EXHIBIT 10.7
SMOKE TREE VILLAGE LEASE OFFICE
BUILDING
THIS LEASE is made and entered into
this 21st day of May, 2001, by and between J. W. WOOD
TRUST dba Smoke Tree Village Shopping Center at 1729 East Palm
Canyon Drive, Suite 117, and CANYON NATIONAL BANK
hereinafter respectively referred to as “Landlord” and
“Tenant” without regard to number or gender.
1. PREMISES
. Landlord hereby leases to Tenant and Tenant
hereby hires from Landlord those certain premises, together with
appurtenances, hereinafter referred to as the
“premises” and described on Exhibit “A”
attached hereto and made a part hereof. The premises, Suite
No. 200/6, comprise approximately 1664 square feet
and are a portion of the Smoke Tree Village Business and
Professional Center, located at 1729 East Palm Canyon Drive, Palm
Springs, Riverside County, California.
2
. DEPOSITS.
Tenant has paid to Landlord and
Landlord acknowledges receipt of deposit as follows:
(a)
The sum of two
thousand four hundred and ninety dollars ($2,490.00) which
shall be applied by Landlord to the first (1
st
) monthly
payment of the items specified in Paragraph 4 to become due and
payable under this Lease; and
(b) The sum of two thousand four hundred and
ninety dollars ($2,490,00) which shall be security for the full
and complete performance of all Tenant’s obligations
hereunder. Should Tenant vacate or surrender the premises prior to
the end of the demised term, said sum may be, at the option of the
Landlord, applied by Landlord as part (but not exclusive) payment
of Landlord’s damages resulting therefrom. Even though Tenant
has not vacated or surrendered the demised premises, said security
deposit may, during the term of this Lease, at the option of
Landlord, be used to correct any breach of Tenant’s
obligations under this Lease. Should all or any portion of said
security deposit be used to cure any breach of Tenant, Tenant
shall, within five (5) days after demand by Landlord,
replenish said security deposit to the original amount set forth
hereinabove. Upon expiration of said Lease, if Tenant shall
surrender said premises to Landlord in the condition and at the
time herein provided and shall have complied with all terms,
covenants and conditions of this Lease, then Landlord shall, within
thirty (30) days after satisfaction of all conditions, refund
said deposit for that portion remaining after all just offsets to
Tenant. Tenant shall be entitled to no interest payments upon said
deposit and Landlord shall have the right to co-mingle said deposit
with any other funds of Landlord.
3. TERM
. The term of this Lease shall be
for a period of three (3) years, commencing on the
1st day of July, 2001 and ending on the 30th day of June,
2004 and two (2) six (6) year renewal options each at
fair market value.
4. MONTHLY
PAYMENTS. Tenant shall pay to Landlord
monthly rental for the premises in the sum of one thousand three
hundred and seventy dollars ($1,370.00) starting on the
1 st
day of September
2001 ,
per
month which sum shall be paid in advance on the first (1
st
) day of each
calendar month throughout the term of the Lease, as set forth in
Article Three hereof, with proration of rentals for any partial
calendar month of the term hereof and subject to annual CPI
increases.
Tenant shall also
pay Tenant’s proportionate share of the costs specified in
Paragraphs 7, 9 and 10 for parking and common facilities, utility
services, utility maintenance costs, management fees and real
estate taxes and it is estimated that Tenant’s proportionate
share of these costs shall be one thousand one hundred and
twenty dollars ($1,120.00) per month due and payable on the
first (1 st
) day of each
month, commencing on the first (1
st
) day of
September, 2001, and will be subject to annual adjustments and
/or surcharge for increased utility rates.
All payments to be paid by Tenant to
Landlord shall be in lawful money of the United States of America
and shall be paid without deduction of offset, prior notice or
demand, and at such place or places as may be designated from time
to time by Landlord.
Landlord and Tenant agree than in
the event the premises are not completed and possession tendered to
Tenant on or prior to the date of commencement of the Lease term,
then said minimum monthly rental shall commence on (i) the day
the premises are tendered to Tenant, or (ii) the date Tenant
opens for business, whichever shall first occur.
In the event of the inability of
Landlord to deliver possession of the premises at the time of the
commencement of the term of this Lease, neither Landlord nor
Landlord’s agents shall be liable for any damage caused
thereby, nor shall this Lease thereby become void or voidable, nor
shall the term herein specified be in any way extended, but in such
event, Tenant shall not be liable for any rent until such time as
Landlord can deliver possession of the premises, but the
commencement date and the term of this Lease shall be extended
equivalent to the delay in delivering possession and until the
premises are capable of delivery (provided, however, if said
premises are not capable of delivery by Landlord to Tenant by the
1st day of June, 2001, either party may by written notice to
the other cancel this Lease and all parties shall be relieved of
any further responsibility hereunder).
5. USE.
The premises may be used for the
purpose of conducting an OFFICE and for no other purpose or
purposes.
Tenant shall not use the premises
nor permit any part thereof to be used for any purposes in
violation of any law, ordinance, or regulation. Tenant shall, at
Tenant’s sole cost, comply with any and all insurance
requirements pertaining to the premises or the use thereof, in
accordance with the terms hereinafter stated in paragraph 13.
Tenant shall also maintain reasonable fire insurance covering the
building and appurtenances of which the premises are a
part.
In the event of any use of the
premises or alteration thereof by Tenant, which results in an
increase in Landlord’s insurance premiums against the
premises or any portion thereof or any portion of the shopping
center of which the premises are a part, Tenant promptly, upon
demand, shall reimburse Landlord for the increased cost of such
insurance.
Tenant agrees that it will not at
any time during the term of this Lease and any extension hereof,
keep or display any merchandise or other objects on or otherwise
obstruct any sidewalks or other common areas of the shopping center
of which the premises are a part.
Upon termination of this Lease, Tenant shall
redeliver the premises to Landlord in the same condition as said
premises were received by Tenant, subject to any improvements,
alterations or remodeling performed pursuant to this Lease,
reasonable wear and tear excepted.
6. CONSTRUCTION AND
REMODELING. Landlord
and Tenant hereby agree that, after the execution of this Lease,
they will each commence and pursue to completion the construction
of the improvements for which Landlord and Tenant are responsible
as set forth on Exhibit “B” (“Description of
Landlord’s work and Tenant’s work”), which is
attached hereto and incorporated herein by reference.
7. REAL ESTATE
TAXES. In addition to
all rentals herein reserved, Tenant shall pay to Landlord his
pro-rata share of any increase in the Real Estate Taxes and
Assessments levied upon and assessed against the portion of the
shopping center and improvements thereon, described in Exhibit
“C” hereto as “Parcel No. 5”, of which
the premises are a part, for each year of the term of this Lease
over and above the taxes for the tax year ending June 30,
1979. Tenant’s “pro-rata share” shall be a
proportion arrived at in comparing the total square footage of
Tenant’s premises as it bears to the total Leaseable building
space of Parcel No. 5 as hereinafter provided. Such increases
in taxes shall be payable within thirty (30) days after
receipt by Tenant of a statement in writing from Landlord setting
forth the amount of such tax increase, together with a copy of the
current year’s tax bill. Landlord expects that said statement
will be prepared on or before January 1st of each
year.
Any such tax increase for the year
in which this Lease ends shall be apportioned and adjusted. With
respect to any assessment which may be levied against or upon the
demised premises and which, under the laws then in force, may be
evidenced by improvement or other bonds, or may be paid in annual
installments. Tenant shall be required to pay each year only the
amount of such annual installment or portion thereof constituting a
tax increase (with appropriate pro-ration for any partial year) and
shall have no obligation to continue such payments after the
termination of this Lease.
The term “Real Estate
Taxes” as used herein shall be deemed to mean all taxes
imposed upon the buildings and permanent improvements on the
premises, and all assessments levied against said building and
improvements, but shall not include personal income taxes, personal
property taxes, inheritance taxes or franchise taxes levied against
the Landlord but not directly against said property, even though
such taxes shall become a lien against said property.
8. PERSONAL PROPERTY
TAXES. During the
Lease term, Tenant shall pay before delinquent, any and all taxes,
assessments, license fees and public charges levied, assessed or
imposed upon Tenant’s fixtures, furnishings, equipment and
other personal property installed or located in the premises.
Tenant shall cause said fixtures, furnishings, equipment and other
personal property to be assessed and billed separately from the
real property of Landlord. In the event any or all of the
Tenant’s fixtures, furnishings, equipment and other personal
property shall be assessed and taxed with Landlord’s real
property, then Tenant shall pay Landlord its share of such taxes
within ten (10) days after delivery to Tenant by Landlord of a
statement in writing setting forth the amount of such taxes
applicable to Tenant’s property.
9. PARKING AND COMMON FACILITIES.
The automobile parking and common
areas of the shopping center, so designated in the attached Exhibit
“A”, shall be available for the non-exclusive use, in
common with Landlord, of Tenant, its agents, employees, customers,
licensees, subtenants and concessionaires during the full term of
this Lease or any extension hereof, for ingress and egress,
roadway, sidewalk and automobile parking.
During the term hereof, Tenant shall
pay to Landlord on a monthly basis Tenant’s prorated share of
the total cost of maintaining and operating the common area and
automobile parking area, including, without limiting the generality
of the foregoing, all maintenance and construction work required to
preserve and maintain the utility of the common area and parking
area in the same condition and status as when originally installed
(including expenses of a capital nature where required for
replacement purposes), reasonable supervision and management fees
incurred in the management of the common area and automobile
parking area, not to exceed fifteen (15%) percent of the total
expenses in any calendar year, all costs of policing, security
protection and traffic direction, all costs of cleaning and
removing rubbish, dirt and debris, landscaping, maintenance and
supplies incidental thereto, all premiums for fire, liability and
property damage insurance carried by Landlord in connection
therewith, all costs of utilities in connection therewith
including, but not limited to, all costs of maintaining and
replacement of lighting facilities, light standards and storm
drainage systems appurtenant thereto, and all taxes (real and
personal), assessments and similar levies, general and special,
ordinary and extraordinary, of any name, nature and kind whatsoever
which may be fixed, charged, levied, assessed or otherwise imposed
upon said common area and automobile parking area.
Tenant’s proportionate share
of the total expenses for the automobile parking area and common
area for the previous calendar year shall be that portion of all
such expenses which are apportionable to the average number of
square feet of floor space, as leased per annum, in those buildings
described on Exhibit “A” hereto, exclusive of Ralphs
and the Union Oil Station, with measurements to be from outside or
exterior walls and from the center of the interior separation
partitions. There shall be appropriate adjustment of Tenant’s
share of automobile and common area expenses as of the commencement
and expiration of the term of this Lease.
Within sixty (60) days after
the conclusion of each calendar year, Landlord shall furnish Tenant
with a statement, certified as correct by an employee of Landlord,
authorized to so certify, showing, for the calendar year just
completed, the total operating costs and average leased square
footage, of the common area, the amount of Tenant’s
proportionate share of such operating costs and the monthly
payments made by Tenant as above set forth. The deficiency or
excess shown on such statement with regard to Tenant’s
obligation to contribute its proportionate share of the operating
costs of the common area shall be adjusted in accordance with, the
above provisions. Landlord shall keep a separate account covering
the operating costs of the common area and the statements to Tenant
required herein shall accurately reflect such operating costs. Said
account records of Landlord shall be retained and preserved for a
period of at least twelve (12) months after the expiration of
each calendar year to which they apply.
Within ten (10) days after receipt of
Landlord’s annual statement, Tenant shall pay Landlord the
deficiency, if any, shown on said annual statement, between
Tenant’s proportionate share of the total operating costs of
the year just completed and actual monthly payments made by Tenant
to Landlord therefor. If said annual statement shows that
Tenant’s payment exceed Tenant’s proportionate share of
said operating costs, Landlord shall refund such excess therewith,
or at Landlord’s option credit such excess against monthly
payments next thereafter to become due to Landlord from Tenant for
said common area and automobile parking area.
Landlord reserves the unqualified
right to change the size, arrangement and location of the building
areas (except the premises), entrances, exits, roadways, parking
spaces, driveways, aisles and other areas which make up the
automobile parking and common areas. Tenant agrees to comply with
such rules and regulations as Landlord may adopt from time to time
with respect to the common areas and automobile parking areas and
the use thereof.
10. UTILITY SERVICES/UTILITY
MAINTENANCE COSTS.
It is understood and agreed that the
phrase “utility services and utility maintenance costs”
as used herein, shall mean all charges for water, gas, heat,
electricity, and all other utility services, as well as all
expenses for maintenance and repairs and replacement of air
conditioning equipment, heating equipment and lighting
apportionable to the Smoke Tree Village Business and Professional
Building.
Tenant agrees to pay his
proportionate share of all utility services and all utility
maintenance costs apportionable to the premises on a monthly basis.
Tenant’s proportionate share of the total expenses for
utility services and all utility maintenance costs for the previous
calendar year shall be that portion of all such expenses which is
equal to the proportion thereof which the number of square feet of
gross floor area in the premises bears to the total number of
square feet of actual leased area in the Smoke Tree Village
Business & Professional Center averaged per annum. There
shall be appropriate adjustment of Tenant’s share of said
expenses as of the commencement and expiration of the term of the
Lease.
Within sixty (60) days after
the conclusion of each calendar year, Landlord shall furnish Tenant
with a statement, certified as correct by an employee of Landlord
authorized to so certify, showing, for the calendar year just
completed, the total expenses for utilities and utility
maintenance, the amount of Tenant’s proportionate share of
said utilities and utility maintenance and the monthly payments
made therefor by Tenant. The deficiency or excess shown on said
statement with regard to Tenant’s obligation to contribute
its proportionate share of the expenses for utilities and utility
maintenance shall be adjusted in accordance with Tenant’s
proportionate share above set forth. Landlord shall keep a separate
account covering the expenses for utilities and utility
maintenance, and the statements to Tenant required herein shall
accurately reflect such expenses for utilities and utility
maintenance. Said account records of Landlord shall be retained and
preserved for a period of at least twelve (12) months after
the expiration of each calendar year to which they apply. Within
ten (10) days after receipt of Landlord’s annual
statement, Tenant shall pay to Landlord the deficiency,
if any, shown on said statement, between
Tenant’s proportionate share for expenses for utility
maintenance, for the year just completed and the actual monthly
payments for utilities and utility maintenance made by Landlord. If
said annual statement shows that Tenant’s monthly payments
exceeded Tenant’s proportionate share of the expenses for
utilities and utility maintenance, Landlord shall refund such
excess therewith, or at Landlord’s option, credit such excess
against monthly payments next thereafter to become due to Landlord
from Tenant.
11. MAINTENANCE AND
REPAIRS. Landlord
shall, at Landlord’s sole cost and expense, keep and maintain
in good order and repair, the exterior foundations, exterior walls
(except interior spaces), exterior doors, downspouts, gutters, and
the roof of the building of which the premises are a part, except
Landlord shall not be responsible for any damage (as to all items)
caused by any negligent act or omission of Tenant or its employees,
agents, guests, invitees, licensees or contractors. Landlord shall
not be required to make any repairs to said items unless Tenant has
notified Landlord in writing of the need for such repairs and
Landlord shall have had a reasonable period of time thereafter
within which to commence and complete said repairs. Landlord agrees
to use due diligence in the making of said repairs upon receipt of
Tenant’s notice with regard thereof. Landlord shall also keep
in good order, condition and repair, the common hallways, walkways,
rest rooms and other public areas in and adjacent to the Smoke Tree
Village Shopping Center.
Except for the maintenance and
repairs Landlord is specifically required to make pursuant to
article 11 hereof, Tenant shall, at Tenant’s own expense,
keep and maintain in good repair the exterior and interior of the
premises including, but not limited to, windows, ceilings, floor
covering, plumbing, electrical, and all other portions of the
premises. Tenant shall also keep and maintain the premises in good
and sanitary order and condition. Tenant hereby waives any rights
for damages to its merchandise and other personal property that
Tenant may have as a result of Landlord’s failure to make
repairs.
By entering into the premises,
Tenant shall be deemed to have accepted said premises as being in
good and sanitary order, condition and repair, and Tenant agrees on
the last day of said term or sooner termination of this Lease, to
surrender the premises, with appurtenances, in the same condition
as when received, reasonable use and wear thereof
excepted.
Tenant hereby waives to the extent
permitted by law, all of the provisions of Section 1941 and
1942, et. seq., of the California Civil Code, and the provisions of
any other law permitting repairs by a lessee at the expense of a
lessor, and the provisions of any other law in contravention of the
provisions of this article.
12.
ALTERATIONS. Tenant
shall not have the right to make any alterations, improvements or
additions to the premises or any portion thereof, without the prior
written consent of Landlord, except those changes, additions and
improvements, if any, which Tenant is required to make by the
provisions of this Lease. All alterations, additions or
improvements which are made in or to the premises shall be
surrendered with the premises upon the termination of this Lease
(with the exception of movable furniture and
trade fixtures), unless prior to such
termination Landlord gives Tenant written notice to remove some or
all thereof, in which case Tenant shall cause the items so
designated to be removed and the premises to be restored to its
original condition, all at the expense of Tenant. If during the
term of this Lease, any additions, alterations or improvements in
or to the premises, as distinguished from repairs, are required by
any governmental authority or any law, ordinance or government
regulation because of the use to which the premises are put by
Tenant and not by reason of the character or structure of the
building, they shall be made and paid for by Tenant.
Tenant agrees to pay promptly for
all labor done or materials furnished for any work of repair,
maintenance, improvement, alteration or addition done by Tenant, in
connection with the premises, and to keep and hold said premises
free, clear and harmless of and from all liens
