AGREEMENT

 

CONTRACT NO. 24244

 

 

This Lease Agreement (“Lease”) is entered into effective July 1, 2004, between THE CITY OF TULSA-ROGERS COUNTY PORT AUTHORITY, an agency of the State of Oklahoma (“Lessor”), with offices at 5350 Cimarron Road, Catoosa, Oklahoma 74015, and Port Partnership, L.L.P. an Oklahoma limited liability partnership (“Lessee”). Lessor and Lessee are collectively referred to herein as the “Parties”.

 

A.           Lessor is the governing body for and the sole and principal operator of a water port terminal and related industrial park located in Rogers County, State of Oklahoma, referred to herein as the “Tulsa Port of Catoosa”. Lessor operates the Tulsa Port of Catoosa in part under a Master Lease Agreement with the City of Tulsa, Oklahoma, a municipal corporation (“City”).

B.           Lessor desires to lease certain lands and/or facilities, comprising a portion of the Tulsa Port of Catoosa, to industries involved in moving raw materials and finished products in water commerce and to such other industries as may be engaged in industrial activities.

C.           Lessee desires to lease a portion of the industrial park premises for the use and purposes set forth in this Lease.

NOW, THEREFORE, for and in consideration of the terms, covenants and conditions hereinafter set forth and contained, the Lessor and Lessee mutually contract and agree as follows:

1.1           Leased Premises.  Lessor hereby leases, and lets unto Lessee and Lessee hereby leases and lets from Lessor a certain parcel and tract of land, together with certain easements, located at and within the Tulsa Port of Catoosa, comprising approximately 7.7 acres, together with improvements located thereon, all of which real and personal property is referred to collectively as the “Leased Premises” and is more fully described on Exhibit “A”, attached hereto and by this reference made a part of this Lease.

1.2           Use of Premises. The Leased Premises are to be occupied and used by Lessee for sublease to LMI Finishing, Inc., for a warehouse and distribution operation and to Oklahoma Installation Company for manufacturing of commercial and household surfaces and fixtures and the operation of services and conduct of business activities related and incident thereto. In the event Lessee for any reason desires hereafter to modify and/or change its use of the Leased Premises, the nature and terms of such modified use, if approved by Lessor, shall be reduced to a written agreement of the Parties and made a part of this Lease. Lessor agrees that it will not unreasonably withhold or delay its consent to any proposed compatible change in use. (The term’s of Lessor’s consent to sublease for both sublessees are hereby incorporated into this agreement and attached as Exhibit “D”.)

1.3           Building and Development Regulations. Lessee covenants that any, every and all uses of the Leased Premises hereunder shall comply with Lessor’s Building and Development Regulations and certain provisions of its Master Plan of Development (collectively the “Building and Development Regulations”), copies of which are attached hereto designated Exhibit “B” and by this reference made a part of this Lease. The Parties understand that the Building and Development Regulations may from time to time be amended and/or otherwise modified by Lessor. Lessor and Lessee agree that the Building and Development Regulations in effect on the date Lessee shall have submitted its improvement or premises utilization plans for approval, pursuant to the provisions of Section 4.1, shall control Lessee’s construction efforts and utilization of the Leased Premises (so long as such utilization is substantially similar to that initially approved in connection with this Lease).

1.4           Acceptance of Leased Premises in Present Condition. Lessee acknowledges that it has inspected the Leased Premises and accepts the same in its present condition “as is” and that all terms and conditions of this Lease are fully binding upon Lessee as if, and to the same extent that, the existing improvements had been made by Lessee as original lessee.

1.5           RESERVED

2.1           Primary Lease Term. The primary term of this Lease (“Primary Term”) shall be for a period of 10 years from and after July 1, 2004 (“Commencement Date”), and terminating on June 30, 2014 unless otherwise terminated, renewed or extended pursuant to other terms of this Lease. The term of the Lease, which includes the Primary Term and all effective renewals and extensions, shall for convenience be referred to as the “Lease Term.”

2.2           Renewal Terms. Provided Lessee is not in default and this Lease is otherwise in full force and effect, Lessee is granted the option to renew this Lease upon the same terms and conditions (subject to adjustment of rentals as set forth in Section 3.3 and subject to modifications required to conform this Lease to the terms of Lessor’s then current form of lease agreement), for two (2) additional term(s) of ten (10) years each: such option to be exercisable upon the giving of written notice of intent to renew by Lessee to Lessor not earlier than 180 days and not later than 120 days prior to the expiration date of the then current primary or option term.

2.3           Assignment of Lease. Lessee shall not sublet, mortgage or pledge this Lease or any interest herein or in the Leased Premises or any part of the same or assign this Lease or any interests herein or portion hereof, nor shall any assignment of any interest(s) of Lessee herein by operation of law or by reason of Lessee’s bankruptcy become effective, without the prior written consent of the Lessor, which consent shall not be unreasonably withheld or delayed. No sublease or assignment arrangement conditionally consented to by Lessor shall be or become effective unless and until Lessee has delivered to Lessor a written assignment and assumption agreement by the sublessee or assignee in a form approved by Lessor, together with adequate assurance of sublessee’s or assignee’s ability to perform, accept, observe and be bound by each and all of the terms, provisions and stipulations of this Lease provided in a form acceptable to Lessor in the exercise of its sole discretion; and provided further, that any subletting or transfer shall not extend beyond the Primary Term or permitted extension(s) hereof, nor shall any subletting or transfer release or relieve Lessee of any obligations to Lessor hereunder. Written approval shall not be required with respect to any mortgages, assignments or pledges respecting any improvements for facilities constructed, erected, installed or maintained by Lessee upon the Leased Premises except as now or hereafter otherwise provided herein.

3.1           Primary Term Rentals. Lessee shall pay to Lessor lease rental during the Primary Term as follows:

(a)           RESERVED

 

(b)           Monthly Rentals. Commencing July 1, 2004, and continuing thereafter on the first day of each consecutive month of the Primary Term, Lessee shall pay to Lessor the sum of $2,781.63. Monthly rentals shall be adjusted during and after the Primary Term in accordance with the other provisions of the Lease.

(c)           RESERVED

3.2           Additional Rentals. In addition to the rentals provided in Section 3.1, and as additional rental charges, Lessee shall pay to Lessor the following sums:

 

(a)           Security. Lessor will contract to provide cooperatively financed and administered security services at Tulsa Port of Catoosa on behalf of its lessees, invitees, operators and users. Lessee agrees to pay its pro rata share of the costs of such security services based on a degree-of-risk formula established by Lessor for all of Lessor’s lessees. The Parties agree that no representations as to the adequacy of the security services are made by Lessor. Neither Lessor nor its officers, directors, agents, servants, representatives or employees shall be directly or indirectly liable to Lessee for any losses or damage to Lessee’s property or to the property of others for which Lessee may be liable, attributable to the acts of third parties. The agreed upon contributions to be paid by Lessee for security services shall be $246.40 per month, commencing the first day of the month next following the month in which Lessee physically occupies the Leased Premises or July 1, 2004, whichever occurs first, unless the Parties agree in writing for Lessee to commence security contributions at a later date. The agreed upon security cost may be modified by Lessor if the cost of providing the services either increases or decreases during the Lease Term.

 

(b)           Barge and Rail Charges. Lessor and Lessee recognize the importance of having reliable barge and railcar moving services readily available. Lessor and Lessee agree that this service is currently provided by Lessor and the initial barge or railcar placement costs are included in the rate prescribed by the barge owner or railroad. Lessor and Lessee agree, however, that charges for initial placements, as appropriate, and for any subsequent moves or shifting of a barge or railcar for the convenience of Lessee shall be paid by Lessee at the rates and in the manner established by the Port’s Operational Circular and, if done after established working periods, such moves or shifts shall be paid by Lessee at overtime rates established therefor.

(c)           Other Charges. Lessee shall also pay to Lessor, on the same payment dates provided in Subsection 3.1(b), all other sums and charges approved from time to time with the written concurrence of the Parties to be set forth and stated on Exhibit “C”, attached hereto and by this reference made a part of this Lease. Exhibit “C” may be amended and replaced from time to time by agreement of the Parties, evidenced by the signatures of their authorized representatives thereon. Lessee covenants to timely prepare and deliver to Lessor accurate and certified reports of events giving rise to other charges properly includable on Exhibit “C.”

 

(d)           Taxes. Lessee agrees to cause to be paid all taxes, levies, imposts and assessments which may be legally made upon or levied and/or assessed against the Leased Premises, any interests therein, and/or any improvements or property located thereupon before the same become delinquent. Lessee shall have the right, at its sole cost and expense and after having given Lessor prior written notice of its intent to do so, to contest by appropriate legal proceedings diligently conducted in good faith, the validity, amount or application, in whole or in part of such taxes, levies, imposts and/or assessments, provided (i) the proceedings will suspend the collection of the tax, levy, impost or assessment, (ii) neither the Leased Premises, nor any rent therefrom, nor any portion of either is in danger of seizure, forfeiture, sale, loss or similar consequences, and (iii) Lessee shall first furnish Lessor and the City with security which in Lessor’s opinion is adequate, satisfactory and sufficient to protect against loss, penalty, interest or costs incurred by reason of the contest.

3.3           Renewal Term(s) Rentals. Lease rentals covering each renewal period shall be negotiated by the Parties and reduced to writing as an addendum or addenda to this Lease at least 120 days prior to the commencement of each renewal term. Renewal period rentals shall be paid by Lessee to Lessor in accordance with the procedure for payment and adjustments set forth in Section 3.1. In the event the Parties hereto cannot agree upon the amount of the renewal term lease rentals, then at least 120 days prior to the expiration of the then existing term, the Parties shall make a bona fide effort to agree upon the then fair market value of the Leased Premises, exclusive of the value of any improvements made by Lessee thereon. If the Parties are unable to agree upon said value, then at least 105 days prior to the expiration of such term the following procedure for determining rental shall be followed:

(a)           A Board of Appraisers shall be appointed consisting of 1 member appointed by each of the Parties and a third member appointed by the first two appointees.

(b)           The Board of Appraisers shall thereupon, at least 15 days prior to the expiration of such term, determine the then fair market value of the Leased Premises, exclusive of the value of any. improvements made by Lessee thereon, and the valuation fixed by the Board of Appraisers shall be conclusive and bind the Parties.

Based upon the fair market value of the Leased Premises, whether determined by agreement or by Board of Appraisers, Lessee agrees to pay Lessor as rent for the next succeeding term hereof an amount equal to 8% per annum of such fair market value during said term, payable in the same manner as the installments during the Primary Term of this Lease and subject to the provision for future adjustment set forth in Subsection 3.1(c). If the Board of Appraisers shall not have determined the fair market value of the Leased Premises at the time of the commencement of the succeeding renewal term, Lessee may nevertheless continue this Lease in effect by paying provisional lease rentals equal to the lease rentals required during the immediately preceding term until such time as the Board of Appraisers makes its determination. Upon such determination Lessee shall, in order to continue this Lease in effect for the renewal period, within 30 days after receipt of notice of the determination, pay to Lessor the amount by which the rental calculation pursuant to the determination of the Board of Appraisers exceeds the provisional rental paid by Lessee retroactive to the first day of the renewal term. To the extent to which the provisional lease rentals paid by Lessee to Lessor exceed the amount of the determination of the Board of Appraisers, Lessee shall be entitled to credit the overpayment to the rentals next due under the Lease. Costs and expenses incident to an appraisal pursuant to this Section shall be borne equally by the Parties.

 

4.1           Notice and Submission of Plans. Prior to the commencement of any construction at or upon the Leased Premises, Lessee shall first cause Lessor to be given written notice of the nature and extent of any specific improvements and/or improvement projects proposed to be undertaken. Lessee shall submit to Lessor for review and approval all of its architectural plans and drawings of proposed facilities and/or improvements, together with such additional specifications as Lessor may reasonably request. Lessee may not commence to construct any proposed improvements until it has secured Lessor’s written approval which shall not be unreasonably withheld or delayed. Lessor’s approval shall be based on compliance with Lessor’s Building and Development Regulations (except as otherwise provided in Section 1.3), the terms of this Lease, and all other applicable rules and regulations of Lessor in effect at the time construction is commenced.

4.2           Improvements. Except as may otherwise be specifically provided in this Lease, all improvements, including structures, electric power and light, water, telephone, sanitary facilities, interior roadways, railways, spur tracks, sidings, turnouts and accessory structures from and to the Leased Premises, including all chattels, goods, tools, equipment and personal property, will be constructed, erected, installed and/or maintained as between the Parties, at the sole expense and risk of Lessee. Within a period of 60 days following the date of Lease termination, Lessee, at its sole cost and expense, shall remove all of the improvements it has constructed, installed on or attached to the Leased Premises and the Leased Premises shall be reasonably restored by Lessee to their original condition. At the election of Lessor, any and all property of the Lessee not timely removed by Lessee from the Leased Premises shall become the property of Lessor. Certain improvements, including but not limited to roadways, roadway material, parking areas, railways, rail switches and/or turnouts, rail and track material, shell, slag, gravel or concrete used to stabilize the soil, pavement, and underground utilities shall remain in place and become the property of Lessor and may not be removed by Lessee.

4.3          Utilities and Services. Except as may otherwise be specifically provided in this Lease, Lessee shall at its sole cost and expense provide for servicing the Leased Premises and all improvements thereon with water, sewer, gas, electricity, telephone or other utility services as may be required for the use and operation of the Leased Premises. Lessee shall be responsible for all costs and charges in connection with its utility installation and service and shall pay the same promptly as the charges accrue to protect, fully indemnify and hold Lessor harmless from and against any and all liability for such costs or charges.

4.4          Easements. Lessor agrees to grant to Lessee, when required by Lessee, nonexclusive easements over, across and through Lessor’s unleased property which it has the right to grant and which are reasonably necessary for the operation of Lessee’s facilities on the Leased Premises or reasonably required by Lessee, including but not limited to, the following:

(a)           Access to railroad lines and spurs, if any, located within the Leased Premises, together with the right to place railroad track switches or turnouts necessary to accommodate Lessee’s use of railroad trackage constructed and used by Lessee at or upon the Leased Premises. All tracks, lines, spurs, switches and turnarounds to be utilized by Lessee shall be identified on Exhibit “A” to be considered a part of the Leased Premises covered by this Lease. Lessee hereby grants to Lessor an easement and right to use for switching and/or storage of railcars any trackage constructed by Lessee, provided that such use by Lessor shall not interfere with Lessee’s use of such trackage.

(b)           Connection of water and sanitary sewer facilities as approved by the City of Tulsa Public Works Department along designated routes as shown on the Master Plan of Development and/or other relevant documents of Lessor for the Tulsa Port of Catoosa.

(c)           Connection of telephone, electric and gas lines, as approved by the appropriate utility companies, to those installed at or upon the Leased Premises.

(d)           Connection of streets and/or roads for vehicular traffic to roads immediately adjacent or near the Leased Premises, subject to Lessor’s prior approval of any proposed curb cuts and roadway improvements for the Leased Premises.

(e)           Location, placement and maintenance of production and/or handling pipelines connecting the Leased Premises to wharves and/or barge mooring dolphins, as may be necessary for Lessee’s activities and/or operations, to the extent the same are permitted and approved by Lessor and upon payment or arrangements for payment to Lessor of appropriate fees therefor.

Lessor shall have no obligation to furnish any easement which would in the exercise of its sole discretion interfere with the orderly development and/or utilization of Lessor’s Industrial Park and/or Terminal Area, in whole or in part, nor shall any easement exceed the height, depth or width reasonably necessary to permit the reasonable operation of Lessee’s facilities on the Leased Premises. Any and all easements in which rights shall be granted hereunder shall be described on and made a part of Exhibit “A” to this Lease to be included within the Leased Premises and the privileges extended to Lessee under this Lease.

4.5           Access. Lessor covenants that so long as Lessee is not in default under any of the terms and conditions of this Lease, Lessee shall have and enjoy the right of ingress and egress in and to the Leased Premises with a nonexclusive right to use any railroad, road, roadway or areas used in common by Lessor and/or its other lessees by, about or adjacent to the Leased Premises; subject, however, to the following provisions:

(a)           This Lease does not grant any tenancy in railroad, road, roadway or common area by, about or adjacent to the Leased Premises.

(b)           Lessor shall have the right to relocate any railroad, road, roadways or common areas or any portion thereof so long as the relocation does not deprive Lessee of access to the Leased Premises for railroad, vehicular, barge and/or utility facilities as are contemplated herein to be constructed by Lessee. Lessor shall have no liability to Lessee for any damage or loss incurred by Lessee as a result of any relocation which is not occasioned by the destruction, removal or relocation of any of Lessee’s facilitates or improvements.

(c)           Lessee shall not use the railroad, roads, roadways or common areas, or any portions thereof, in any way which would interfere with the use of the same by Lessor or any of its lessees, operators, invitees or users.

4.6           Signs. Lessee shall be entitled to erect, install and maintain on the Leased Premises identification and advertising signs appropriate to its business. All Lessee’s signs at all times shall be subject to the prior written approval of Lessor’s Port Director as to location, size, shape, color and content.

4.7           Lien Claims. Lessee covenants to unconditionally indemnify Lessor and the City, as fee owner of the Leased Premises, from and against and save them harmless from any and all lien claims of any nature whatsoever arising out of or in any manner connected with the construction, installation, erection, maintenance, repair, occupancy, use and/or operation of any improvements, facilities and/or equipment erected by Lessee or any third persons on or about the Leased Premises. Lessee further agrees that it shall, in the event any liens are filed encumbering the Leased Premises, effect their removal and/or satisfaction. Lessee shall have the right, at its sole cost and expense and after having given Lessor prior written notice of its intent to do so, to contest by appropriate legal proceedings diligently conducted in good faith, the amount, validity or application, in whole or in part, of any lien(s), provided (i) such proceedings shall suspend the collection of the lien(s), (ii) neither the Leased Premises nor any rent therefrom, or any portion of either, would be in danger of attachment, forfeiture, loss or similar consequence, and (iii) that Lessee shall first furnish Lessor and the City with the security which in Lessor’s opinion is adequate, satisfactory and sufficient to protect Lessor and the City from any loss, penalty, interest, cost or injury incurred by reason of the contest. Except as otherwise provided hereinabove, at Lessor’s request Lessee shall furnish Lessor with written proof of payment of any item which would or might constitute the basis for a lien on the Leased Premises or upon its interest in this Lease if not paid.

4.8           Inspection and/or Repair of Premises. Lessor shall at all reasonable times be permitted and allowed to enter the. Leased Premises to inspect the condition of the Lease Premises and Lessee’s operations and/or improvements to determine compliance with the terms of this Lease, and further, Lessor shall be permitted to make repairs and/or engage in maintenance necessary in respect to any facilities as it may have installed upon or about the Leased Premises. If the obligation to make repairs and/or to engage in maintenance is Lessee’s hereunder and Lessor elects to undertake to perform the same, then Lessee shall reimburse Lessor for the cost of charges therefor upon receipt of invoices therefor.

 

5.1           Pollution Control. Lessee agrees that it shall not pollute the air, water or ground at or upon the Leased Premises and/or in the vicinity of its operations or activities, and/or at or upon other premises as it may by these covenants have the right to use or occupy, whether or not in connection with others, in violation of applicable governmental statute, rule or regulation and/or in violation of standards and/or requirements as Lessor may from time to time reasonably and uniformly adopt in pursuit of governmental regulations. In this connection, Lessee shall obtain and maintain current all required permits, local, state and federal, needed to construct facilities and/or conduct the operations or activities contemplated under this Lease.

5.2           Compliance with Laws and Regulations. Lessee’s exercise of rights and/or privileges extended hereunder shall at all times be in full compliance with all applicable laws, rules and regulations, including safety regulations, of the State of Oklahoma, the United States and other governmental authorities now or hereafter having jurisdiction and/or any of their duly empowered agencies and/or instrumentalities. Lessee further agrees to comply with all applicable rules and regulations of Lessor pertaining to the Leased Premises and the Tulsa Port of Catoosa now in existence and hereafter promulgated for the general safety and convenience of Lessor, its various tenants, invitees, licensees and the general public, provided such rules and regulations shall not materially conflict with the provisions of this Lease. A copy of all Lessee’s building permits, Corps of Engineers and Coast Guard permits, licenses and similar authorizing documents shall be provided by Lessee to Lessor as and when reasonably requested by Lessor.

5.3           Maintenance of Adjoining Grounds. As part of the consideration for this Lease, Lessee agrees to regularly perform all “grounds maintenance” of the area between the Leased Premises and the pavement of any road, bed of any railroad or centerline of any rights-of-way within the boundaries of and abutting the Leased Premises. “Grounds maintenance” will include keeping areas clean, mowed, orderly and free from debris and waste materials. Lessor retains full rights to utilize the areas concerned, including the right to grant easements for utilities, installation of signs, etc., and Lessee shall not be deemed as having any tenancy in these areas. Any activities by Lessor in exercising its rights in such areas shall not provide a basis for Lessee’s claim for reimbursement. Lessor shall have the right to withdraw all or part of Lessee’s responsibility under this Section 5.3, if Lessor so desires and so informs Lessee in writing. In any instance in which construction of roads or railroads has been commenced but not completed within or adjacent to the Leased Premises, Lessee shall be responsible for ground maintenance of the areas between the Leased Premises and existing road and railroad improvements as have been or are in the process of being constructed in the adjoining rights-of-way therefor. If no road or railroad improvements shall exist, Lessee shall maintain the areas from the Leased Premises to the centerline of future roads and railroads as are shown on the Tulsa Port of Catoosa Master Development Plan, and as may be reflected in Exhibit “A”. Notwithstanding the requirements of this Section, Lessee shall not be required to undertake ground maintenance with respect to any areas between the Leased Premises and any road or railroad improvements or rights-of-way therefor in excess of a 50-foot distance from the Leased Premises.

5.4           Indemnification. Lessee hereby releases and discharges Lessor and the City from and shall fully protect, indemnify and keep, hold and save Lessor and the City harmless from and against any and all costs, including, but not limited to, clean-up costs, charges, expenses, penalties, damages (including contamination) and consequences imposed for or arising from the violation of any law or regulations of the United States, the State of Oklahoma, any local authorities, or any of such entities’ agencies and instrumentalities (collectively “Governmental Authorities”), occasioned, in whole or in part, by any act or omission of Lessee or its representatives, assigns, agents, servants, employees, licensees, invitees, and any other person(s) occupying under Lessee (except to the extent that any such costs are attributable to the negligent or willful act or omission of Lessor or the City, or their agents, servants, employees, licensees or invitees). Lessee shall further protect, fully indemnify and save forever harmless Lessor and the City from and against any and all liability, cost, damage (including clean-up costs and contamination) and expense, incident to injury (including injury resulting in death) of third parties or damage to or destruction of their property incident to, arising out of or in any way connected with Lessee’s use and occupancy or rights of use and occupancy of the Leased Premises (whether by omission or commission and irrespective of exclusive or nonexclusive rights therein) including, but not limited to, the operation of Lessee’s business, the construction, erection, installation, existence, repair, maintenance, alteration and/or demolition of any improvements, facilities and/or equipment or the conduct of any other activities, and which would not have arisen but for the exercise or pursuit by Lessee of the rights and privileges accorded hereby or the failure on Lessee’s part in any respect to comply with the requirements hereof, except as a loss occasioned by the negligent or willful act or omission of Lessor or the City or their representatives, agents, servants or employees.

5.5           Use Prohibition and Duties (Environmental). Lessee covenants and agrees that it will not use, generate, manufacture, produce, store, release, discharge or dispose of on, under or about the Leased Premises or transport to or from the Leased Property any Hazardous Materials, except in strict compliance with all applicable laws. “Hazardous Materials” shall mean (i) any “hazardous waste” as defined by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. . 6901, et seq.), as amended from time to time, and regulations promulgated thereunder; (ii) any “hazardous substance” as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. , 9601, et seq.) (“CERCLA”), as amended from time to time, and regulations promulgated thereunder; (iii) asbestos; (iv) polychlorinated biphenyls; (v) underground storage tanks, whether empty, filled or partially filled with any substance; (vi) any substance the presence of which on the Leased Premises is prohibited by any applicable governmental requirements and regulations; and (vii) any other substance which by any governmental requirements requires special handling or notification of any federal, state or local governmental entity in its collection, storage, treatment or disposal. Lessee will keep and maintain the Leased Premises in compliance with, and shall not cause or permit the Leased Premises to be in violation of any governmental requirements and will not allow any other person or entity to do so. Lessee shall allow Lessor to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with violation of any governmental requirements and Lessee hereby agrees to pay any attorneys’ fees incurred by Lessor in connection therewith. Without Lessor’s prior written consent, which shall not be unreasonably withheld, Lessee shall not take any remedial action in response to the presence of any Hazardous Materials on, under, or about the Leased Premises, nor enter into any settlement, agreement, consent, decree or other compromise in respect to any claims regarding the presence of Hazardous Materials. Lessor’s consent may be withheld, without limitation, if Lessor, in its reasonable judgment, determines that remedial action, settlement, consent or compromise might impair the value of the Leased Premises; provided, however, that Lessor’s prior consent shall not be necessary in the event that the presence of Hazardous Materials in, on, under or about the Leased Premises either poses an immediate threat to the health, safety, or welfare of any individual or is of such a nature that an immediate remedial response is necessary, and it is not possible to obtain Lessor’s consent before taking such action. In such event Lessee shall notify Lessor as soon as practicable of any action so taken. Lessee agrees to (a) give notice to Lessor immediately upon its acquiring knowledge of the presence of any Hazardous Materials on the Leased Premises or of any hazardous substance contamination with a full description thereof, (b) promptly comply with any governmental requirement of removal, treatment or disposal of Hazardous Materials or hazardous substance contamination and provide Lessor with satisfactory evidence of compliance; and (c) provide Lessor, within 30 days after demand by Lessor, a bond, letter of credit or similar financial assurance evidencing to Lessor’s satisfaction that the necessary funds are available to pay the cost of removing, treating and disposing of Hazardous Materials or hazardous substance contamination and discharging any assessments which may be established on the Leased Premises as a result thereof.

5.6           Site Assessments. If Lessor shall have an objective reason to believe that there are Hazardous Materials or Hazardous Materials contamination, such reason being based upon a visible, apparent or documented condition of the Leased Premises or any contiguous Leased Premises, then Lessor (by its officers, employees and agents), at any reasonable time and from time to time, may first provide Lessee with notice of its concern and request that Lessee retain a qualified industrial hygienist approved by Lessor (the “Site Reviewers”) to perform a Phase I site assessment and a Phase II site assessment, as required or recommended in the Phase I report, (“Site Assessments”). If Lessee fails to deliver the requested Site Assessment to Lessor within a prompt, yet reasonable, period of time, then Lessor may contract for the services of Site Reviewers to perform Site Assessments. The Site Assessments on the Leased Premises will be reasonable in scope and based upon the suspected condition for the purpose of determining whether there exists on the Leased Premises any environmental condition which could reasonably be expected to result in any liability, cost or expense to the owner, occupier or operator of such Leased Premises arising under any state, federal or local law, rule or regulation relating to Hazardous Materials. The Site Assessments may be performed at any time(s), upon reasonable notice, and under reasonable conditions established by Lessee which do not impede the performance of the Site Assessments. Site Reviewers are authorized to enter upon the Leased Premises for such purposes. Site Reviewers are further authorized to perform both above and below the ground testing for environmental damage or the presence of Hazardous Materials on the Leased Premises and such other tests on the Leased Premises as may be necessary to conduct the Site Assessments in the reasonable opinion of the Site Reviewers. Lessee will supply to the Site Reviewers such historical and operational information regarding the Leased Premises as may be reasonably requested by the Site Reviewers to facilitate the Site Assessments and will make available for meetings with the Site Reviewers appropriate personnel having knowledge of such matters. On request, the results of any Site Assessments shall be made fully available to Lessee and Lessor. The cost of performing Site Assessments shall be paid by Lessee, and if incurred by Lessor shall be paid by Lessee to Lessor upon its demand. This monetary obligation shall constitute additional rental due on demand made by Lessor.

5.7           Environmental Indemnification. Regardless of whether any Site Assessments are conducted hereunder, Lessee shall defend, indemnify and hold harmless Lessor and the City from any and all liabilities (including strict liability), actions, demands, penalties, losses, costs or expenses (including without limitation attorneys’ fees and expenses, and remedial costs), suits, costs of any settlement or judgment and claims of any and every kind. whatsoever which may now or in the future (whether before or after the termination of this Lease) be paid, incurred or suffered by or asserted against Lessor or the City by any person or entity or governmental agency for, with respect to, or as a direct or indirect result of, the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, or release from the Leased Premises of any Hazardous Materials or any Hazardous Materials contamination or arise out of or result from the environmental condition of the Leased Premises or the applicability of any governmental requirements relating to Hazardous Materials (including without limitation CERCLA or any federal, state or local so-called “Superfund” or “Superlien” laws, statute, law, ordinance, code, rule, regulation, order or decree). The representations, covenants, warranties and indemnifications contained in this Section shall survive the termination of this Lease.

5.8           Insurance. In pursuit, but not in derogation of or by way of substitution for Lessee’s obligations under Article V, Lessee shall at all times cause to be maintained at its sole cost and expense minimum insurance coverage and policies with the following prescribed terms:

(a)           Commercial General Liability Insurance with a combined single limit of $1,000,000 each occurrence and $2,000,000 annual aggregate, applicable to bodily injury and property damage, including pollution liability.

(b)           The Commercial General Liability Insurance shall be issued on an “occurrence” basis and shall include coverage for all operations of Lessee, including independent contractor’s coverage, blanket contractual liability and the policy will be endorsed to eliminate exclusion for work, construction or demolition within 50 feet of railroad trackage, broad form property damage, including completed operations, and, where applicable, property damage liability resulting from blasting or explosion, collapse or structural injury and/or subsurface operations. The policy shall not be modified to reduce the standard coverages provided under a Commercial General Liability policy form. The pollution liability endorsement may be on a “claims made” basis.

(c)           Lessor shall be designated as additional named insured under the policy required by Lessor.

(d)           As respects all insurance policies applicable to this Lease, Lessee shall, prior to the commencement of this Lease and upon the annual anniversaries, furnish to Lessor certificates of insurance evidencing the maintenance of all coverages required and the payment of premiums.

(e)           Lessor shall have the right to review Lessee’s insurance coverages, and/or to obtain upon request certified copies of the insurance policies, periodically, to insure full and adequate protection and to otherwise reasonably require additional and/or other forms of coverage, in accordance with current generally accepted coverages in the industry and/or within the Tulsa Metropolitan Area in respect to operations and/or activities similar to those of Lessee, whether similar in whole or in part. The cost of additional coverage and/or forms of coverage shall be borne by Lessee.

(f)           All policies of insurance shall require that Lessor and Lessee be given 30 days’ prior written notice of any modification, termination and/or cancellation of coverages.

(g)           All insurance policies shall be issued by an insurance company rated A (Excellent) or better and be included in financial size category VII, or better, in Best’s Insurance Guide, and be otherwise reasonably satisfactory to Lessor with respect to form and content. If Lessee refuses or neglects to secure and maintain insurance policies complying with the provisions of this Section, Lessor may, but shall not be required to, secure and maintain insurance policies, and Lessee shall reimburse Lessor for the cost thereof as additional rent, upon demand.

(h)           Lessee shall not use the Leased Premises in any manner which would increase the existing rates of insurance premiums paid by Lessor with respect to its operations and activities at the Tulsa Port of Catoosa and/or in the vicinity of the Leased Premises. If it nevertheless does so, then, at the option of the Lessor, the full amount of any resulting increase in premiums, to the extent allocable to the remaining rent for the year in which the increase is recognized, may be added to the amount of rentals specified herein and shall be paid by Lessee to Lessor commencing upon the monthly rental day next thereafter occurring.

 

6.1           Termination. Upon the termination of this Lease, however termination may be brought about, whether by expiration of the term hereof, or otherwise, Lessee shall quit and surrender the Leased Premises to Lessor in good condition, excepting only natural wear and tear from a reasonable use thereof and destruction of the Leased Premises by covered peril and subject to the provisions of Section 4.2.

6.2           Events of Default: The following shall be “events of default” under this Lease, and the terms “events of default” or “default” shall mean whenever they are used in this Lease, any one or more of the following events:

(a)           Failure or refusal of Lessee to pay or cause to be paid any lease rental, charges and/or assessments hereunder or any installment thereof when due and the continuance of such failure for a period of 10 days;

(b)           Failure by Lessee to perform any agreement, covenant, condition, obligation and/or undertaking herein contained and/or to observe or comply with any of the terms, provisions and conditions of this Lease;

(c)           In the event Lessee, before the expiration of this Lease, without the written consent of Lessor, vacates the Leased Premises or abandons possession of all or any portion thereof, or uses the same for purposes other than the purposes for which the Leased Premises are let hereunder, or ceases to use the Leased Premises for the purposes herein specified;

(d)           Issuance of execution against Lessee’s interest in this Lease or any legal process which by operation of law would cause Lessee’s interest in this Lease to pass to any person other than Lessee or its successor assignee pursuant to Section 2.3; and/or

(e)           Insolvency, assignment for the benefit of creditors, adjudication as a bankrupt or the appointment of a receiver for substantially all of the Lessee’s property and/or Lessee’s interest in this Lease.

6.3           Cancellation. Save and except for defaults occurring under Subsections 6.2 (a), (d) and (e), in which cases no notice of default shall be required of Lessor, if any default shall occur and continue unremedied or uncorrected for a period of 60 days after Lessor shall have given Lessee notice in writing specifying the default, then at the written option of Lessor this Lease and all Lessee’s interests and rights hereunder shall immediately cease and terminate. In the case of a default occurring under Section 6.2(b) which does not endanger or impair or threaten to endanger or impair Lessor or any of its lessees or operators or any of their facilities or operations and which is. remediable but will reasonably require in excess of 60 days to remedy, if Lessee shall, upon receipt of notice of default from Lessor, have notified Lessor of the probability of such delay and thereupon undertaken to remedy with due diligence and reasonable dispatch, then termination shall be stayed so long as, and only so long as, Lessee in good faith continues its best efforts to remedy with due diligence and reasonable dispatch.

6.4           Right of Re-entry. Upon the termination of this Lease, however such termination is brought about, whether by Lessor’s election to terminate under any one or more of the foregoing provisions, or otherwise, Lessor may immediately, or at any time thereafter, re-enter the Leased Premises without notice or demand and remove all persons and things therefrom with or without legal process and without prejudice to any of Lessor’s other legal rights, using such force as may be necessary or proper for the purpose. Any and all claims for damages by reason of Lessor’s re-entry or the form or manner of re-entry or the taking possession of the Leased Premises are hereby waived as also are all claims for damage by reason of any proceedings in the nature of execution, attachment, sequestration, forcible detainer or other legal action which Lessor may employ to recover possession of the Leased Premises or rentals and charges due. If upon Lessor’s re-entry there remains any personal property of Lessee or any person holding under or through it pursuant to Section 2.3, other than property as either or both shall hold as actual or constructive bailee(s), Lessor may take possession of the property and sell it at public or private sale without notice to Lessee, and this right to take and sell shall be a prior lien and claim against the property, subject, however, to any prior duly perfected third party encumbrance thereof Subject to any legal and priority encumbrances, Lessor may, without obligation to do so take possession of the property and hold it for the owners thereof or may place the same in a public garage or warehouse, all at the expense and risk of the owners thereof Lessee shall reimburse Lessor for any expenses it incurs in connection with removal and storage of property upon Lessor’s presentment of invoices therefor. If Lessor elects to take possession of the property and sell it, the proceeds of sale shall be applied first to the costs of the sale, second to the payment of the charges for storage, if any, and third to the payment of any other amounts which may then be due from Lessee to Lessor, with the balance, if any, to be paid to Lessee. Notwithstanding any re-entry upon default by Lessee or a termination of this Lease occasioned by reason thereof, the lease rentals due hereunder for the remainder of the then current lease term and such other charges and/or obligations, if any as may be otherwise payable under this Lease, shall be and become immediately due and payable and the liability of Lessee for the full amount provided herein shall not be extinguished for the balance of the term of this Lease. Lessee shall make good to Lessor any deficiency arising from a reletting of the Leased Premises at a lesser rental than that hereinbefore agreed upon. Lessee shall pay the rental deficiency each month as the amount thereof is ascertained by Lessor, upon the presentment of invoices therefor.

6.5           Holding Over. If Lessee shall, with the consent of the Lessor, hold over after the expiration or sooner termination of the term of this Lease, the resulting tenancy shall, unless otherwise mutually agreed, be for an indefinite period of time on a month-to-month basis. During any month-to-month tenancy, Lessee shall pay to Lessor the same rate of rental as set forth herein, unless a different rate shall be agreed upon, and Lessee shall be bound by all of the provisions of this Lease insofar as they may be pertinent.

6.6           Waiver of Breach or Default Cumulative Remedies. Waiver by either of the Parties of any breach or default of this Lease shall not be deemed a waiver of similar or other breaches or defaults, nor shall the failure of either of the Parties to take any action by reason of any such breach or default deprive that party of the right to take action at any time while the breach or default continues. The rights and remedies created by this Lease shall be cumulative and nonexclusive of those to which the Parties may be entitled at law and equity. The right to exercise all remedies is hereby reserved. The use and availability of one remedy shall not be taken to exclude or waive the right to use of another. In order to entitle either of the Parties to exercise any remedy reserved to it in this Lease it shall not be necessary to give any notice, other than notice expressly required.

7.1           Examination of Lessee’s Records. Lessor shall at all reasonable times be permitted to examine and/or audit and, to the extent necessary, duplicate Lessee’s books and records maintained with respect to its operations and activities hereunder and/or maintained in compliance with the terms and conditions of this Lease. In the event books and records are maintained at other than Lessee’s local office identified above, Lessee, upon the receipt of written notice by Lessor specifying the nature and extent of its intended inquiry and/or examination, agrees to immediately furnish Lessor with full, true and accurate copies of all its books and records as may be appropriate thereto.

7.2           Lessor’s Leasehold Interest. It is mutually understood and agreed by the Parties that: (i) Lessor has only a leasehold interest in the property covered by this Lease which has been granted to Lessor by the City, (ii) this instrument is a sublease and the Parties are sublessees and sublessors as the case may be, (iii) this Lease is subject to the terms and conditions of a lease from the City to Lessor, and (iv):

(a)           Lessor is authorized to enter into this Lease for the primary and renewal terms provided herein, pursuant to the terms of its lease with the City.

(b)           The lease between the City and Lessor dated June 22, 1971, has been modified subsequent to the date of its original execution.

(c)           This Lease is generally in accordance with the Master Plan of Development of the Port Authority, as amended, and as required in Article III of Lessor’s lease with the City.

7.3           RESERVED

7.4           Quiet Enjoyment. Lessor covenants that during the entire Lease Term and for so long as Lessee (i) shall make timely payment of rentals due hereunder and (ii) shall perform all covenants on its part to be performed, Lessee shall and may peaceably and quietly have, hold and enjoy the Leased Premises.

7.5           Notices. All notices under this Lease must be sent by United States mail, postage prepaid, addressed as follows, except that either Party may by written notice given as aforesaid change its address for subsequent notices to be given hereunder;

(a)           Lessor:

	THE CITY OF TULSA-ROGERS COUNTY PORT AUTHORITY
	5350 Cimarron Road
	Catoosa, Oklahoma 74015

(b)           Lessee:

	PORT PARTNERSHP
	c/o David James
	P.O. Box 14049
	Tulsa, Oklahoma 74159

provided, however, that payments made by Lessee may be sent first class mail, postage prepaid, to Lessor at the address above given or paid in such other manner as Lessor may designate. Any and all notices given by either of the Parties hereto shall be deemed effective upon their receipt by the primary addressee, as set forth hereinabove.

7.6           Nondiscrimination. Lessee agrees that it shall not, with respect to its operations conducted on the Leased Premises, discriminate against any employee or applicant for employment because of race, color, religion, sex, age, national origin or handicap. Lessee shall take affirmative action to ensure that applicants are employed, and employees are treated during employment, without regard to race, color, religion, sex, age, national origin or handicap. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.

7.7           Navigability. The United States Corps of Engineers endeavors to maintain the water level in the Tulsa Port of Catoosa channel at 532 feet above mean sea level. Lessor assumes no responsibility for any increase or decrease in the water level caused by the raising or lowering of the water level in the Verdigris River, the backwater provided by said river in the channel, the erosion of water channel banks or sediment.

7.8           Substitution of Performance. If Lessee shall fail to do anything required to be done by it under the term(s) of this Lease, except to pay rent and other charges, Lessor may, after 30 days, written notice to Lessee, at Lessor’s sole option, do such act or thing on behalf of Lessee, and upon notification of the cost thereof to Lessor, Lessee shall promptly pay to Lessor the amount of that cost.

7.9           Exhibits and Attachments. All exhibits, attachments, riders and addenda referred to in this Lease, together with the exhibits listed hereinbelow, are incorporated into this Lease and made a part hereof by this reference for all intents and purposes.

Exhibit “A”:                                Leased Premises

Exhibit “B”:                                Building and Development Regulations

Exhibit “C”:                                Other Charges

Exhibit “D”:                                Consent to Subleases

7.10           Authority. Each of the Parties to this Lease represents to the other that it has taken all action necessary to authorize the execution, delivery and performance of this Lease and that it has executed and delivered all other documents as required herein and that its representative who has signed this Lease has all requisite power and authority to enter into this Lease and bind the party on whose behalf execution is provided. Each of the Parties to this Lease represents and warrants to the other that this Lease is the legal, valid and binding obligation of that Party, enforceable in accordance with its terms and performance of said Party does not require the consent of or approval of any other person, agency or court, and will not conflict with, result in the breach of any term of, or constitute a default under any material agreement or instrument to which that Party is party, or to which that Party is subject.

7.11           Entire Agreement. This Lease embodies the entire agreement between the Parties with respect to the leasing and use of the Leased Premises. There are no representations, terms, conditions, covenants or agreements between the Parties relating thereto which are not mentioned or contained herein. This Lease shall completely and fully supersede all other prior agreements, both written and oral, between the Parties pertaining to the Leased Premises including but not limited to the agreement dated August 1, 1983, as amended August 1, 2000. No party to any such prior agreement hereafter will have any rights thereunder, and shall look solely to this Lease for definition and determination of its rights, liabilities or responsibilities or relating to the matters set forth herein.

7.12           Captions. The article and section headings and captions contained herein are included for convenience only and shall not be considered a part hereof or affect in any manner of the construction or interpretation of this Lease.

7.13           Severability. The Parties agree that if it should ever be held by a court of competent jurisdiction that any one or more sections, clauses or provisions of this Lease are invalid or ineffective for any reason, any such section, clause or provision shall be deemed separate from the remainder of this Lease and shall not affect the validity and enforceability of such remainder.

7.14           Successors and Assigns. The covenants, terms, conditions and obligations set forth and contained in this Lease shall be binding upon and inure to the benefit of Lessor and Lessee and their respective successors and assigns.

7.15           Governing Law. The Parties understand and agree this Lease, its terms and conditions, and any interpretation thereof shall be governed by the laws of the State of Oklahoma.

7.16           Counterparts. This Lease may be executed in two or more counterparts, each of which when so executed shall be deemed an original, and which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, this Lease has been executed in multiple counterparts, each of which, for all purposes, shall be deemed an original and all of which shall evidence one agreement between the Parties.