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Exhibit 10.27
DATE: [1.4.2000]
LEASE AGREEMENT
BETWEEN
OUTOKUMPU HARJAVALTA METALS OY
AND
OUTOKUMPU NICKEL OY
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INDEX
I INTERPRETATION 4
1.1 Definitions................................................. 4
1.2 References.................................................. 5
1.3 Headings.................................................... 5
2 OBJECT OF THE AGREEMENT............................................. 6
2.1 Leased Land................................................. 6
2.2 Construction Right.......................................... 6
2.3 Shared Areas................................................ 6
3 DURATION............................................................ 6
4 RENT................................................................ 7
4.1 Amount...................................................... 7
4.2 Escalation of annual rent................................... 7
5 ASSIGNMENT AND SEEKING MORTGAGE..................................... 7
6 EXCLUSION OF THE OPTION AREA........................................ 8
6.1 Right to exclude the Option Area............................ 8
6.2 Right to demolish........................................... 8
6.3 Resulting effects........................................... 8
7 OWNER'S RIGHT TO GIVE INSTRUCTIONS.................................. 9
8 CERTAIN ROADS AND OWNER'S PROPERTY ON LEASED LAND................... 9
8.1 "Kuparitehtaantie".......................................... 9
8.2 "Siilotie".................................................. 9
8.3 Owner's Fixtures............................................ 10
8.4 Water Tanks................................................. 10
8.5 Slag........................................................ 11
9 LESSEE'S FIXTURES................................................... 11
10 COMPLIANCE WITH LAWS, RULES AND REGULATIONS......................... 12
11 ENVIRONMENTAL DAMAGES AND EXCLUSION OF CONSEQUENTIAL DAMAGES........ 12
12 USE OF LEASED LAND.................................................. 12
13 RELATIONSHIP BETWEEN THE PARTIES.................................... 13
13.1 Co-operation............................................... 13
13.2 Co-operation Committee..................................... 13
13.3 Hardship................................................... 13
14 GOVERNING LAW AND ARBITRATION....................................... 14
15 MISCELLANEOUS....................................................... 14
15.1 Amendments................................................. 14
15.2 Notices.................................................... 14
15.3 Annexes.................................................... 14
15.4 Confidentiality............................................ 15
ANNEX I
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THIS AGREEMENT is made on the [1st] day of [April], 2000
BY AND BETWEEN
OUTOKUMPU HARJAVALTA METALS OY (registration number [ ]), having its registered
office in Harjavalta, Finland (hereinafter the "Owner")
AND
OUTOKUMPU NICKEL OY (registration number [ ]), having its registered office in
Harjavalta, Finland (hereinafter the "Lessee").
RECITALS:
A. On [March 31], 2000, through a division procedure OKHA (as defined
below) was dissolved and two new companies, the Owner and the Lessee,
were incorporated.
B. As a result of the division title to the Property has passed from OKHA
to the Owner.
C. The Owner and the Lessee own and operate their respective industrial
plants on the Property, share a number of facilities, services and
utilities on the Property and have certain plans to expand their
operations and to build further premises on the Property.
D. The Lessee is willing by this Agreement to lease from the Owner and the
Owner is willing to lease to the Lessee the land areas the Lessee needs
for proper operation of its plant.
OPERATIVE PROVISIONS:
1 INTERPRETATION
1.1 DEFINITIONS
The following terms when used in this Agreement shall have the meanings
herein assigned to them, unless their use in the context is
inconsistent with such meanings:
"LESSEE'S FIXTURES" shall mean any and all pipings, cabelings, fittings
and constructions owned by the Lessee, located on the Property but
outside the Leased Land.
"LEASED LAND" shall, subject to Clause 6, mean the three land areas
located on the Property as further defined in Annex 1, having the
combined surface area of approximately 89.295 square meters. Where the
boundary of Leased Land is in Annex 1 indicated to be immediately next
to a building, the boundary is always construed to be two meters off
the wall of such building.
"OKHA" shall mean the dissolved company called Outokumpu Harjavalta
Metals Oy (registration number 455.718).
"OPTION AREA" shall mean the area defined in Annex I, initially
included in the Leased Land, which may be excluded from the Leased Land
in accordance with Clause 6. The boundary of the Option Area is
considered be two meters off the wall of the electrolysis building
after the demolishing work referred to in clause 6.
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"OWNER'S FIXTURES" shall mean all pipings, cabelings, fittings,
buildings and constructions of the Owner located on the Leased Land.
"PROPERTY" shall mean the real estate registered under the land
registration number 00-000-00-00 and located in the town of Harjavalta.
"SHARED AREAS" shall mean the passages and areas located on the
Property (both inside and outside the Leased Area) as further defined
in Annex 1, subject to clause 6.3.
"WATER TANKS" shall mean the two tank constructions (including pump
stations) indicated in Annex 1.
1.2 REFERENCES
References herein and in the Annexes hereto to any deed, agreement
(including this Agreement) or other instrument or document or any
provision thereof shall be deemed to include a reference to the deed,
agreement, instrument, document or provision as varied, supplemented,
novated, assigned or replaced from time to time.
Unless otherwise stated, a reference to a Clause, sub-Clause or Annex
is a reference to a Clause or sub-Clause of, or an Annex to 1 this
Agreement.
1.3 HEADINGS
The headings and index to this Agreement are included for convenience
only and do not affect the interpretation of this Agreement.
2 OBJECT OF THE AGREEMENT
2.1 LEASED LAND
The Owner hereby leases to the Lessee and the Lessee hereby leases from
the Owner the Leased Land for the purposes of the Lessee continuing its
industrial activity thereon.
2.2 CONSTRUCTION RIGHT
The Owner has in the whole industrial site in Harjavalta, whereof the
Leased Land is a part, a construction right for additional buildings of
approximately 24.000 square meters approved by the city planning
authorities. The Owner hereby accepts and undertakes to cooperate to
the effect that of this additional construction right 9.000 square
meters shall be for the benefit of the Lessee.
In case the construction right for further buildings on the Property
increases and exceeds the above 24.000 square meters (by act of local
authorities) in the future then the benefit of such increase shall be
divided between the parties in the same proportion agreed above.
The Lessee shall be responsible to apply for all permits required for
its use of the construction right.
2.3 SHARED AREAS
The parties hereby grant each other a right to access and use the
Shared Areas for traffic, parking, transportation and maintenance
purposes.
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3 DURATION
This lease shall commence on the date hereof and shall be valid for 50
(fifty) years.
4 RENT
4.1 AMOUNT
The Lessee shall pay to the Owner for the Leased Land an annual rent of
0,80 euros per square meter, i.e. 71.436,00 euros, as escalated in
accordance with Clause 4.2. The rent shall be paid by equal semi-annual
installments latest on January 2nd and July 3rd of each calendar year
against invoices issued by Metals.
4.2 ESCALATION OF ANNUAL RENT
The amount of the rent shall be adjusted once every calendar year on
January 1st by the percentage by which the latest Consumer Price Index
(1951 = 100) published by the Central Statistical Office of Finland,
available on January 1st of each calendar year, exceeds the latest
available index figure of the month of the date hereof.
During the first five years of the term of this Agreement the
adjustment to the rent as defined above in this paragraph 4.2 shall be
effected by one half of the percentage. Thereafter the adjustment shall
be made by the full percentage.
5 ASSIGNMENT AND SEEKING MORTGAGE
The Lessee may assign whole or part of its interest in this lease
without the Owner's consent. Such intended transfer shall, however, be
notified to the Owner in advance and be discussed in accordance with
clause 13.
The Lessee may seek mortgage as security for its leasehold rights
hereunder without obtaining the Owner's consent.
6 EXCLUSION OF THE OPTION AREA
6.1 RIGHT TO EXCLUDE THE OPTION AREA
The parties recognise the Owner's potential need for further land area
in order to increase the capacity of its electrostatic precipitators
located on the Property. Therefore it is agreed that the Owner shall
have the right, at any time after December 31, 2003, to give a six
months (or more) notice to the effect that the Option Area is excluded
from the Leased Area.
6.2 RIGHT TO DEMOLISH
The Owner shall after the effective date of such notice have the right
at its own cost to demolish a part of the Lessee's electrolysis
building (three building modules corresponding approximately 18 meters
from the length of the building) such part being mainly located on the
Option Area.
The demolishing work shall be conducted in a manner causing as little
inconvenience to the Lessee as reasonably possible. The Owner shall be
responsible for any additional reconstruction work necessary in order
to ensure the proper condition and usefulness of the remaining part of
the building.
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6.3 RESULTING EFFECTS
The lease payable for the Leased Area shall be adapted pro rata to
reflect the change in the leased land area, resulting from the
exclusion of the Option Area.
Upon exclusion of the Option Area as provided in this clause 6 above,
the area between the electrostatic precipitators of the Owner and the
electrolysis building of the Lessee in no longer considered a part of
the Shared Areas.
7 OWNER'S RIGHT TO GIVE INSTRUCTIONS
It is agreed that the Owner shall have the right to give reasonable
instructions to the Lessee for the purposes of securing the safety and
order on the Property and in order to enable the proper maintenance of
the Property. The Lessee shall comply and use its best efforts to cause
its employees to comply with such instructions.
It is recognized by the Lessee that on the basis of this Clause the
Owner accepts no responsibility towards the Lessee for any failures to
reach the objectives mentioned.
8 CERTAIN ROADS AND OWNER'S PROPERTY ON LEASED LAND
8.1 "KUPARITEHTAANTIE"
The parties acknowledge that presently there is a road called
"Kuparitehtaantie" across a part of the Leased Area as indicated in
Annex 1. It is agreed that the road may remain in its present location
and use until and unless it becomes necessary for the Lessee (at its
sole discretion) to take the land occupied by the road in other use.
The Lessee shall have the right to take the part of the road located in
the Leased Area in its sole control after six months from a
notification to the Owner. The Lessee shall compensate the Owner all
reasonable costs caused by constructing a substitutive road outside the
Leased Area.
8.2 "SIILOTIE"
The parties acknowledge that presently there is a road called
"Siilotie" across a part of the Leased Area as indicated in Annex 1. It
is agreed that all roads on the piece of the Leased Area where also
Siilotie is situated may remain in their present locations and use
until and unless it becomes necessary for the Lessee (at its sole
discretion) to take the land occupied by such roads in other use. The
Lessee shall have the right to take the parts of the roads located in
the Leased Area its sole control after six months from a notification
to the Owner. The Lessee shall compensate the Owner all reasonable
costs caused by constructing a substitutive road outside the Leased
Area.
8.3 OWNER'S FIXTURES
The Owner's Fixtures exist within the Leased Land on the date hereof.
The Lessee accepts that the Owner's Fixtures remain at their present
position free of charge.
The Owner shall provide the Lessee with additional information and
material (as available) indicating the Owners Fixtures on the Leased
Land. The Owner shall also xxxx the Owners Fixtures located on the
Leased Land with its name, sign or other clear marking method as far as
reasonable and practical.
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The Owner shall indemnify and keep indemnified the Lessee from and
against all repairs, costs, expenses, fines, damages and losses
suffered by the Lessee as a result of any deficiency, malfunction or
other cause arising out of the fixtures construed by the Owner and
existing on the Leased Land.
8.4 WATER TANKS
Nickel hereby sells to Metals and Metals accepts to buy the so called
PIPO water tank, one of the Water Tanks located on the Leased Land, at
its book value of 224.337,21 euros. Title to the PIPO water tank passes
immediately to Metals, payment shall be made within 14 days from the
date hereof.
The parties acknowledge that presently the Water Tanks are located on
the Leased Land. It is agreed that the Water Tanks may remain in their
present locations and use until and unless it becomes necessary for the
Lessee, at its sole discretion, to take the land occupied by all or
part of the Water Tanks in other use. The Owner shall transfer or
dismount all or part of the Water Tanks within six months after a
request to remove is presented by the Lessee and the Lessee shall
compensate the Owner all reasonable costs caused by such transferring
or dismounting.
8.5 SLAG
The parties acknowledge that presently a heap of the Owner's slag is
partly located on the Leased Land as indicated in Annex 1. It is agreed
that the heap of slag may remain in its present location under the
supervision and care and at the risk of the Owner until and unless it
becomes necessary for the Lessee to take the land occupied by the heap
in other use. Subject to a six months (or more) notice, the Lessee
shall have the right at its own cost to remove the part of the slag
located on the Leased Land to a location outside the Leased Land which
location the Owner shall have the obligation to allot and provide for.
9 LESSEE'S FIXTURES
The Lessee's Fixtures exist within the Property but outside the Leased
Land and outside the Shared Areas. The Owner accepts that the Lessee's
Fixtures remain at their present position free of charge.
The Lessee shall xxxx the Lessee's Fixtures located on the Property but
outside the Leased Land with its name, sign or other clear marking
method as far as reasonable and practical.
The Lessee shall indemnify and keep indemnified the Owner from and
against all repairs, costs, expenses, fines, damages and losses
suffered by the Owner as a result of any deficiency, malfunction or
other cause arising out of the fixtures construed by the Lessee and
existing on the Property.
10 COMPLIANCE WITH LAWS, RULES AND REGULATIONS
The Lessee shall at its own expense, comply with the requirements of
all municipal, state and provincial authorities relating to use or
condition of the Leased Land and buildings, equipment or other fixtures
on the Leased Land. The Lessee shall apply for and maintain in force
all necessary governmental, provincial or municipal approvals, permits
and notices required for any operations of the Lessee.
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11 ENVIRONMENTAL DAMAGES AND EXCLUSION OF CONSEQUENTIAL DAMAGES
Owners indemnifications under this Agreement shall be exclusively
governed by the applicable provisions in a Share Purchase Agreement
dated February 23, 2000 between Outokumpu Nickel B.V., Outokumpu Oyj,
OM Group Inc. and OMG Kokkola Chemicals B.V.
Under no circumstances, however, shall either party be liable for any
consequential or indirect damages to the other party.
12 USE OF LEASED LAND
The Lessee shall have the right to use the Leased Land for production
of metal powder, metal salts, carboxylates and other value added
specialty chemicals and to build on the Leased Land all buildings,
facilities, utilities, equipment and fixtures connected to the pursuing
of the above or any ancillary or connected activities, provided,
however, that the Lessee shall always in respect of erection and
maintenance of all buildings, facilities, utilities, equipment and
fixtures referred above obtain and have proper permits, licenses and
approvals from the appropriate authorities, such as city planning and
environmental authorities and agencies.
13 RELATIONSHIP BETWEEN THE PARTIES
13.1 CO-OPERATION
The parties acknowledge the need for and commit themselves to
reasonable co-operation beyond the strict wording of this Agreement in
order to make their coexistance on the Property as smooth as reasonably
possible.
13.2 CO-OPERATION COMMITTEE
The parties undertake to nominate 2-4 representatives to a co-operation
committee the purpose of which is to discuss issues relating to the
parties' coexistence on the Property at meetings held twice a year. The
chairman of the committee and convener of every other meeting shall be
a representative of the Owner, and every other respectively of the
Lessee. The first meeting shall be chaired and convened by a
representative of the Owner.
The co-operation committee is a discussion forum only and it shall not
have authority to amend this Agreement.
13.3 HARDSHIP
The parties declare it to be their intention that this Agreement shall
operate between them with fairness and without substantial hardship to
either party.
If the circumstances during which the Agreement was concluded are
essentially changed by events that neither party could reasonably
foresee, either party may propose appropriate review of the Agreement
and in such case both parties will try their utmost to find a mutually
acceptable solution.
14 GOVERNING LAW AND ARBITRATION
This Agreement shall be governed by and construed according to the laws
of Finland.
Any disputes arising from this Agreement shall be settled by
arbitration. The arbitrators shall be
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appointed by the Arbitration Committee of the Central Chamber of
Commerce of Finland and the arbitration rules of the said committee
shall apply.
15 MISCELLANEOUS
15.1 AMENDMENTS
Any amendments to the Agreement shall not be binding unless made in
writing and signed by the duly authorized representatives of each
party.
15.2 NOTICES
All notices, requests or other communication between the parties under
this Agreement shall be given to either party in writing by registered
mail, telefax or hand delivered using the recipients address or telefax
number publicly available or to such other address or telefax number as
a party shall have specified in a notice.
15.3 ANNEXES
The annex referred to in this Agreement form an integral part thereof.
In case of discrepancies between the annex and the contents of this
Agreement the latter shall prevail.
15.4 CONFIDENTIALITY
Any information relating to this Agreement or to the coexistence of the
parties on the Property including any such information concerning the
parties, which is either non-public, confidential or proprietary in
nature, shall be kept confidential and shall not be disclosed to any
third party or as far as information relating to one of the parties is
concerned, unless such party has given his prior written consent to
such disclosure.
SIGNATURES:
The parties hereto have respectively caused this Agreement to be
executed by their duly authorized representatives.
OUTOKUMPU HARJAVALTA METALS OY OUTOKUMPU NICKEL OY
------------------------------- -------------------------------
By: By:
Title: Title:
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Annex 1
Document is a drawing of the leased property described in the lease
agreement between Outokumpu Harjavalta Metals Oy and Outokumpu
Nickel Oy. A copy of Annex 1 will be provided to the Commission upon request.
