUM
  RENT

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  PERCENTAGE
  RENT

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
   

  	
  CONDITION
  OF PREMISES

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
   

  	
  ADDITIONAL
  RENT - TAXES

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
   

  	
  MAINTENANCE
  AND OPERATION; TENANT’S CONTRIBUTION

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
   

  	
  UTILITIES

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
   

  	
  USE OF
  PREMISES

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
   

  	
  OTHER
  STORES

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
   

  	
  PROMOTIONAL
  OR MARKETING FUND

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
   

  	
  MAINTENANCE
  OF BUILDING, ETC.

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIV.

  	
   

  	
  INDEMNITY
  AND LIABILITY INSURANCE

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XV.

  	
   

  	
  LANDLORD’S
  ACCESS TO PREMISES

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XVI.

  	
   

  	
  INSURANCE

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XVII.

  	
   

  	
  DAMAGE
  CLAUSE

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XVIII.

  	
   

  	
  EMINENT
  DOMAIN

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIX.

  	
   

  	
  BANKRUPTCY
  OR INSOLVENCY

  	
   

  	
  29

  

 

i

 

	
  XX.

  	
   

  	
  LANDLORD’S
  REMEDIES

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XXI.

  	
   

  	
  MISCELLANEOUS
  PROVISIONS

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  21.1.

  	
  Waiver

  	
   

  	
  33

  
	
   

  	
   

  	
  21.2.

  	
  Covenant of Quiet Enjoyment

  	
   

  	
  34

  
	
   

  	
   

  	
  21.3.

  	
  Status Report

  	
   

  	
  34

  
	
   

  	
   

  	
  21.4.

  	
  Notice to Mortgagee and/or Ground Lessor

  	
   

  	
  35

  
	
   

  	
   

  	
  21.5.

  	
  Assignment of Rents

  	
   

  	
  35

  
	
   

  	
   

  	
  21.6.

  	
  Mechanic’s Liens

  	
   

  	
  36

  
	
   

  	
   

  	
  21.7.

  	
  No Brokerage

  	
   

  	
  36

  
	
   

  	
   

  	
  21.8.

  	
  Definition of Additional Rent

  	
   

  	
  36

  
	
   

  	
   

  	
  21.9.

  	
  Landlord’s Fees and Expenses

  	
   

  	
  36

  
	
   

  	
   

  	
  21.10.

  	
  Invalidity of Particular Provisions

  	
   

  	
  37

  
	
   

  	
   

  	
  21.11.

  	
  Provisions Binding, Etc.

  	
   

  	
  37

  
	
   

  	
   

  	
  21.12. 

  	
  Governing Law

  	
   

  	
  37

  
	
   

  	
   

  	
  21.13. 

  	
  Recording

  	
   

  	
  37

  
	
   

  	
   

  	
  21.14. 

  	
  Notices

  	
   

  	
  37

  
	
   

  	
   

  	
  21.15. 

  	
  When Lease Becomes Binding

  	
   

  	
  38

  
	
   

  	
   

  	
  21.16. 

  	
  Paragraph Headings

  	
   

  	
  38

  
	
   

  	
   

  	
  21.17. 

  	
  Lease Superior or Subordinate to Mortgage and
  Sale-Leaseback

  	
   

  	
  39

  
	
   

  	
   

  	
  21.18. 

  	
  Holding-Over

  	
   

  	
  40

  
	
   

  	
   

  	
  21.19. 

  	
  Interest

  	
   

  	
  40

  
	
   

  	
   

  	
  21.20. 

  	
  Price Index

  	
   

  	
  40

  
	
   

  	
   

  	
  21.21. 

  	
  Expansion

  	
   

  	
  41

  
	
   

  	
   

  	
  21.22. 

  	
  Other Agreements

  	
   

  	
  44

  
	
   

  	
   

  	
  21.26. 

  	
  Intentionally Omitted

  	
   

  	
  44

  
	
   

  	
   

  	
  21.14. 

  	
  REIT Financing Provision

  	
   

  	
  44

  
	
   

  	
   

  	
  21.26. 

  	
  Intentionally Omitted

  	
   

  	
  44

  
	
   

  	
   

  	
  21.26. 

  	
  Intentionally Omitted

  	
   

  	
  44

  
	
   

  	
   

  	
  21.27. 

  	
  Intentionally Omitted

  	
   

  	
  44

  
	
   

  	
   

  	
  21.28. 

  	
  Tenant’s Identity Representation

  	
   

  	
  44

  
	
   

  	
   

  	
  21.29.

  	
  Intentionally Omitted

  	
   

  	
  45

  
	
   

  	
   

  	
  21.30. 

  	
  Special Right of Termination

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Guarantee

  	
   

  	
   

  
	
  Exhibit A - Plan

  	
   

  	
   

  
	
  Exhibit B - Store Remodeling Regulations

  	
   

  	
   

  

 

ii

 

INDENTURE OF LEASE

 

WARWICK MALL

 

THIS INDENTURE OF
LEASE made as of the 20th day of August, 2003, by and between WARWICK MALL
L.L.C., a Rhode Island limited liability company, having a mailing address c/o Bliss
Properties, Inc., P.O. Box 2513, Providence, RI 02906-0513
(hereinafter referred to as “Landlord”), of the one part, and the Tenant named
in Section 1.1. below (hereinafter referred to as the “Tenant”) of the
other part.

 

W I T N E S S E T H:

 

ARTICLE I

Basic Data

 

Section 1.1.  The following sets forth basic data
hereinafter referred to in this lease, and, where appropriate, constitute
definitions of the terms hereinafter listed.

 

Tenant:  Vitamin World, Inc.

 

State of
Incorporation: 
Delaware.

 

Present Mailing
Address of Tenant: 
4320 Veterans Memorial Highway, Holbrook, NY 11741.

 

Tenant’s Trade
Name: Vitamin World.

 

Lease Term:  Commencing on the date determined in
accordance with the provisions of Section 3.2. of this lease and
continuing until the expiration of seven (7) years (plus the partial
calendar month, if any) from and after said commencement date, unless sooner
terminated as provided herein.

 

Minimum Rent
Payment: For and with
respect to the first (1st)
and second (2nd) twelve (12) full calendar month periods of the
term of this lease (plus the partial calendar month, if any, from and after the
term commencement date), at the rate of Sixty-seven Thousand Five Hundred and
00/100 DOLLARS ($67,500.00) per annum, payable at the rate of Five Thousand Six
Hundred Twenty-five and 00/100 DOLLARS ($5,625.00) per calendar month, and
proportionately at such rate for any partial month.

 

For
and with respect to the third (3rd) through fifth (5th) twelve (12) full calendar month periods of the
term of this lease, at the rate of Seventy-five Thousand and 00/100 DOLLARS
($75,000.00) per annum, payable at the rate of Six Thousand Two Hundred 

 

1

 

Fifty
and 00/100 DOLLARS ($6,250.00) per calendar month, and proportionately at such
rate for any partial month.

 

For
and with respect to the sixth (6th) and seventh (7th) twelve (12) full calendar month periods (being
the balance) of the term of this lease, at the rate of Eighty-two Thousand Five
Hundred and 00/100 DOLLARS ($82,500.00) per annum, payable at the rate of Six
Thousand Eight Hundred Seventy-five and 00/100 DOLLARS ($6,875.00) per calendar
month, and proportionately at such rate for any partial month.

 

Percentage Rent
Payment:  An amount
equal to eight percent (8%) of the excess of gross sales (as herein defined)
over the Base gross sales figure determined as follows:  said figure, with respect to each lease-year,
shall be arrived at by dividing the annual minimum rent paid for such
lease-year by eight percent (8%).

 

Initial
Promotional Charge:  At
the rate of $208.33 per calendar month.

 

Sprinkler Charge:  50¢ per square foot of floor area contained
within the demised premises (as set forth in Section 2.1 hereof) per
annum.

 

Security Deposit:  None. 
(See Section 21.28.)

 

Guarantor of
Tenant’s Obligations: 
None. (See Section 21.28.)

 

Use:  Only as a first-class, high-quality retail
store for the display and sale of vitamins, food supplements and sports
nutrition products, and as incidental thereto, for the display and sale of
health and beauty aids and incidental items such as literature related thereto,
provided that in no event shall the area devoted to the sale of such health and
beauty items (and incidental items related thereto) exceed fifteen percent (15%)
of the sales area of the demised premises. 
The demised premises shall be used for no other purpose or purposes.

 

Subject to and
without enlarging upon the foregoing enumerated, permitted use, the Tenant’s
operations in the demised premises shall always be of substantially the same
type, high quality and character (including, without limitation, types of goods
to be sold, pricing and other basic policies) as the other “Vitamin World”
shopping center retail store operations presently being conducted in the New
England area.

 

ARTICLE II.

Premises

 

Section 2.1.  The Landlord hereby leases to the Tenant and
the Tenant hereby leases from the Landlord, upon and subject to the terms and
provisions of this lease, the portion of the building (which portion is sometimes
hereinafter referred to as the 

 

2

 

“demised premises”) shown
on Exhibit “A” hereto annexed and made a part hereof as Vitamin World
containing approximately 1,500 square feet of floor area.

 

Excepting and
reserving to the Landlord the roof and exterior walls of the building or
buildings of which the demised premises are a part; and further reserving to
the Landlord the right to place in the demised premises (in such manner as to
reduce to a minimum the interference with the Tenant’s use of the demised
premises) utility lines, pipes, and the like, to serve premises other than the
demised premises, and to replace and maintain and repair such utility lines,
pipes and the like in, over and upon the demised premises as may have been
installed in the building.

 

Section 2.2.  The term “Shopping Center” wherever used in
this lease is hereby defined to mean only the “Developer’s Tract” portion of
the Warwick Mall development (located in Warwick, RI, and comprised of three (3) tracts;
namely, the Developer’s Tract, the Macy’s Tract and the Filene’s Tract) as
indicated on said Exhibit “A”, including any and all structures, parking
facilities, roadways, common facilities and the like built (or to be built)
thereon, as the same may from time to time be reduced by eminent domain
takings, dedications to public authorities, or exclusions by the Landlord (by
written notice to the Tenant) of portions thereof, or increased by the addition
of other lands together with structures and the like thereon which may from
time to time be designated by the Landlord, by written notice to the Tenant, as
constituting a part of the Shopping Center. 
Anything in this lease to the contrary notwithstanding, it is expressly
understood and agreed that the designation or use from time to time of portions
of the Shopping Center as common areas shall not restrict the Landlord’s use,
as it determines for its exclusive benefit, of such areas for buildings or
structures and/or for retail or such other purposes as the Landlord shall
determine, including, without limitation, the expansion or remodeling of the
Shopping Center to include one or more converted or new department stores,
other Major Stores and small stores (on the present and/or additional levels),
the Landlord hereby reserving the unrestricted right to build, add to, subtract
from, lease, license, relocate and/or otherwise use (permanently and/or
temporarily) any buildings, structures and roadways anywhere upon, and make use
of areas within, the Shopping Center, including but without limitation, the
right to erect and maintain any number of so-called “kiosks”, etc., anywhere
within the enclosed malls or other common areas of the Shopping Center, for
retail or such other purposes as Landlord shall determine.

 

ARTICLE III.

Term of Lease

 

Section 3.1.  TO HAVE AND TO HOLD the demised premises unto
the Tenant for the term specified in Section 1.1 hereof unless sooner
terminated as provided herein.

 

Section 3.2.  The term hereof shall commence on the earlier
to occur of:  (i) November 1,
2003, or, if later, forty-five (45) days after delivery of possession of the
demised premises to the Tenant as herein provided (see Section 21.28); or (ii) the
date that the Tenant first opens for business in the demised premises.  The parties hereto agree, upon demand of the
other, to execute a supplemental instrument expressing the commencement and
termination dates of the term hereof when the commencement date has been determined.

 

3

 

Section 3.3.  The Tenant, subsequent to the delivery of
possession and prior to the commencement of the term hereof, shall be permitted
to install fixtures and other equipment, and do other work, provided, however,
that such activities of the Tenant shall not interfere with construction work
of the Landlord or the conduct of business or construction work of other
tenants or occupants in the Shopping Center.

 

Section 3.4.  In the event the Tenant shall have failed to
complete the Tenant’s work in accordance with the provisions of Section 6.2
of this lease and to have opened the demised premises for business by the term
commencement date determined in Section 3.2 of this lease, then all of
Tenant’s charges hereunder nevertheless shall commence on that date at the
rates specified or determined in accordance with the provisions of this lease,
but if the Tenant still has not so opened for business by the date that is
thirty (30) days after said term commencement date, then from and after the end
of such 30-day period minimum rent shall accrue hereunder and be payable at the
rate of one-fifteenth (1/15th) of the monthly amount of the Tenant’s initial
minimum rent per day until the Tenant shall open for business.

 

ARTICLE IV.

Minimum Rent

 

Section 4.1.  The Tenant covenants and agrees to pay
without notice, demand or offset to the Landlord, minimum rent for said
premises at the rate(s) specified in Section 1.1 hereof, and
proportionately at such rate for any partial month occurring at the commencement
of the term hereof, which minimum rent shall be paid monthly, in advance, on
the first day of each and every calendar month during the term hereof, the
first such payment to be made on the commencement of the term of this lease.  All checks for rent and all other charges
payable under this lease shall be made payable to Warwick Mall and shall be
sent, until further notice from Landlord, to Warwick Mall, c/o Bliss
Properties, P.O. Box 25l3, Providence, R.I. 02906.  For and with respect to each installment of
minimum rent that is not received by the Landlord within five (5) days
after the date when due, the Tenant shall pay to the Landlord on demand, as
additional rent, a late charge in an amount equal to five percent (5%) of the
amount of the overdue payment for the purpose of defraying Landlord’s
administrative expenses relative to handling such overdue payment.

 

ARTICLE V.

Percentage Rent

 

Section 5.1.  In addition to the minimum rent specified in
ARTICLE IV above, and as part of the total rent to be paid by the Tenant to the
Landlord, the Tenant covenants and agrees to pay to the Landlord, as aforesaid,
as percentage rent for each lease-year (as hereinafter defined) of the term
hereof, a sum equal to the percentage of gross sales specified in Section 1.1
hereof, multiplied by the amount by which gross sales (as hereinafter defined)
during such lease-year exceeds the Base gross sales specified in Section 1.1
hereof, if there is any such excess.

 

4

 

For any lease-year
with respect to which the minimum rent paid by the Tenant under this lease is,
or is abated, refunded or otherwise for any reason reduced to, a sum which is
less than the total amount of minimum rent specified in Section 1.1 hereof
as payable for such lease-year, the Base gross sales figure shall be reduced
proportionately to the same extent as the amount of minimum rent actually paid
by the Tenant hereunder for and with respect to such lease-year bears to the
minimum rent stated as payable for such lease-year in said Section 1.1.  In addition, to the extent that any
lease-year constitutes less than a full twelve (12) calendar month period, the
Base gross sales figure shall be reduced proportionately to the same extent as
the number of days in such lease-year bears to 365.  In the event the Tenant is not open for
business during the days and hours required hereunder, then, in addition to all
other remedies available hereunder, the Base gross sales figure shall be
proportionately reduced.

 

Section 5.2.  Lease-years shall be the twelve month periods
from February 1 through January 31. 
However, the first lease-year shall run from the date Tenant first opens
for business in the demised premises through the 31st day of January immediately
following; and the last lease-year shall run from the previous February 1
through the date of the expiration or earlier termination of the term of this
lease.

 

Section 5.3.  The phrase “gross sales”, as used in this
lease, is hereby defined to mean the dollar aggregate of:

 

(a)           the sales prices of all goods, wares
and merchandise sold, and the charges for all services performed by the Tenant
in, at, on or from the demised premises, whether made for cash, on credit, or
otherwise, without reserve or deduction for inability or failure to collect,
including but not limited to such sales and services (i) where the orders
therefor originate at and are accepted by the Tenant in the demised premises
but delivery or performance thereof is made from or at any place other than the
demised premises, (ii) pursuant to mail, telegraph, telephone, video,
electronic, computer or other technology-based systems whether existing now or
developed in the future, or other similar orders made, received or filled at or
from the demised premises, (iii) by means of mechanical and other vending
devices in the demised premises, (iv) as a result of transactions
originating upon the demised premises, and/or (v) which the Tenant in the
normal and customary course of its operations would credit or attribute to its
business upon the demised premises, or any part or parts thereof; and

 

(b)           all moneys or other things of value
received by the Tenant from its operations at, in, on or from the demised
premises which are neither included in nor excluded from gross sales by the
other provisions of this definition.

 

“Gross sales”
shall not include:  (a) the exchange
of merchandise between stores of the Tenant where such exchanges are made
solely for the convenient operation of the Tenant’s business and not for the
purpose of consummating a sale which has theretofore been made at, in, on or
from the demised premises and/or for the purpose of depriving the 

 

5

 

Landlord of the
benefit of a sale which otherwise would have been made at, in, on or from the
demised premises; or (b) returns to shippers or manufacturers; or (c) sales
of fixtures after use thereof in the conduct of the Tenant’s business in the
demised premises; and there shall be deducted from gross sales:  (i) cash or credit refunds made upon
transactions included within gross sales, not exceeding the selling price of
merchandise returned by the purchaser and accepted by the Tenant, and (ii) the
amount of any city, county, state or federal sales, luxury, or excise tax on
such sales which is both (a) added to the selling price or absorbed
therein, and (b) paid to the taxing authority by the Tenant.

 

The phrase “gross
sales” shall also include such gross sales made by any sublessee,
concessionaire, licensee or otherwise at, in, on or from the demised premises;
and such gross sales made by sublessees, concessionaires, licensees, or
otherwise, shall be included in the reports provided for in this lease (but the
foregoing shall not be construed to give the Tenant the right to sublease,
concession or license, which right shall be governed by the provisions of
ARTICLE X hereof).

 

Section 5.4.  The Tenant agrees without notice or demand
from the Landlord to deliver to the Landlord, within twenty (20) days after the
end of each calendar month during the term hereof, a complete statement signed
by an executive or other authorized agent of the Tenant, showing gross sales
for the preceding month.  The Tenant
shall utilize cash registers equipped with sealed continuous and cumulative
totals (or computer equipment performing substantially similar functions) to
record all gross sales and which shall number consecutive rings.  The Tenant agrees to maintain accounting
controls and books of account in form adequate for auditing purposes, in
accordance with generally accepted accounting principles to assure the proper
recording of all gross sales and the exclusions and deductions therefrom
provided in Section 5.3 hereof.

 

For the purposes
hereof, the term “Percentage Rent Periods” shall, in light of the fact that
lease-years end on January 31, be the quarter-annual periods ending on January 31,
April 30, July 31, and October 31 of each year during the term
of this lease and any partial such periods occurring at the beginning and the
end of the term of this lease.

 

The Tenant agrees
without notice or demand from the Landlord, within twenty (20) days after the
end of each Percentage Rent Period (accompanied by the monthly statement
showing gross sales for the preceding calendar month), to pay to the Landlord
on account of percentage rent a sum equal to the percentage of gross sales
specified in Section 1.1 hereof, multiplied by the amount by which gross
sales during such Percentage Rent Period exceeds one-quarter (1/4) of the
applicable Base gross sales.

 

The Tenant agrees,
without notice or demand from the Landlord, within forty-five (45) days after
the end of each lease-year, to cause a statement of the gross sales of the
Tenant made at, in, on and/or from the demised premises for such lease-year to
be certified by a financial executive officer of the Tenant (subject to further
verification as provided in Section 5.5), and a copy of such statement
certified by such officer shall be delivered by the Tenant to the Landlord
within such 45-day period, and such statement shall be accompanied by check of
the Tenant for the balance of the percentage rent, if any, payable with respect
to such prior lease-year.  In the event
that the Tenant’s quarterly payments of percentage rent for and with respect to
a lease-year shall in the aggregate exceed the percentage rent payable by the
Tenant for the entire lease-year, the Landlord agrees to apply any such excess
against the minimum rent next due under this lease.

 

6

 

All statements
deliverable by the Tenant to the Landlord under this lease shall be delivered
to the place where rent is then payable, or to such other place or places as
the Landlord may from time to time direct by written notice to the Tenant.

 

Section 5.5. 
The Landlord shall have the right, upon at least five (5)days notice and
at any time within thirty-six (36) months after receipt of the annual statement
of gross sales of the Tenant required to be furnished pursuant to Section 5.4
above, to audit all of the books of account, documents, records, returns,
papers, sales tax returns, original sales records (including, without
limitation, cash register tapes, sales slips, bank statements and deposit
slips, credit-card records, mail orders, telephone orders, computer records and
such other sales records, if any, which would normally be examined by an
independent accountant pursuant to generally accepted auditing standards in
performing an audit of the Tenant’s gross sales) and files of the Tenant
relating to gross sales for any lease-year; and the Tenant, on request of the
Landlord, shall make all such matters available for such examination at the
Shopping Center or, at the Tenant’s option, at the Tenant’s corporate office
provided the same is located in the eastern continental United States.  If the Landlord shall have such an audit made
for any lease-year, and the gross sales shown by the Tenant’s statement for
such lease-year shall be found to be understated by more than three percent
(3%), or the Tenant fails to make available for such audit the aforesaid books
of account and other documents and records reasonably requested in order to
complete such audit in accordance with generally accepted auditing standards,
then the Tenant shall pay to the Landlord on demand the cost of such audit (and
in any event the next two future annual statements of gross sales shall be
certified by an independent certified public accountant).  In any event, the Tenant shall promptly pay
to the Landlord any deficiency in percentage rent plus interest at the rate set
forth in Section 21.19 from the date such payment should have been made to
the date that such payment is received by Landlord.  In the event the gross sales shown by the
Tenant’s statement for any two (2) lease-years of the term shall be found
to have been understated by more than four percent (4%) in each instance, or
for any one (1) lease-year of the term shall be found to have been
understated by more than eight percent (8%), or the Tenant fails to make
available for such audit the aforesaid books of account and other documents and
records reasonably requested in order to complete such audit in accordance with
generally accepted auditing standards, then the Landlord, in addition to all
other remedies available at law or in equity or pursuant to the other
provisions of this lease, shall have the right to terminate this lease upon
written notice to the Tenant.  Such
examination and audit may be made by any accountant designated in writing by
the Landlord from time to time.

 

Section 5.6. 
Computation of the percentage rent specified herein shall be made
separately with regard to each lease-year of the term hereof; it being
understood and agreed that the gross sales of any lease-year and the percentage
rent due thereon shall have no bearing on, or connection with, the gross sales
of any other lease-year of the term hereof. 
It is further understood and agreed that the Landlord shall in no event
be construed or held to be a partner or associate of the Tenant in the conduct
of the Tenant’s business, nor shall the Landlord be liable for any debts
incurred by the Tenant in the conduct of the Tenant’s business; but it is
understood and agreed that the relationship is and at all times shall remain
that of landlord and tenant.

 

7

 

ARTICLE VI.

Condition of the
Premises

 

Section 6.1. 
Tenant acknowledges that it is fully aware of the condition of the
demised premises and agrees to take the same on a strictly “as is” basis
without any warranty, representation or obligation whatsoever on the part of
the Landlord with respect thereto.

 

Section 6.2. 
Tenant shall completely remodel the demised premises in the manner to
outfit the same for its use; but all such remodeling work shall meet the following
requirements:  (i) same shall be
done in a good and first-class workmanlike manner; (ii) same shall not
adversely affect the structural strength of the demised premises or the
building of which they are a part; (iii) Tenant shall abide by all applicable
laws, ordinances and insurance requirements, and Tenant shall first provide to
Landlord adequate evidence of insurance; (iv) such remodeling shall be
done by contractor(s) and in full conformity with plans and
specifications, which shall first require Landlord’s written approval; (v) such
remodeling shall be done at such times and in such manner so as not to
interfere in any manner with the continued conduct of business in the Shopping
Center or with any work being performed by Landlord or any other occupants of
the Shopping Center and, without limitation, the Tenant shall use every legal
effort to prevent work stoppages of any kind attributable to work being
performed by or on behalf of the Tenant (and shall require provisions in its
contracts permitting it to do so); and (vi) such remodeling shall conform
in every respect to the “Store Remodeling Regulations” set forth on Exhibit “B”
hereto annexed and hereby made a part hereof.

 

In any event,
however, all such remodeling shall be completed by Tenant, including
construction and installation of all leasehold improvements and equipping the
demised premises with new trade fixtures and all personal property necessary or
proper for the operation of Tenant’s business, and the demised premises shall
be officially opened for business to the public, not later than the date
determined in accordance with the provisions of Section 3.2. of this
lease.

 

Section 6.3. 
As part of Tenant’s said remodeling, Tenant shall install a temporary
barricade to be put in front of the demised premises prior to commencing and
until Tenant has completed remodeling of the demised premises and is ready to
open for business. The exact location and all specifications of said barricade
shall be reflected in Tenant’s plans and specifications for its remodeling
which as aforesaid shall be subject to Landlord’s prior written approval.

 

Tenant agrees to
furnish and install a sign or signet indicating that Tenant is coming to
Warwick Mall which will be placed on said barricade.  The exact size, type, location and wording of
said sign shall be subject to Landlord’s prior written approval.

 

Section 6.4. 
Certain details of the construction of the Shopping Center may change,
including the area, height and number of levels above or below grade, but,
subject to other provisions of this lease, the position of the demised premises
shall be substantially as shown on Exhibit “A”.  Nothing in Exhibit “A” shall be treated
as a representation that any or all of the buildings, or any other improvements
or facilities, for which provision is made thereon shall be constructed, or
that such buildings, etc. will be or continue to be located, precisely within
the areas shown on Exhibit “A”, or that such 

 

8

 

buildings, etc.
will be or continue to be of the dimensions or shapes (or occupied by any
particular retail store) shown, it being the intention of Exhibit “A” only
generally to show diagrammatically, rather than precisely, the current status
and possible development of the Shopping Center as presently contemplated.

 

ARTICLE VII.

Additional Rent -
Taxes

 

Section 7.1. The Landlord shall pay, or cause to be
paid, before the same become delinquent, all general and special taxes,
including existing and future assessments for road, sewer, utility and other
local improvements and other governmental charges (hereinafter collectively
referred to as “real estate taxes”) which may be lawfully charged, assessed, or
imposed upon or relating to all or any portion of the Landlord’s Tax Tract (as
hereinafter defined) on both land and all structures and other improvements
thereon; provided however, that if authorities having jurisdiction assess real
estate taxes on any of the same which the Landlord deems excessive, the
Landlord may defer compliance therewith to the extent permitted by the laws of
the State of Rhode Island so long as the validity or amount thereof is
contested by the Landlord in good faith and so long as the Tenant’s occupancy
of the demised premises is not disturbed or threatened.  For the purposes hereof, the term “Landlord’s
Tax Tract” shall mean the portion(s) of the entire Warwick Mall
development owned by (or ground leased to) Landlord from time to time
(currently being the Developer’s Tract and the theater tract portion of the
Macy’s Tract, all as shown on Exhibit “A”) and any other portions thereof
for which Landlord is responsible to pay the real estate taxes.

 

Section 7.2. 
The Tenant shall pay all such taxes which may be lawfully charged,
assessed, or imposed upon all fixtures and equipment of every type and also
upon all personal property in the demised premises, and the Tenant shall pay
all license fees and other charges which may lawfully be imposed upon the
business of the Tenant conducted upon the demised premises.

 

Section 7.3. 
Tenant shall, during the term of this lease, pay to Landlord that
portion of the taxes and other governmental charges set forth in Section 7.1
above as shall result from multiplying the same by a fraction, the numerator of
which is the total square footage of floor area of the demised premises, and
the denominator of which is the total square footage of leased floor area of
all store premises within the buildings located on the Landlord’s Tax Tract as
of the first day of each applicable tax year during the term hereof; provided,
however, with respect to any buildings located on the Landlord’s Tax Tract (and
any land appurtenant thereto) which are now or hereafter separately owned or
assessed, at the Landlord’s option, the taxes and assessments relating thereto
shall be deemed not to be real estate taxes hereunder, and in such event, there
shall be excluded from the denominator of such fraction the floor area of such
separately owned or assessed building(s). 
In particular, but without limitation, with respect to the J.C. Penney
Department Store located on the westerly side of the Shopping Center, which is
now separately assessed directly to said occupant thereof for building taxes,
so long as such building remains so occupied and so separately assessed it is
agreed that Tenant shall not be required to share in any portion of real estate
taxes or assessments attributable to said 

 

9

 

J.C. Penney
Building; and, in exchange, it is agreed that the square footage of floor area
of said Penney Building shall be excluded from the denominator in the
determination of Tenant’s share of taxes in accordance with this lease.  Without limiting the generality of the
foregoing, in any event there shall also be excluded from the denominator of
such fraction the floor area of non-selling mezzanines (if any), malls,
passageways, service corridors, common (employee and/or public) bathrooms,
governmental offices, management and superintendent and any other mall offices,
mall storage areas, mall utility rooms and mall sprinkler rooms, all outside
and all above-grade level and below-grade level areas and facilities, all
parking and loading areas and facilities and other common areas and facilities
(including any such areas where retail modular units may be located or where
used periodically for seasonal or other temporary units) and, without
limitation, there shall be excluded from the denominator of such fraction the
square footage of floor area of the Major Stores on the Landlord’s Tax Tract
(and, for the purposes of this lease, a “Major Store” is defined to mean a
store containing at least fifteen thousand (15,000) square feet of floor
area).  Reference is made to the fact
that a Major Store (such as the former Caldor store) on the Landlord’s Tax
Tract may be recaptured by the Landlord. 
Accordingly, when the floor area formerly contained in any such Major
Store actually is leased by Landlord and occupied as non-Major Store space
which otherwise pursuant to the foregoing provisions would be included in the
denominator on which the calculation of the Tenant’s share of real estate taxes
is based, such floor area shall be so included; until such time, such floor
area shall continue to be excluded from the denominator in calculating the
charges to be shared under the provisions of this Section.

 

Tenant’s
fractional share of such taxes shall be equitably adjusted for and with respect
to the first and last partial tax years (if any) of the term of this
lease.  Where the applicable tax bills
and computations are not available prior to the end of the term hereof, then a
tentative computation shall be made on the basis of the previous year’s taxes
payable by Tenant, with a final adjustment to be made between Landlord and
Tenant promptly after all bills and computations are available for such period.

 

Tenant’s pro rata
share of said taxes shall be due and payable within ten (10) days after
receipt by Tenant of Landlord’s invoice plus a copy of the tax bills
involved.  However, Tenant shall make
monthly tax deposits with Landlord (along with payments of minimum rent) in an
amount equal to one-twelfth (1/12th) of Tenant’s annual pro rata share of such
taxes as reasonably estimated by Landlord (taking into account relevant factors
including the prior year’s taxes), with a final adjustment to be made between
the parties as soon as said pro rata share has been determined.

 

In every case,
real estate taxes shall be adjusted to take into account any abatement or
refund thereof paid to the Landlord by the taxing authorities, less all of the
Landlord’s costs of securing such abatement or refund (the Landlord having the
sole right to contest real estate taxes). 
If Landlord shall elect to contest such real estate taxes, Landlord
shall be entitled to bill Tenant for its said pro rata share of the costs and
expenses thus incurred by Landlord as and when the same are incurred, and the
same shall constitute part of such real estate taxes (in which event, to the
extent that Landlord has so billed and received from Tenant payment of such
costs and expenses, the same 

 

10

 

shall not be
deducted as aforesaid from the abatement or refund, if any, ultimately received
with respect thereto).

 

Section 7.4. 
In an attempt to reduce the potential tax burden on the Shopping Center
by controlling costs for off-site improvements which are or may hereafter be
required by governmental authorities in connection with the present or future
development of the Shopping Center (for example: highway improvements, sewer
and water facilities, park improvements), Landlord may agree with such
governmental authorities to be responsible for the construction of such
off-site improvements.  In such case upon
notice from Landlord, Tenant shall pay to Landlord, as additional rent and in
substitution, in whole or in part, for any special district real estate taxes
or betterment assessment relating to such improvements which could otherwise be
imposed against the Shopping Center if such improvements were constructed under
governmental responsibility, an annual charge representing Tenant’s pro rata
share of the amortized cost of such facilities. 
Tenant’s pro rata share of such costs shall be computed in the same
manner as used to compute Tenant’s pro rata share of real property taxes as
provided in Section 7.3 above.  This
annual charge shall be paid by Tenant in equal monthly installments, in
advance, on the first day of each calendar month during the term of this lease.

 

Section 7.5. 
The foregoing provisions of this ARTICLE VII are predicated upon the
present system of taxation in the State of Rhode Island.  Should any governmental authority having
jurisdiction over all or any portion of the Shopping Center impose a tax and/or
assessment of any kind or nature upon, against, measured by or with respect to
the rentals payable by tenants on Landlord’s Tax Tract to the Landlord or with
respect to the ownership of the land and buildings comprising the Landlord’s
Tax Tract by the Landlord (or any individual or entity forming the Landlord),
either by way of substitution for all or any part of the present ad valorem
real estate taxes or in addition thereto, then such tax and/or assessment shall
be deemed to constitute real estate taxes for the purposes of this lease and
the Tenant shall be obligated to pay its proportionate share thereof as set
forth in Section 7.3 hereof.  
Further, if there is any other change in the system of taxation (other
than as set out immediately above) which is in substitution of the present
system, Tenant shall be responsible for its fair and equitable share thereof,
taking into account the prorations provided for in this ARTICLE VII.

 

ARTICLE VIII.

Maintenance and
Operation;

and the Tenant’s
Contribution

 

Section 8.1. 
The Landlord shall cause all parking facilities of the Shopping Center,
including lighting thereof, to be maintained in reasonably good repair and in
reasonably clean condition at all times during the term of this lease.  Plowing of snow from the parking areas will
be provided by Landlord, but reasonable stockpiling thereof shall be permitted.

 

The Landlord
agrees that the Tenant may during the term hereof, with others, have the
non-exclusive right to use, subject to other provisions hereof, the parking
facilities of the Shopping Center for the accommodation and parking of such
automobiles of the 

 

11

 

Tenant, its
officers, agents and employees, and its customers while shopping in the
Shopping Center.

 

The Tenant agrees
to cause its officers, agents, employees, contractors, licensees and
concessionaires to park their cars only on such areas as the Landlord may from
time to time designate as employee parking areas, and such employee parking
areas may be located outside of the entire Shopping Center development,
provided the same shall be within a reasonable distance of the Shopping
Center.  The Tenant shall furnish to the
Landlord, within five (5) days following the request of the Landlord
therefor, the automobile license numbers of the vehicles customarily used by
the Tenant and the Tenant’s officers, agents, employees, contractors, licensees
and concessionaires.  If any officer,
employee, agent, contractor, licensee or concessionaire of the Tenant shall
park his or her car other than in designated employee parking areas, the
Landlord shall have the right and privilege to have any such car towed away at
the Tenant’s expense.

 

With respect to
the enclosed malls, the same shall be maintained (including lighting) by Landlord
in a reasonably neat and clean condition throughout the term of this lease,
reasonably heated when required, and reasonably air conditioned when
required.  Landlord may at any time close
temporarily the common areas (including, without limitation, the parking
facilities and roadways) or any portion thereof to make repairs or changes to
prevent the acquisition of public rights therein, or to discourage noncustomer
parking, and may do such other acts in and to the common areas as in its
judgment may be desirable to improve the convenience thereof.

 

Section 8.2. The Landlord shall, as aforesaid,
maintain and repair the Shopping Center common areas and parking facilities
intended to service the demised premises; and Tenant agrees to pay to the
Landlord, on account of the Tenant’s share of the costs and expenses relating
thereto, as additional rent, an amount initially equal to $31,050.00
(calculated, as agreed upon, by multiplying the 1,500 sq. ft. floor area of the
demised premises set forth in Section 2.1 above by $18, and then adding to
that product 15% thereof as an administrative charge) per annum payable in
twelve equal, monthly installments on the first day of each and every month, in
advance, included within the term hereof, the first such payment to be made on
the term commencement date.  For any
fraction of a calendar month at the beginning or end of the term, the monthly
payment hereunder shall be prorated.  The
Tenant’s charge under this Section (the “Tenant’s Maintenance Charge”)
shall be subject to increase during each calendar year contained within the
term of this lease.  In that regard, on
the first January 1 included within the term of this lease (such date and
each ensuing anniversary thereof being referred to hereinafter, for the
purposes hereof, as a “Maintenance Charge Adjustment Date”), and on each
Maintenance Charge Adjustment Date thereafter during the term of this lease,
the Tenant’s Maintenance Charge shall be increased to an amount equal to one
hundred two percent (104%) of the annual (and corresponding monthly) amount
thereof then in effect immediately before the Maintenance Charge Adjustment
Date in question (for example, the annual Tenant’s Maintenance Charge for 2004
shall be ($31,050.00) (104%) = $32,292.00; the annual Tenant’s Maintenance
Charge for calendar year 2005 shall be ($32,292.00) (104%) = $33,583.68, etc.,
and each such increased figure shall then become the Tenant’s Maintenance
Charge and shall remain in effect until the next such Maintenance Charge
Adjustment Date.

 

12

 

Except for the
aforesaid Tenant’s Maintenance Charge, the Tenant shall not be required
hereunder to pay any charge to the Landlord on account of common area
maintenance.

 

ARTICLE IX.

Utilities

 

Section 9.1. 
The Tenant shall pay for all utilities consumed in the demised premises
from the date of delivery of possession thereof by the Landlord to the Tenant
through the end of the term of this lease, including, but not limited to, gas,
steam, water, electricity, sewer charges, and the like, including all utilities
necessary for heating and air conditioning the demised premises.  In the event that from time to time the
Landlord shall elect to, or contract to, supply any of such utilities
(including, for the purposes hereof, internet access, or other technology or
communication services) to the demised premises, the Tenant agrees to purchase
the same from the Landlord or the Landlord’s designees, provided the rate does
not exceed the rate which the Tenant would be required to pay to purchase the
same from the provider furnishing the same to the Shopping Center; and, in the
event that from time to time utility service(s) are available to the
Shopping Center in whole or in part from various or multiple providers, the
Landlord shall have the right to choose the provider(s) which from time to
time shall furnish such utility service(s) to the Shopping Center.

 

Section 9.2. 
The Landlord has provided and installed a sprinkler main to the demised
premises.  The Tenant agrees to pay
monthly, in advance on the first day of each calendar month, as additional
rental, an amount equal to one-twelfth (1/12) of the product of the
per-square-foot charge specified in Section 1.1 hereof and the square
footage of floor area of the demised premises specified in Section 2.1
hereof, and proportionately at such rate for any partial month.  Any modifications or additions required to
the portion of the existing sprinkler system serving the demised premises will
be at the Tenant’s sole cost and expense.

 

ARTICLE X.

Use of Premises

 

Section 10.1. 
It is understood, and the Tenant so agrees, that the demised premises
during the term of this lease shall be used and occupied by the Tenant only for
the purposes specified as the use thereof in Section 1.1 of this lease,
and for no other purpose or purposes. 
Moreover, the Tenant always shall conduct its business operations in the
demised premises in a fashion consistent in all respects with the image of a
first-class retail operation located in a first-class regional enclosed mall
shopping center.  Further, without in any
manner enlarging upon (and notwithstanding) the permitted use specified in Section 1.1,
the Tenant agrees to comply with the use restrictions and all provisions set
forth in Exhibit “C” hereto annexed and made a part hereof.

 

Section 10.2. 
The Tenant further agrees to conform to the following provisions during
the entire term of this lease:

 

13

 

(a)           The Tenant shall always conduct its operations
in the demised premises under its present trade name set forth in Section 1.1,
or such other trade name to which all or substantially all then existing “Vitamin
World” retail operations are changed provided that such trade name will not
conflict with the trade name of any other tenant of the Shopping Center;

 

(b)           No sales or promotions may be
conducted within the demised premises other than in the normal course of the
Tenant’s continuing business operations therein. Without limiting the
generality of the foregoing, no auction, fire, bankruptcy, “lost our lease” or “going
out of business sales” (or the like, however denominated) may be conducted
within the demised premises.  The Tenant
shall display, sell and advertise only first-quality merchandise and not any
seconds or damaged goods, and shall never conduct any “outlet”, warehouse or
like discount operations, in or from the demised premises;

 

(c)           The Tenant shall not use any area
outside of the demised premises, including, without limitation, the malls or
sidewalks adjacent to the demised premises or the recessed vestibules, if any,
of the demised premises for business purposes (including, without limitation,
the sale or display of merchandise or the distribution of handbills or
advertising of any type).  Without
limitation, the Tenant shall conduct business in the demised premises in such
manner that the Tenant’s customers and invitees shall not collect, line up or
linger outside of the demised premises;

 

(d)           The Tenant shall keep the display
windows of the demised premises clean and shall keep the same electrically
lighted during such periods of time as windows throughout a major portion of
the Shopping Center development are kept lighted, and for this purpose shall
install and maintain a mechanical time-clock. 
In no event shall Tenant place advertisements relating to internet
shopping in the display windows of the demised premises or redirect sales from
the demised premises to an internet website;

 

(e)           The Tenant shall receive and deliver
goods and merchandise only in the manner, at such times, and in such areas, as
may be designated by the Landlord; and all trash, refuse, and the like, shall
be kept in covered metal cans (or other customary, suitable and adequate
containers), which metal cans (or other such containers) shall be kept within
the demised premises at all times, and in no event stored outside of the
same.  All trash, refuse and the like
shall be separated and otherwise be disposed of as required by applicable
law.  The Tenant agrees to fully
cooperate with the Landlord in any recycling programs instituted by the
Landlord.  If provision is made by the
Landlord for trash removal by a contractor 

 

14

 

(and/or the
purchase or rental of compactors or dumpsters, or both), the Tenant agrees to
use said contractor, etc., for its trash removal and to pay when due all
charges at the rates established therefor from time to time provided such rates
are reasonably competitive for similar services in the area.  If the Tenant fails so to pay for trash
removal, the Landlord shall have the same remedies (even if such payment is due
to such contractor and not to the Landlord) as the Landlord has for nonpayment
of rent hereunder;

 

(f)            The Tenant shall not place on the
exterior of the demised premises any signs (including, but without limitation,
any signage on interior and exterior surfaces of windows, doors, and entrance
lobbies, and storefront area signs facing and visible from the enclosed mall –
all of which are considered exterior signage for the purposes of this clause),
including replacements thereof, other than those which shall first have been
approved by the Landlord.  The aforesaid
signs initially desired by the Tenant shall be indicated in the Tenant’s plans
and specifications to be submitted to the Landlord for approval and no signs
not so approved shall ever be placed as aforesaid.  All interior signs must be professionally
prepared and shall be reasonably limited in number;

 

(g)           The Tenant shall not perform any act
or carry on any practice which may injure the demised premises or any other
part of the Shopping Center, or cause any offensive odors or vibrations or loud
noises (including, but without limitation, the use of loudspeakers), or
constitute a nuisance or menace to any other occupant or other persons in the
Shopping Center, and in no event shall any such noises, vibrations or odors be
emitted from the demised premises;

 

(h)           The demised premises (as well as all
doors and entryways thereto) shall be kept open for business at least during
the following:  (i) twelve (12)
hours per day six days a week as designated by the Landlord (and on Sundays and
holidays, and seasonal sales periods, for the number of hours designated by the
Landlord) provided (and to the extent) that at least 50% of the non-Major Store
tenants in the mall building of the Shopping Center are likewise required to
keep open or do in fact keep open for such days and hours, but in no event a
greater number of hours than that permitted by then applicable law; and (ii) such
other periods of time that at least one (1) of the so-called “anchor”
stores is open for business;

 

(i)            The Tenant shall at all times keep
the demised premises fully and adequately stocked and fixtured, so as to promote
and facilitate maximum sales.  The Tenant
shall devote the maximum possible floor area of the demised premises (and in
any event not less than eighty percent (80%) of such floor area) to selling
space, and shall not use any portion of the

 

15

 

demised premises
for storage or other services, except for its operations in the demised
premises;

 

(j)            The Tenant shall at all times fully
and adequately heat and/or air-condition (as the circumstances require) the demised
premises and shall at all times abide by all so-called “energy” rules and
regulations prescribed by public authorities from time to time.  In no event shall the Tenant in any manner “bleed”
from the heating or air-conditioning provided for the enclosed malls;

 

(k)           The Tenant and its employees of the
demised premises will participate as reasonably requested from time to time by
the Landlord or its mall manager in fire/safety evacuation drills;

 

(l)            The Tenant shall at all times
provide handicap access to and through the demised premises in accordance with
all applicable laws (including the Americans With Disabilities Act) and
ordinances, and in accordance with all directions, rules and regulations
of the building inspector and other proper officials of governmental agencies
having jurisdiction thereof;

 

(m)          The Tenant shall employ throughout the
term of this lease a full staff in the demised premises in order properly to
conduct business, including a qualified store manager to manage and control the
operations of the demised premises.  The
Tenant shall furnish the Landlord’s mall manager with the name, address and
telephone number of such store manager of the demised premises, so that the
Landlord will, at all times, be able to contact the store manager of the
demised premises;

 

(n)           The Tenant shall not use, transport,
handle, store, release, discharge or otherwise dispose of any oil, hazardous or
toxic materials or hazardous or toxic wastes in or about the Shopping
Center.  The foregoing shall constitute a
continuing warranty and covenant which shall survive the expiration of the term
of this lease; and

 

(o)           The Tenant agrees that it and its
employees and others connected with the Tenant’s operations at the demised
premises will abide by all reasonable rules and regulations from time to
time established by the Landlord by written notice to the Tenant with respect
to such Shopping Center.

 

The Tenant
acknowledges that the foregoing obligations are material inducements to the
Landlord to enter into this lease, and in the event the Tenant defaults therein
the Landlord shall have all remedies available at law or in equity including,
without limitation, the right to terminate this lease as provided in ARTICLE XX
hereof.

 

16

 

Section 10.3. 
Notwithstanding any other provisions of this lease, the Tenant covenants
and agrees that it will not assign this lease or sublet (which term, without
limitation, shall include the granting of concessions, licenses, and the like)
the whole or any part of the demised premises without in each instance having
first received the express written consent of the Landlord.

 

In the event the
Tenant seeks the Landlord’s consent pursuant to this Section 10.3, the
Tenant shall furnish the Landlord with such information regarding the
prospective assignee or sublessee as the Landlord may require, including
without limitation information regarding financial ability and business
experience relating to the uses permitted hereunder.  Notwithstanding anything to the contrary in
this lease, except as specifically permitted pursuant to the following
provisions of this Section 10.3, the Landlord may in its sole discretion
withhold its consent to any proposed assignment or subletting.  In the case of any assignment or subletting,
including any case where the Landlord shall consent to such assignment or
subletting, the Tenant named herein (and any guarantor of the Tenant’s
obligations) shall remain fully liable for the obligations of the Tenant
hereunder, including, without limitation, the obligation to pay the rent and
other amounts provided under this lease; and the rights and interests of the
assignee or sublessee shall be subject to all of the terms and provisions of
this lease, and such assignee or sublessee shall have no greater rights,
irrespective of the format of the document of assignment or subletting, than
would be available to Tenant hereunder. 
The provisions of this Section 10.3 prohibiting assignment shall
not, however, be applicable to an assignment of this lease by the Tenant to its
wholly owned subsidiary or immediate controlling corporation (for such period
of time as such corporation remains such a subsidiary or such a controlling
corporation, respectively, it being agreed that the subsequent sale or transfer
of stock resulting in a change in voting control, or any other transaction(s) having
the overall effect that such corporation ceases to be such a subsidiary or such
a controlling corporation, respectively, of the Tenant, shall be treated as if
such sale or transfer or transaction(s) were, for all purposes, an
assignment of this lease governed by the provisions of this Section 10.3),
provided (and it shall be a condition of the validity of any such assignment)
that such wholly owned subsidiary or such immediate controlling corporation
first agree directly with the Landlord to be bound by all of the obligations of
the Tenant hereunder, including, without limitation,  the obligation to pay the rent and other amounts
provided for under this lease, the covenant to use the demised premises only
for the purposes specifically permitted under this lease and the covenant
against further assignment; but, as aforesaid, such assignment shall not
relieve the Tenant (or any guarantor) herein named of any of its obligations
hereunder, and the Tenant (and any guarantor) shall remain fully liable
therefor.

 

For the purposes
of this lease, the entering into of any management agreement or any agreement
in the nature thereof transferring control or any substantial percentage of the
profits and losses from the business operations of the Tenant in the demised
premises to a person or entity other than the Tenant, or otherwise having
substantially the same effect, shall be treated for all purposes as an
assignment of this lease and shall be governed by the provisions of this Section 10.3.  In addition, for the purposes of this lease,
the sale or transfer (which term shall include, without limitation, the
exchange, issuance and redemption) of twenty-five percent (25%) or more, or
such smaller

 

17

 

percentage as
would result in a change in the voting control, of the voting stock of the
Tenant (if the Tenant is a corporation), the voting stock of any corporate
general partner of the Tenant (if the Tenant is a partnership), the voting
stock of any corporate guarantor of the Tenant (whether or not specified in Section 1.1
hereof), or the voting stock of any immediate or remote controlling corporation
of the Tenant (whether such sale or transfer occurs at one time or at intervals
so that, in the aggregate, over the term of this lease, such transfer shall
have occurred), or any other transaction(s) overall having the effect of a
change in voting control or substantially the same effect if the entity in
question is not a corporation (such as, without limitation, a change in the
number or the identity of partners of a partnership or of beneficiaries of a
trust), shall be treated as if such sale or transfer or transaction(s) were,
for all purposes, an assignment of this lease and shall be governed by the
provisions of this Section 10.3.

 

In the event the
Tenant assigns this lease (which term shall include the entering into of any
management or similar control transferring agreement, and also shall include
the sale or transfer of stock or a change in control, as aforesaid) or sublets
the whole or any part of the demised premises (other than as expressly
hereinabove permitted to its wholly owned subsidiary or its immediate
controlling corporation or with the Landlord’s prior written consent), in
addition to and without limiting any of the Landlord’s rights and remedies on
account of the resulting default hereunder by the Tenant, the Landlord shall
have the right, without regard to whether the Landlord’s withholding its
consent to such assignment or subletting would be construed to be unreasonable,
to terminate this lease by giving the Tenant notice of the Landlord’s desire so
to do, in which event this lease shall terminate on the date specified by the
Landlord in such notice all as if such date were the natural expiration date of
the term.  In the event of any assignment
or subletting (other than as expressly hereinabove permitted to a wholly owned
subsidiary or immediate controlling corporation of the Tenant), the minimum
rent shall be adjusted for the balance of the term of this lease such that the
minimum rent payable hereunder shall thereafter be equal to the sum of (i) the
greater of (a) the annual minimum rent specified in Section 1.1 of
this lease and (b) the annual minimum rent payable pursuant to such
assignment or sublease, plus (ii) the highest of the amounts of the annual
percentage rent payable hereunder for and with respect to any of the then last
three (3) full lease-years preceding the assignment or subletting; and, in
addition, any lump sum or installment payments for the leasehold payable by
such assignee or sublessee shall be payable directly to the Landlord and not to
the Tenant.  As aforesaid, the fact that
Landlord shall consent to any such assignment or subletting shall not be deemed
to waive the requirement of Landlord’s consent to any future assignment or
subletting.

 

Without limiting
or otherwise derogating from the foregoing or any other provisions herein
contained, in the event that the Tenant (or any guarantor of the obligations of
the Tenant under this lease) consolidates or merges into any other firm or
corporation, or if the Tenant (or any such guarantor) sells a majority of its
assets or the division (subsidiary, company or entity) occupying the demised
premises or otherwise holding the interest of the Tenant under this lease, to
any person, firm or corporation, then and in any such event the Tenant (and any
such guarantor) hereby agrees timely to notify the Landlord thereof and, at the
Landlord’s election, promptly to deliver to the Landlord an assumption
agreement or guaranty (or both, as the case may be) duly executed by and

 

18

 

on behalf of each
of the merged or consolidated or acquiring successor or purchasing entity or
entities, agreeing to assume performance and be bound by all of the obligations
of the Tenant (and any such guarantor) under the terms, conditions and
provisions of this lease, together with appropriate corporate or like
certificates or resolutions confirming the authority and incumbency of the
signatories.  As aforesaid, any such
transaction and the validity thereof shall be governed by the foregoing
provisions of this Section 10.3 and, without limitation, notwithstanding
any such transaction and any such assumption, the Tenant (and any such
guarantor of its obligations under this lease) shall continue and remain fully
liable hereunder.

 

Notwithstanding
the foregoing provisions of this Section 10.3:

 

(a)           whenever the Tenant is a corporation,
the foregoing provisions treating a transfer of a controlling interest in the
Tenant’s voting stock as an assignment for the purposes of this lease shall not
apply to the transaction by which the Tenant becomes, or to the public trading
in the marketplace of the Tenant’s voting stock while the Tenant remains, a
so-called reporting public corporation under the provisions of the Securities
Exchange Act of 1934, as amended, the outstanding voting stock of which is
registered in accordance with the provisions of the Securities Act of 1933, as
amended, and actively traded on the New York Stock Exchange or another
recognized, national securities exchange (and for the purposes hereof, the term
“voting stock” shall refer to shares of stock regularly entitled to vote for
the election of directors of the corporation); and

 

(b)           in the event that all of the Vitamin
World operations (then including at least 100 retail stores) are being sold at
arm’s-length and tranferred to another entity by way of merger, consolidation
or sale of all or substantially all of the stock therein or assets thereof,
then the Landlord will not unreasonably withhold consent to an assignment of
this lease to such resulting or acquiring entity, provided (and it shall be a
condition of the validity of any such assignment), without limitation,
that:  (i) such entity shall first
agree directly with Landlord to be bound by all of the obligations of Tenant
hereunder, including, without limitation, the obligations to pay the rent and
other charges provided for under this lease, and the covenant against further
assignment; (ii) such assignment shall not relieve the Tenant herein named
of any of its obligations hereunder, and the Tenant shall remain fully liable
therefor; and (iii) Tenant shall furnish Landlord with such information
regarding such entity as Landlord may reasonably require confirming to Landlord’s
reasonable satisfaction that such entity then (x) has the financial
strength and capacity, including good creditworthiness and sufficient net
worth, necessary in order successfully to carry on such business and, without
limitation, to pay all rent and charges hereunder, (y) is acquiring said
operations as part of a combined and going business operation, and (z) has
a management team with the successful retail business experience and good
reputation necessary to and will conduct the business permitted hereunder in a
manner consistent in all material respects with the high quality of the Tenant
herein named and executing this lease and all provisions of this lease.

 

19

 

ARTICLE XI.

Other Stores

 

Section 11.1. 
In recognition of the facts that several leases (including this lease)
of space in the Shopping Center provide for a percentage rent based upon sales
made and that it is anticipated that the Tenant’s operations in the demised
premises will contribute to attracting shoppers, the Tenant covenants and
agrees (insofar as and to the extent that it is lawful so to agree) that for
the period commencing with the execution of this lease and continuing for the
full term of this lease, none of the Tenant, any guarantor or principal of or
partner in the Tenant, any of their affiliated, parent, or subsidiary
companies, or any franchisor (or licensor) or franchisee (or licensee) of any
of them, will operate, either directly or indirectly, another store (including
a department or concession in another store) of any kind, nature or description
(other than stores, departments, or concessions presently being operated by it
or them) within a reasonable area of the demised premises, without the prior
written consent of the Landlord, the Tenant acknowledging that the area within
a circle having as its center the demised premises and having a radius of one (1) mile
is a reasonable area for this purpose. 
In addition to any other remedy otherwise available to the Landlord for
breach of this covenant, it is specifically agreed that the Landlord may at the
Landlord’s election require that any and all sales made in or from any such
other store be included in the computation of the percentage rent due
hereunder, with the same force and effect as though such sales had actually
been made in or from the demised premises.

 

ARTICLE XII.

Promotional or
Marketing Fund

 

Section 12.1. 
[Intentionally Omitted.]

 

Section 12.2. 
The Tenant shall fully cooperate with the other tenants and occupants of
the Shopping Center in promoting the use of such trade names and slogans as
may, from time to time, be adopted for the Shopping Center and in all marketing
and advertising campaigns.  The Tenant
agrees that it shall pay to the Landlord, as the Tenant’s contribution to the
Landlord’s promotional or marketing fund (the “Promotional Fund”) as additional
rent, a sum (the “Promotional Charge”) initially equal to the Promotional
Charge specified in Section 1.1 hereof, payable on the first day of each
and every month, in advance, included within the term hereof, the first such
payment to be made on the commencement of the term hereof.  For any fraction of a month at the
commencement or expiration of the term, the monthly payment of the Tenant’s
Promotional Charge shall be prorated. 
The Landlord agrees that the Promotional Fund will be used for
advertising, promotion, public relations and administrative expenses
(including, without limitation, the salaries of any marketing personnel)
relating to the promotion of the Shopping Center, as the Landlord determines;
but the Landlord shall not be responsible to account therefor to the
Tenant.  Without limiting the generality
of the foregoing, the Landlord shall have the right to utilize the Promotional
Fund for the costs of circulars and other publications, as well as electronic
or other advertising media, and the Tenant agrees, upon request from the
Landlord, to furnish suitable advertising material for such purposes.  Any advertisements, circulars or other
promotions need not make specific reference to any one or more occupants of the
Shopping Center, but may advertise the Shopping Center generally or specific
portions therein or occupants of such 

 

20

 

portions. It is
understood and agreed that the Tenant’s Promotional Charge shall be subject to
increase for each lease-year after the first lease-year included within the
term of this lease. In that regard, on the first February 1 included within the
term of this lease (such date and each ensuing anniversary thereof being
referred to hereinafter as a “Promotional Adjustment Date”), and on each
Promotional Adjustment Date thereafter during the term of this lease, the
Tenant’s Promotional Charge shall be increased to an amount equal to one
hundred three percent (103%) of the Tenant’s Promotional Charge for and with
respect to the then immediately preceding lease-year, and each such increased
figure shall then become the Tenant’s Promotional Charge and shall remain in
effect until the next Promotional Adjustment Date. As an illustration, the
Tenant’s Promotional Charge during the second lease-year (2/1/04 – 1/31/05)
shall be $214.58 per month (being 103% of the Tenant’s Initial Promotional
Charge), and the Tenant’s Promotional Charge during the third lease-year
(2/1/05 – 1/31/06) shall be $221.02 per month (being 103% of the Tenant’s
Promotional Charge during the second lease-year).

 

At present, there is an
existing Merchants Association established at Warwick Mall.  In order properly to “meld” the Promotional
Fund with the activities of said Association, it is understood and agreed that
Landlord may use the Promotional Fund, in whole or in part, as a contribution
to the activities of said Association; but the same shall be at the sole option
of the Landlord.  It is understood and
agreed that if the Landlord shall elect, the Landlord may replace the
Promotional Fund with an Association in order to carry out the activities
formerly carried out by the Promotional Fund. 
In such event, the Tenant shall immediately join such Association and
maintain membership therein.  In addition
thereto, the Tenant shall pay to the Association a sum equal to that which the
Tenant would have paid to the Landlord for the Tenant’s Promotional Charge if
the Promotional Fund had remained in existence. 
If such Association shall replace the Promotional Fund or if the Promotional
Fund shall be an independent entity, it is understood and agreed that, if the
Tenant shall fail to pay the dues and assessments to the Association, or if the
Tenant shall fail to pay the Promotional Charge to such an independent
Promotional Fund, as above provided, the Landlord shall have the same rights
granted to the Landlord under this lease for the non-payment of rent or other
charges, even though such dues or assessments may be payable to such
Association or the Tenant’s Promotional Charge may be payable to another
entity.

 

ARTICLE XIII.

Maintenance of
Building, Etc.

 

Section 13.1. 
Other than as provided below in this Section, the Landlord agrees to
keep in good order, condition, and repair foundations and structural portions
of the demised premises to the extent, but only to the extent, originally
constructed by the Landlord (except glass and glass windows and doors and the
so-called store front, irrespective of which party installed the same), except
for any damage thereto caused by any act or negligence of the Tenant, its
employees, agents, licensees, or contractors. 
The Landlord shall not be responsible to make any other improvements or
repairs of any kind upon the demised premises, except as provided in ARTICLES
XVII and XVIII hereof.  The provisions of
this Section shall not diminish the obligations of Tenant under or 

 

21

 

otherwise affect
the provisions of ARTICLE VIII above relative to common expenses and charges.

 

Section 13.2. 
Except as specifically herein otherwise provided, the Tenant agrees that
from and after the date that possession of the demised premises is delivered to
the Tenant, and continuously thereafter until the end of the term hereof, it
will keep neat and clean and maintain in good order, condition and repair, the
demised premises and every part thereof, including, without limitation, the
store front and the exterior and interior portions of all doors, windows, plate
glass and showcases surrounding the demised premises, all plumbing and sewage
facilities within the demised premises, fixtures and interior walls, floors,
ceilings, signs (including exterior signs where permitted), and all wiring,
electrical systems, interior building appliances, HVAC systems and equipment, and
similar equipment.  With respect to the
HVAC system and equipment, the Tenant specifically agrees to maintain at all
times during the term of this lease the usual service contract with respect
thereto, furnishing evidence thereof (including renewals) to the Landlord.  The Tenant shall, at the Tenant’s expense,
repaint, refurbish, and remodel the demised premises and any part and portion
thereof from time to time to assure that the same are kept in a first-class,
tenantable, and attractive condition throughout the term of this lease.  There is excepted from this paragraph,
however, damage to such portions of the demised premises originally constructed
by the Landlord as Landlord is required to repair pursuant to the provisions of
ARTICLE XVII hereof.  The Tenant further
agrees that it shall so keep the demised premises, including all areas and
facilities thereof and all such HVAC and other systems and equipment serving
the demised premises, in a clean, sanitary and safe condition in accordance and
shall in all respects comply with the laws of the United States of America and
of the State of Rhode Island and ordinances of the City of Warwick and in
accordance with all directions, rules, and regulations of the Health Officer,
Fire Marshal, Building Inspector, and other proper officers of the governmental
agencies having jurisdiction thereover. 
The Tenant shall not permit or commit any waste.

 

Section 13.3. 
The Tenant shall not make any alterations, improvements and/or additions
to the demised premises (except as initially required by the terms of ARTICLE
VI of this lease) without first obtaining, in each instance, the written
consent of the Landlord, except that the Tenant may make non-structural
alterations to the interior thereof but not affecting the storefront or any of
the mechanical or utility systems costing no more than $10,000.00 provided that
the Tenant shall first give written notice to the Landlord specifying the
proposed alterations, the commencement and approximate completion dates
thereof; and in any event any such alterations by Tenant shall be made in
accordance with all applicable laws and in a good and first-class, workmanlike
manner and in accordance with this lease including the remodelling provisions
set forth in the first paragraph of Section 6.2 (to the full extent
applicable) and the provisions of Exhibit “B”.  Any and all alterations, additions,
improvements, and fixtures which may be made or installed by either the
Landlord or the Tenant upon the demised premises and which in any manner are
attached to the floors, walls or ceilings (including, without limitation, any
linoleum or other floor covering of similar character which may be cemented or
otherwise adhesively affixed to the floor, and any electrical, plumbing,
heating, ventilating and/or air-conditioning systems and equipment) shall
remain upon the demised premises, and at the termination of this lease shall be
surrendered with the demised premises as a part 

 

22

 

thereof without
disturbance, molestation or injury. 
However, the usual trade fixtures and furniture which may be installed
in the demised premises prior to or during the term hereof at the cost of the
Tenant may be removed by the Tenant from the demised premises upon the termination
of this lease if, but only if, the Tenant is not then in default
hereunder.  Further, the Tenant covenants
and agrees, at its own cost and expense, to repair any and all damage to the
demised premises resulting from or caused by such removal.  In no event shall the Tenant be entitled to
remove any building components, including, but without limitation, the HVAC
system, plumbing system, electrical system (including light fixtures and bulbs)
and security gate(s) (if any).  The
demised premises shall be delivered to Landlord at the expiration or earlier
termination of this lease in a broom-clean condition and otherwise in the
condition in which the same are to be maintained by the Tenant under this lease
(that is, in the condition as improved by the Tenant in accordance with the
foregoing provisions of ARTICLES III and VI and of this ARTICLE XIII,
reasonable wear and tear permitted provided that the same always are maintained
by the Tenant in the condition required by the foregoing provisions of this ARTICLE
XIII); and at such expiration or earlier termination any and all property of
Tenant which has not been removed by Tenant shall be deemed abandoned by Tenant
and shall become Landlord’s exclusive property or may be disposed of by
Landlord, at Landlord’s option and at Tenant’s cost and expense, without
further notice or demand to Tenant and without any requirement to account for
the same to or any other liability to or recourse by Tenant or anyone claiming
by, through or under Tenant.

 

ARTICLE XIV.

Indemnity and
Liability Insurance

 

Section 14.1. 
The Tenant agrees to indemnify, defend with counsel acceptable to
Landlord, and save harmless the Landlord from and against all claims of
whatever nature, including without limitation any violation of law and any
breach of the Tenant’s covenants or obligations set forth in this lease,
arising from any act, omission or negligence of the Tenant, or the Tenant’s
contractors, licensees, agents, servants, or employees, or arising from any
accident, injury, or damage whatsoever caused to any person, or to the property
of any person occurring from and after the date that possession of the demised
premises is delivered to the Tenant and until the end of the term hereof in or
about the Tenant’s demised premises, or arising from any accident, injury or
damage occurring outside of the demised premises but within the Shopping
Center, where such accident, damage or injury results or is claimed to have
resulted from an act or omission on the part of the Tenant or the Tenant’s agents
or employees and/or from the bursting, stopping or leaking of water, gas,
sprinkler, sewer or steam pipes which are the responsibility of the Tenant to
maintain or repair under the provisions of ARTICLE XIII hereof.  This indemnity and hold harmless agreement
shall include indemnity against all costs, expenses and liabilities incurred in
or in connection with any such claim or proceeding brought thereon, and the
defense thereof.

 

Section 14.2. 
Tenant agrees to maintain in full force, with respect to all occurrences
from and after the date that possession of the demised premises is delivered to
Tenant and until the end of the term hereof, a broad form policy of commercial
general 

 

23

 

liability
insurance (or the then successor equivalent from time to time), without any
so-called employee exclusion or the like, and otherwise in the broadest and
most comprehensive commercial form then generally available from time to time,
under which the Landlord (and such other persons as are in privity of estate
with the Landlord as may be set out in notice from time to time) is named
additional insured (on a primary basis) and the Tenant is named primary
insured, and under which the insurer agrees to indemnify and hold the Landlord
and those in privity of estate with the Landlord harmless from and against all
cost, expense and/or liability arising out of or based upon any and all claims,
accidents, injuries, and damages mentioned in Section 14.1 of this ARTICLE
XIV.  Without limitation, if any beer,
wine or other alcoholic beverages are to be sold, served or dispensed (but none
of the same shall be sold, served or dispensed unless expressly permitted by
the terms of this lease), or if otherwise appropriate, such insurance also
shall include (by endorsement or separate policy) the broadest so-called dram
shop or innkeeper’s liability insurance from time to time available.  Each such policy shall be written by a
reputable and financially sound (i.e., having an AVII or better financial
rating from A.M. Best’s Insurance Rating Service, or its then successor
equivalent from time to time), duly licensed and admitted insurance company and
non-cancelable with respect to the Landlord and the Landlord’s said designees
without thirty (30) days’ prior written notice to the Landlord, and a duplicate
original or certificate thereof shall be delivered to the Landlord.  The minimum limits of liability per
occurrence in or about the Shopping Center of such insurance shall be
$5,000,000.00 combined single limit, or such higher limits as Landlord may from
time to time request, provided such higher limits are then customarily carried
by national retail tenants of first-class regional shopping centers.

 

Section 14.3. 
The Tenant agrees to use and occupy the demised premises and to use such
other portions of the Shopping Center as it is herein given the right to use at
its own risk; and that the Landlord shall have no responsibility or liability
for any loss of or damage to the Tenant’s leasehold improvements or to fixtures
or other personal property of the Tenant or those claiming by, through or under
the Tenant.  The provisions of this Section shall
apply during the whole of the term hereof, and in view of the permission given
to the Tenant to install fixtures and do certain work prior to the commencement
of the term hereof, shall also apply at all times prior to the commencement of
the term hereof.

 

Section 14.4. 
The Tenant agrees that the Landlord shall not be responsible or liable
to the Tenant, or to those claiming by, through or under the Tenant, for any
loss or damage that may be occasioned by or through the acts or omissions of
persons occupying adjoining premises or any part of the premises adjacent to or
connecting with the demised premises or any of the buildings on the Shopping
Center, or otherwise, or for any loss or damage resulting to the Tenant or
those claiming by, through or under the Tenant, or its or their property, from
the bursting, stopping or leaking of water, gas, sprinkler, sewer or steam
pipes.

 

Section 14.5. Subject only to the provisions of the
foregoing Section 14.3 with respect to loss of or damage to property of
Tenant and those claiming by, through or under Tenant and the mutual waiver and
non-subrogation provisions of Section 16.2 below with respect to items
covered by property insurance, nothing contained in the foregoing provisions of
this ARTICLE XIV or elsewhere in this lease shall be construed

 

24

 

as indemnifying
Landlord against, or releasing Landlord from, liability for bodily injury or
property damage arising from the negligent or willful act or omission of
Landlord, its agents and employees (and not of Tenant, its agents or
employees).

 

ARTICLE XV.

Landlord’s Access
to Premises

 

Section 15.1. 
The Landlord and his designees shall have the right, upon reasonable
prior written notice to the Tenant (which notice shall not be required in the
event of an emergency),  to enter upon
the demised premises at all reasonable hours for the purpose of inspecting or
making repairs to the same.  If repairs
are required to be made by the Tenant pursuant to the terms hereof or if the
Tenant is required to perform any other obligation under this lease, the
Landlord may demand that the Tenant make such repairs or perform such
obligation forthwith, and if the Tenant refuses or neglects to commence such
repairs or performance and complete the same with reasonable dispatch, after
such demand, the Landlord may (but shall not be required so to) make or cause
such repairs or performance to be done and shall not be responsible to the
Tenant for any loss or damage that may accrue to its stock or business by
reason thereof.  If the Landlord makes or
causes such repairs or performance to be done, or endeavors so to do, the
Tenant agrees that it will forthwith, on demand, pay to the Landlord the cost
thus incurred, and if the Tenant shall default in such payment, the Landlord
shall have the remedies provided in ARTICLE XX hereof.

 

Section 15.2. 
For a period commencing upon the expiration or earlier termination of
the term of this lease, the Landlord may install on the demised premises a “for
rent” sign; and at all times the Landlord may have reasonable access to the
demised premises for the purpose of exhibiting the same to prospective tenants.

 

ARTICLE XVI.

Insurance

 

Section 16.1. 
The Landlord shall keep the demised premises insured against loss or
damage by fire, with the usual extended coverage endorsements and such other
insurance as from time to time the then holder of the first mortgage which
includes the demised premises shall require or the Landlord otherwise shall
deem advisable, in amounts not less than eighty percent (80%) of the full
insurable value thereof above foundation walls or such greater amounts as the
Landlord shall deem advisable, and with such deductibles as the Landlord shall
deem advisable, but specifically excluding any property or improvements
installed by or belonging to the Tenant.

 

Section 16.2. 
The Tenant also agrees that it shall continuously keep its fixtures,
merchandise and equipment and other personal property from time to time located
in, on or about the demised premises, and all leasehold improvements to the
demised premises constructed or installed by the Tenant, insured under a policy
or policies naming the Landlord (and such other persons as are in privity of
estate with the Landlord as may be set out in notice from time to time) as an
additional insured and the Tenant as primary insured, written by reputable and
financially sound (as aforesaid), duly licensed insurance

 

25

 

companies, against
loss or damage by fire with the usual all risk of physical loss endorsements
(or the then successor equivalent from time to time) in amounts equal to the
full replacement cost thereof.  Prior to
the Commencement Date, and at any other time upon the request of the Landlord,
the Tenant shall furnish to the Landlord evidence of such continuous insurance
coverage satisfactory to the Landlord. 
It is understood and agreed that the Tenant assumes all risk of damage
to its own property arising from any cause whatsoever, including, without
limitation, loss by theft or otherwise.

 

Section 16.3. 
Insofar as and to the extent that the following provision may be
effective without invalidating or making it impossible to secure insurance
coverage obtainable from responsible insurance companies doing business in the
State of Rhode Island (even though extra premium may result therefrom):  the Landlord and the Tenant mutually agree
that with respect to any loss which is covered by insurance then being carried
by them, respectively, the one carrying such insurance and suffering said loss
releases the other of and from any and all claims with respect to such loss;
and they further mutually agree that their respective insurance companies shall
have no right of subrogation against the other on account thereof.  In the event that extra premium is payable by
either party as a result of this provision, the other party shall reimburse the
party paying such premium the amount of such extra premium.  If, at the written request of one party, this
release and non-subrogation provision is waived, then the obligation of reimbursement
shall cease for such period of time as such waiver shall be effective, but
nothing contained in this Section shall be deemed to modify or otherwise
affect releases elsewhere herein contained of either party for claims.

 

Section 16.4. 
The Tenant covenants and agrees that it will not do or permit anything
to be done in or upon the demised premises or bring in anything or keep
anything therein, which shall increase the rate of insurance on the demised
premises or on the other buildings located on the Shopping Center above the
standard rate on said premises and buildings with a regular retail store
located in the demised premises; and the Tenant further agrees that in the
event it shall do any of the foregoing, it will promptly pay to the Landlord on
demand any such increase resulting therefrom, which shall be due and payable as
additional rent hereunder.

 

ARTICLE XVII.

Damage Clause

 

Section 17.1. 
In case the demised premises shall be partially damaged (as
distinguished from “substantially damaged”, as that term is hereinafter
defined) or so substantially damaged or destroyed by fire or other casualty,
the risk of which is covered by the Landlord’s insurance, this lease shall,
except as hereinafter provided, remain in full force and effect, and the
Landlord shall promptly after such damage and the determination of the net
amount of insurance proceeds available to the Landlord, expend so much as may
be necessary of such net amount to restore, to the extent originally
constructed by the Landlord (consistent, however, with zoning laws and building
codes then in existence), so much of the demised premises as was originally
constructed by the Landlord to substantially the condition in which such
portion of the demised premises was in at the time of such damage, except as
hereinafter provided, but the Landlord shall

 

26

 

not be responsible
for delay which may result from any cause beyond the reasonable control of the
Landlord.  Should the net amount of
insurance proceeds available to the Landlord be insufficient to cover the cost
of restoring the demised premises, in the reasonable estimate of the Landlord,
the Landlord may, but shall have no obligation to, supply the amount of such
insufficiency and restore the demised premises with all reasonable diligence or
the Landlord may terminate this lease by giving notice to the Tenant not later
than a reasonable time after the Landlord has determined the estimated net
amount of insurance proceeds available to the Landlord and the estimated cost
of such restoration.  In case of any
damage or destruction, as a result of a risk which is not covered by the
Landlord’s insurance, the Landlord shall likewise be obligated to rebuild the
demised premises, all as aforesaid, unless the Landlord, within a reasonable
time after the occurrence of such event, gives written notice to the Tenant of
the Landlord’s election to terminate this lease.  If the Landlord shall elect to terminate this
lease, as aforesaid, this lease and the term hereof shall cease and come to an
end as of the date of said damage or destruction.

 

Section 17.2. 
However, if the demised premises shall be substantially damaged or
destroyed by fire, windstorm, or otherwise within the last year of the term of
this lease, either party shall have the right to terminate this lease, provided
that notice thereof is given to the other party not later than sixty (60) days
after such damage or destruction.  If
said right of termination is exercised, this lease and the term hereof shall
cease and come to an end as of the date of said damage or destruction.

 

Section 17.3. 
Unless this lease is terminated as provided in Section 17.1, Section 17.2
or Section 17.5 of this ARTICLE XVII, if the demised premises shall be
damaged or destroyed by fire or other casualty, then the Tenant shall:  (i) repair and restore all portions of
the demised premises not required to be restored by the Landlord pursuant to
this ARTICLE XVII to substantially the condition which such portions of the
demised premises were in at the time of such casualty; (ii) equip the
demised premises with trade fixtures and all personal property necessary or
proper for the operation of the Tenant’s business; and (iii) open for
business in the demised premises - as soon thereafter as possible.

 

Section 17.4. 
In the event that the provisions of Section 17.1 of this ARTICLE
XVII shall become applicable, the minimum rent, and all other charges payable
by the Tenant hereunder except percentage rent and real estate taxes payable
pursuant to ARTICLES V and VII hereof, shall be abated or reduced
proportionately during any period in which, by reason of such damage or
destruction, there is substantial interference with the operation of the
business of the Tenant in the demised premises,having regard to the extent to
which the Tenant may be required to discontinue its business in the demised premises,
and such abatement or reduction shall continue for the period commencing with
such destruction or damage and ending upon the earlier of the completion by the
Landlord of such work of repair and/or reconstruction as the Landlord is
obligated to do or the reopening by Tenant for business in the demised
premises.  Nothing in this Section shall
be construed to abate or reduce percentage rent or real estate taxes.

 

Section 17.5. 
If, however, the Shopping Center shall be substantially damaged or
destroyed by fire or casualty, irrespective of whether or not the demised
premises are

 

27

 

damaged or
destroyed, the Landlord shall promptly restore, to the extent originally
constructed by the Landlord (consistent, however, with zoning laws and building
codes then in existence), so much of such Shopping Center as was originally
constructed by the Landlord to substantially the condition thereof at the time
of such damage, unless the Landlord, within a reasonable time after such loss,
gives notice to the Tenant of the Landlord’s election to terminate this
lease.  If the Landlord shall give such
notice, then anything in this ARTICLE XVII to the contrary notwithstanding this
lease shall terminate as of the date of such notice with the same force and
effect as if such date were the date originally established as the expiration
date hereof.

 

Section 17.6. 
The terms “substantially damaged” and “substantial damage”, as used in
this ARTICLE, shall have reference to damage of such a character as cannot
reasonably be expected to be repaired or the premises restored within sixty
(60) days from the time that such repair or restoration work would be
commenced.

 

ARTICLE XVIII.

Eminent Domain

 

Section 18.1. 
If the demised premises, or such portion thereof as to render the
balance (when reconstructed) unsuitable for the purposes of the Tenant in the
reasonable opinion of the Landlord and the Tenant, shall be taken by
condemnation or right of eminent domain, either party, upon written notice to
the other, shall be entitled to terminate this lease, provided that such notice
is given not later than thirty (30) days after the Tenant has been deprived of
possession.  For the purposes of this
ARTICLE, any deed or any transfer of title in lieu of any such taking shall be
treated as such a taking. Moreover, for the purposes of this ARTICLE, such a
taking of the Tenant’s entire leasehold interest hereunder in the demised
premises (or assignment or termination in lieu thereof) shall be treated as a
taking of the entire demised premises, and in such event the Tenant shall be
treated as having been deprived of possession on the effective date
thereof.  Should any part of the demised
premises be so taken or condemned, and should this lease not be terminated in
accordance with the foregoing provision, the Landlord covenants and agrees
within a reasonable time after such taking or condemnation, and the
determination of the Landlord’s award therein, to expend so much as may be
necessary of the net amount which may be awarded to the Landlord in such
condemnation proceedings in restoring the demised premises to an architectural
unit as nearly like their condition prior to such taking as shall be
practicable.  Should the net amount so
awarded to the Landlord be insufficient to cover the cost of restoring the
demised premises, as estimated by the Landlord’s architect, the Landlord may,
but shall not be obligated to, supply the amount of such insufficiency and
restore said premises as above provided, with all reasonable diligence, or
terminate this lease.  Where the Tenant
has not already exercised any right of termination accorded to it under the
foregoing portion of this paragraph, the Landlord shall notify the Tenant of
the Landlord’s election not later than ninety (90) days after the final
determination of the amount of the award. 
Further, if so much of the Shopping Center shall be so taken that
continued operation of the Shopping Center would be uneconomic in the Landlord’s
judgment or prohibited by zoning or other applicable law, the Landlord shall
have the right to terminate this lease by giving notice to the

 

28

 

Tenant of the
Landlord’s desire so to do not later than thirty (30) days after the effective
date of such taking.

 

Section 18.2. 
Out of any award for any taking of the demised premises (including,
without limitation, any taking of the Tenant’s leasehold interest as
aforesaid), in condemnation proceedings or by right of eminent domain, the
Landlord shall be entitled to receive and retain the amounts awarded for such
demised premises and for the Landlord’s business loss.  The Tenant shall be entitled to receive and
retain such amounts (if any) and only such amounts, as may be specifically
awarded to it in any such condemnation proceedings, because of the taking of
its trade fixtures or furniture and its leasehold improvements to the extent
Landlord’s award is not thereby reduced and the Tenant is not otherwise
reimbursed for the same by the Landlord.

 

Section 18.3. 
In the event of any such taking of the demised premises, the minimum
rent, and all other charges payable by the Tenant hereunder except percentage
rent and real estate taxes payable pursuant to ARTICLES V and VII hereof,  or a fair and just proportion thereof,
according to the nature and extent of the damage sustained, shall be suspended
or abated.

 

ARTICLE XIX.

Bankruptcy or
Insolvency

 

Section 19.1. 
If the Tenant shall become a debtor under the United States Bankruptcy
Code, 11 U.S.C. §§101 et seq. (the “Bankruptcy Code”) then, to the extent that
the Bankruptcy Code may be applicable or affect the provisions of this lease,
the following provisions shall also be applicable.  If the trustee or debtor-in-possession shall
fail to elect to assume this lease within sixty (60) days after the
commencement of a case under the Bankruptcy Code, this lease shall be deemed to
have been rejected; and the Landlord shall be thereafter immediately entitled
to possession of the demised premises and this lease shall be terminated
subject to and in accordance with the provisions of this lease and of law
(including such provisions for damages). 
No election to assume (and, if applicable to assign) this lease by the
trustee or debtor-in-possession shall be permitted or effective unless: (i) all
defaults shall have been cured and the Landlord shall have been provided with
adequate assurances reasonably satisfactory to the Landlord, including (a) any
reasonably required guaranties and/or security deposits, and (b) any other
reasonably required assurances that there will continue to be sufficient funds
and personnel available to professionally merchandise, stock, promote, staff
and operate the demised premises in strict compliance with all provisions of
this lease; and (ii) neither such assumption nor the operation of the
demised premises subsequent thereto shall, in the Landlord’s reasonable
judgment, cause or result in any breach or other violation of any provision of
this or any applicable lease, mortgage or other contract, or disrupt the tenant
mix of the Shopping Center; and (iii) the assumption and, if applicable,
the assignment of this lease satisfies in full the provisions of the Bankruptcy
Code, including, without limitation, Sections 365(b)(1) and (3) and
(f)(2); and (iv) the assumption has been ratified and approved by order of
such court or courts as have final jurisdiction over the Bankruptcy Code and
the case.  No assignment of this lease by
the trustee or debtor-in-possession shall be 

 

29

 

permitted or
effective unless the proposed assignee likewise shall have satisfied (i), (ii),
(iii) and (iv) of the preceding sentence regarding such assignment,
and any such assignment shall, without limitation, be subject to the provisions
of Section 10.3 hereof.  When
pursuant to the Bankruptcy Code the trustee or debtor-in-possession is
obligated to pay reasonable use and occupancy charges, such charges shall not
be less than the minimum rent and other charges specified herein to be payable
by the Tenant.  Neither the Tenant’s
interest or estate in the demised premises herein or created hereby nor any
lesser interest or estate of the Tenant shall pass to anyone under any law of
any state or jurisdiction without the prior written consent of the
Landlord.  In no event shall this lease,
if the term hereof has expired or has been terminated in accordance with the
provisions of this lease, be revived, and no stay or other proceedings shall nullify,
postpone or otherwise affect the expiration or earlier termination of the term
of this lease pursuant to the provisions of this ARTICLE XIX or ARTICLE XX
hereof, or prevent the Landlord from regaining possession of the demised
premises thereupon.

 

ARTICLE XX.

Landlord’s
Remedies

 

Section 20.1. 
Any one of the following shall be deemed to be an “Event of Default”:

 

A.  Failure on the part of the Tenant to make
payment of rent or any other monetary amount due under this lease within seven (7) days
after the Landlord has sent to the Tenant notice of such default.

 

However, if:  (i) the Landlord shall have sent to the
Tenant two (2) notices of such default, even though the same shall have
been cured and this lease not terminated; and (ii) during the same
calendar year in which said two (2) notices of default have been sent by
the Landlord to the Tenant, the Tenant thereafter shall default in any monetary
payment - the same shall be deemed to be an Event of Default upon the Landlord
giving the Tenant written notice thereof, without the seven (7) day grace
period set forth above.

 

B.  With respect to a non-monetary default under
this lease, failure of the Tenant to cure the same within the minimum time
period, if any, required to cure the default after the Landlord has sent to the
Tenant notice of such default (but in no event more than 30 days unless the
default is of such a nature as to be impossible to be cured within 30 days, in
which case the 30-day period shall be extended for the number of days required
to cure same).  In any event, the Tenant
shall be obligated to commence forthwith and to complete as soon as possible
the curing of such default; and if the Tenant fails so to do, the same shall be
deemed to be an Event of Default.

 

However, if:  (i) the Landlord shall have sent to the
Tenant two (2) notices of such default, even though the same shall have
been cured and this lease not terminated; and (ii) during the same
calendar year in which said two (2) notices of default have been sent by
the Landlord to the Tenant, the Tenant thereafter shall default in any similar
non-monetary matter - the same shall be deemed to be an Event of Default upon
the Landlord giving the Tenant written notice thereof, and the Tenant shall
have no grace period within which to cure the same.

 

30

 

C.  The commencement of any of the following
proceedings, with such proceeding not being dismissed within sixty (60) days
after it has begun:  (i) the estate
hereby created being taken on execution or by other process of law; (ii) the
Tenant being judicially declared bankrupt or insolvent according to law; (iii) an
assignment being made of the property of the Tenant for the benefit of
creditors; (iv) a receiver, guardian, conservator, trustee in involuntary
bankruptcy or other similar officer being appointed to take charge of all or
any substantial part of the Tenant’s property by a court of competent
jurisdiction; or (v) a petition being filed for the reorganization of the
Tenant under any provisions of the Bankruptcy Code or any federal or state law
now or hereafter enacted.

 

D.  The Tenant filing a petition for
reorganization or for rearrangement under, or otherwise availing itself of any
provisions of, the Bankruptcy Code or any federal or state law now or hereafter
enacted, and providing a plan or other means for a debtor to settle, satisfy or
to extend the time for the payment of debts.

 

E. Excepting only
those days on which the Tenant is prevented from remaining open by virtue of
strike, fire, unavoidable casualty or other so-called force
majeure event beyond the control of the Tenant, but financial
inability shall never be deemed to be an event beyond the Tenant’s control (and
the Tenant agrees promptly to advise the Landlord of any such event and
closing, and further agrees to reopen as soon thereafter as possible), failure
of the Tenant, after the term of this lease commences, to be open for business
to the public for more than seven (7) days when required by this lease to
be so open or for more than two (2) such days in any one lease-year,
either of which shall for purposes hereof be considered to be an abandonment by
Tenant of the demised premises, or if the Tenant shall otherwise abandon or
vacate the demised premises.

 

Section 20.2. 
Should any Event of Default occur then, notwithstanding any license of
any former breach of covenant or waiver of the benefit hereof or consent in a
former instance, the Landlord lawfully may, in addition to any remedies
available to the Landlord under applicable statutes or case law, or otherwise,
immediately or at any time thereafter, and, to the maximum extent permitted by
law,  without demand or notice (and the
Tenant hereby expressly waives any notice to quit possession of the demised
premises), enter into and upon the demised premises or any part thereof in the
name of the whole and repossess the same as of the Landlord’s former estate,
and expel the Tenant and those claiming through or under it and remove its or
their effects (forcibly if necessary) without being deemed guilty of any manner
of trespass, and without prejudice to any remedies which might otherwise be
used for arrears of rent or preceding breach of covenant and/or the Landlord
may send written notice to the Tenant terminating the term of this lease; and
upon the first to occur of:  (i) entry
as aforesaid; or (ii) the fifth (5th) day following the sending of such
notice of termination, the term of this lease shall terminate.

 

Section 20.3. 
The Tenant covenants and agrees, notwithstanding any termination of this
lease as aforesaid or any entry or re-entry by the Landlord, whether by summary
proceedings (and, to the maximum extent permitted by law, the Tenant hereby
expressly waives any notice to quit possession of the demised premises prior to
the institution of such summary proceedings), termination, or otherwise, to pay
and be liable for on the days originally fixed herein for the payment thereof,
amounts equal to the several installments of rent and other charges reserved as
they would, under the terms of this lease, become due if this lease had not
been terminated or if the Landlord had not entered

 

31

 

or re-entered, as
aforesaid, and whether the demised premises be relet or remain vacant, in whole
or in part, or for a period less than the remainder of the term, and for the
whole thereof; but in the event the demised premises be relet by the Landlord,
the Tenant shall be entitled to a credit in the net amount of rent received by
the Landlord in reletting, after deduction of all expenses incurred in
reletting the demised premises (including, without limitation, remodeling
costs, brokerage fees, and the like), and in collecting the rent in connection
therewith.  It is specifically understood
and agreed that the Landlord shall not be required to prefer the reletting of
the demised premises over other premises, and the Landlord shall be entitled to
take into account in connection with any reletting of the demised premises all
relevant factors which would be taken into account by a sophisticated developer
in securing a replacement tenant for the demised premises, such as, but not
limited to, the type of shopping center then being operated on the Shopping
Center, matters of tenant mix, the type of operation proposed to be conducted by
any such replacement tenant, and the financial responsibility of any such
replacement tenant; and the Tenant hereby waives, to the extent permitted by
applicable law, any obligation the Landlord may have to mitigate the Landlord’s
damages.  As an alternative, at the
election of the Landlord, the Tenant will upon such termination pay to the
Landlord, as damages, such a sum as at the time of such termination represents
the amount of the excess, if any, of the then value of the total rent and other
benefits which would have accrued to the Landlord under this lease for the
remainder of the lease term if the lease terms had been fully complied with by
the Tenant over and above the then cash rental value (in advance) of the
premises for the balance of the term.  In
lieu of such alternative, at the election of the Landlord, the Tenant will upon
such termination pay to the Landlord as liquidated damages and not as a penalty
the sum of one (1) full year’s minimum rent, percentage rent and other
charges.  For the purposes of the
foregoing, the amount of percentage rent to be paid shall be equal to twelve
(12) times the monthly percentage rent determined as set forth in Section 20.4
of this lease.  To induce the Landlord to
enter into this lease, (i) the Tenant confirms and agrees that this
transaction is a commercial and not a consumer transaction, (ii) the
Tenant hereby waives any right to trial by jury in any action, proceeding or
counterclaim brought by the Landlord against the Tenant on any matters
whatsoever arising out of or in any way connected with this lease, the
relationship of the Landlord and the Tenant, the Tenant’s use or occupancy of
the demised premises, and/or any claim of injury or damage, and (iii) the
Tenant agrees not to interpose any non-compulsory counterclaim of whatever
nature or description (or take any action having substantially the same effect)
in any proceeding commenced by the Landlord for nonpayment of rent, minimum
rent, percentage rent or any other amount due hereunder, provided the foregoing
shall not be construed as a waiver of the right of the Tenant to assert and
pursue separately any such claims in any separate action brought by the Tenant.

 

Section 20.4. 
For the purposes of this ARTICLE, it shall be deemed that percentage
rent, if provision therefor is made in this lease, for any period after any
such default and entry by the Landlord would have been at a monthly rate
thereafter equal to the average monthly percentage rent which the Tenant was
obligated to pay to the Landlord under this lease either:  (i) from the commencement hereof to the
date of such default; or (ii) during the last three (3) years prior
to the date of such default - whichever is the greater.

 

32

 

Section 20.5. 
If this lease shall be guaranteed on behalf of the Tenant, all of the
foregoing provisions of the preceding ARTICLE XIX and this ARTICLE XX with
respect to bankruptcy of the Tenant, etc., shall be deemed to read “the Tenant
or the guarantor hereof”.

 

Section 20.6. 
The Landlord shall in no event be in default in the performance of any
of the Landlord’s obligations hereunder unless and until the Landlord shall
have failed to perform such obligations within thirty (30) days or such
additional time as is reasonably required to correct any such default after
notice by the Tenant to the Landlord properly specifying wherein the Landlord
has failed to perform any such obligation.

 

Nothing in this
lease shall limit any right that the Tenant might otherwise have to obtain
injunctive relief against the Landlord in equity; but, except as specifically
permitted (if at all) in any express provision of this lease, the Tenant shall
not withhold or delay making any payment to be made hereunder; and, in no event
shall the Tenant ever have the right to terminate or cancel this lease as a
result of any default by Landlord or breach by Landlord of its covenants or any
warranties or promises hereunder, except in the case of a breach of the quiet
enjoyment covenant of this lease which constitutes a wrongful eviction of
Tenant from the demised premises by Landlord continuing as aforesaid.  Without limiting the generality of the
foregoing, the Tenant shall not assert any right to deduct the cost of repairs
or any monetary claim against the Landlord from rent thereafter due and
payable, but shall look solely to the Landlord for satisfaction of such claim.

 

ARTICLE XXI.

Miscellaneous
Provisions

 

Section 21.1.  Waiver.

 

Failure on the
part of the Landlord to complain of any action or non-action on the part of the
Tenant, no matter how long the same may continue, shall never be deemed to be a
waiver by the Landlord of any of his rights hereunder.  Further, it is covenanted and agreed that no
waiver at any time of any of the provisions hereof by the Landlord shall be
construed as a waiver of any of the other provisions hereof, and that a waiver
at any time of any of the provisions hereof shall not be construed as a waiver
at any subsequent time of the same provisions. 
The consent or approval of the Landlord to or of any action by the
Tenant requiring the Landlord’s consent or approval shall not be deemed to
waive or render unnecessary the Landlord’s consent or approval to or of any
subsequent similar act by the Tenant. 
Any consent required of Landlord in any provision of this lease may be
withheld by Landlord in its sole discretion unless the provision requiring such
consent specifically states that Landlord shall not withhold such consent
unreasonably.  Tenant shall never be
entitled to any monetary damages from Landlord for failure of Landlord to give
any required consent even if Landlord has agreed elsewhere herein not
unreasonably to withhold such consent; Tenant’s sole recourse therefor shall be
to seek injunctive relief.

 

No payment by the
Tenant, or acceptance by the Landlord, of a lesser amount than shall be due
from the Tenant to the Landlord shall be treated otherwise than as a payment on
account.  The acceptance by the Landlord
of a check for a lesser amount with an 

 

33

 

endorsement or
statement thereon, or upon any letter accompanying such check, that such lesser
amount is payment in full, shall be given no effect, and the Landlord may
accept such check without prejudice to any other rights or remedies which the
Landlord may have against the Tenant.

 

Section 21.2.  Covenant
of Quiet Enjoyment.

 

The Tenant,
subject to the terms and provisions of this lease on payment of the rent and
observing, keeping and performing all of the terms and provisions of this lease
on its part to be observed, kept and performed, shall lawfully, peaceably and
quietly have, hold, occupy and enjoy the demised premises during the term
hereof without hindrance or ejection by any persons lawfully claiming under the
Landlord; but it is understood and agreed that this covenant and any and all
other covenants of the Landlord contained in this lease shall be binding upon
the Landlord named herein and any successor holder of the Landlord’s interest
hereunder (the term “Landlord”, when used in this lease, being a reference to
the then holder from time to time of the Landlord’s interest hereunder),
respectively, only during and with respect to breaches occurring during such
holder’s ownership of the Landlord’s interest hereunder.  In addition, the Tenant specifically agrees,
subject to the rights and claims of the holder of any mortgage or deed of trust
and any ground lessor, to look solely to the Landlord’s equity interest in the
Shopping Center for recovery of any judgment from the Landlord; it being
specifically agreed that neither the Landlord nor anyone holding, acting or
claiming by, through or under the Landlord (including, without limitation, the
Landlord’s lenders or its managing agent or its partners, members, managers or
beneficiaries) shall ever be personally liable for any such judgment.  Without limitation, the representatives of
the Landlord are executing this lease in a representative and fiduciary
capacity and neither said representatives so executing nor any trustee,
partner, officer, director, manager, member, shareholder or beneficiary of the
estate represented shall be personally liable for any obligation
hereunder.  It is further understood and
agreed that with respect to any services to be furnished or work to be
performed by the Landlord to or for the Tenant, the Landlord shall in no event
be liable for failure to furnish or perform the same when prevented from so
doing by strike, lockout, breakdown, accident, order or regulation of or by any
governmental authority, or failure of supply, or inability by the exercise of
reasonable diligence to obtain supplies, parts, or employees necessary to
furnish such services, or because of war or other emergency, or for any cause
beyond the Landlord’s reasonable control, or for any cause due to any act or
neglect of the Tenant or its servants, agents, employees, licensees, or any person
claiming by, through or under the Tenant, or any termination for any reason of
the Landlord’s occupancy of the premises from which the service or work is
being supplied by the Landlord, and in no event shall the Landlord or anyone
holding, acting or claiming by, through or under Landlord as aforesaid ever be
liable to the Tenant for any lost profits, any punitive, or any indirect or
consequential damages.

 

Section 21.3.  Status
Report.

 

Recognizing that
both parties may find it necessary to establish to third parties, such as
accountants, banks, mortgagees, or the like, 
the then current status of performance hereunder, either party, on the
written request of the other made from time to time, will promptly furnish a
written statement of the status of any matter pertaining to this lease.  Without limiting the generality of the
foregoing, the Tenant specifically 

 

34

 

agrees, promptly
upon the commencement of the term hereof, to notify the Landlord in writing of
the date of commencement of the term, and acknowledge satisfaction of the
requirements with respect to construction and other matters by the Landlord,
save and except for such matters as the Tenant may wish to set forth
specifically in said statement.

 

Section 21.4.  Notice
to Mortgagee and/or Ground Lessor.

 

After receiving
written notice from any person, firm, or other entity, that it holds a mortgage
(which term shall include a deed of trust) which includes as part of the
mortgaged premises the Landlord’s interest in the demised premises, or that it
is a ground lessor of a ground lease (which term shall include a similar master
lease) that covers the demised premises, the Tenant shall, so long as such
mortgage is outstanding and/or the ground lease is in effect, be required to
give to such holder and/or ground lessor the same notice as is required to be
given to the Landlord under the terms of this lease, but such notice may be
given by the Tenant to the Landlord and such holder and/or ground lessor
concurrently.  The present holder of the
mortgage which includes the demised premises is Fleet National Bank, having a
current mailing address of 111 Westminster Street, Suite 800, Mail Stop RI
DE 03308A, Providence, Rhode Island 02903 (Attn:  Commercial Real Estate Loan
Administration).  It is further agreed
that such holder and/or ground lessor shall have the same opportunity to cure
any default, and the same time within which to effect such curing, as is
available to the Landlord; and if necessary to cure such a default, such holder
and/or ground lessor shall have access to the demised premises.

 

Section 21.5.  Assignment
of Rents.

 

With reference to
any assignment by the Landlord of the Landlord’s interest in this lease, or the
rents payable hereunder, conditional in nature or otherwise, which assignment
is made to the holder of a mortgage or deed of trust which covers the Landlord’s
interest in the demised premises and/or a ground lessor of a ground lease which
covers the demised premises, the Tenant agrees:

 

(a)  that the
execution thereof by the Landlord, and the acceptance thereof by such holder
and/or ground lessor, shall never be deemed an assumption by such holder and/or
ground lessor of any of the obligations of the Landlord hereunder, unless such
holder and/or ground lessor shall, by written notice sent to the Tenant,
specifically otherwise elect; and

 

(b)  that,
except as aforesaid, such holder and/or ground lessor shall be treated as
having assumed the Landlord’s obligations hereunder only upon foreclosure of
such holder’s mortgage or deed of trust or the termination of the ground lease
resulting from a default of Landlord, and the taking of possession of the
demised premises by such holder or such ground lessor, as the case may be.

 

The Tenant agrees
that, in the event of foreclosure of any such mortgage or deed of trust to
which this lease is subordinate or termination of any such ground lease to
which this lease is subordinate (or deed or assignment in lieu of foreclosure
or termination, as the case may be, thereof), at the election of the holder or
ground lessor, as the case may be, the Tenant shall attorn to such holder or
ground lessor (and its successors and assigns) as the successor holder of the
Landlord’s interest hereunder in which case, subject to any applicable terms
and provisions of any written agreement between Tenant and such holder or
ground lessor, as the case may be, this lease shall continue in effect directly
between Tenant and such holder or ground lessor all as if this 

 

35

 

lease had been
executed and delivered, and notice hereof properly recorded, prior to the
execution of such mortgage or ground lease. 
The foregoing shall be self-operative; however, the Tenant agrees, upon
receipt of written request so to do, to execute such instruments, if any, as
may be required in order to give effect to the foregoing.

 

Section 21.6.  Mechanic’s
Liens.

 

The Tenant agrees
immediately to discharge of record (either by payment or by filing of the
necessary bond, or otherwise) any mechanic’s, materialman’s, or other lien or
like filing including, without limitation, any notice of contract, against the
demised premises and/or the Landlord’s interest therein, which liens may arise
out of any payment due for, or purported to be due for, any labor, services,
materials, supplies, or equipment alleged to have been furnished to or for the
Tenant in, upon or about the demised premises.

 

Section 21.7.  No
Brokerage.

 

The Tenant
warrants and represents that it has dealt with no broker in connection with the
consummation of this lease, and in the event of any brokerage claims against
the Landlord predicated upon prior dealings with the Tenant named herein, the
Tenant agrees to defend the same and indemnify the Landlord against any such
claim.

 

Section 21.8.  Definition
of Additional Rent.

 

Without limiting
any other provision of this lease, it is expressly understood and agreed that
all percentage rent, the Tenant’s participation in real estate taxes, common
area maintenance expenses, utility and trash removal charges, the Sprinkler
Charge and all other charges which the Tenant is required to pay hereunder,
together with all interest and penalties that may accrue thereon, shall be
deemed to be additional (but not minimum) rent, and in the event of non-payment
thereof by the Tenant, the Landlord shall have all of the rights and remedies
with respect thereto as would accrue to the Landlord for non-payment of minimum
rent.  Tenant’s failure to object to any
statement, invoice or billing rendered by Landlord within a period of ninety
(90) days after Tenant’s receipt thereof shall constitute Tenant’s acquiescence
with respect thereto and shall render such statement, invoice or billing an
account between Landlord and Tenant.

 

Section 21.9.  Landlord’s
Fees and Expenses.

 

Unless prohibited
by applicable law, the Tenant agrees to pay to the Landlord the reasonable
amount of all legal fees and expenses incurred by the Landlord arising out of
or resulting from any act or omission by the Tenant with respect to this lease
or the demised premises or from any bankruptcy case involving the Tenant,
including without limitation, any breach by the Tenant of its obligations
hereunder or the filing by or against the Tenant of any petition for relief
under any applicable bankruptcy law (any bankruptcy matter referred to herein
being subject to the provisions of ARTICLE XIX hereof).

 

Further, if the
Tenant shall request the Landlord’s consent or joinder in any instrument
pertaining to this lease, the Tenant agrees promptly to reimburse the Landlord
for the reasonable legal fees incurred by the Landlord in processing such
request, whether or not the Landlord complies therewith; and if the Tenant
shall fail promptly so to reimburse the Landlord, same shall be deemed to be a
default in the Tenant’s monetary obligations under this lease.

 

Whenever Tenant
shall request approval by Landlord or Landlord’s architect of plans, drawings,
specifications, or otherwise with respect to initial alteration of the

 

36

 

demised premises,
subsequent remodeling thereof, installation of signs including subsequent
changes thereof, or the like, Tenant specifically agrees promptly to pay to
Landlord’s architect (or reimburse Landlord for the payment Landlord makes to
said architect for) all reasonable charges involved in the review (and
re-review, if necessary) and approval or disapproval thereof whether or not
approval shall ultimately be given.

 

Section 21.10.  Invalidity of Particular Provisions.

 

If any term or
provision of this lease, or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder
of this lease, or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision of this lease shall
be valid and be enforced to the fullest extent permitted by law.

 

Section 21.11.  Provisions Binding, Etc.

 

Except as herein
otherwise expressly provided, the terms hereof shall be binding upon and shall
inure to the benefit of the successors and assigns, respectively, of the
Landlord and the Tenant.  Each term and
each provision of this lease to be performed by the Tenant shall be construed
to be both a covenant and a condition. 
The foregoing reference contained to successors and assigns of the
Tenant is not intended to constitute a consent to assignment by the Tenant.

 

Section 21.12.  Governing Law.

 

This lease shall
be governed exclusively by the provisions hereof and by the laws of the State
of Rhode Island, as the same may from time to time exist.

 

Section 21.13.  Recording.

 

The Tenant agrees
not to record the within lease, but each party hereto agrees, on request of the
other, to execute a notice of lease in recordable form and complying with
applicable Rhode Island laws, and reasonably satisfactory to the Landlord’s
attorneys.  In no event shall such
document set forth the rental or other charges payable by the Tenant under this
lease; and any such document shall expressly state that it is executed pursuant
to the provisions contained in this lease, and is not intended to vary the
terms and conditions of this lease.

 

Section 21.14.  Notices.

 

Whenever by the
terms of this lease notice, demand, or other communication shall or may be
given either to the Landlord or to the Tenant, the same shall be in writing and
shall be sent by registered or certified mail (postage prepaid) return receipt
requested, or by a recognized private express carrier (express charges paid by
sender) confirmation of receipt requested:

 

If intended for
the Landlord, addressed to it at the address set forth on the first page of
this lease, and a copy thereof addressed to the Landlord, sent by like mail,
shall be sent c/o Goulston & Storrs, P.C., 400 Atlantic Avenue,
Boston, MA 02110-3333, Attention: 
Warwick Mall (or to such other address or addresses as may from time to
time hereafter be designated by the Landlord by like notice); and

 

If intended for
the Tenant, addressed to it at the address set forth on the first page of
this lease, Attention:  Sandra Jennings,
Director, Real Estate (or to such other address or addresses as may from time
to time hereafter be designated by the Tenant by like notice).

 

37

 

Each such notice
shall be effective when deposited in the United States mail or with such a
private express carrier within the Continental United States, provided that the
same is received (or refused) in the ordinary course at the address to which
the same was sent.  Any such notice,
demand, or communication from an attorney acting or purporting to act on behalf
of a party shall be deemed to be notice from such party provided that such
attorney is authorized to act on behalf of such party.

 

Section 21.15.  When Lease Becomes Binding.

 

Employees or
agents of the Landlord have no authority to make or agree to make a lease or
any other agreement or undertaking in connection herewith.  The submission of this document for examination
and negotiation does not constitute an offer to lease, or a reservation of, or
option for, the premises, and this document shall become effective and binding
only upon the execution and delivery hereof by both the Landlord and the
Tenant.

 

Tenant warrants
and represents to Landlord that all information furnished by Tenant or any
guarantor to Landlord or Landlord’s representatives in connection with this
lease or in respect of the financial condition of Tenant and such guarantor is
true and correct and properly reflects the financial condition of Tenant and
such guarantor without material adverse change, in each case as of the date
hereof.  Within ten (10) days after
Landlord’s demand therefor which may be made no more often than once per year,
the Tenant shall furnish to Landlord, at Tenant’s sole cost and expense, then
current financial statements of Tenant and of each guarantor, audited, if
audited statements have been recently prepared on behalf of Tenant or such
guarantor, or otherwise certified as being true and correct by the chief
financial officer of Tenant or such guarantor, as the case may be, or by the
Tenant or such guarantor if the same is an individual.

 

All negotiations,
considerations, representations, and understandings between Landlord and Tenant
are incorporated herein and may be modified or altered only by agreement in
writing between Landlord and Tenant, and no act or omission of any employee or
agent of Landlord shall alter, change, or modify any of the provisions
hereof.  Without limiting the generality
of the foregoing, Tenant specifically acknowledges that before entering into
this lease, Tenant has made its own determination with respect to the financial
prospects of its business in the premises demised hereunder, including, but without
limitation:  (i) the so-called “demographics”
including the size of the market as well as competition, both present and
prospective; (ii) the volume of business which it will be able to do; (iii) the
profit it will be able to generate therefrom; and (iv) all other factors
relevant to its determination to enter into this lease.  Tenant further specifically acknowledges
that:  (i) neither Landlord nor any
representative of Landlord has made any representation whatsoever with respect
to any of the foregoing matters; and (ii) Tenant is not relying on “conversations”
of any kind which it may have had with Landlord or Landlord’s said
representatives.

 

Section 21.16.  Paragraph Headings.

 

The paragraph
headings throughout this instrument are for convenience and reference only, and
the words contained therein shall in no way be held to explain, modify,
amplify, or aid in the interpretation, construction, or meaning of the
provisions of this lease.

 

38

 

Section 21.17.  Lease Superior or Subordinate to Mortgage
and Sale-Leaseback.

 

It is agreed that
the rights and interest of the Tenant under this lease shall be subject and
subordinate to any mortgages or deeds of trust that may hereafter be placed
upon the Shopping Center or any portion thereof containing the demised
premises, and to any and all advances to be made thereunder, and to the
interest thereon, and all renewals, modifications, replacements and extensions
thereof, if the mortgagee or trustee named in said mortgages or deeds of trust
shall elect by written notice delivered to the Tenant to subject and
subordinate the rights and interest of the Tenant under this lease to the lien
of its mortgage or deed of trust; it is further agreed that any mortgagee or trustee
may elect to give the rights and interest of the Tenant under this lease
priority over the lien of its mortgage or deed of trust.  In the event of either such election, and
upon notification by such mortgagee or trustee to the Tenant to that effect, the
rights and interest of the Tenant under this lease shall be automatically
deemed to be subordinate to, or to have priority over, as the case may be, the
lien of said mortgage or deed of trust, without the need for any further
instrument, whether this lease is dated prior to or subsequent to the date of
said mortgage or deed of trust.

 

It is agreed that
the rights and interest of the Tenant under this lease shall be subject and
subordinate to any lease of the demised premises in connection with a sale and
leaseback or any sublease of the demised premises in connection with a lease
and subleaseback that may hereafter occur (such leaseback or subleaseback to be
referred to in this Section 21.17 as “Primary Lease”), if the lessor or
sublessor pursuant to such sale and leaseback or lease and subleaseback (such
lessor or sublessor to be referred to in this Section 21.17 as “Primary
Lessor”) shall elect, by written notice delivered to the Tenant, to subject and
subordinate the rights and interest of the Tenant under this lease to the
Primary Lease; it is further agreed that the Primary Lessor may elect to give
the rights and interest of the Tenant under this lease priority over the
Primary Lease.  In the event of either
such election, and upon notification by the Primary Lessor to the Tenant to
that effect, the rights and interest of the Tenant under this lease shall be
automatically deemed to be subordinate to, or to have priority over, as the
case may be, the Primary Lease without the need for any further instrument,
whether this lease is dated prior to or subsequent to the date of the Primary
Lease.  In no event shall the acquisition
by the Primary Lessor of its right, title and interest in the premises be
treated as an assumption of the Landlord’s obligations hereunder; the Tenant
shall continue (as before) to look solely to the lessee or sublessee under the
Primary Lease (and its successors and assigns) for performance of Landlord’s
obligations, unless and until Landlord’s position shall have been assumed by the
Primary Lessor as elsewhere provided in this lease.

 

The foregoing
subordination provisions of this Section shall be self-operative; however,
the Tenant shall execute and deliver whatever instruments may be required for
such purposes forthwith upon demand, and in the event the Tenant fails so to do
within ten (10) days after demand in writing, without limiting the
Landlord’s other rights on account of such failure, the Tenant does hereby
make, constitute and irrevocably appoint the Landlord as its attorney in fact
and in its name, place and stead so to do.

 

Notwithstanding
the foregoing provisions of this Section 21.17, the Landlord agrees to use
reasonable efforts (meaning thereby, to make an official written request and,
if necessary, a follow up such request) to have the holder of any such mortgage
or deed of trust which may become prior to this lease, or any Primary Lessor,
as the case may be,

 

39

 

execute and
deliver to the Tenant a so-called non-disturbance agreement in favor of Tenant
in the form then customarily used by such holder or such Primary Lessor (with
such commercially reasonable modifications as Tenant is able to negotiate), or
in lieu thereof provide the Tenant with an instrument by the terms of which
such holder or Primary Lessor agrees to recognize the rights of the Tenant
under this lease in the event of the foreclosure of such mortgage or deed of
trust or the termination of such Primary Lease, respectively, so long as the
Tenant is not in default hereunder beyond the expiration of any applicable
notice or grace period set forth herein (and which instrument may require,
among its other terms and conditions, that the Tenant agree to attorn to such
holder or Primary Lessor and its successors and assigns).  Any legal or administrative fees charged by
such holder or Primary Lessor for furnishing such agreement shall be paid by
Tenant.

 

Section 21.18.  Holding-Over.

 

Tenant recognizes
that the Landlord must arrange for a replacement occupant long in advance of
the expiration or earlier termination of the term of this lease, and incident
to consummating a new lease for the premises demised hereunder, Landlord may be
required to guarantee delivery of possession to the new occupant promptly upon
the expiration or earlier termination of this lease.  Accordingly, Tenant specifically agrees to
remove all of its goods and effects and to deliver full possession of the
demised premises to Landlord not later than the date of the expiration or
earlier termination hereof in order to avoid substantial, and perhaps
irreparable, harm to Landlord.  Tenant
agrees that Landlord shall have all remedies available at law or in equity for
Tenant’s failure so to do.  In addition
to all such remedies, Tenant further agrees that any holding over by it which
has not been consented to in writing by Landlord shall be treated as a tenancy
at sufferance at three times the rent and other charges then applicable as of
the date of the expiration or earlier termination of this lease, prorated on a
daily basis, and such tenancy at sufferance shall otherwise be on the terms and
conditions set forth in this lease so far as applicable.

 

Section 21.19.  Interest.

 

All payments
becoming due from Tenant under this lease and not paid when within five (5) days
after the date when due shall bear interest from the applicable due date until
received by Landlord at the lesser of:  (i) four
percent (4%) per annum above the prime rate announced from time to time by
Fleet National Bank (or its then successor); or (ii) the highest lawful
rate of interest permitted at the time in the State of Rhode Island.  All checks from Tenant to Landlord shall be
drawn on a bank or banks located in the Continental United States.

 

Section 21.20.  Price Index.

 

The term “Price
Index”, as used in this lease, means the Consumer Price Index for all Urban
Consumers (CPI-U): U.S. City Average, All Items (unadjusted) (1982-84=100),
published monthly by the Bureau of Labor Statistics, U.S. Department of Labor,
and first so published in its present form (with said “base”) in 1988.  If any expenditure groups, items, or
components used to compute the Price Index are added, deleted, or otherwise
changed, or if the weights assigned to any spending categories are altered, or
if the Index population is changed, or if the Bureau of Labor Statistics should
otherwise cease to publish such Index in its present form and calculated on the
present basis, a

 

40

 

comparable index
or an index reflecting changes in the cost of living determined in a similar
manner or by substitution, combination or weighting of available indices,
expenditure groups, items, components or population, published by the Bureau of
Labor Statistics or by a responsible financial periodical or recognized
authority shall be designated by the Landlord to be the Price Index
thereafter.  The Price Index for any date
relevant to the application of any ARTICLE hereof shall be that published by the
Bureau of Labor Statistics for the month containing such date, if computed for
such month, or otherwise for the most recent month immediately preceding the
month for which the application is to be made. 
Since a Price Index relevant to the application of any ARTICLE may not
be available as of the date on which a determination using the Price Index is
to be made, necessary adjustments between Landlord and Tenant shall be made
retroactively, within a reasonable time after required computations can be
readily completed.

 

Section 21.21.  Expansion.

 

Landlord
contemplates the possibility of an expansion (laterally and/or vertically) of
the Shopping Center.  If Landlord shall
proceed as aforesaid (which Landlord shall be permitted to do), then Landlord
may elect either of the following procedures:

 

(a)  To
exclude all real estate taxes on the land and buildings of said expansion area
as well as all common area maintenance charges with respect to said expansion
from proratable charges in which Tenant is required to participate, in which
case the square footage of floor area of the buildings on the expansion area
shall be excluded from the denominator in computing Tenant’s share of taxes and
common area maintenance charges hereunder; or

 

(b)  To
include all real estate taxes and common area maintenance charges on the
expansion area in the charges to be prorated pursuant to the terms of this
lease, in which case the square footage of floor area of buildings on the
expansion area shall be included in said denominator to the extent
provided in Sections 7.3 and 8.3 hereof.

 

Landlord agrees to
notify Tenant as to which of the foregoing procedures Landlord elects to
follow, which notice shall be sent to Tenant within a reasonable time after
said expansion has been completed.

 

In either of the
foregoing events if the said expansion area includes a Major Store as
aforesaid, then and in that event the minimum rent payable under this lease
shall be increased, from and after the date that said Major Store shall first
open for business, by ten percent (10%); and the parties agree to execute a
supplemental instrument memorializing said increase and the date of its
commencement.

 

As aforesaid, as
part of such an expansion, Landlord may in the future add or, to the extent
then existing, expand or otherwise modify, a second level above one or more of
the one-story buildings at Warwick Mall. 
Landlord shall be permitted so to do subject, however, to the following
provisions:

 

(1)  If any
such expansion involves the addition above the demised premises and would in
any manner affect the demised premises, all expenses involved in such physical
aspects shall be borne by Landlord, and Tenant shall not be put to any expense
by reason thereof.

 

(2)  If entry
into the demised premises is required in connection with construction work for
any vertical or horizontal expansion, Landlord agrees that it will

 

41

 

attempt to do such
work within the demised premises at such times and in such manner so as to
reduce to a feasible minimum the interference with Tenant’s use and occupancy
of its premises. Landlord will also, in such case, attempt to box-in any
working areas of the demised premises to be utilized for said work with
dust-proof partitions so as to enable Tenant to continue in business to the
maximum extent possible.

 

(3)  If entry
into the demised premises is required, Landlord agrees that, subject to the
provisions of Section 16.3 hereof, Landlord shall be responsible for any
damage to Tenant’s property which can be established by Tenant to have been
caused directly by Landlord’s entry and work as aforesaid; but Landlord shall
not be responsible for any consequential damages in any event.

 

(4)  There
shall be a fair and equitable abatement of minimum rent and other charges for
each business day during which Tenant’s use of its premises is interfered with,
due regard being given to the extent to which Tenant is required to curtail,
reduce, or close down its operations by reason thereof.

 

Furthermore, if
Landlord decides to expand, remodel or reconfigure Warwick Mall (but Landlord
agrees not to invoke these relocation provisions solely in order to combine the
demised premises with other non-Major Store premises for use by another mall
store tenant) and Landlord determines that the same would require that the area
in which the demised premises are located be changed in any manner, then and in
that event, Landlord shall notify Tenant thereof and in such notice shall
specify an effective date, if applicable in accordance with the following provisions,
of a shift in location of the demised premises, which effective date shall not
be sooner than ninety (90) days after the date of such notice.  In such event, Landlord and Tenant shall
attempt in good faith to agree upon a suitable new location (if any is
available) for Tenant’s store (“New Premises”) in the original or expansion
area of the mall building of the Shopping Center which New Premises are
comparable in size and mall frontage to the original demised premises
hereunder.  If so available, Landlord
shall designate such New Premises within the “footprint” of the area shown on
Sheet 2 of Exhibit “A” hereto as the “Relocation Area”; and if Landlord so
designates such New Premises within said Relocation Area footprint, then Tenant
shall accept same and the demised premises shall be shifted into same subject
to and in accordance with the following provisions of this section; if Landlord
shall in good faith determine that it cannot offer any available such space to
Tenant within the Relocation Area, then Landlord may offer to Tenant such New
Premises (if available) in another location but Tenant shall not be required to
accept a relocation into such New Premises outside of the Relocation Area.  If Landlord and Tenant agree on a new
location in accordance with the foregoing, they shall enter into an amendment
to this lease (“Amendment”) which shall set forth the shift in location of the
demised premises into the New Premises as of the aforesaid effective date.  In such event:  (a) this lease shall be amended by the
Amendment to be for a term approximating in length the original term hereof
(that is, expiring seven (7) years after the effective date of the shift
into the New Premises; (b) minimum rent under this lease shall be amended
by the Amendment to be at the same per square foot rate as originally set forth
in this lease for the period through the original expiration date of the term
set forth in Section 1.1 (the “Original Expiration Date”) and minimum rent
shall be increased by $3.33 per square foot per annum every two (2) years
for the balance of the term after the Original Expiration Date; (c) Tenant
will remodel the New Premises and otherwise prepare to and open for business in
the New

 

42

 

Premises (subject only to
force majeure delays in so doing) by the aforesaid effective
date of the shift, in accordance with the provisions of ARTICLES III and VI of
this lease (all as if the New Premises were the original demised premises and
the effective date of the shift were the term commencement date); and (d) Tenant
shall vacate the original demised premises and deliver possession thereof to
Landlord, on or before the aforesaid effective date of the shift, in the
condition required as at the end of the term hereof.

 

In the event of
such a shift in location and execution of the Amendment as specified above,
Landlord agrees that if (a) Tenant shall not then be in default under this
lease (and, without limitation, shall have vacated the original demised
premises leaving the same in the condition required as at the end of the term,
and shall have opened for business in the New Premises), and (b) Tenant
shall have certified to Landlord the amount of “Tenant’s Leasehold Improvement
Costs” (as defined below), and furnished Landlord with such certification and
reasonable back-up (such as paid invoices and the like) as Landlord may request
confirming the same not later than sixty (60) days after the original
commencement date of the term of this lease, then it shall be a condition of
the effectiveness of such shift in location that Landlord pay to Tenant, within
thirty (30) days after satisfaction of the foregoing conditions, an amount
equal to the then unamortized portion of Tenant’s Leasehold Improvement Costs,
amortized on a straight-line basis over the original term of this lease.  In addition, Landlord shall thereupon
reimburse Tenant an amount equal to Tenant’s reasonable costs paid by Tenant to
third parties (as likewise confirmed to Landlord’s reasonable satisfaction) for
physically moving from the original demised premises to the New Premises Tenant’s
inventory and any other personal property to be sold from or used in its
operations in the New Premises.

 

In the event that
Landlord makes any such election but no agreement is reached to shift the
location of the demised premises or such Amendment is not signed within thirty
(30) days after Tenant’s receipt of Landlord’s notice of its election, Landlord
shall have the right to terminate this lease by giving Tenant notice of
Landlord’s desire to do so prior to the execution of such Amendment.  If Landlord shall give Tenant such
termination notice, this lease shall terminate as of the termination date
specified in such notice, which date shall not be sooner than sixty (60) days
after the date of such notice.  Such
termination shall have the same force and effect as if the date so stipulated
was the date originally established as the expiration date of the term hereof;
provided, however, that within thirty (30) days after the effectiveness of such
termination and the execution and delivery by Tenant to Landlord of a
recordable instrument satisfactory to Landlord for the purpose of confirming
such termination of this lease, and the payment of all charges hereunder
payable by Tenant and vacating by Tenant of the demised premises in accordance
with all applicable provisions of this lease — Landlord shall pay to Tenant an
amount equal to the then unamortized portion of Tenant’s Leasehold Improvement
Costs determined and certified to Landlord within sixty (60) days after the
original term commencement date, and amortized, all as aforesaid.

 

The foregoing
provisions of this Section shall not be construed to confer upon Tenant
any so-called option, right of refusal or other right, or to impose upon
Landlord any obligation except as expressly hereinabove set forth.

 

For the purposes
hereof, the term “Tenant’s Leasehold Improvement Costs” shall mean the actual
cost to Tenant of performing the initial leasehold improvements actually

 

43

 

made to the
demised premises as part of Tenant’s work (performed in accordance with plans
and specifications approved by Landlord) in initially remodeling the demised
premises, but excluding costs for signs, fixtures, furniture, equipment, design
costs, legal fees, engineering fees or other such soft costs.  Tenant shall certify to Landlord the amount
of Tenant’s Leasehold Improvement Costs as soon as such initial remodeling is
completed and shall supply to Landlord such back-up material (such as paid invoices)
as Landlord may reasonably require in respect thereof.

 

Section 2l.22.  Other Agreements.

 

The Tenant hereby
warrants and represents that neither this lease nor the operation of the
demised premises hereunder violates the provisions of any instrument heretofore
executed by the Tenant or any affiliate of the Tenant, including, without
limitation, any so-called radius restriction contained in any such instrument.

 

Section 21.23.
[Intentionally Omitted.]

 

Section 21.24.  REIT Financing Provision.

 

The Landlord and
the Tenant hereby agree that it is their intent that all minimum rent,
percentage rent and all additional and other charges payable to the Landlord
under this lease (hereinafter individually and collectively referred to as “Rent”)
shall qualify as “rents from real property” within the meaning of Section 856(d) of
the Internal Revenue Code of 1986, as amended, (the “Code”) and the Department
of the U.S. Treasury Regulations promulgated thereunder (the “Regulations”).  Should the Code or the Regulations, or
interpretations thereof by the Internal Revenue Service contained in revenue
rulings or other similar public pronouncements, be changed so that any Rent no
longer so qualifies as “rent from real property” for purposes of Section 856(d) of
the Code and the Regulations promulgated thereunder, such Rent shall be
adjusted in such manner as the Landlord may require so that it will so qualify;
provided, however, that any adjustments required pursuant to this Section 21.24
shall be made so as to produce the equivalent (in economic terms) Rent as
payable prior to such adjustment.  The
parties agree to execute such further instruments as may reasonably be required
by the Landlord in order to give effect to the foregoing provisions of this Section 21.24.

 

Section 21.25.
[Intentionally Omitted.]

 

Section 21.26.  [Intentionally Omitted.]

 

Section 21.27.
[Intentionally Omitted.]

 

Section 21.28.  Tenant’s Identity Representation.

 

Tenant represents
to Landlord that Tenant is a wholly-owned subsidiary of NBTY Inc., a public
corporation; and that Tenant is the affiliate of said public corporation which
is the tenant-occupant and operator of a substantial majority of the Vitamin
World retail stores (numbering several hundred) throughout the United States.  Landlord has relied on the accuracy of the
foregoing in entering into this lease with Tenant without requiring a guarantee
or security deposit; accordingly, it shall be an Event of Default by Tenant
hereunder (for which Landlord shall have all remedies available to it pursuant
to the provisions of this lease or otherwise at law or in equity) if, at any
time prior to the expiration of the term of this lease, the Tenant is not a
wholly-owned subsidiary of said NBTY Inc., a public corporation and/or the
Tenant is not the affiliate of said public corporation which is the
tenant-occupant and operator of a substantial majority of the Vitamin World
retail stores (numbering several hundred) throughout the United States.

 

44

 

Section 21.29.  Satellite Dish.

 

Subject
to strict compliance with the following provisions, Tenant shall be permitted
during the term of this lease to install and use a satellite dish (the “Dish”,
which shall be a reference thereto, original and any replacement, including any
related wiring, etc., connecting the same to the demised premises in order to
render the same operational for intended purposes), to be used for, and only
for, Tenant’s own business communications purposes for its operations in the demised
premises.  The Tenant’s rights under this
Section to install and use the Dish are and shall be considered a
license.  Landlord agrees not arbitrarily
to revoke the same during the term of this lease provided that Tenant complies
with all of the provisions of this Section (including all of its
obligations set forth or referred to herein) relating to the Dish; conversely,
if Landlord determines that Tenant is not in strict compliance therewith,
Landlord may terminate Tenant’s rights under this Section, without in any way
diminishing or otherwise affecting any other provision(s) of this lease,
upon notice thereof to Tenant (but Landlord agrees that the first time, if any,
that Landlord elects so to terminate on account of any such noncompliance, the
Tenant shall have a 10-day cure period).

 

For all purposes (except as specifically otherwise provided in this
Section), including without limitation, for and with respect to the Tenant’s
liability for any damage to property or injury to persons, and Tenant’s obligations
at its own cost to repair and maintain, insure and indemnify the Landlord, the
Dish shall be considered to be Tenant’s personal property contained within the
demised premises.  Furthermore,
specifically, all matters pertaining to the Dish and Tenant’s rights under this
Section, including without limitation, the use and the location of any Dish,
the method of any such installation, and the type and specifications (including
size, shape, color and technical specifications), shall be subject to (and
Tenant agrees as aforesaid strictly to comply with) the following:  (i) all applicable laws, codes, rules and
regulations, and directions, of governmental authorities, as well as any such
rules, regulations and directions of Landlord’s mall manager; (ii) prior
written approval by Landlord, which shall be required for any and all
installations and related work and/or other such matters related to any such
Dish; (iii) no Dish shall be visible from the exterior of the building in
which the demised premises are located nor shall any such Dish (specifically
including the operation thereof) interfere with any other equipment or systems
located in or about the building or the balance of the Shopping Center, or any
use of the same; (iv) all work related to any such Dish shall be performed
in accordance with all applicable provisions of this lease including, without
limitation, the provisions of Articles VI and XIII and Exhibit “B”, and,
as aforesaid, the provisions of Articles XIV and XVI regarding indemnity,
insurance, etc., shall be fully applicable (with only such changes, if any, as
are required in this context) to the installation, use, repair and maintenance,
replacement, relocation and removal of any such Dish; (v) the Tenant shall
be responsible for any and all charges and fees imposed by any network for the
provision of satellite dish communications to any such Dish but the Tenant may
select its own satellite dish communications network to serve the demised
premises as long as there is no resulting noncompliance with the provisions of
this Section or other applicable provisions of this lease; (vi) the
installation, repair and maintenance, replacement, relocation and removal of
any such Dish shall be performed and otherwise effected at all times so as to
maintain in full force and effect any applicable

 

45

 

roof and/or construction-related guaranties and warranties; and (vii) the
Tenant agrees, upon Landlord’s notice requesting same, to relocate the Dish
and, upon the termination of this lease or of Tenant’s rights repaired
consistent with the provisions hereof any damage resulting from any such
relocation or removal.  Furthermore, the
Tenant shall defend, indemnify and hold the Landlord harmless from and against
any and all loss, cost, damage and expense, and any claims relating thereto,
resulting from the installation, use, repair and maintenance, replacement,
relocation and/or removal of any such Dish including, without limitation, all
fees, costs and expenses relating to roof or wall penetrations and any such
communications network fees and charges.

 

Section 21.30.  Special Right of Termination.

 

In the event that the
premises adjacent to the demised premises currently being operated as a Newport
Creamery operation (the “Creamery Premises”) becomes available to Landlord and
Landlord desires to combine all or substantially all of the Creamery Premises
with all or substantially all of the demised premises, then Landlord shall have
the right to terminate this lease by giving Tenant notice of Landlord’s desire
so to do.  If Landlord shall give Tenant
such notice, then this lease shall terminate as of the termination date
specified in such notice, which date shall not be sooner than sixty (60) days
after the date of such notice, with the same force and effect as if the date so
stipulated was the date originally established as the expiration date of the
term hereof; provided, however, that if (a) Tenant shall not then be in
default under this lease, and (b) Tenant shall have certified to Landlord
the amount of “Tenant’s Leasehold Improvement Costs” (as defined in this
lease), and furnished Landlord with such certification and reasonable back-up
(such as paid invoices and the like) as Landlord may request confirming the
same not later than sixty (60) days after the original commencement date of the
term of this lease, then it shall be a condition of the effectiveness of such
termination that Landlord pay to Tenant an amount equal to the then unamortized
portion as of the effective date of such termination of Tenant’s Leasehold
Improvement Costs, as amortized on a straight-line basis over the original term
of this lease.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK;

SIGNATURE PAGE
FOLLOWS]

 

46

 

WITNESS the
execution hereof in any number of counterpart copies, each of which counterpart
copies shall be an original for all purposes, as of the day and year first
above written.

 

	
   

  	
  WARWICK MALL L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark T. Brennan

  
	
   

  	
   

  	
  Mark T. Brennan,
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  -
  and -

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Bliss
  Properties, Inc., Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Dan Bliss

  
	
   

  	
   

  	
   

  	
  Its Vice President

  
	
   

  	
   

  	
   

  	
  Hereunto Duly
  Authorized

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  As Managers of Warwick
  Mall L.L.C., in their capacity as such Managers and not individually

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [LANDLORD]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  VITAMIN WORLD, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey Schneider

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Michael Slade

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
  [TENANT]

  

 

47

 

	
  STATE OF

  	
  Rhode Island

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  Kent

  	
  )

  
				

 

In Rhode Island on this 8th
day of September, 2003, before me personally appeared Mark T. Brennan, as
Manager of Warwick Mall L.L.C., to me known and known by me to be the party
executing the foregoing instrument, and he acknowledge said instrument, by him
executed, to be his free act and deed in his capacity as Manager of Warwick
Mall L.L.C.

 

	
   

  	
  /s/ Lisa L. Normandin

  
	
   

  	
  Notary Public

  
	
   

  	
  Printed Name:

  	
  Lisa L. Normandin

  
	
   

  	
  My Commission Expires:

  	
  9-8-03

  
				

 

 

	
  STATE OF RHODE ISLAND

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
    Kent

  	
   

  	
  )

  
				

 

In Rhode Island on this 8th day of Sept., 2003, before me personally
appeared Dan Bliss, who being by me duly sworn did say he is Vice President of
Bliss Properties, Inc., a Rhode Island corporation, and a Manager of
Warwick Mall L.L.C., to me known and known by me to be the party executing the
foregoing instrument, and he acknowledged said instrument, by him executed, to
be his free act and deed in his capacity as such officer and the free act and
deed of said corporation in its capacity as Manager of Warwick Mall L.L.C.

 

	
   

  	
  /s/ Lisa L. Normandin

  
	
   

  	
  Notary Public

  
	
   

  	
  Printed Name:

  	
  Lisa Normandin

  
	
   

  	
  My Commission Expires:

  	
  9-8-03

  
				

 

48

 

 

	
  STATE OF  New
  York

  	
  )

  
	
   

  	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  Suffolk

  	
  )

  
				

 

On this 27 day of August,
2003, personally appeared before me Jeffrey Schneider, President of Vitamin
World, Inc. known to me and known by me to be the person who executed the
foregoing instrument, and acknowledged the same to be his own free act and deed
and the free act and deed of said corporation.

 

IN WITNESS
WHEREOF, I have hereunto set my hand and seal the day and year above written.

 

	
   

  	
  /s/ Marialise
  Dunphy

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  
	
   

  	
  April 18, 2006

  

 

49

 

EXHIBIT “A”

 

PLAN

 

1

 

 

 

 

 

 

 

EXHIBIT “B”

STORE REMODELING
REGULATIONS

 

1.                                       Tenant
and Tenant’s contractor shall be responsible for supplying a mop and mopping
dust and “tracks” in the enclosed mall of Warwick Mall (the “Mall”) as
necessary throughout the day.

 

2.                                       All
debris must be neatly removed through the rear door of the store between the
hours of 9:30 p.m. and 9:30 a.m. 
No dumpsters are allowed, and no use shall be made of any
existing compactors with respect to such debris.

 

3.                                       Any
work deemed to be “loud” must be performed between 9:30 p.m. and 9:30 a.m.

 

4.                                       Large
deliveries of construction materials shall be made only between 9:30 p.m.
and 9:30 a.m.

 

5.                                       If
there is no construction barricade, work on the Mall side of the storefront
must be performed between 9:30 p.m. and 9:30 a.m.

 

6.                                       The
Mall’s doors are opened at 7:00 a.m. and closed at 10:00 p.m.  Access during “off” hours may be arranged by
contacting The Mall Office (401-739-7500).

 

7.                                       Any
shutdown of the sprinkler system must be done by the Mall’s service
contractor.  Arrangements must be made
directly with that service contractor after Mall management is notified.  All costs incurred are the responsibility of
the Tenant or Tenant’s contractor.

 

8.                                       With
respect to the so-called “neutral piers” which separate the various stores at
the Mall and which protrude beyond the lease line into the Mall area, should
Tenant (in connection with its construction and remodeling work)  do any damage whatsoever to the covering of
said piers, Landlord will repair any such damage and Tenant shall reimburse
Landlord promptly upon receiving Landlord’s statement for such work.

 

9.                                       Whether
part of Tenant’s initial remodeling work or subsequent thereto, Tenant agrees
that no work whatsoever will be done which may affect any portion of the roof
of the Shopping Center without first having secured Landlord’s written consent
to any such work.  Further, all of such
work as it affects the roof shall be performed by Landlord’s roofing
contractor, with Tenant obligated to reimburse Landlord immediately upon receipt
of Landlord’s invoice therefor for all charges imposed by said roofing
contractor; with Landlord having the same rights to proceed against Tenant as
though said charges were payable as minimum rent pursuant to the terms of the
lease to which this Exhibit “B” is annexed.

 

[NOTE:  All times are “local time”]

 

1

 

EXHIBIT “C”

 

LIST OF EXISTING USE RESTRICTIONS

 

The following is a list
of the use restrictions referred to in Section 10.1 of this lease.  Tenant agrees that none of the following
enumerated items ever shall be sold (or rented) or displayed in or from the
demised premises (except in such limited areas and/or amounts as are set forth
below as being permitted):

 

1.             Pre-recorded music and/or video entertainment, such as
(but not limited to) records, cassettes, compact discs, laser discs, and video
tapes;

 

2.             Computer hardware and software, including (but not
limited to) so-called video games;

 

3.             Greeting cards and party goods;

 

4.             Athletic footwear;

 

5.             Books, newspapers and periodicals;

 

6.             Health and beauty aids such as are sold in drugstores or
pharmacies;

 

except
that, if and to the extent expressly permitted by the Tenant’s Use
clause set forth in Section 1.1 of this lease, the Tenant shall be permitted
to devote up to fifty (50) square feet of floor area within the demised
premises to the incidental sale and display of items within each such category.

 

In addition, the Tenant
agrees that the demised premises never shall be used:  (a) for any restaurant, cafeteria or
like operations selling food and/or beverages for on-site and/or so-called “takeout”
consumption; or (b) as a savings bank (or the like) or for the provision
of banking services and/or ATM (automatic teller machine) or any other vending
machine retail services.

 

(Here ends Exhibit “C”)

 

1Exhibit 10.4

 

 

NBTY Retirement Benefits Policy

for Certain Eligible Members of the Board of Directors

 

1.               Eligibility:  The policy shall apply only to those members
of the Board who have served as members of the Board for at least 15 years and
who retire from the Board solely as a result of the Corporation’s mandatory
retirement age policy (the “Eligible Retiree”).

 

2.               Annual Benefits:  Each Eligible Retiree shall continue to
receive the annual retainer in effect for directors at the time of such
Eligible Retiree’s retirement from the Board, until the earlier to occur of the
following:  (x) the 10 year
anniversary of the date of such retirement and (y) such Eligible Retiree’s
death (such period, the “Retirement Period”).

 

3.               Annual Meetings:  During the Retirement Period, each Eligible
Retiree shall be invited to attend all of the Corporation’s Annual Shareholders’
Meetings.  All reasonable costs and
expenses incurred by such Eligible Retiree to attend such Annual Meetings shall
be borne by the Corporation.

 

4.               Board Meetings:  Each Eligible Retiree shall receive notice of
and be invited to attend, as an observer with no voting power, all meetings of
the Board of Directors, at such Eligible Retiree’s sole cost and expense.

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