COMMERCIAL LEASE AGREEMENT
This Commercial Lease Agreement ("Lease") is made and effective May
7, 2001, by and between Camper Clubs Of America, Inc. ("Landlord")
and Vital Living, Inc. (formerly known as Nutritional Systems, Inc.)
("Tenant").
Landlord is the owner of land and improvements commonly known and
numbered as ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and legally
described as follows (the "Building"): Tracts A-1 and A-2, ▇▇▇▇▇▇▇▇▇▇
Garden, a subdivision recorded in Book 213 of Maps, Page 17, records
of Maricopa County, Arizona; Together with the rights in private
roadways as reserved in said map of record in Book 213 of Maps, Page
17, and as set forth in the Declaration of Covenants, Conditions and
Restrictions as recorded in docket 13257, commencing in page 437.
Landlord makes available for lease a portion of the Building
designated as "The Vital Living, Inc. Suites" consisting of 2,500
square feet of space including storage space, office space, mailroom
space, restrooms and lunchroom. Lease also includes cost of
miscellaneous office equipment as deemed necessary by Tenant
including telephone equipment, copiers, office furniture and computer
equipment and related installed software (the "Leased Premises").
Landlord desires to lease the Leased Premises to Tenant, and Tenant
desires to lease the Leased Premises from Landlord for the term, at
the rental and upon the covenants, conditions and provisions herein
set forth.
THEREFORE, in consideration of the mutual promises herein, contained
and other good and valuable consideration, it is agreed:
1. Term.
A. Landlord hereby leases the Leased Premises to Tenant, and Tenant
hereby leases the same from Landlord, for an "Initial Term" beginning
May 7, 2001 and continuing on a month to month basis with the
understanding that a minimum of 90 days notice needs to be given to
terminate the lease. Landlord shall use its best efforts to give
Tenant possession as nearly as possible at the beginning of the Lease
term. If Landlord is unable to timely provide the Leased Premises,
rent shall ▇▇▇▇▇ for the period of delay. Tenant shall make no other
claim against Landlord for any such delay.
B. Tenant may continue the Lease on a month to month basis for an
indefinite period subject to the mutual agreement of all parties. The
renewal term shall be at the rental set forth below and otherwise
upon the same convenants, conditions and provisions as provided in
this Lease.
2. Rental.
A. Tenant shall pay to Landlord during the Initial Term rental of
$2,500 per month, payable in installments of $2,500 per month. In
consideration for signature of this lease and payment of security
deposit as described in this paragraph, Landlord agrees to defer
first rent payment until August 1, 2001 at which time, Tenant shall
pay $9,516 (for prorated portion of May rent and entire balance of
June, July and August 2001 rent). Thereafter, each installment
payment shall be due in advance on the first day of each calendar
month during the lease term to Landlord at ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
▇▇ ▇▇▇▇▇ or at such other place designated by written notice from
Landlord or Tenant. The rental payment amount for any partial
calendar months included in the lease term shall be prorated on a
daily basis. Tenant shall also pay to Landlord a "Security Deposit"
in the amount of $3,000 no later than June 1, 2001.
B. The rental for any renewal lease term beyond the initial 12
months, if created as permitted under this Lease, shall be $33,000
per year payable in installments of $2,750 per month.
3. Use
The Tenant may use the property to conduct business activity
including sales and storage of nutritional supplements.
Notwithstanding the forgoing, Tenant shall not use the Leased
Premises for the purposes of storing, manufacturing or selling any
explosives, flammables or other inherently dangerous substance,
chemical, thing or device.
4. Sublease and Assignment.
Tenant shall have the right without Landlord's consent, to assign
this Lease to a corporation with which Tenant may merge or
consolidate, to any subsidiary of Tenant, to any corporation under
common control with Tenant, or to a purchaser of substantially all of
Tenant's assets. Except as set forth above, Tenant shall not sublease
all or any part of the Leased Premises, or assign this Lease in whole
or in part without Landlord's consent, such consent not to be
unreasonably withheld or delayed.
5. Repairs.
During the Lease term, Tenant shall make, at Tenant's expense, all
necessary repairs to the Leased Premises. Repairs shall include such
items as routine repairs of floors, walls, ceilings, and other parts
of the Leased Premises damaged or worn through normal occupancy,
except for major mechanical systems or the roof, subject to the
obligations of the parties otherwise set forth in this Lease.
6. Alterations and Improvements.
Tenant, at Tenant's expense, shall have the right following
Landlord's consent to remodel, redecorate, and make additions,
improvements and replacements of and to all or any part of the Leased
Premises from time to time as Tenant may deem desirable, provided the
same are made in a workmanlike manner and utilizing good quality
materials. Tenant shall have the right to place and install personal
property, trade fixtures, equipment and other temporary installations
in and upon the Leased Premises, and fasten the same to the premises.
All personal property, equipment, machinery, trade fixtures and
temporary installations, whether acquired by Tenant at the
commencement of the Lease term or placed or installed on the Leased
Premises by Tenant thereafter, shall remain Tenant's property free
and clear of any claim by Landlord. Tenant shall have the right to
remove the same at any time during the term of this Lease provided
that Tenant shall repair all damage to the Leased Premises caused by
such removal at Tenant's expense.
7. Property Taxes.
Landlord shall pay, prior to delinquency, all general real estate
taxes and installments of special assessments coming due during the
Lease term on the Leased Premises, and all personal property taxes
with respect to Landlord's personal property, if any, on the Leased
Premises. Tenant shall be responsible for paying all personal
property taxes with respect to Tenant's personal property at the
Leased Premises.
8. Insurance.
A. If the Leased Premises or any other party of the Building is
damaged by fire or other casualty resulting from any act or
negligence of Tenant or any of Tenant's agents, employees or
invitees, rent shall not be diminished or abated while such damages
are under repair, and Tenant shall be responsible for the costs of
repair not covered by insurance.
B. Landlord shall maintain fire and extended coverage insurance on
the Building and the Leased Premises in such amounts as Landlord
shall deem appropriate. Tenant shall be responsible, at its expense,
for fire and extended coverage insurance on all of its personal
property, including removable trade fixtures, located in the Leased
Premises.
C. Tenant and Landlord shall, each at its own expense, maintain a
policy or policies of comprehensive general liability insurance with
respect to the respective activities of each in the Building with the
premiums thereon fully paid on or before due date, issued by and
binding upon some insurance company approved by Landlord, such
insurance to afford minimum protection of not less than $1,000,000
combined single limit coverage of bodily injury, property damage or
combination thereof. Landlord shall be listed as an additional
insured on Tenant's policy or policies of comprehensive general
liability insurance, and Tenant shall provide Landlord with current
Certificates of Insurance evidencing Tenant's compliance with this
Paragraph. Tenant shall obtain the agreement of Tenant's insurers to
notify Landlord that a policy is due to expire at least (10) days
prior to such expiration. Landlord shall not be required to maintain
insurance against thefts within the Leased Premises or the Building.
9. Utilities.
Landlord shall pay all charges for water, sewer, gas, electricity,
and other services and utilities used by Tenant on the Leased
Premises during the term of this Lease unless otherwise expressly
agreed in writing by Landlord. Tenant shall pay all charges for
telephone services used by Tenant on leased Premises. Tenant
acknowledges that the Leased Premises are designed to provide
standard office use electrical facilities and standard office
lighting. Tenant shall not use any equipment or devices that utilizes
excessive electrical energy or which may, in Landlord's reasonable
opinion, overload the wiring or interfere with electrical services to
other tenants without Landlord written consent.
10. Signs.
Following Landlord's consent, Tenant shall have the right to place on
the Leased Premises, at locations selected by Tenant, any signs,
which are permitted by applicable zoning ordinances and private
restrictions. Landlord may refuse consent to any proposed signage
that is in Landlord's opinion too large, deceptive, unattractive or
otherwise inconsistent with or inappropriate to the Leased Premises
or use of any other tenant. Landlord shall assist and cooperate with
Tenant in obtaining any necessary permission from governmental
authorities or adjoining owners and occupants for Tenant to place or
construct the foregoing signs. Tenant shall repair all damage to the
Leased Premises resulting from the removal of signs installed by
Tenant.
11. Entry.
Landlord shall have the right to enter upon the Leased Premises at
reasonable hours to inspect the same, provided Landlord shall not
thereby unreasonably interfere with Tenant's business on the Leased
Premises.
12. Parking.
During the term of this Lease, Tenant shall have the non-exclusive
use in common with Landlord, other tenants of the Building, their
guests and invitees, of the non-reserved common automobile parking
areas, driveways, and walkways, subject to rules and regulations for
the use thereof as prescribed from time to time by Landlord. Landlord
reserves the right to designate parking areas within the Building or
in reasonable proximity thereto, for Tenant and Tenant's agents and
employees. Tenant shall provide Landlord with a list of all license
numbers for the cars owned by Tenant, its agents and employees.
Separated structured parking, if any, located about the Building is
reserved for tenants of the Building who rent such parking s paces.
Tenant hereby leases from Landlord no more than ten spaces in such
structural parking area, such spaces to be on a first come-first
served basis. In consideration of the leasing to Tenant of such
spaces, Tenant shall pay a monthly rental which is already included
in the rent payment listed in Section 2.
13. Building Rules.
Tenant will comply with the rules of the Building adopted and altered
by Landlord from time to time and will cause all of its agents,
employees, invitees and visitors to do so; all changes to such rules
will be sent by Landlord to Tenant in writing.
14. Damage and Destruction.
Subject to Section 8 A. above, if the Leased Premises or any part
thereof or any appurtenance thereto is so damaged by fire, casualty
or structural defects that the same cannot be used for Tenant's
purposes, then Tenant shall have the right within ninety (90) days
following damage to elect by notice to Landlord to terminate this
Lease as of the date of such damage. In the event of minor damage to
any part of the Leased Premises, and if such damage does not render
the Leased Premises unusable for Tenant's purposes, Landlord shall
promptly repair such damage at the cost of the Landlord. In making
the repairs called for in this paragraph, Landlord shall not be
liable for any delays resulting from strikes, governmental
restrictions, inability to obtain necessary materials or labor or
other matters which are beyond the reasonable control of Landlord.
Tenant shall be relieved from paying rent and other charges during
any portion of the Lease term that the Leased Premises are inoperable
or unfit for occupancy, or use, in whole or in part, for Tenant's
purposes. Rentals and other charges paid in advance for any such
periods shall be credited on the next ensuing payments, if any, but
if no further payments are to be made, any such advance payments
shall be refunded to Tenant. The provisions of this paragraph extend
not only to the matters aforesaid, but also to any occurrence which
is beyond Tenant's reasonable control and which renders the Leased
Premises, or any appurtenance thereto, inoperable or unfit for
occupancy or use, in whole or in part, for Tenant's purposes.
15. Default.
If default shall at any time be made by Tenant in the payment of rent
when due to Landlord as herein provided, and if said default shall
continue for fifteen (15) days after written notice thereof shall
have been given to Tenant by Landlord, or if default shall be made in
any of the other covenants or conditions to be kept, observed and
performed by Tenant, and such default shall continue for thirty (30)
days after notice thereof in writing to Tenant by Landlord without
correction thereof then having been commenced and thereafter
diligently prosecuted, Landlord may declare the term of this Lease
ended and terminated by giving Tenant written notice of such
intention, and if possession of the Leased Premises is not
surrendered, Landlord may reenter said premises. Landlord shall have,
in addition to the remedy above provided, any other right or remedy
available to Landlord on account of any Tenant default, either in law
or equity. Landlord shall use reasonable efforts to mitigate its
damages.
16. Quiet Possession.
Landlord covenants and warrants that upon performance by Tenant of
its obligations hereunder, Landlord will keep and maintain Tenant in
exclusive, quiet, peaceable and undisturbed and uninterrupted
possession of the Leased Premises during the term of this Lease.
17. Condemnation.
If any legally, constituted authority condemns the Building or such
part thereof which shall make the Leased Premises unsuitable for
leasing, this Lease shall cease when the public authority takes
possession, and Landlord and Ten ant shall account for rental as of
that date. Such termination shall be without prejudice to the rights
of either party to recover compensation from the condemning authority
for any loss or damage caused by the condemnation. Neither party
shall have any rights in or to any award made to the other by the
condemning authority.
18. Subordination.
Tenant accepts this Lease subject and subordinate to any mortgage,
deed of trust or other lien presently existing or hereafter arising
upon the Leased Premises, or upon the Building and to any renewals,
refinancing and extensions thereof, but Tenant agrees that any such
mortgagee shall have the right at any time to subordinate such
mortgage, deed of trust or other lien to this Lease on such terms and
subject to such conditions as such mortgagee may deem appropriate in
its discretion. Landlord is hereby irrevocably vested with full power
and authority to subordinate this Lease to any mortgage, deed of
trust or other lien now existing or hereafter placed upon the Leased
Premises of the Building, and Tenant agrees upon demand to execute
such further instruments subordinating this Lease or attorning to the
holder of any such liens as Landlord may request. In the event that
Tenant should fail to execute any instrument of subordination herein
require d to be executed by Tenant promptly as requested, Tenant
hereby irrevocably constitutes Landlord as its attorney-in-fact to
execute such instrument in Tenant's name, place and stead, it being
agreed that such power is one coupled with an interest. Tenant agrees
that it will from time to time upon request by Landlord execute and
deliver to such persons as Landlord shall request a statement in
recordable form certifying that this Lease is unmodified and in full
force and effect (or if there have been modi fications, that the same
is in full force and effect as so modified), stating the dates to
which rent and other charges payable under this Lease have been paid,
stating that Landlord is not in default hereunder (or if Tenant
alleges a default stating the nature of such alleged default) and
further stating such other matters as Landlord shall reasonably
require.
19. Security Deposit.
The Security Deposit shall be held by Landlord without liability for
interest and as security for the performance by Tenant of Tenant's
covenants and obligations under this Lease, it being expressly
understood that the Security Deposit shall not be considered an
advance payment of rental or a measure of Landlord's damages in case
of default by Tenant. Unless otherwise provided by mandatory non-
waivable law or regulation, Landlord may commingle the Security
Deposit with Landlord' s other funds. Landlord may, from time to
time, without prejudice to any other remedy, use the Security Deposit
to the extent necessary to make good any arrearages of rent or to
satisfy any other covenant or obligation of Tenant hereunder.
Following any such application of the Security Deposit, Tenant shall
pay to Landlord on demand the amount so applied in order to restore
the Security Deposit to its original amount. If Tenant is not in
default at the termination of this Lease, Landlord shall return the
balance of the Security Deposit remaining after any such application
to Tenant. If Landlord transfers its interest in the Premises during
the term of this Lease, Landlord may assign the Security Deposit to
the transferee and thereafter shall have no further liability for the
return of such Security Deposit.
20. Notice.
Any notice required or permitted under this Lease shall be deemed
sufficiently given or served if sent by United States certified mail,
return receipt requested, addressed as follows:
If to Landlord to:
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Tenant to:
C/O ▇▇▇▇▇▇▇ ▇▇▇▇▇, Chief Executive Officert
Vital Living, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Landlord and Tenant shall each have the right from time to time to
change the place notice is to be given under this paragraph by
written notice thereof to the other party.
21. Brokers.
Tenant represents that Tenant was not shown the Premises by any real
estate broker or agent and that Tenant has not otherwise engaged in,
any activity which could form the basis for a claim for real estate
commission, brokerage fee, finder's fee or other similar charge, in
connection with this Lease.
22. Waiver.
No waiver of any default of Landlord or Tenant hereunder shall be
implied from any omission to take any action on account of such
default if such default persists or is repeated, and no express
waiver shall affect any default other than the default specified in
the express waiver and that only for the time and to the extent
therein stated. One or more waivers by Landlord or Tenant shall not
be construed as a waiver of a subsequent breach of the same covenant,
term or condition.
23. Memorandum of Lease.
The parties hereto contemplate that this Lease should not and shall
not be filed for record, but in lieu thereof, at the request of
either party, Landlord and Tenant shall execute a Memorandum of Lease
to be recorded for the purpose of giving record notice of the
appropriate provisions of this Lease.
24. Headings.
The headings used in this Lease are for convenience of the parties
only and shall not be considered in interpreting the meaning of any
provision of this Lease.
25. Successors.
The provisions of this Lease shall extend to and be binding upon
Landlord and Tenant and their respective legal representatives,
successors and assigns.
26. Consent.
Landlord shall not unreasonably withhold or delay its consent with
respect to any matter for which Landlord's consent is required or
desirable under this Lease.
27. Performance.
If there is a default with respect to any of Landlord's covenants,
warranties or representations under this Lease, and if the default
continues more than fifteen (15) days after notice in writing from
Tenant to Landlord specifying the default, Tenant may, at its option
and without affecting any other remedy hereunder, cure such default
and deduct the cost thereof from the next accruing installment or
installments of rent payable hereunder until Tenant shall have been
fully reimbursed for such expenditures, together with interest
thereon at a rate equal to the lessor of twelve percent (12%) per
annum or the then highest lawful rate. If this Lease terminates prior
to Tenant's receiving full reimbursement, Landlord shall pay the
unreimbursed balance plus accrued interest to Tenant on demand.
28. Compliance with Law.
Tenant shall comply with all laws, orders, ordinances and other
public requirements now or hereafter pertaining to Tenant's use of
the Leased Premises. Landlord shall comply with all laws, orders,
ordinances and other public requirements now or hereafter affecting
the Leased Premises.
29. Final Agreement.
This Agreement terminates and supersedes all prior understandings or
agreements on the subject matter hereof. This Agreement may be
modified only by a further writing that is duly executed by both
parties.
IN WITNESS WHEREOF, the parties have executed this Lease as of the
day and year first above written.
Camper Clubs of America, Inc,
▇▇▇▇ ▇▇▇▇▇▇▇, Chief Operating Officer
/S/ ▇▇▇▇ ▇▇▇▇▇▇▇
Vital Living Inc.,
/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
September 5, 2001
▇▇▇▇ ▇▇▇▇▇▇▇, C.O.O.
Camper Clubs of America, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇.
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: Rent Pre-payment, check no. 1626
Dear ▇▇▇▇:
Pursuant to our discussion and agreement, please sing below as confirmation
that Vital Living will prepay 6 months rent (10/1/01 thru 3/31/02) at the
rate of $2,500 per month and receive 3 months "free." The free period will
run from 4/1/02 thru 6/30/02.
Additionally, should the building be sold or Vital Living move prior to the
conclusion of the term that CCA (its successors, heirs) will refund the
unused portion on a pro-rata basis.
Thanks,
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
President
/S/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, C.O.O.