LEASE AGREEMENT
This Lease Agreement made and executed on March 7, 1988, but and between NORTHWEST FINANCIAL CORPORATION, a federally organized savings and loan association (hereinafter referred to as "Landlord"), and INTERNATIONAL ENVIRONMENTAL CORPORATION, an Oklahoma Corporation (hereinafter referred to as "Tenant").
The parties to this Lease Agreement agree as follows:
1. Agreement to Lease. Landlord hereby demises and leases to Tenant, and Tenant hereby hires and takes from Landlord, the premises and the buildings and improvements located thereon and the appurtenances thereto (including, without limitation, adequate ways of ingress and egress directly between the building on the premises and public roads, and the parking area for automobiles) situated in the City of Oklahoma City, County of Oklahoma, Oklahoma, described in Exhibit "A" of this Lease Agreement and which is incorporated herein by this reference (hereinafter referred to as the "Leased Premises").
2. Term. The term of the Lease Agreement shall be for a period of twelve (12) years from the date of this Lease Agreement and ending on March 6, 2000, unless this Lease Agreement is sooner terminated pursuant to the terms of this Lease Agreement or the term hereof is extended pursuant to the terms of this Lease Agreement.
3. Delivery of the Leased Premises. Notwithstanding any other provision hereof, Landlord covenants that actual possession of the Leased Premises shall be delivered to Tenant as of the date of this Lease Agreement, free and clear of all tenancies or other claims, rights or, interests of occupancy, use, or any other inconsistent or adverse claims, rights or interests.
4. Rent During Term. Subject to the terms of this Lease Agreement, Tenant agrees to pay the Landlord rent for the Leased Premises, as follows:
(a) For the first year of this Lease Agreement, the annual rental to be paid by Tenant to Landlord shall be$447,319 ("Base Rent"), payable in twelve equal monthly installments of$37,276.58 each, with each monthly installment payable on or before the 15th day of each month during the first year of this Lease Agreement. For the purposes of this Lease Agreement, "first year of this Lease Agreement" shall mean the twelve month period beginning on the date of this Lease Agreement and ending March 6, 1988.
(b) Within fifteen (15) days after the beginning of each year during the term hereof after the first year of this Lease Agreement- the amount of the annual rental to be paid by Tenant to the Landlord for such year shall be calculated and determined, as follows ("Adjusted Annual Rental"): The Base Rent less the amount or amounts received during the preceding year just ended by the Landlord of all income, revenues or payments due to or as a result of or from the oil and gas working interests listed in Exhibit B attached hereto and which is incorporated herein by reference ("Oil and Gas Revenues"). Within ten (10) days after the beginning of each year during the term hereof after the first year of this Lease Agreement, the Landlord shall advise the Tenant of the amount of the oil and Gas Revenues received by the Landlord during the preceding year just ended and shall advise the Tenant of the Adjusted Annual Rental, if any, based on the above calculation for such year. The Tenant shall pay to the Landlord the Adjusted Annual Rental for such year in twelve (12) equal monthly installments during said year, with each monthly installment payable on or before the 15th day of each month during such year. If in calculating the Annual Adjusted Rental for a particular year the oil and Gas Revenues for the preceding year just ended is equal to or greater than the Base Rental, then no rental shall be payable to the Landlord by the Tenant hereunder during such year, and the amount by which such oil and Gas Revenues exceeds the Base Rent shall be carried forward and added to the amount of Oil and Gas Revenues in calculating the Annual Adjusted Rental for the next subsequent year. For the purposes of this Lease Agreement, a "year" means a twelve month period beginning on March 7 and ending on March 6.
5. Covenant of Peaceful Possession. Landlord covenants and warrants that if Tenant shall discharge the obligations set forth in this Lease Agreement to be performed by Tenant, Tenant shall peaceably have, hold and enjoy the quiet and undisturbed possession of the Leased Premises, together with all the appurtenances thereto, without hindrance, ejection, disturbance or molestation by Landlord or any person or entity claiming through or under Landlord, or otherwise, and free of any inconsistent or adverse claim, right or interest.
6. Assignment and Sublease by Tenant. The Tenant may sublet the Leased Premises or any portion thereof covered by this Lease Agreement and may assign this Lease Agreement. If Tenant does so sublet the Leased Premises or assign this Lease Agreement, Tenant shall remain liable as guarantor hereunder in connection with the obligations that the Tenant is to perform under this Lease Agreement.
7. Use of Premises. Tenant may use the Leased Premises for the purpose of operating a manufacturing operation, distribution center and/or for offices, or any other related business (landlord hereby warranting that such uses are lawful and permissible), and Tenant agrees not to use or knowingly permit the Premises to be used for any unlawful purposes.
8. Condition or Premises. Tenant has examined the Leased Premises and accepts the Leased Premises in its existing condition. Upon termination of this Lease Agreement pursuant to the terms hereof, Tenant shall repair any material damage to the interior of the buildings and improvements on the Leased Premises caused by Tenant's breach of this Lease Agreement, ordinary wear and tear and damages due to structural elements excepted; provided, further, that if the Landlord is obligated to make repairs to the Leased Premises under the terms of this Lease Agreement but fails to make such repairs, Tenant shall not be obligated to make such repairs upon termination of this Lease Agreement (it being understood that this proviso on Landlord's repair obligation shall in no event be deemed to be in substitution for, or in limitation, modification or derogation of, any of the Landlord's repair obligations under this Lease Agreement.
9. Option to Terminate Lease. In addition to any other rights to terminate this Lease Agreement provided for under any other Section of this Lease Agreement, Tenant may, at its sole option, terminate this Lease Agreement during the term hereof or any renewal or extension period only upon compliance with the following conditions:
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