EXHIBIT 10.4
LEASE
AGREEMENT
ARTICLE 1 - BASIC LEASE
TERMS
1.01
Parties. THIS LEASE AGREEMENT ("Lease") is entered into
this 24thday of January, 2007, by and between the following LESSOR
and LESSEE: JUDY WILLOUGHBY, LLC, a Delaware limited liability
company ("LESSOR") having a principal place of business located at
4413 Hamann Parkway, Willoughby, Ohio 44094, and PACIFIC FUEL CELL
CORP., a Nevada corporation (''LESSEE'') having a principal place
of business located at 131 N. Tustin Ave., Suite 100, Tustin.
California 92780. This Lease will be solidified upon public
approval process.
1.02
Leased Premises. In consideration of the rents, terms,
provisions and covenants of this Lease, LESSOR hereby leases, lets
and demises to LESSEE approximately 23,886 square feet of the
commercial realty located at 4413 Hamann Parkway, Willoughby, Ohio
44094 (the ''Leased Premises") as more particularly described on
Exhibit "A" attached hereto and made a part hereof Notwithstanding
the foregoing, this Lease is subject to that certain lease by and
between LESSOR and Danny's Organic Marketplace, dated January 1,
2007 (the "Existing Lease").
1.03
Term. Subject to and upon the conditions set forth
herein, the term of this Lease with respect to the "Leased
Premises" shall commence March 1, 2007 ("Commencement Date") and
shall terminate on February 28, 2009 (the "Original
Term").
1.04
Rent .
(See Article 2). During the Original Term, Base Rent shall be One
Hundred Seventy-Three Thousand Five Hundred Twenty-Four and 00/100
Dollars ($173,524.00) payable as follows:
(i)
The sum of Seventy-One Thousand Nine
Hundred Thirty-Seven and 00/100 Dollars ($71,937.00), payable in
twelve equal monthly installments of Five Thousand Nine Hundred
Ninety-Four and 75/100 Dollars ($5,994.75) on the first day of each
month, beginning on the Commencement Date and ending on February
1,2008;
(ii) The sum of One Hundred One
Thousand Five Hundred Eighty-Seven and 00/100 Dollars
($101,587.00), payable in twelve equal monthly installments of
Eight Thousand Four Hundred Sixty-Five and 58/100 Dollars
($8,465.58), beginning on March 1,2008 and ending February
1,2009.
1.05
Notification addresses. The addresses set forth in the first paragraph
of this Lease. as may be changed from time to time.
1 .06
Permitted Use. LESSEE shall use the Leased Premises for the
operation of a fuel cell manufacture and uses incidental or related
thereto.
ARTICLE 2 - RENT
2.01
Base and Additional Rent.
LESSEE covenants and agrees to pay
LESSOR at LESSOR's office or such other place as LESSOR may from
time to time designate, as Base Rent for the Leased Premises
without abatement, deduction or set-off and without demand, unless
otherwise provided herein. the sums specified in paragraph 1.04
hereof during each month of the Original Term, or until its earlier
termination as provided in this Agreement. Said sums shall be paid
in advance on the first day of each and every calendar month of the
Original Term.
2.02
Late Payment Charge. Other remedies for nonpayment of rent
notwithstanding, if the monthly rental payment is not received by
LESSOR on or before ten days following its due date, or if any
other payment due LESSOR by LESSEE is not received by LESSOR on or
before the thirtieth (30th) day following receipt of an invoice or
accounting. a late payment charge of five percent (5%) of such
amount due shall become due and payable in addition to such amounts
owed under this Lease. LESSOR's receipt of such charges shall not
be a waiver of LESSEE's default, nor shall its receipt affect any
other remedy available to LESSOR hereunder or otherwise. If any
payment made hereunder to LESSOR by LESSEE is tendered by check,
and such check is returned unpaid to LESSOR by LESSOR's bank for
any reason, there shall be an additional charge to LESSEE of Fifty
Dollars ($50). Any charge occurring pursuant to this Section shall
be considered additional rent.
2.03
Increase in Insurance Premiums.
If an increase in any insurance
premiums paid by LESSOR for the Leased Premises is caused by
LESSEE's use of the Leased Premises in a manner other than as set
forth in Section 1.06, or if LESSEE vacates the Leased Premises and
causes an increase in such premiums, then LESSEE shall pay as
additional rent the amount of such increase to LESSOR.
ARTICLE 3 - OCCUPANCY AND
USE
3.01
Use. LESSEE warrants and represents to LESSOR that it
is a Nevada corporation licensed to do business in the State of
Ohio. LESSEE shall occupy the Leased Premises, conduct its business
and control its agents, employees, invitees and licenses in such a
manner as is lawful and respectful and will not create a
nuisance.
3.02
Warranty of Possession. LESSOR warrants that it has the right and
authority to execute this Lease, and LESSEE, upon payment of the
required rents and subject to the terms, conditions, covenants and
agreements contained in this Lease, shall have possession of the
Leased Premises during the Original Term as well as any Renewal
Term (hereinafter defined). LESSOR shall not be responsible for the
acts or omissions of any third party that may interfere with
LESSEE's use and enjoyment of the Leased Premises.
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ARTICLE 4 - COMPLIANCE WITH
LAWS
4.01
Compliance with Laws. LESSEE shall at all times comply with all laws,
ordinances, rules and regulations of all governmental authorities
and maintain all certifications and licenses with respect to use of
the Leased Premises. If any violations are noted or issued with
respect to any condition in the Leased Premises or, arise out of
LESSEE's use of the Leased Premises, LESSEE shall promptly procure
the cancellation or discharge of same, including making any
necessary structural repairs or alterations.
4.02
Conflicts with Fire or Other
Insurance. LESSEE shall
not do or permit any act or thing to be done in or about the Leased
Premises which is contrary to law, or which will invalidate,
violate a condition imposed by, or be in conflict with, public
liability, fire or other policies of insurance at any time carried
by or for the benefit of LESSOR. LESSEE shall not keep anything in
the Leased Premises, nor use the Leased Premises, in a manner which
will increase the insurance rate for the Leased Premises. If by
reason of failure to comply with the foregoing, the insurance rate
will be higher than it otherwise would be during the Original Term
or the Renewal Term (hereinafter defined). then LESSEE shall pay
directly to the insurance carrier or reimburse LESSOR as rent
hereunder for that portion of the additional insurance premiums
charged because of such acts by LESSEE.
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4.03
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Hazardous Materials/Environmental
Compliance.
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(a) For purposes hereof: the
following definitions shall apply:
(i) "Hazardous Materials" shall mean
asbestos, urea formaldehyde, polychlorinated biphenyls, petroleum
products, flammable explosives, radioactive materials, hazardous
materials, hazardous wastes and hazardous or toxic substances which
are defined, determined or identified as such in any Environmental
Requirements.
(ii) "Environmental Requirements"
shall mean any and all federal, state or local environmental laws,
ordinances, rules or regulations (whether now existing or hereafter
enacted or promulgated) or any judicial or administrative
interpretations of such laws, ordinances, rules or regulations, or
any judicial or administrative orders or judgments with respect
thereto, including, without limitation. all local laws of the City
of Independence, Ohio. LESSEE shall comply with and shall cause all
subtenants or other occupants of the Leased Premises to comply in
all respects with all Environmental Requirements and with any
reasonable program of environmental health and safety which may be
instituted by LESSOR with respect to the Leased Premises. LESSEE
will not generate, store, handle, process, dispose of or otherwise
use and will not permit any subtenant or other occupant of the
Leased Premises to generate, store, handle, process, dispose of or
otherwise use, Hazardous
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Materials at, in., on, under or
about the Leased Premises in a manner that could lead or
potentially lead to the imposition on LESSOR, LESSEE or the Leased
Premises of any liability or lien of any nature whatsoever under
any Environmental Requirement.
(b) LESSEE covenants and agrees to
indemnify. protect and save LESSOR, its directors, agents,
officers, managers and employees, harmless against and from any and
all damages, losses, liabilities, obligations, fines, penalties,
claims, causes of action, litigation, demands, defenses, judgments,
suits, proceedings, liens, encumbrances, costs, disbursements or
expenses of any kind or of any nature whatsoever (including,
without limitation, reasonable attorneys' and experts' fees and
disbursements).known or unknown, foreseen or unforeseen, contingent
or otherwise, which may at any time be imposed upon, incurred by or
asserted or awarded against LESSOR or the Leased Premises or any
portion thereof and arising from or out of any Hazardous Materials
on, in, under or affecting all or any portion of the Leased
Premises, introduced by, or on behalf of LESSEE.
(c) The obligations and liabilities
of LESSEE under this Article 4 shall survive and continue in full
force and effect and shall not be terminated, discharged or
released, in whole or in part, irrespective of the termination or
expiration of the Original Term or the Renewal Term of this
Lease.
ARTICLE 5 - UTILITIES AND
SERVICE
LESSEE covenants and agrees to pay
for electric, gas, water, sewer and all other utility services
rendered or furnished to the Leased Premises during the Original
Term, and any Renewal Term. In addition, LESSEE shall pay the cost
of installing (with LESSOR's prior approval), servicing and
maintaining any special or additional inside or outside wiring of
lines, meters and subrneters, transformers and poles, air
conditioning costs or the cost of any other equipment necessary to
increase the amount or type of electricity, power or utilities
available to the Leased Premises. LESSEE shall pay for any removal
of any trash and debris.
ARTICLE 6 - REPAIRS AND
MAINTENANCE
6.01
Lessor Repairs. Except as set forth herein, LESSOR shall not be
liable to LESSEE to make repairs or replacements to the Leased
Premises, and LESSEE except as set forth herein, shall not be
entitled to any abatement or reduction of rent by reason of
repairs, alterations or additions made under this Lease.
Notwithstanding the foregoing, LESSOR shall maintain only the roof,
foundation, parking lot (including landscaping and snow removal),
underground plumbing and outside electrical supply, and the
structural soundness of the exterior walls of the Leased Premises,
making repairs thereto which may become necessary during the
Original Term or the Renewal Term, unless occasioned by any act or
negligence of LESSEE, its agents, contractors, invitees or
employees, in which event such damage shall be promptly repaired by
LESSEE at its sale cost and expense, ordinary wear and tear
excepted.
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6.02
Lessee Maintenance and Repairs.
LESSEE agrees to keep and maintain
the Leased Premises in good order, condition and repair. LESSEE
shall, at its own cost and expense, repair or replace any damage or
injury to all or any part of the Leased Premises caused by any act
or omission of LESSEE or LESSEE's agents, employees, invitees, or
licensees. Except as otherwise expressly provided in this Lease,
LESSEE shall, at LESSEE'S sole cost and expense, keep and maintain
the interior of the Premises and all non-common fixtures and
equipment therein, including, but not limited to, all plumbing,
HVAC equipment and ducts attached thereto; exposed electrical, gas,
water and sewer pipes, lines and connections within the Leased
Premises; fire extinguishers; interior wall, ceiling and floor
surfaces and coverings; non-common window frames and glass; all
non-common doors (including overhead and sliding); and all signs of
LESSEE erected on the Leased Premises or outside of the Leased
Premises, in good repair, order and condition, making all repairs
and replacements thereto (including the replacement of the HVAC
system) as may be required. All repairs and replacements shall be
in quality equal to or better than the original equipment,
materials or work. LESSEE shall at all times maintain sufficient
heat in the Leased Premises to prevent freezing of sprinkler and
water lines. If LESSEE installs or moves partitions or walls within
the Leased Premises, LESSEE shall make, at its own expense but
subject to LESSOR'S approval, all additions to or changes in
location of heating, plumbing, sprinkler or electrical lines and
equipment made necessary by those installations.
ARTICLE 7 - ALTERATIONS AND
IMPROVEMENTS
Except as expressly provided herein,
LESSEE shall not make or allow to be made any alterations or
physical additions in or to the Leased Premises without first
obtaining the written consent of LESSOR, which consent will not be
unreasonably withheld. Any alterations, physical additions or
improvements to the Leased Premises made by LESSEE shall, unless
otherwise agreed upon by the parties, at once become the property
of LESSOR and shall be surrendered to LESSOR upon the termination
of this Lease; provided, however, LESSOR, at its option, may
require LESSEE to remove any physical additions and/or repair any
alterations in order to restore the Leased Premises to the
condition existing at the time LESSEE took possession, all costs of
removal and/or alterations to be borne by LESSEE. This clause shall
not apply to moveable equipment or furniture owned by LESSEE, which
may be removed by LESSEE at the end of the Original Term or any
Renewal Term., as the case may be. LESSEE hereby indemnifies and
holds harmless LESSOR from all costs, expenses, liens, claims or
damages arising out of or resulting from the making of such
alterations, additions, improvements or removal of moveable
equipment or furniture.
ARTICLE 8 - TRADE FIXTURES IN
LEASED PREMISES
8.01
Removal by Lessee. Removable trade fixtures shall not be deemed to
become a part of the Leased Premises unless so affixed as to damage
the Leased Premises in removal. LESSEE may, at the expiration of
the Original Term or a Renewal Term, remove all of its trade
fixtures which can be removed without costly injury to, or undue
defacement of the Leased Premises, provided all rents stipulated
herein are paid in full and LESSEE is not otherwise
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in default hereunder, and provided
further that any and all damage to the Leased Premises resulting
from or caused by such removal shall be promptly repaired at
LESSEE's expense.
8.02
Risk of Loss. LESSEE covenants and agrees that all personal
property of every kind or description which may at any time be in
the Leased Premises shall be at LESSEE's sole risk, or at the risk
of those claiming under LESSEE, and LESSOR shall not be liable for
any damage to said property or loss suffered by the business or
occupation of LESSEE and arising from or caused in any manner
whatsoever except as may result from and be caused by the
negligence of LESSOR or its agents or employees.
ARTICLE 9 - ACCESS TO LEASED
PREMISES
9.01
Inspection by Lessor. LESSEE covenants and agrees to permit LESSOR and
LESSOR's agents to inspect and examine the Leased Premises at any
reasonable time to permit LESSOR to make such repairs, decorations,
alterations, improvements or additions in and to the Leased
Premises that LESSOR may deem desirable or necessary for its
preservation or which LESSEE has failed so to do, and for other
reasonable purposes without the same being construed as an eviction
of LESSEE so long as LESSOR does not interfere with the conduct of
LESSEE's business operations conducted on the Leased Premises.
LESSOR shall have the right to use any and all means which LESSOR
may deem proper to enter the Leased Premises in an emergency
without liability thereof
9.02
Showing of Leased Premises.
LESSOR and its agents shall also
have the right to enter upon the Leased Premises, upon reasonable
prior notice to LESSEE, for the purpose of exhibiting the same to
prospective tenants or purchasers. During said period LESSOR may
place signs in or upon the Leased Premises to indicate the same are
for rent. These signs shall not be removed, obliterated or hidden
by LESSEE.
ARTICLE 10 - LESSEE'S
TAXES
LESSEE covenants and agrees to pay
promptly when due all taxes assessed against LESSEE's fixtures,
furnishings, equipment and stock-in-trade placed in or on the
Leased Premises during the Original Term and any Renewal
Term.
ARTICLE 11 - DESTRUCTION OF
LEASED PREMISES
11.01
Repairs Within Three (3) Months.
If the Leased Premises shall be
destroyed or so injured by any cause as to be unfit for occupancy,
in whole or in part, and such destruction or injury could be
substantially repaired within three (3) months from the happening
of such destruction or injury, the LESSEE shall not be entitled to
surrender possession of the Leased Premises nor shall LESSEE's
liability to pay rent under this Lease cease without the mutual
consent of the parties. In case of any such destruction or injury,
LESSOR shall repair the same with all reasonable speed and shall
substantially complete such repairs within three (3) months from
the happening of such injury. If during such period LESSEE shall be
unable to use all or any portion of the Leased Premises, an
allowance from its rent may be made to LESSEE in a
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proportionate amount corresponding
to the time during which and to the portion of the Leased Premises
of which LESSEE is so deprived.
11.02
Repairs Taking Longer Than Three
Months. If such
destruction or injury cannot be substantially repaired within three
(3) months, LESSOR shall notify LESSEE within thirty (30) days
after receiving notice of the happening thereof whether or not
LESSOR will repair or rebuild. If LESSOR elects not to repair or
rebuild, this Lease shall terminate. If LESSOR shall elect to
repair or rebuild, LESSOR shall specify the time within which such
repairs or reconstruction will be completed. LESSEE shall have the
option, within thirty (30) days after the receipt of such notice,
to elect in writing either to (a) terminate this Lease and, subject
to Paragraph 11.03 to be released from further liability hereunder
or (b) to extend the term of the Lease by a period of time
equivalent to the time from the happening of such destruction or
injury until the Leased Premises are, to the extent reasonably
possible, restored to their former condition. LESSEE shall not be
liable to pay rent until either the Leased Premises are so repaired
or until LESSEE resumes operations in the Leased Premises.
whichever first occurs.
11.03
Damage Caused by Lessee. Notwithstanding anything herein stated to the
contrary, if such damage or destruction is caused by or the result
of any act or negligence of LESSEE or its employees, agents,
invitees, or licenses, LESSEE shall not be relieved of its
obligation to pay rent hereunder and unless LESSOR elects to
terminate this Lease, this Lease shall not be terminated, If LESSOR
does not perform repairs in such event, LESSEE shall do so at its
own cost and expense so as to restore the Leased Premises to their
former condition.
ARTICLE 12 - SURRENDER OF LEASED
PREMISES
12.01
Condition of Leased Premises.
LESSEE covenants and agrees to
surrender to LESSOR possession of the Leased Premises upon
expiration of this Lease, or its earlier termination as herein
provided, broom clean and in as good condition and repair as it was
at the commencement of the Original Term of this Lease.
12.02
Removal of Property. Prior to LESSEE's vacating or delivering up the
Leased Premises to LESSOR, LESSEE shall. at LESSEE's cost and
expense, remove all property of LESSEE and all alterations,
additions and improvements as to which LESSOR shall have made the
election provided for in Article 7.00. LESSEE shall furthermore
repair any damage to the Leased Premises caused by its permitted
removal of trade fixtures, alterations, additions and improvements
and shall restore the Leased Premises to the condition in which
they were prior to the installation of the articles. Any property
not removed and as to which LESSOR shall not have made the
foregoing election, shall be deemed to have been abandoned by
LESSEE and may be retained or disposed of by LESSOR, as LESSOR
shall desire. LESSEE's obligation to observe or perform this
covenant shall survive the expiration or termination of the term of
this Lease.
ARTICLE 13 - INDEMNITY AND
INSURANCE BY LESSEE; WAIVER OF
SUBROGATION
13.01
Lessee Indemnity. LESSEE covenants and agrees that it shall
protect and save LESSOR harmless and keep LESSOR forever harmless
and indemnified against and from
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any penalties, damages. charges or
costs imposed or resulting from any violation of any law, order of
governmental agency, or ordinance by LESSEE, whether occasioned by
the neglect or other acts or omissions of LESSEE or those holding
under LESSEE. LESSEE further agrees that LESSEE shall at all rimes
protect, indemnify and save and keep harmless the LESSOR against
and from all claims, losses, costs, damages or expenses arising out
of or from any accident or other occurrence on or about the Leased
Premises causing injury to any person or property whomsoever or
whatsoever, except those arising from the act or negligence of
LESSOR. LESSEE shall protect. indemnify, save and keep harmless
LESSOR against and from any and all claims, costs, damages or
expenses arising out of any failure of LESSEE in any respect to
comply with or perform all the material requirements and provisions
of this Lease.
13.02
Lessor Indemnity. LESSOR covenants and agrees that it shall
protect and save LESSEE harmless and keep LESSEE forever harmless
and indemnified against and from any penalties, damages, charges or
costs imposed upon LESSOR or resulting from any violation of any
law, order of governmental agency, or ordinance by LESSOR, whether
occasioned by the neglect or other acts of omissions of LESSOR or
those holding under LESSOR. LESSOR further agrees that LESSOR shall
at all times protect, indemnify and save and keep harmless the
LESSEE against and from all claims, losses, costs, damages or
expenses arising out of or from any accident or other occurrence on
or about the Leased Premises causing injury to any person or
property whomsoever or whatsoever and arising from the act or
negligence of LESSOR. LESSOR shall protect, indemnify, save and
keep harmless LESSEE against and from any and all claims, costs,
damages or expenses arising out of any failure of LESSOR in any
respect to comply with or perform all the material requirements and
provisions of this Lease.
13.03
Insurance . LESSEE agrees that, at its own cost and
expense, it will procure and continue in force, in the names of
LESSOR, LESSOR's mortgagee(s) and LESSEE as their interests may
appear, general liability and all-risk casualty insurance against
any and all claims for injuries to persons and property occurring
in, upon or about the Leased Premises, including all damage to
signs, glass, awnings, fixtures or other appurtenances now or
hereafter erected on the Leased
