LEASE
OF
PROPERTY LOCATED AT 000 XXXXXX XXX, XXXX, XXXXXX
This Lease is made and entered by and between BHP MINERALS
INTERNATIONAL INC., a Delaware corporation ("Lessor") and ALTAIR INTERNATIONAL
INC., an Ontario, Canada, corporation (or a subsidiary designated by Altair
International, Inc.) ("Tenant").
RECITALS
A. Lessor is the owner of that certain real property and improvements
thereon located at 000 Xxxxxx Xxx, Xxxx, Xxxxxx, hereinafter referred to as "BHP
Facilities".
X. Xxxxxx desires to lease to Tenant and Tenant desires to lease from
Lessor office and laboratory space in the BHP Facilities, consisting of
approximately twenty thousand (20,000) square feet.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein, the parties agree as follows:
1. DEFINITIONS. For purposes of this Lease the following definitions
shall apply:
1.1 "BHP Facilities" shall mean the real property and improvements
constructed thereon located at 000 Xxxxxx Xxx, Xxxx, Xxxxxx.
1.2 "Lessor" shall mean BHP Minerals International Inc., a Delaware
corporation, and its successors and assigns.
1.3 "Premises" shall mean approximately 20,000 square feet of office
and laboratory space located in the BHP Facilities designated from time to time
by mutual agreement of Lessor and Tenant and which is subject to the exclusive
use, occupation and control of the Tenant.
1.4 "Rent" shall mean the amount of compensation payable by the Tenant
to the Lessor in U.S. Dollars for use and occupancy of the Premises during the
term of the Lease. Rent is payable on a monthly basis and shall be determined as
a product of the "Rental Rate" as defined in Section 4 for each square foot of
space occupied as a part of the entire Premises.
1.5 "Tenant" shall mean Altair International Inc., an Ontario, Canada,
corporation (or a subsidiary designated by Altair International, Inc.), and its
successors and assigns.
2. LEASE OF PREMISES. Lessor leases to Tenant and Tenant leases from
Lessor the Premises in the BHP Facilities upon the terms and
conditions described herein, which Premises shall be subject to
the
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Exhibit 10.2
exclusive use, occupation and control of the Tenant. In addition to the
Premises, Tenant shall have the right, without payment of any additional rent,
to jointly utilize the BHP Facilities with Lessor, including loading docks,
shipping facilities and out-parcel storage Nareas. It is expressly understood
that Lessor and Tenant shall jointly use the entire BHP Facilities and that,
except for the Premises, the entire BHP Facilities shall be utilized by both
parties at the same time. As required by the parties, additional specific areas,
upon agreement, will be specifically reserved for each party. Lessor and Tenant
agree that neither party will unreasonably interfere with the other party's use
and enjoyment of the BHP Facilities; it being the intention of Lessor and Tenant
that each party shall be authorized to simultaneously conduct its business
within the BHP Facilities with a minimum of interference from the other party.
2.1 Option to Expand. In the event that Lessor vacates the BHP
Facilities or any part thereof, Tenant shall have the option to expand the
Premises, or the space otherwise subject to use by the Tenant, to include some
or all of the space vacated by Lessor. If Tenant makes such election, the
monthly Rent for the remainder of the initial term or extended term shall be
increased by an amount equal to the product of the additional square footage
included in the Premises multiplied by one-twelfth (1/12th) of the Rental Rate.
Tenant shall exercise its option to expand the Premises by written notice of
its election to do so given to Lessor, or its successor, not less than thirty
(30) days after Tenant's receipt of a written notice from Lessor describing the
portion of the BHP Facilities to be vacated by Lessor and offering the same to
Tenant for lease.
3. INITIAL TERM. The initial term of this Lease shall commence on
November 15, 1999, and terminate on December 31, 2000.
3.1 Tenant's Option to Exercise at Market Rent. The term of the lease
shall automatically extend for successive six-month periods unless terminated by
Tenant by written notice of its election to do so given to Lessor at least
ninety (90) days prior to the expiration of the then expiring term. Except as
provided in Paragraph3.2, Tenant's use and occupancy of the Premises and the BHP
Facilities during the extended term will be on all of the terms and conditions
of the Lease applicable at the expiration of the then expiring term.
3.2 Extended Term Monthly Rent. The initial monthly rent for an
extended term will be determined as follows:
(a) Not later than the date which is seventy-five (75) days
prior to the expiration of the initial term or the applicable extended term,
Lessor and Tenant shall agree on the then-fair market rental value of the
Premises; provided, however, that in no event shall the monthly rent for any
extended term be more than 102.5% of the monthly rent for the initial term or
the then expiring extended term. If Lessor and Tenant agree on the monthly rent
for the extended term before such date, they will amend this Lease by stating
the monthly rent for the extended term.
(b) If Tenant and Lessor are unable to agree on the monthly
rent pursuant to Paragraph 3.2(a), then the monthly rent for the extended term
will be the then-fair market rental value of the Premises as determined in
accordance with Paragraph 3.2(d).
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Exhibit 10.2
(c) The "then-fair market rental value of the Premises" means
what a Lessor under no compulsion to lease the Premises and a Tenant under no
compulsion to lease the Premises would determine as rents for the extended term,
as of the commencement of the extended term, taking into consideration the uses
permitted under this Lease, the quality, size, design, and location of the
Premises, and the rent for comparable buildings located in Washoe County,
Nevada. The then-fair market rental value of the Premises will not be less than
that provided during the initial term nor more than 102.5%% of the monthly rent
for the preceding initial term or extended term.
(d) Within seven (7) days after the expiration of the time
period set forth in Paragraph 3.2(A), Lessor and Tenant will each appoint a real
estate appraiser with at least five (5) years' full-time commercial appraisal
experience in the area in which the Premises are located to appraise the
then-fair market rental value of the Premises. If either Lessor or Tenant does
not appoint an appraiser within ten (10) days after the other has given notice
of the name of its appraiser, the single appraiser appointed will be the sole
appraiser and will set the then-fair market rental value of the Premises. If two
appraisers are appointed pursuant to this Paragraph, they will meet promptly and
attempt to set the then-fair market rental value of the Premises. If they are
unable to agree within thirty (30) days after the second appraiser has been
appointed, they will attempt to elect a third appraiser meeting the
qualifications stated in this Paragraph within ten (10) days after the last day
the two appraisers are given to set the then fair market rental value of the
Premises. If they are unable to agree on the third appraiser, either Lessor or
Tenant, by giving ten (10) days' prior notice to the other, can apply to the
then presiding judge of the Washoe County Court for the selection of a third
appraiser who meets the qualifications stated in this Paragraph. Lessor and
Tenant will bear one-half (1/2) of the cost of appointing the third appraiser
and of paying the third appraiser's fee. The third appraiser, however selected,
must be a person who has not previously acted in any capacity for either Lessor
or Tenant.
Within thirty (30) days after the selection of the third appraiser, a
majority of the appraisers will set the then-fair market rental value of the
Premises. If a majority of the appraisers are unable to set the then-fair market
rental value of the Premises within thirty (30) days after selection of the
third appraiser, the three appraisals will be averaged and the average will be
the then-fair market rental value of the Premises.
4. RENT. The monthly rental payable by Tenant hereunder shall be equal
to Seventy-Five Cents ($.75 U.S.) per square foot (the "Rental Rate") of leased
space included within the Premises which the parties agree shall be up to twenty
thousand (20,000) square feet, unless the Premises is expanded pursuant to the
terms of Paragraph 2.1. The rent therefore shall be Fifteen Thousand and 00/100
Dollars ($15,000.00) per month, payable in advance.
4.1 Time for Payment of Rent. Rent is payable in advance. Tenant shall
pay the rent described herein, without prior notice or demand, on or before the
first day of the first full calendar month after the effective date (as defined
below) and a like sum on or before the first day of each and every successive
calendar month thereafter during the term hereof. Rent for the period before the
first day of the first full calendar month after the effective date which is for
less than one (1) month shall be a pro rated portion of the monthly rent herein,
based upon a thirty (30) day month and shall be payable on the first day of the
first full calendar month after the effective date. All rental shall be paid to
Lessor, without deduction or offset, in lawful money of the United States of
America, which shall be legal tender at the time of payment, at the
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Exhibit 10.2 America, which shall be legal tender at the time of payment, at the
address described herein for delivery of notice to Lessor, or to such other
person or at such other place as Lessor may from time to time designate in
writing.
4.2 Rent includes water, sanitation, heat, electricity, air
conditioning, security, outdoor landscaping and janitorial services.
5. TENANT IMPROVEMENT COSTS. It is fully acknowledged by the parties
hereto that there shall be no required tenant improvements. If either Lessor or
Tenant specifically require improvements for that party's specific needs, then
the party desiring such improvements shall pay the total cost thereof.
6. USE. Tenant shall use the Premises for general office, laboratory,
research and manufacturing purposes. Tenant shall not do or permit anything to
be done in or about the Premises which will in any way obstruct or interfere
with the rights of other tenants or occupants of the BHP Facilities or injure or
annoy them or use or allow the Premises to be used for any improper, immoral, or
unlawful purposes, nor shall Tenant cause, maintain or permit any nuisance in,
on or about the Premises.
7. ENVIRONMENTAL WARRANTIES. Each party warrants to the other as
follows:
(a) Lessor warrants to Tenant that to the best of Lessor's
knowledge, after diligent search and inquiry, the BHP Facilities, and Lessor's
operation thereof, are in compliance with all "Applicable Law" (as defined
below), and there are no "Environmental Conditions" (as defined below) existing
or that have existed on, to or with respect to the BHP Facilities. Lessor has
made available concurrently with the execution of this Lease and shall make
available to Tenant for its review and inspection any and all documents,
information, reports, photographs, or recordings concerning or relating to the
"Environmental Condition" (as defined below) of the BHP Facilities known to or
within the possession of Lessor. To the best of Lessor's knowledge, there are no
underground storage tanks, septic tanks, or underground injection xxxxx in, at,
on, or under the BHP Facilities. To the best of Lessor's knowledge, the BHP
Facilities contain no material which contains and may emit formaldehyde into the
air, no polychlorinated biphenyls ("PCBs") or PCB-containing equipment or
articles. To the best of Lessor's knowledge, neither Lessor nor, to its
knowledge, any third party has:
(i) caused or permitted the BHP Facilities to be used
to generate, manufacture, refine, transport, treat, store,
use, handle, dispose of, transfer, produce, process, contain,
or be constructed of a "Hazardous Material" (as defined
below), except in compliance with all Applicable Law (as
defined below).
(ii) caused, permitted, authorized, or has knowledge
of the presence or release or threat of release of any
Hazardous Material in, on, under, or migrating to or from the
BHP Facilities;
(iii) received any notice or other information,
whether written or oral and whether actual or threatened,
except for the attached two notices, one dated February 28,
1996 from the City of Reno, the other being the warning letter
dated August 3, 1999 sent by the State of Nevada, Division of
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Exhibit 10.2
Environmental Protection, from any governmental agency or
authority or any other entity or individual, whether
governmental or private, concerning or alleging any liability
of Lessor or other persons or entities with respect to the BHP
Facilities, any intentional or unintentional act or omission
or any fact or condition which has resulted or which may
result in any Environmental Condition in, on, under, or
adjacent to the BHP Facilities.
For purposes of this Lease, "Environmental Condition" means
(i) contamination or pollution of soil, air, or surface or ground
waters, (ii) the disposal, placement, existence, presence, or release
or threat of release of a Hazardous Material and the affects thereof,
(iii) noncompliance with or violation of Applicable Law, including,
without limitation, any lack or required governmental permits or
approvals, "Hazardous Material" means (i) any substance, the presence
of which requires investigation, remediation, or other response or
corrective action under Applicable Law, or (ii) any substance which is
or hereafter becomes defined as a hazardous waste, hazardous substance,
extremely hazardous substance, hazardous material, hazardous matter,
hazardous chemical, toxic substance, toxic chemical, pollutant or
contaminant, or other similar term in or pursuant to applicable Law, or
(iii) PCBs or equipment or articles containing PCBs, petroleum, diesel
fuel, gasoline, or other petroleum hydrocarbons, and "Applicable Law"
means all existing or hereafter enacted or amended Federal, State, or
local laws, common law, statutes or regulations, including, without
limitation, those relating to the protection of human health and
safety, protection of the environment, or prevention of pollution.
(b) Lessor warrants to Tenant that after a diligent search it
believes it is operating the BHP Facilities in compliance of all local, state
and federal laws and regulations, and is totally unaware of any Environmental
Condition or other environmental problems, hazards, spills, discharges or
intentional violations of such statutes or ordinances.
(c) Tenant warrants that as part of its due diligence search
of the BHP Facilities, including conversations with some Lessor employees, it is
of the belief that no environmental problems, of any kind or nature, exist on
the BHP Facilities.
(d) Lessor and Tenant warrant to each other that if either
party learns of any Environmental Condition, environmental hazards, violations
of Applicable Law or environmental permits before or during the period of this
lease, it will immediately notify the other party. The parties agree to fully
cooperate to remediate the Environmental Condition or environmental hazards on
the BHP Facilities. It is further understood that the party causing the
Environmental Condition or environmental hazard is financially responsible for
all remediation thereof. Each party agrees that, to the extent that an
Environmental Condition is caused by such party (the "Indemnifying Party"), the
Indemnifying Party shall indemnify, defend and hold harmless the other party
(the "Indemnified Party") and the Indemnified Party's employees and agents from
and against all demands, claims, causes of action, judgments, losses, damages,
liabilities, fines, penalties, costs and expenses, including, without
limitation, reasonable attorneys' fees, arising from an Environmental Condition
with respect to the BHP Facilities. In addition, Lessor shall indemnify, defend
and hold harmless Tenant and the Tenant's employees and agents from and against
all demands, claims, causes of action, judgments, losses, damages, liabilities,
fines, penalties, costs and expenses, including, without limitation, reasonable
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Exhibit 10.2
attorneys' fees, arising from an Environmental Condition existing upon, or the
origin of which arose prior to, the commencement of the initial term of this
Lease with respect to the BHP Facilities. If any action or proceeding is brought
against the Indemnified Party or the Indemnified Party's employees or agents by
reason of any of the matters set forth in the preceding sentence, the
Indemnifying Party, on written notice from the Indemnified Party, shall defend
the Indemnified Party at the Indemnifying Party's expense with counsel
reasonably satisfactory to the Indemnified Party. This Paragraph 7(b) is subject
to the waiver of subrogation provisions set forth in Paragraph 12.
8. COMPLIANCE WITH THE LAW. Neither Lessor with respect to the BHP
Facilities nor Tenant with respect to the Premises shall permit anything to be
done in or about the Premises or the BHP Facilities, as the case may be, which
will in any way conflict with any law, statute, permit, ordinance or
governmental rule or regulation now in force or which may hereafter be enacted
or promulgated. Lessor and Tenant shall, to the extent that compliance is
required of either and at their respective sole cost and expense, promptly
comply with all laws, statutes, ordinances, and governmental rules, regulations
or requirements now in force or which may hereafter be in force, and with the
requirement of any board of fire insurance underwriters or other similar bodies
now or hereafter constituted, relating to or affecting the conditions, use or
occupancy of the Premises and the BHP Facilities, as the case may be, excluding,
with respect to the Tenant, structural changes not related to or affected by
Tenant's improvements or acts. The judgment of any court of competent
jurisdiction or the admission of either party to this Lease in any action
against such party, whether the other party to this Lease be a party to such
action or not, that said party to this Lease has violated any law, statute,
ordinance or governmental rule, regulation or requirement, shall be conclusive
of that fact as between said party and the other. Tenant and Lessor each agree
to diligently ascertain, obtain and operate in accordance with all permits of
every kind or nature required to operate their respective businesses within the
BHP Facilities.
9. TENANT'S OBLIGATIONS. By taking possession of the Premises, Tenant
shall be deemed to have accepted the Premises as being in good, sanitary order,
condition and repair. Tenant shall upon the expiration or sooner termination of
this Lease hereof surrender the Premises to the Lessor in good condition,
ordinary wear and tear and damage from causes beyond the reasonable control of
Tenant excepted. Except as specifically provided in an addendum, if any, to this
Lease, Lessor shall have no obligation whatsoever to alter, remodel, improve,
repair, decorate or paint the Premises or any part thereof and the parties
hereto affirm that Lessor has made no representations to Tenant respecting the
condition of the Premises or the building except as specifically herein
described. It is expressly understood that upon termination of this Lease and
return of the Premises to Lessor, Tenant shall, at its effort and expense,
remedy and/or clean up any violation of Applicable Law or Environmental
Condition with respect to the BHP Facilities to the extent that such
Environmental Condition or violation of Applicable Law is caused by the acts or
omissions of Tenant. It is expressly understood that upon Tenant's exercise of
its option to purchase pursuant to Paragraph 28 of this Lease, Lessor shall, at
its effort and expense, surrender the BHP Facilities to the Tenant in good
condition, ordinary wear and tear excepted, and that Lessor shall remedy and/or
clean up any violation of Applicable Law or Environmental Condition with respect
to the BHP Facilities to the extent that such Environmental Condition or
violation of Applicable Law is caused by the acts or omissions of Lessor. Raw
materials and chemicals received by Lessee from Lessor or subsequently purchased
by Lessee and utilized on the Premises are the responsibility of Lessee, said
responsibility to survive this Lease.
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Exhibit 10.2
10. LESSOR'S OBLIGATIONS. Lessor shall repair and maintain the
structural portions of the BHP Facilities (but not the pilot plant equipment),
including the basic plumbing and electrical systems, installed or furnished by
Lessor, except to the extent that such maintenance and repairs are caused by the
negligence or wilful misconduct of Tenant, its agent, servants, employees or
invitees, in which case Tenant shall pay to Lessor the reasonable cost of such
maintenance and repairs. Lessor shall not be liable for any failure to make any
such repairs or to perform any maintenance unless such failure shall persist for
an unreasonable time after written notice of the need of such repairs or
maintenance is given to Lessor by Tenant. There shall be no abatement of rent
and no liability of Lessor by reason of any injury to or interference with
Tenant's business arising from the making of any repairs, alterations or
improvements in or to any portion of the BHP Facilities or the Premises or in or
to fixtures, appurtenances and equipment therein. Lessor specifically agrees to
expeditiously repair and/or replace when necessary the electrical, HVAC,
telephone, mechanical, roof, plumbing, and sewer connections.
11. LIENS. Tenant shall keep the Premises and the property in which the
Premises are situated free from any subsequent liens arising out of any work
performed, materials furnished or obligations incurred by Tenant. Lessor may
require, at Lessor's sole option, Tenant to provide to Lessor, at Tenant's sole
cost and expense, a lien and completion bond in an amount equal to one and
one-half (1 1/2) times any and all estimated cost of any improvements, additions
or alterations made by Tenant in the Premises, to insure Lessor against any
liability for mechanic's and materialmen's liens and to insure completion of the
work. Tenant shall give notice to Lessor sufficiently in advance of any proposed
improvement, addition or alteration so that Lessor may properly record a Notice
of Non-Responsibility with the Washoe County Recorder.
12. ASSIGNMENT AND SUBLETTING. Tenant shall not either voluntarily or
by operation of law, assign, transfer, mortgage, pledge, hypothecate or encumber
this Lease or any interest therein, and shall not sublet the said Premises or
any part thereof, or any right or privilege appurtenant thereto, or suffer any
other person (the employees, agents, servants and invitees of Tenant excepted)
to occupy or use the said Premises, or any portion thereof, without the prior
written consent of Lessor, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, Tenant may, without the consent of Lessor, assign
this Lease to any subsidiary of Tenant. Lessor's consent to one assignment,
subletting, occupation or use by any other person shall not be deemed to be a
consent to any subsequent assignment, subletting, occupation or use by another
person. Any such assignment or subletting without such consent shall be void,
and shall, at the option of the Lessor, constitute a default under this Lease.
Lessor shall be entitled to receive fifty percent (50%) of any additional rent
paid by a sublessee over and above the amount of rent specified herein to be
paid by Tenant.
13. TENANT'S HOLD HARMLESS. Tenant shall indemnify and hold harmless
Lessor against and from any and all claims arising from Tenant's use of the BHP
Facilities for the conduct of its business or from any activity, work or other
thing done, permitted or suffered by the Tenant (except for claims arising out
of Lessor's use and occupancy of the BHP Facilities) in or about the BHP
Facilities, and shall further indemnify and hold harmless Lessor against and
from any and all claims arising from any breach or default in the performance of
any obligation on Tenant's part to be performed under the terms of this Lease,
or arising from any act or negligence of the Tenant, or any officer, agent,
employee, guest, or invitee of Tenant (except for claims arising out of Lessor's
use and occupancy of the BHP Facilities), and from all and against
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Exhibit 10.2
all cost, attorney's fees, expenses and liabilities incurred in or about any
such claim or any action or proceeding brought thereon. In any case, action or
proceeding brought against Lessor by reason of any such claim, Tenant shall,
upon notice from Lessor, defend the same at Tenant's expense by counsel
reasonably satisfactory to Lessor. Tenant as material part of the consideration
to the Lessor hereby assumes all risk or damage to property or injury to persons
in, upon or about the Premises, from any cause other than Lessor's negligence or
wilful misconduct, and Tenant hereby waives all claims in respect thereof
against Lessor.
Lessor or its agents shall not be liable for any injury or damage to
persons or property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak from any part of the BHP Facilities or
from the pipes, appliances or plumbing works therein or from the roof, street or
subsurface or from dampness or any other cause whatsoever, unless caused by or
due to the negligence or wilful misconduct of Lessor, its agents, servants or
employees. Lessors or its agents shall not be liable for interference with the
light or other incorporeal hereditaments pertaining to the Premises or loss of
business by Tenant, nor shall Lessor be liable for any latent defect in the
Premises or in the BHP Facilities. Tenant shall give prompt notice to Lessor in
case of fire or accidents in the Premises or in the BHP Facilities or of defects
therein in the fixtures or equipment.
14. LESSOR'S HOLD HARMLESS. Lessor shall indemnify and hold harmless
Tenant against and from any and all claims arising from Lessor's use of the BHP
Facilities for the conduct of its business or from any activity, work or other
thing done, permitted or suffered by the Lessor (except for claims arising out
of Tenant's use and occupancy of the BHP Facilities) in or about the BHP
Facilities, and shall further indemnify and hold harmless Tenant against and
from any and all claims arising from any breach or default in the performance of
any obligation on Lessor's part to be performed under the terms of this Lease,
or arising from any act or negligence of the Lessor, or any officer, agent,
employee, guest, or invitee of Lessor (except for claims arising out of Tenant's
use and occupancy of the BHP Facilities), and from all and against all cost,
attorney's fees, expenses and liabilities incurred in or about any such claim or
any action or proceeding brought thereon. In any case, action or proceeding
brought against Tenant by reason of any such claim, Lessor shall, upon notice
from Tenant, defend Tenant at Lessor's expense by counsel reasonably
satisfactory to Tenant. Lessor as material part of the consideration to the
Tenant hereby assumes all risk or damage to property or injury to persons in,
upon or about the BHP Facilities, from any cause other than Tenant's negligence
or wilful misconduct, and Lessor hereby waives all claims in respect thereof
against Tenant.
Tenant or its agents shall not be liable for any injury or damage to
persons or property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak from any part of the BHP Facilities or
from the pipes, appliances or plumbing works therein or from the roof, street or
subsurface or from dampness or any other cause whatsoever, unless caused by or
due to the negligence or wilful misconduct of Tenant, its agents, servants or
employees. Tenant or its agents shall not be liable for interference with the
light or other incorporeal hereditaments pertaining to the BHP Facilities or
loss of business by Lessor, nor shall Tenant be liable for any latent defect in
the Premises or in the BHP Facilities. Lessor shall give prompt notice to Tenant
in case of fire or accidents in the Premises or in the BHP Facilities or of
defects therein in the fixtures or equipment.
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Exhibit 10.2
15. SUBROGATION. As long as their respective insurers so permit, Lessor
and Tenant hereby mutually waive their respective rights of recovery against
each other for any loss insured by fire, extended coverage and other property
insurance policies existing for the benefit of the respective parties. Each
party shall obtain any special endorsements, if required by their insurer, to
evidence compliance with the aforementioned waiver.
16. LIABILITY INSURANCE. Each party shall, at such party's expense,
obtain and keep in force during the term of this Lease a policy of comprehensive
public liability insurance insuring such party against any liability arising
from said party's use, occupancy or maintenance of the Premises and/or the BHP
Facilities. Such insurance shall be written as a primary policy, not
contributing with and not in excess of the coverage which the other party may
carry, and shall name the other party as an additional insured. The limit of
insurance obtained by either party shall not limit the liability of either party
hereunder. Either party may carry said insurance under a blanket policy. If
either party shall fail to procure and maintain said insurance, the other party
may, but shall not be required to, procure and maintain such insurance, but at
the expense of the defaulting party. Insurance required hereunder shall be in
companies rated A+AAA or better in "Best's Insurance Guide". Each party shall
deliver to the other before occupancy of the Premises by Tenant copies of
policies of liability insurance required herein or certificates evidencing the
existence and amounts of such insurance with loss payable clauses satisfactory
to the other. No policy shall be cancelable or subject to reduction of coverage
except after ten (10) days' prior written notice to each party. The minimum
coverage shall be One Million Dollars ($1,000,000.00). Equipment owned by either
party and utilized on the BHP Facilities shall, if the owning party desires to
insure the same, be insured under a separate insurance policy maintained by such
party. Lessor shall procure and continue in force hazard insurance with special
causes of loss, insuring against fire, extended coverage risks, vandalism and
malicious mischief, in an amount equal to the full replacement cost of the BHP
Facilities (but not any furnishings, equipment and other personal property
installed in the Premises by Tenant). It is expressly understood that Tenant
shall acquire insurance for the Tangible Assets as defined in the Asset Purchase
and Sale Agreement dated November 15, 1999.
17. SERVICES AND UTILITIES. Provided that Tenant is not in default
hereof, Lessor agrees to provide utility services for water and sanitation,
electricity, heat, air conditioning, security, outdoor landscaping, and
janitorial services on weekdays. On weekends, Lessor agrees to provide utility
services for water and sanitation, electricity, heat and air conditioning.
18. PROPERTY TAXES. Lessor shall pay, or cause to be paid, before
delinquency, any and all real estate taxes levied or assessed, and which become
payable during the term hereof, upon the BHP Facilities. Tenant shall pay, or
cause to be paid, before delinquency, any and all taxes levied or assessed, and
which become payable during the term hereof, upon all Tenant's equipment,
furniture, fixtures and personal property located in the Premises, except that
which has been paid for by Lessor and is the standard of the building. In the
event any or all of the Tenant's equipment, furniture, fixtures and personal
property shall be assessed and taxed with the building, Tenant shall pay to
Lessor its share of such taxes within ten (10) days after delivery to Tenant by
Lessor of a statement in writing setting forth the amount of such taxes
applicable to Tenant's property.
19. RULES AND REGULATIONS. Tenant shall faithfully observe and comply
with all reasonable non-discriminatory rules and regulations that Lessor shall
from time to time promulgate in
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Exhibit 10.2
writing; provided, however, that such rules and regulations shall not interfere
with Tenant's quite use and enjoyment of the Premises and joint use of the BHP
Facilities in accordance with the terms of this Lease. Lessor reserves the right
from time to time to make all reasonable modifications to said rules. The
additions and modifications to those rules shall be binding upon Tenant upon
delivery of a written copy of the same to Tenant. Lessor shall not be
responsible to Tenant for the nonperformance of any said rules by any other
tenants or occupants unless such nonperformance materially interferes with
Tenant's quiet use and enjoyment of the Premises and joint use of the BHP
Facilities.
20. HOLDING OVER. If Tenant remains in possession of the Premises or
any part thereof after the expiration of the term hereof, with the express
written consent of Lessor, such occupancy shall be a tenancy from month to month
at a rental in the amount of the last monthly rental, plus all other charges
payable hereunder, and upon all the terms hereof applicable to a month to month
tenancy.
21. ENTRY BY LESSOR. Lessor, inasmuch as it will be sharing the BHP
Facilities, shall at any and all times have the right to enter the Premises,
inspect the same, supply any service to be provided by Lessor to Tenant
hereunder, submit said Premises to prospective purchasers or tenants, post
notices of non- responsibility, and alter, improve or repair the Premises and
any portion of the building of which the Premises are a part that Lessor may
deem necessary or desirable, without abatement of rent and may for that purpose
erect scaffolding and other necessary structures where reasonably required by
the character of the work to be performed, always providing that the entrance to
the Premises shall not be blocked thereby, and further providing that the
business of the Tenant shall not be interfered with unreasonably. Lessor
covenants that it shall maintain as strictly confidential any proprietary
information, trade secrets or trade processes that Lessor might have access to
by reason of Lessor's right of access granted pursuant to this Paragraph21 or
Lessor's joint use of the BHP Facilities with Tenant.
22. DEFAULT. The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant:
22.1 Abandonment. The vacating or abandonment of the Premises without
benefit of sublease or assignment of the Premises by Tenant.
22.2 Failure to Pay Rent. The failure by Tenant to make any payment of
rent or any other payment required to be made by Tenant hereunder, as and when
due, where such failure shall continue for a period of twenty (20) days after
written notice thereof by Lessor to Tenant.
22.3 Breach of Covenants, Conditions and Terms. The failure by Tenant
to observe or perform any of the covenants, conditions or terms of this Lease to
be observed or performed by the Tenant, other than described in Paragraph21.2
above, where such failure shall continue for a period of thirty (30) days after
written notice thereof by Lessor to Tenant; provided, however, that if the
nature of Tenant's default is such that more than thirty (30) days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant commences such cure within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion.
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Exhibit 10.2
22.4 Tenant Insolvency. The making by Tenant of any general assignment
or general arrangement for the benefit of creditors, or the filing by or against
Tenant of a petition to have Tenant adjudged a bankrupt, or a petition or
reorganization or arrangement under any law relating to bankruptcy, unless, in
the case of a petition filed against the Tenant, the same is dismissed within
ninety (90) days; or the appointment of a trustee or a receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored to Tenant
within thirty (30) days of the attachment, execution or other judicial seizure
of substantially Lease, where such seizure is not discharged in thirty (30)
days.
23. REMEDIES IN DEFAULT. In the event of any such material default or
breach by Tenant, Lessor may at any time thereafter, with or without notice or
demand and without limiting Lessor in the exercise of a right or remedy which
Lessor may have by reason of such default or breach:
23.1 Termination. Lessor may terminate Tenant's right to possession of
the Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Lessor. In such
event Lessor shall be entitled to recover from Tenant all damages incurred by
Lessor by reason of Tenant's default, including, but not limited to, the cost of
recovering possession of the Premises; expenses of reletting including necessary
renovation and alteration of the Premises, reasonable attorney's fees, any real
estate commission actually paid; the worth at the time of award by the court
having jurisdiction thereof the amount by which the unpaid rent for the balance
of the term after the time of such award exceeds the amount of such rental loss
for the same period that Tenant proves could be reasonably avoided; that portion
of the leasing commission paid by Lessor and applicable to the unexpired term of
this Lease. Unpaid installments of rent or other sums shall bear interest from
the date due at the rate of twelve percent (12%) per annum. In the event Tenant
shall have abandoned the Premises, Lessor shall have the option of (a) taking
possession of the Premises and recovering from Tenant the amount specified in
this Paragraph, or (b) proceeding under the provisions of the following
Paragraph 22.2.
23.2 Recovery of Rent. Lessor may maintain Tenant's right to
possession, in which case this Lease shall continue in effect whether or not
Tenant shall have abandoned the Premises. In such event Lessor shall be entitled
to enforce all of Lessor's rights and remedies under this Lease, including the
right to recover the rent as it becomes due hereunder.
23.3 Other Remedies. Pursue any other remedy now or hereafter available
to Lessor under the laws or judicial decisions of the State of Nevada.
24. DEFAULT BY LESSOR. Lessor shall not be in default under this Lease
unless Lessor or the holder of any mortgage or deed of trust covering the BHP
Facilities whose name and address have been furnished to Tenant in writing fails
to perform an obligation required of Lessor under this Lease within thirty (30)
days after written notice by Tenant to Lessor and to such holder, specifying the
respects in which Lessor has failed to perform such obligation. If the nature of
Lessor's obligation is such that more than thirty (30) days are reasonably
required for performance or cure, Lessor shall not be in default if Lessor or
such holder commences performance within such thirty (30) day period and after
such commencement diligently prosecutes the same to completion.
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Exhibit 10.2
25. OFFSET STATEMENT. Tenant shall at any time and from time to time
upon not less than ten (10) days' prior written notice from Lessor execute,
acknowledge and deliver to Lessor a statement in writing (a) certifying that
this Lease is unmodified and in full force and effect (or, if modified, stating
the nature of such modification and certifying that this Lease as so modified,
is in full force and effect), and the date to which the rental and other charges
are paid in advance, if any, and (b) acknowledging that there are not, to
Tenant's knowledge, any uncured defaults on the part of the Lessor hereunder, or
specifying such defaults if any are claimed. Any such statement may be relied
upon by any prospective purchaser or encumbrancer of all or any portion of the
real property of which the Premises are a part.
26. PARKING. Tenant shall have the right to use in common with other
tenants or occupants of the BHP Facilities the parking facilities of the BHP
Facilities, subject to rules and regulations which may be established by Lessor.
Lessor reserves the right to designate, in its sole discretion, certain parking
spaces for the exclusive use by visitors to the BHP Facilities, which parking
spaces shall not be used by members or employees of Tenant or other tenants of
the BHP Facilities. Other parking spaces at the BHP Facilities not so designated
for visitors' use shall be allocated among Tenant and other tenants of BHP
Facilities in the proportion that each tenant's rented square footage bears to
the total rented square footage in the BHP Facilities, including any
alterations, additions or expansions of the BHP Facilities. Tenant shall also
have use of the loading docks and shipping facilities associated with the BHP
Facilities, and Lessor shall not designate parking facilities for exclusive use
if such exclusive use shall materially interfere with Tenant's use of such
loading docks and shipping facilities.
27. AUTHORITY OF PARTIES. The parties acknowledge that Tenant and
Lessor are corporations and each individual executing this Lease on behalf of
said corporations represents and warrants that, with respect to said
corporation, he is duly authorized to execute and deliver this Lease on behalf
of said corporation, in accordance with a duly adopted authorization of said
corporation or in accordance with the articles of incorporation of said
corporation, and that this Lease is binding upon the said corporation in
accordance with its terms.
28. RIGHT OF FIRST REFUSAL.
(a) Lessor shall not sell the BHP Facilities prior to May 15,
2000. If at any time after May 15, 2000 Lessor receives a bona fide offer to
purchase the BHP Facilities, it shall promptly present such offer to Tenant.
Tenant will thereupon have sixty (60) days within which to acquire the BHP
Facilities on similar economic terms and conditions as presented by the offeror.
Notice of election to purchase and therefore exercise this right of first
refusal shall be given to Lessor in writing, actual delivery to occur within the
above stated 60-day period. If Tenant fails to exercise its right under this
paragraph 28, Lessor shall be free to sell the BHP Facilities upon the terms and
conditions offered to Tenant notwithstanding the option to purchase granted to
Tenant in paragraph 28 of this Lease. If Lessor desires to sell the BHP
Facilities on terms more favorable to the proposed purchaser than the terms
offered to Tenant, Lessor shall again re-offer the BHP Facilities to Tenant
under this paragraph 28.
(b) In addition to the right of first refusal granted herein,
the parties hereto agree to negotiate, in good faith, for the purpose of
Tenant's possible purchase of the BHP Facilities. The legal description of the
property the subject of this right of first refusal is "Parcel A of Parcel Map
No. 2242,
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Exhibit 10.2
according to the map thereof, filed in the Office of the County Recorder of
Washoe County, State of Nevada, on March 2, 1988 as File No. 1229829."
29. GENERAL PROVISIONS.
29.1 Plats and Riders. Clauses, plats and riders, if any, signed by the
Lessor and the Tenant and endorsed on or affixed to this Lease are a part
hereof.
29.2 Waiver. The waiver by Lessor of any term, covenant or condition
herein contained shall not be deemed to be a waiver of such term, covenant or
condition on any subsequent breach of the same or any other term, covenant or
condition herein contained. The subsequent acceptance of rent hereunder by
Lessor shall not be deemed to be a waiver of any preceding breach by Tenant of
any term, covenant or condition of this Lease, other than the failure of the
Tenant to pay the particular rental so accepted, regardless of Lessor's
knowledge of such preceding breach at the time of the acceptance of such rent.
29.3 Notices. All notices and demands which may or are to be required
or permitted to be given by either party to the other hereunder shall be in
writing. All notices and demands by the Lessor to the Tenant shall be sent by
United States certified mail, return receipt requested, postage prepaid,
addressed to the Tenant at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx, Xxxxxxx 00000
or to such other place as Tenant may from time to time designate in a notice to
the Lessor. All notices and demands by the Tenant to the Lessor shall be sent by
United States certified mail, return receipt requested, postage prepaid,
addressed to BHP Minerals International Inc., 000 Xxxxxx Xxx, Xxxx, Xxxxxx
00000, or to such other person or place as the Lessor may from time to time
designate in a notice to the Tenant.
29.4 Joint Obligation. If there be more than one Tenant, the
obligations hereunder imposed upon Tenants shall be joint and several.
29.5 Marginal Headings. The marginal headings and Paragraph titles to
the Paragraphs of this Lease are not a part of this Lease and shall have no
effect upon the construction or interpretation of any part hereof.
29.6 Time. Time is of the essence of this Lease and each and all of its
provisions in which performance is a factor.
29.7 Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
29.8 Recordation. Neither Lessor nor Tenant shall record this Lease
without the prior written consent of the other party. At the request of either
party, the parties shall execute a short form memorandum which may be recorded
in the Office of the Washoe County Recorder,
29.9 Quiet Possession. Upon Tenant paying the rent reserved hereunder
and observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed
-13-
Exhibit 10.2
hereunder, Tenant shall have quiet possession of the Premises and the right to
use the BHP Facilities in accordance with the terms hereof for the entire term
hereof, subject to all the provisions of this Lease.
29.10 Late Charge. Tenant hereby acknowledges that the late payment by
Tenant to Lessor of rent or other sums due hereunder will cause Lessor to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to
processing and accounting charges, and late charges may be imposed upon Lessor
by terms of any mortgage or trust deed covering the Premises. Accordingly, if
any installment of rent or of a sum due from Tenant shall not be received by
Lessor or Lessor's designee within twenty (20) days after written notice that
said amount is past due, then Tenant shall pay to Lessor a late charge equal to
five percent (5%) of such overdue amount. The parties hereby agree that such
late charges represent a fair and reasonable estimate of the cost that Lessor
will incur by reason of the late payment by Tenant. Acceptance of such late
charges by the Lessor shall in no event constitute a waiver of Tenant's default
with respect to such overdue amount, nor prevent Lessor from exercising any of
the other rights and remedies granted hereunder.
29.11 Prior Agreements. This Lease is being executed in connection with
the execution of that certain Asset Purchase and Sale Agreement, dated of even
date herewith (the "Acquisition Agreement"), between Lessor and Tenant. This
Lease and the Acquisition Agreement contain all of the agreements of the parties
with respect to any matter covered or mentioned in this Lease or the Acquisition
Agreement, and no prior agreements or understanding pertaining to any such
matters shall be effective for any purpose. No provision of this Lease may be
amended or added to except by an agreement in writing signed by the parties or
their respective successors in interest. This Lease shall not be effective or
binding on any party until fully executed by both parties.
29.12 Inability to Perform. This Lease and the obligations of the
Tenant hereunder shall not be affected or impaired because the Lessor is unable
to fulfill any of its obligations hereunder or is delayed in doing so, if such
inability or delay is caused by reason of strike, labor troubles, acts of God or
any other cause beyond the reasonable control of the Lessor; provided, however,
if Lessor's ability to perform extends beyond a period of sixty (60) days or
more, Lessor shall be entitled to terminate this Lease upon fifteen (15) days
written notice to Lessor.
29.13 Attorneys' Fees. In the event of any action or proceeding brought
by either party against the other under this Lease, the prevailing party shall
be entitled to recover all costs and expenses including the fees of its
attorneys in such action or proceeding in such amount as the court may adjudge
reasonable as attorneys' fees.
29.14 Sale of Premises by Lessor. Except as specifically contemplated
by this Lease or in the event of Tenant's purchase of the BHP Facilities, Lessor
shall be and is hereby entirely freed and relieved of all liability under any
and all of its covenants and obligations contained in or derived from this Lease
arising out of any act, occurrence or omission occurring after the consummation
of such sale; and the purchaser at such sale or any subsequent sale of the
Premises shall be deemed, without any further agreement between the parties or
their successors in interest or between the parties and any such purchaser, to
have assumed and agreed to carry out any and all of the covenants and
obligations of the Lessor under this Lease.
-14-
Exhibit 10.2
29.15 Name. Tenant shall not use the name of the building or of the
development in which the building is situated for any purpose other than as an
address of the business to be conducted by the Tenant in the Premises.
29.16 Severability. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof and such other provision shall remain in full force and effect.
29.17 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive, but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
29.18 Choice of Law. This Lease shall be governed by the laws of the
State of Nevada.
29.19 Signs. Tenant shall not place any sign upon the Premises or
building or conduct any auction thereon without Lessor's prior written consent.
Should Lessor construct an outdoor sign (s) , then the sign (s) shall describe
Tenant's business in the same manner as Lessor's and other tenants' business are
described.
29.20 Effective Date. The effective date of this Lease shall be the
date on which Tenant commences occupancy of the Premises.
The parties hereto have executed this Lease at the place and on the
dates specified immediately adjacent to their respective signatures.
LESSOR:
BHP MINERALS INTERNATIONAL INC.,
a Delaware corporation
By _______________________________________
Its _____________________________
TENANT:
ALTAIR INTERNATIONAL INC.,
an Ontario corporation
By _______________________________________
Its _____________________________
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