LEASE AGREEMENT

Exhibit 10.20

LEASE AGREEMENT

Between

COMMERCIAL NET LEASE REALTY, LP,

a Delaware limited partnership,

as Landlord,

and

SSP PARTNERS,

a Texas general partnership,

as Tenant,

TABLE OF CONTENTS

 

 

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LEASE AGREEMENT

THIS LEASE AND AGREEMENT (the “ Lease ”) is made and entered into effective as of the ___ day of December, 2005 by and between COMMERCIAL NET LEASE REALTY, LP , a Delaware limited partnership (the “ Landlord ”), and SSP PARTNERS , a Texas general partnership (the “ Tenant ”).

WITNESSETH:

WHEREAS, Tenant or Tenant’s affiliate is the owner of fee simple title to certain real property located in the City of *, County of *, State of * and described in Exhibit A attached hereto (the “ Land ” ) upon which a building has been constructed, together with related site improvements including: (i) the Storage Tank System as defined in Section 4.6 of this Lease, (ii) canopies on the pump islands, and (iii) the car wash, if any, located in, on or under the Land (collectively, the “ Improvements ”) (the Land and the Improvements, together with all licenses, rights, privileges and easements appurtenant thereto shall be collectively referred to herein as the “ Premises ”);

WHEREAS, simultaneously with the date of this Lease Tenant or Tenant’s affiliate has conveyed the Premises to Landlord together with certain other properties owned by Tenant or Tenant’s affiliates; and

WHEREAS, Tenant desires to lease back from Landlord, and Landlord has agreed to lease back to Tenant, all of the Premises upon the terms and conditions as more particularly hereinafter provided and described;

NOW, THEREFORE, for and in consideration of the premises hereof, the sums of money to be paid hereunder, and the mutual and reciprocal obligations undertaken herein, the parties hereto do hereby covenant, stipulate and agree as follows:

ARTICLE I.

AGREEMENT TO LEASE

1.1 Demise . Landlord does hereby demise, let and lease unto Tenant, and Tenant does hereby hire, lease and take as Tenant from Landlord the entire Premises upon those terms and conditions hereinafter set forth.

1.2 Condition . Tenant acknowledges and agrees that the Premises is and shall be leased by Landlord to Tenant in its present “as is” condition, and that Landlord makes absolutely no representations or warranties whatsoever with respect to the Premises or the condition thereof. Tenant acknowledges that Landlord has not investigated and does not warrant or represent to Tenant that the Premises are fit for the purposes intended by Tenant or for any other purpose or purposes whatsoever, and Tenant acknowledges that the Premises are to be leased to Tenant in their existing condition, i.e., “as-is”, on and as of the Effective Date. Tenant acknowledges that Tenant shall be solely responsible for any and all actions, repairs, permits, approvals and costs required for the rehabilitation, renovation, use, occupancy and operation of the Premises in accordance with applicable governmental requirements, including, without limitation, all governmental charges and fees, if any, which may be due or payable to applicable authorities.

 

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Tenant agrees that, by leasing the Premises, Tenant warrants and represents that Tenant has examined and approved all things concerning the Premises which Tenant deems material to Tenant’s leasing and use of the Premises. Tenant further acknowledges and agrees that (a) neither Landlord nor any agent of Landlord has made any representation or warranty, express or implied, concerning the Premises or which have induced Tenant to execute this Lease except as contained in this Lease, and (b) any other representations and warranties are expressly disclaimed by Landlord.

1.3 Quiet Enjoyment . Landlord covenants and agrees that so long as Tenant shall timely pay all rents due to Landlord from Tenant hereunder and keep, observe and perform all covenants, promises and agreements on Tenant’s part to be kept, observed and performed hereunder, Tenant shall and may peacefully and quietly have, hold and occupy the Premises free of any interference from Landlord; subject, however, and nevertheless to the terms, provisions and conditions of this Lease.

ARTICLE II.

TERM

2.1 Term . The initial term of this Lease (the “ Initial Term ”) shall, unless sooner terminated as elsewhere provided in this Lease, commence on the Effective Date and shall terminate and expire at 11:59 p.m. on the date immediately preceding the twentieth (20 ^th ) anniversary of the Effective Date. The Initial Term, together with any properly exercised Option Period (defined in Section 2.4 below) shall be collectively referred to herein as the “ Term ”.

2.2 Rental Commencement Date . For the purposes of this Lease, the “ Rental Commencement Date ” shall be the Effective Date hereof.

2.3 Effective Date . For the purposes of this Lease, the “ Effective Date ” shall be the date set forth in the first paragraph of this Lease.

2.4 Option to Renew . Tenant shall have and is hereby granted five (5) options (individually an “ Option ”) to extend this Lease beyond the Initial Term for an additional period of five (5) years each (individually an “ Option Period ”), upon the same terms, covenants, conditions and rental as set forth herein. Tenant may exercise each such Option successively by giving written notice to Landlord not less than six (6) months prior to the expiration of the Initial Term of this Lease or expiration of the then current Option Period, as applicable (the “ Option Notice ”). Notwithstanding the foregoing, Tenant shall not be entitled to extend the Term of this Lease if, at the time of exercise of an Option, an Event of Default has occurred and is continuing. If Tenant does not elect to extend, or shall not be entitled pursuant to the preceding sentence to extend the Term of this Lease for an additional Option Period, all remaining rights of renewal shall automatically expire.

Notwithstanding anything else contained herein, if Tenant exercises an Option hereunder and if the Base Rent for such Option Period (pursuant to the calculation called for in Section 3.2(f) hereof), (i) is less than the Base Rent that would be arrived at if the Base Rent was increased pursuant to Section 3.2(e), then Landlord may reject said Option Notice by delivering a written notice of rejection to Tenant (the “ Rejection Notice ”), and (ii) if the Base Rent for such

 

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Option Period (pursuant to the calculation called for in Section 3.2(f) hereof), is more than the Base Rent that would be arrived at if the Base Rent was increased pursuant to Section 3.2(e), the Tenant may withdraw its Option Notice by delivering written notice of withdrawal of the Option Notice within thirty (30) days of determination of amount of Base Rent under Section 3.2(f). Should Landlord deliver a Rejection Notice to Tenant or should Tenant withdraw its Option Notice as provided for above, Tenant’s Option Notice shall be void and of no effect and the Lease shall expire and terminate at the end of the then current Option Term. However, Tenant may, at its option, extend the Term for the applicable Option Period after receipt of Landlord’s Rejection Notice, by delivering within thirty (30) days of receipt of Landlord’s Rejection Notice a second Option Notice (the “ Second Option Notice ”) stating that Tenant desires to extend the Term for the Option Period and Tenant agrees to pay Base Rent equal to Base Rent obtained by the application of the formula set forth in Section 3.2(e) hereof. Tenant shall have no obligation hereunder to deliver a Second Option Notice or to so extend the Lease under the terms required in a Second Option Notice. Should Tenant timely deliver to Landlord a Second Option Notice which complies with the requirements of this Section, the Term of the Lease shall be extended for the applicable Option Period at the Base Rent called for in the Second Option Notice.

2.5 Termination . Notwithstanding any present or future law to the contrary, this Lease shall not be terminated by Tenant for any failure of Landlord to perform pursuant to the terms and conditions of this Lease or otherwise for any reason except as expressly provided herein.

ARTICLE III.

RENT

3.1 Base Rent . Beginning on the Rental Commencement Date, and subject to proration as set forth below, Tenant shall pay annual base rent for the Premises for the first Lease Year in equal monthly installments of $*** (“ Base Rent ”), together with any sales and use taxes thereon, if any are ever imposed in the State where the Premises is located. Such Base Rent shall be paid in advance, on the first (1st) day of each calendar month commencing on the first (1st) day of the calendar month immediately following the Rental Commencement Date, it being agreed that Base Rent payable with respect to the period between the Rental Commencement Date and the first day of the following calendar month shall be due at the time that the first payment of Base Rent is due.

For the purposes of this Lease, the term “ Lease Year ” shall mean and be defined as each twelve month period commencing on the first day of the calendar month immediately following the Rental Commencement Date; provided, however, that the first Lease Year shall include the period from the Rental Commencement Date to the first day of the next following calendar month after the Rental Commencement Date. Base Rent shall be proportionately prorated for any extended or partial Lease Year (i.e., the first Lease Year and/or the final Lease Year).

 

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3.2 Annual Rent Increases . The capitalized terms used herein are defined below. Base Rent shall be increased each Lease Year during the Term of the Lease, as more particularly set forth below.

(a) On each of the first four Adjustment Dates, Base Rent shall increase by two percent (2%) (i.e. on the first Adjustment Date, the beginning of the second Lease Year, Base Rent shall increase by two percent (2%) so that the Base Rent for the second Lease Year is one hundred and two percent (102%) of the Base Rent for the first Lease Year, on the second Adjustment Date, the beginning of the third Lease Year, Base Rent shall increase by two percent (2%) so that the Base Rent for the third Lease Year is one hundred and two percent (102%) of the Base Rent paid in the second Lease Year, etc.). [*** ALTERNATIVE PROVISION FOR THE SITES THAT WILL BE SOLD BY NNN ***] On each of the first four Adjustment Dates, Base Rent shall increase by two times the percentage increase in the CPI, subject to the Increase Cap set forth below. The increases in Base Rent will be calculated as follows: (i) subtract one point zero (1.0) from a fraction, the numerator of which shall be the Variable Index, and the denominator of which shall be the Base Index; and (ii) multiply the result obtained in subpart (i) above by two (2); then (iii) multiply Base Rent for the Lease Year immediately prior to the Adjustment Date by the product obtained in subpart (ii) above. Notwithstanding the foregoing, in no event shall the increase in Base Rent on the first through fourth Adjustment Dates exceed two percent (2.0%) (the “ Increase Cap ”), and in no event shall the new Base Rent be less than the Base Rent for the Lease Year prior to the Adjustment Date.

(b) On each of the fifth through ninth Adjustment Dates, Base Rent shall increase by one and one-half percent (1.5%) (i.e. on the sixth Adjustment Date, the beginning of the seventh Lease Year, Base Rent shall increase by one and one-half percent (1.5%) so that the Base Rent for the seventh Lease Year is one hundred and one and one-half percent (101.5%) of the Base Rent for the sixth Lease Year, on the seventh Adjustment Date, the beginning of the eight Lease Year, Base Rent shall increase by one and one-half percent (1.5%) so that the Base Rent for the eight Lease Year is one hundred and one and one-half percent (101.5%) of the Base Rent paid in the seventh Lease Year, etc.). .). [*** ALTERNATIVE PROVISION FOR THE LEASES THAT WILL BE SOLD BY NNN ***] On each of the fifth through ninth Adjustment Dates, Base Rent shall increase by two times the percentage increase in the CPI, subject to the Increase Cap set forth below. The increases in Base Rent will be calculated as follows: (i) subtract one point zero (1.0) from a fraction, the numerator of which shall be the Variable Index, and the denominator of which shall be the Base Index; and (ii) multiply the result obtained in subpart (i) above by two (2); then (iii) multiply Base Rent for the Lease Year immediately prior to the Adjustment Date by the product obtained in subpart (ii) above. Notwithstanding the foregoing, in no event shall the increase in Base Rent on the fifth through ninth Adjustment Dates exceed one and one half percent (1.5%) (the “ Increase Cap ”), and in no event shall the new Base Rent be less than the Base Rent for the Lease Year prior to the Adjustment Date.

(c) On each of the tenth through nineteenth Adjustment Dates, Base Rent shall increase by the percentage increase in the CPI, subject to the Increase Cap set forth below. The increases in Base Rent will be calculated as follows: (i) subtract one point zero (1.0) from a fraction, the numerator of which shall be the Variable Index, and the denominator of which shall be the Base Index; and then (ii) multiply the result obtained in subpart (i) above by the Base Rent for the Lease Year immediately prior to the Adjustment Date. Notwithstanding the foregoing, in no event shall the increase in Base Rent on the eleventh through nineteenth Adjustment Dates

 

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exceed one and one half percent (1.5%) (the “ Increase Cap ”), and in no event shall the new Base Rent be less than the Base Rent for the Lease Year prior to the Adjustment Date.

(d) Intentionally deleted.

(e) At the beginning of [*** INSERT NUMBER OF YEARS/OPTION TERMS NECESSARY TO TAKE THE LEASE OUT CLOSE TO THE USEFUL LIFE OF THE PREMISES ***] Option Period exercised by Tenant hereunder, Base Rent shall be initially set to the Base Rent which would be arrived at by increasing the Base Rent for the Lease Year prior to the applicable Option Period by the percentage increase in the CPI, using the same formula set forth in subsection 3.2(c) above and subject to the Increase Cap.

(f) At the beginning of [*** INSERT NUMBER OF YEARS/OPTION TERMS THAT TAKES THE LEASE OUT CLOSE TO THE USEFUL LIFE OF THE PREMISES ***] Option Period exercised by Tenant hereunder, Base Rent shall be initially set the Fair Market Rental Value of the Premises as of the date of the commencement of the Option Period.

(g) After the resetting of the Base Rent for the beginning of each Option Period as provided for in subsection 3.2(e) or 3.2(f) above, Base Rent shall increase each Lease Year on each Adjustment Date in the applicable Option Period by the percentage increase in the CPI, using the same formula set forth in subsection 3.2(c) above and subject to the Increase Cap.

(h) Landlord’s delay or the failure of Landlord, beyond commencement of any Adjustment Date in computing or billing for these adjustments will not impair the continuing obligation of Tenant to pay any and all Base Rent or other Rent due hereunder including any increased Base Rent when billed.

(i) In applying the foregoing formula for Base Rent adjustments, the following terms shall have the following meaning:

(1) “ Adjustment Date ” shall mean, as the case may require, the first (1 ^st ) day of the second Lease Year, and the first day of each succeeding Lease Year during the Term, including any Option Periods.

(2) “ Base Index ” for the first Adjustment Date shall mean the CPI for the month which is two months prior to the Rent Commencement Date. Thereafter, the Base Index shall mean the CPI for the month which is two months prior to the prior Adjustment Date. By way of example, for the first Adjustment Date, the Base Index will be the CPI for the month which is two months prior to the Rent Commencement Date, for the second Adjustment Date, the Base Index will be the CPI for the month which is two months prior to the first Adjustment Date, for the third Adjustment Date the Base Index will be the CPI for the month which is two months prior to the second Adjustment Date, etc.

(3) “ CPI ” shall mean the Consumer Price Index for All Urban Consumers, All Items, U.S.A. Area, 1982-1984 = 100, as published by the Bureau of Labor Statistics, United States Department of Labor (U.S. City Average). If such index is discontinued,

 

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CPI shall then mean the most nearly comparable index published by the Bureau of Labor Statistics or other official agency of the United States Government as determined by Landlord.

(4) “ Fair Market Rental Value ” shall mean the market rent for the Premises as determined as follows: Landlord and Tenant shall each appoint an independent appraiser who is a designated member (MAI) in good standing with the Appraisal Institute, having at least ten (10) years experience in appraising properties similar to the Premises. Each appraiser is encouraged to share market data information with each other. Each appraiser shall prepare and submit a written appraisal of the Fair Market Value of the Premises within sixty (60) days after either party so requests. The Fair Market Value shall be calculated as of the date of said request. If the difference, if any, between the highest appraisal submitted and the lowest appraisal submitted is an amount less than or equal to ten percent (10%) of the amount of the lesser appraisal, the appraised Fair Market Value of the Premises shall be deemed to be equal to the numerical average of the amounts of the two (2) appraisals submitted. If the difference between the two (2) appraisals submitted is an amount greater than ten percent (10%) of the amount of the lesser appraisal, then the two appraisers shall appoint a third appraiser within thirty (30) days after the two appraisers have submitted their reports. The third appraiser shall prepare and submit a written appraisal of the Premises within forty (40) days after such appraiser’s appointment. If a third appraiser is required to be submitted, the appraised Fair Market Value of the Premises shall be deemed to be equal to the numerical average of the two (2) appraisals that have the closest value. If the two appraisers are unable to agree to the appointment of the third appraiser, then either party may request such appointment by a presiding district court judge for *** County, Texas. Such appointed third appraiser shall meet the same qualifications set forth herein. Landlord and the Tenant shall each pay the costs and expenses for their respective appraisers, and, if a third appraiser is necessary, Landlord and Tenant shall share equally the expense of the third appraiser. Landlord and Tenant each agree to cooperate with the appraisers and provide the appraisers with such information as the appraisers may request.

(a) “ Variable Index ” shall mean the CPI for the month which is two months prior to the current Adjustment Date. By way of example, for the first Adjustment Date the Variable Index will be the CPI for the month which is two months prior to the first Adjustment Date, and for the second Adjustment Date the Variable Index will be the CPI for the month which is two months prior to the second Adjustment Date, for the third Adjustment Date the Variable Index will be the CPI for the month which is two months prior to the third Adjustment Date, etc.

3.3 Additional Rent; Rent Defined . If Landlord shall make any expenditure for which Tenant is responsible or liable under this Lease, or if Tenant shall become obligated to Landlord under this Lease for any sum other than Base Rent or as hereinabove provided, the amount thereof shall be deemed to constitute additional rent (“ Additional Rent ”) and shall be due and payable by Tenant to Landlord, together with all applicable sales taxes thereon, if any, simultaneously with the next succeeding monthly installment of Base Rent or at such other time as may be expressly provided in this Lease for the payment of the same.

For the purpose of this Lease, the term “ Rent ” shall mean and be defined as all Base Rent and Additional Rent due from Tenant to Landlord hereunder.

 

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3.4 Payment of Rent . Each of the foregoing amounts of Rent and other sums shall be paid to Landlord without demand and without deduction, set-off, claim or counterclaim of any nature whatsoever which Tenant may have or allege to have against Landlord, and all such payments shall, upon receipt by Landlord, be and remain the sole and absolute property of Landlord. All such Rent and other sums shall be paid to Landlord in legal tender of the United States at the address to which notices to Landlord are to be given or to such other party or to such other address as Landlord may designate from time to time by written notice to Tenant. If Landlord shall at any time accept any such Rent or other sums after the same shall become due and payable, such acceptance shall not excuse a delay upon subsequent occasions, or constitute or be construed as a waiver of any of Landlord’s rights hereunder. At the request of Landlord, Tenant shall pay Base Rent and any Additional Rent hereunder by electronic funds transfer or by wire, provided Landlord provides to Tenant appropriate wire instructions or electronic transfer instructions.

3.5 Past Due Rent . If Tenant fails to make any payment of Rent or any other sums or amounts to be paid by Tenant within five (5) days of the date such payment is due and payable, Tenant shall pay to Landlord an administrative late charge of two and one-half percent (2.5%) of the amount of such payment. In addition, any past due payment of Rent shall bear interest from the date such payment became due to the date of payment thereof by Tenant at a rate which is equal to the lesser of (i) twelve percent (12%) per annum, or (ii) the maximum interest rate then allowable under the laws of the State in which the Premises are located. Such late charge and interest shall constitute Additional Rent and shall be due and payable with the next installment of Rent due hereunder.

3.6 No Diminution or Abatement of Rent . No abatement, diminution or reduction (i) of Rent, charges or other compensation, or (ii) of Tenant’s other obligations hereunder shall be allowed to Tenant or any person claiming under Tenant, under any circumstances or for any reason whatsoever, except as expressly provided otherwise herein.

ARTICLE IV.

USE AND OPERATION OF PREMISES

4.1 Permitted Use . Tenant covenants that it shall, throughout the Term of this Lease, use and occupy the Premises only for lawful purposes which do not conflict with covenants, restrictions or other matters of record affecting title to the Premises; notwithstanding the foregoing provision, however, the following uses shall be prohibited on the Premises:

(a) Any obnoxious odor, noise or sound which can be heard or smelled outside of the Building, provided that any usual paging system shall be allowed and further provided that typical restaurant odors shall not be deemed prohibited hereby if such restaurant facilities have been properly constructed and maintained so as not to pollute.

(b) Any operation primarily used as a warehouse operation and any assembling, manufacturing, distilling, refining, smelting, agricultural or mining operation.

 

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(c) Any mobile home, trailer court, labor camp, junk yard or stock yard (except that this provision shall not prohibit the temporary use of construction trailers during periods of construction, reconstruction or maintenance).

(d) Any dumping, disposing, incineration or reduction of garbage (exclusive of garbage compactors located in the rear of any Building).

(e) Any fire sale, bankruptcy sale (unless pursuant to a court order) or auction house operation.

(f) A facility whose primary business is auto or truck repair.

(g) Any establishment which has as its principal business the selling or exhibiting of pornographic materials, including, without limitation any adult book or film store and any adult entertainment nightclub.

(h) Any so called “head shop” engaged primarily in the sale of rolling paper and other drug paraphernalia.

4.2 Reserved .

4.3 Compliance With Laws . Tenant shall at all times keep and maintain the Premises in compliance with all applicable laws, ordinances, statutes, rules, regulations, orders, directions and requirements of all federal, state, county and municipal governments and of all other governmental agencies or authorities having or claiming jurisdiction over the Premises or the business activities conducted thereon or therein and of all of their respective departments, bureaus, agencies or officers, and of any insurance underwriting board or insurance inspection bureau having or claiming such jurisdiction or any other body exercising similar functions and of all insurance companies from time to time selected by Tenant to write policies of insurance covering the Premises and any business or business activity conducted thereon or therein. However, notwithstanding the foregoing, should there be a de minimis issue of non-compliance with applicable law which does not have a material adverse effect on the Premises, Tenant shall not be obligated to correct such de minimis violation but Tenant shall have the indemnity obligations set forth in Section 18.2 with respect to any such de minimis violation, including indemnity against any fines or penalties imposed against the Premises as a result of such de minimis violations, if any.

Notwithstanding the generality of the foregoing, but subject to the proviso set forth in the last sentence of the preceding paragraph, Tenant shall, at its sole expense, maintain the Premises in full compliance with all applicable federal, state or municipal laws, ordinances, rules and regulations currently in existence or hereafter enacted or rendered governing accessibility for the disabled or handicapped, including, but not limited to, any applicable provisions of The Architectural Barriers Act of 1968, The Rehabilitation Act of 1973, The Americans With Disabilities Act, the accessibility code(s), if any, of the State in which the Premises is located, and all regulations and guidelines promulgated under any all of the foregoing, as the same may be amended from time to time (collectively the “ Accessibility Laws ”).

 

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4.4 Compliance With Restrictions, Etc . Tenant, at its expense, shall comply with all restrictive covenants or other title exceptions affecting the Premises and comply with and perform all of the obligations set forth therein to the extent that the same are applicable to the Premises or to the extent that the same, if not complied with or performed, would impair or prevent the continued use, occupancy and operation of the Premises. Further, in addition to Tenant’s payment obligations under this Lease, Tenant shall pay (i) all sums charged, levied or assessed under any restrictive covenants, declaration, reciprocal easement agreement or other title exceptions affecting the Premises promptly as the same become due and shall furnish Landlord evidence of payment thereof, and (ii) any fees, charges, fines, costs, assessments, taxes, demands, orders, directives, or other requirements by any governmental agency asserting jurisdiction, or under any Environmental Laws which arise from or relate to Tenant’s use of, or Tenant’s activities at, the Premises, including, but not limited to, Storage Tank System registration fees, any applicable fees, and any consultant or attorneys’ fees related to or arising under any Environmental Laws.

4.5 Hazardous Materials and Sewage .

(a) Definitions . The following terms shall have the following meanings:

(i) “ De Minimis Release ” shall mean a Release which is (i) not reportable under any governmental authority under any applicable Environmental Laws, or (ii) not above action levels established by [*** TCEQ or Oklahoma Corporate Commission ***] .

(ii) “ Environmental Laws or Environmental Requirements ” , as used herein, shall mean all applicable federal, state, and local government laws (including common law), rules, regulations, statutes, codes, ordinances, directives, guidance documents, cleanup or other standards, and any other governmental requirements or standards which pertain to, regulate, or impose liability or standards of conduct concerning the use, storage, human exposure to, handling, transportation, release, cleanup or disposal of Hazardous Materials.

(iii) “ Hazardous Materials ” shall mean and be defined as any and all toxic or hazardous substances, chemicals, materials or pollutants, of any kind or nature, which are regulated, governed, restricted or prohibited by any federal, state or local law, decision, statute, rule, or ordinance currently in existence or hereafter enacted or rendered, and shall include (without limitation), all oil, gasoline and petroleum based substances.

(iv) “ Material Release ” shall mean any Release other than a De Minimis Release.

(v) “ Pre-Existing Environmental Condition ” means presence of: (i) Hazardous Materials in soil, groundwater or surface water on or about the Premises which first existed or first occurred prior to the Effective Date; or (ii) any other environmental condition which first existed or first occurred prior to the Effective Date.

(vi) “ Release ” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment any Hazardous Materials on, over, under, from or affecting the Premises or the air,

 

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soil, water vegetation, buildings, personal property, persons or animals thereon, whether occurring before or during the Term of this Lease.

(vii) “ Storage Tank System ” means a complex of one or more underground or aboveground storage tanks and their associated underground, above ground, and/or connected piping and related fuel dispensing, pumping, mechanical, control and detectional equipment, as more particularly located on the Land.

(b) Environmental Compliance . Tenant shall comply with all laws, including Environmental Laws, relating to the use, storage, transportation, dispensing, sale or Release of Hazardous Materials at the Premises, except for any noncompliance of a de minimis nature or for which the result of noncompliance would not have a material adverse effect on the Premises. Without limiting the foregoing, Tenant shall comply with all laws, including Environmental Laws, relating to Storage Tank Systems, their construction, operation, maintenance, calibration and alarm systems, and promptly shall implement any and all upgrade requirements promulgated by any government agency having jurisdiction at the earliest possible time, but in no event, no later than any applicable deadline announced or promulgated by the government agency. Tenant shall not intentionally Release, and shall use commercially reasonable efforts to prevent any employee, contractor, agent, sublessee, invitee or licensee from Releasing, any Hazardous Materials on the Premises, into the air or the surrounding land, surface water or ground water; provided, however, a De Minimis Release on the Premises shall not be a violation of or a default of Tenant under the Lease (but Tenant shall have the remediation and indemnity obligations set forth in Section 4.6(c) and 4.6(d) below). Tenant shall provide Landlord with copies of all reports, studies, complaints, claims, directives, citations, demands, inquiries, notices of violation, or orders relating to Hazardous Materials at or emanating from or to the Premises, at any time, or any alleged non-compliance with Environmental Laws at the Premises, reasonably promptly (and in no event later than fifteen (15) days) after such documents are provided to or generated by Tenant. Tenant also shall notify Landlord of any Material Release of Hazardous Materials at, on, under or from the Premises promptly upon notification of Tenant thereof, and promptly shall abate and remove any such Releases as required in this Article. A Material Release in and of itself shall not be a violation of or a default under this Lease, unless such Material Release shall result from the intentional acts of Tenant or from Tenant’s failure to use commercially reasonable efforts to prevent any employee, contractor, agent, lessee, invitee or licensee from Releasing, any Hazardous Materials on the Premises, into the air or the surrounding land, surface water or ground water; provided, however, Tenant’s failure to respond or take action after a Material Release as otherwise required in this Lease shall be a default hereunder. Any fuel spills immediately shall be removed and cleaned up using absorbent or other appropriate materials. Water shall not be used to clean gasoline or diesel from the surfaces of the Premises, other than for routine power washing and any water used by the fire department in response to a fire. All reporting, investigation and/or remediation requirements under any Environmental Law with respect to any and all Releases of Hazardous Materials at, on, from or near the Premises are the responsibility of Tenant.

(c) Tenant’s Responsibility for Hazardous Materials . Hazardous Materials at the Premises shall be the responsibility of Tenant and Tenant shall be liable for and responsible for such Hazardous Materials, including without limitation, at Tenant’s sole cost (i) any Pre-Existing Environmental Condition (provided, however, that Tenant represents that based on the

 

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environmental information in Tenant’s files, there are no known Pre-Existing Environmental Conditions on the date of this Lease, and based on such information, the possibility of such a Pre-Existing Environmental Condition is remote); (ii) permitting, reporting, assessment, testing, investigation, treatment, removal, remediation, transportation and disposal of such Hazardous Materials as directed by any governmental agency, as required by Environmental Laws; (iii) damages, costs, expenditures and claims for injury to persons, property, the Premises and surrounding air, land, surface water, and ground water resulting from such Hazardous Materials; (iv) claims by any governmental agency or third party associated with injury to surrounding air, land, surface water and ground water or other damage resulting from such Hazardous Materials; (v) damages for injury to the buildings, fixtures, appurtenances, equipment and other personal property of Landlord to the extent caused by such Hazardous Materials; (vi) fines, costs, fees, assessments, taxes, demands, orders, directives or any other requirements imposed in any manner by any governmental agency asserting jurisdiction, or under any Environmental Laws with respect to such Hazardous Materials; (vii) damages, costs and expenditures for injury to natural resources to the extent caused by such Hazardous Materials as directed by any governmental agency or otherwise as required by applicable law, including Environmental Laws; (viii) compliance with Environmental Laws regarding the use, storage, transportation, release, disposal, dispensing or sale of Hazardous Materials; and (ix) any other liability or obligation related to such Hazardous Materials. Except as otherwise provided in Section 4.6(f) below, Landlord is not required to incur any costs, fees (including attorney, consultant and expert witness fees) or expenses for environmental compliance, testing, investigation, assessment, remediation or cleanup relating to Hazardous Materials, should Landlord incur any such reasonable costs, expenses or fees relating to Hazardous Materials at the Premises or surrounding lands or surface water or ground water, Tenant shall promptly reimburse Landlord for said costs, expenses or fees (except to the extent such costs, fees or expenses arise from other property owned by Landlord, if any).

(d) Tenant’s Environmental Indemnification . Tenant shall indemnify, defend, and hold Landlord harmless from any and all claims, judgments, damages, penalties, fines, costs, liabilities, or losses (including, without limitation, diminution in value of the Premises, damages for the loss or restriction on use of rentable or usable space or of any amenity of the Premises, damages arising from any adverse impact on marketing of space of the Premises, and sums paid in settlement of claims, attorneys’ fees, consultation fees, and expert fees) which arise before, or during the term of the Lease as a result of Hazardous Materials (provided, however, that Tenant represents that based on the environmental information in Tenant’s files, there are no known Pre-Existing Environmental Conditions on the date of this Lease, and based on such information, the possibility of such a Pre-Existing Environmental Condition is remote). This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation or site conditions or any cleanup, remedial, removal, or restoration work required by any federal, state, or local governmental agency or political subdivision because of Hazardous Materials present in the soil or ground water on or under the Premises. Without limiting the foregoing, if the presence of any Hazardous Materials on the Premises results in any contamination of the Premises, Tenant shall promptly take all actions at its sole expense as are recommended by environmental consultants hired by Tenant and are necessary to return the Premises to the condition required by the appropriate governmental authority; provided that Landlord’s approval of such actions shall first be obtained, which approval shall not be unreasonably withheld so long as such actions would not potentially have any material adverse

 

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long-term or short-term effect on the Premises. Should Tenant obtain a “no further action” closure letter or similar evidence of the completion of remediation from [*** insert TCEQ or Oklahoma Corporate Commission *** ] (an “ NFA Letter ”) Tenant shall have no obligation to further remediate the Premises, but Tenant shall continue to indemnify, defend and hold harmless Landlord for any claims, judgments, damages, penalties, fines, costs, liabilities, or losses as more particularly set forth in the beginning of this paragraph. Notwithstanding the foregoing, as more particularly provided for in Section 4.7(b), upon the end of the Lease Term, should Tenant obtain an NFA Letter, Tenant’s indemnity obligations under this subsection shall be modified as more particularly set forth in Section 4.7(b).

(e) Tenant’s Notification Obligation . Tenant promptly shall notify Landlord of any of the following: (i) any correspondence or communication from any governmental entity regarding the application of Environmental Laws to the Premises or Tenant’s operation of the Premises, if such communication would enlarge or materially change or has the potential to materially change Tenant’s or Landlord’s obligations or liabilities under the Environmental Laws; (ii) any correspondence, communication or notifications as are required by either the Federal or State Emergency Planning and Community Right to Know Acts if such communication would enlarge or materially change or has the potential to materially change Tenant’s or Landlord’s obligations or liabilities under the Environmental Laws; (iii) any material change in Tenant’s operations on the Premises that will enlarge or materially change or has the potential to materially change Tenant’s obligations or liabilities under the Environmental Laws; (iv) any Material Release or suspected Material Releases of any and all Hazardous Materials at, from or near the Premises. In addition, within thirty (30) days of Landlord’s written request, Tenant shall provide to Landlord a copy of Tenant’s “ Leaseback Environmental Status Report ” or a similar report if such report is no longer created by Tenant, which describes all testing and test results of the Premises during the prior year. Such request of shall not be made by Landlord more than twice in any calendar year.

(f) Landlord’s Right of Entry . If there has been a Material Release, at Landlord’s sole expense and sole discretion, Landlord may enter upon the Premises (without interfering with Tenant’s business and operations on the Premises) and make any inspection, tests, borings, measurements, investigation or assessment Landlord deems necessary in the exercise of its reasonable judgment in order to determine the presence of Hazardous Materials. Provided, however, that Landlord shall not conduct any soil borings or other invasive testing procedures unless there has been a Material Release or Landlord has a reasonable basis to suspect there has been a Material Release on the Premises. Landlord shall select a qualified environmental consultant to complete such tasks and shall not conduct any such inspections or other activities described herein without consulting and coordinating such efforts with the Tenant’s environmental team. Nothing herein shall be deemed to require Landlord to conduct any such testing, measurement, investigation or assessment. Landlord shall give Tenant a minimum of five (5) days written notice prior to conducting any such inspection, tests, borings, measurements, investigation or assessment, so that Tenant may have the opportunity to be present and to receive split test samples and/or to observe such testing. Landlord agrees to consult with and coordinate such actions with Tenant’s environmental team. In conducting any such inspections, and testing, Landlord shall not unduly interrupt or interfere with the conduct of Tenant’s business. Notwithstanding any other provisions of this Lease to the contrary, Landlord shall be solely responsible for any costs, claims, damages, expenses or liabilities that

 

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arise as a result of Landlord’s inspections and testing to the extent attributable to the negligence or misconduct of Landlord or Landlord’s agents. Provided, however, no notice from Landlord to Tenant shall be required under urgent or emergency conditions. Tenant shall be provided with a copy of each report setting forth the results of any test performed by Landlord promptly upon receipt. Landlord’s right of entry and inspection shall include the right to inspect Tenant’s records required to be maintained pursuant to Environmental Laws.

(g) Tenant’s Environmental Records . Landlord shall have the right to require Tenant to provide to Landlord access to Tenant’s file with respect to environmental matters affecting the Premises upon two (2) business days prior written notice. Upon such request, not to be made more than once in any calendar year, Tenant shall provide a copy of all new correspondence, reports and other written material in Tenant’s environmental file for the Premises.

(h) Tenant’s Right to Remove the Storage Tank System during the Term .

Tenant shall have the right, at its sole discretion, during the first fifteen (15) Lease Years to remove all or part of the Storage Tank System, and upon such removal Tenant shall not be obligated to replace such Storage Tank System but shall be obligated to restore the surface where the Storage Tank System was removed to grade (including restoration of the asphalt or other Improvements damaged by such removal, if any) consistent with the condition of the surface and Improvements prior to such removal. After the first fifteen (15) Lease Years, and only if Tenant has exercised the next five-year option, Tenant shall have the right, at its sole discretion, to remove all or part of the Storage Tank System, and upon such removal Tenant shall not be obligated to replace such Storage Tank System but shall be obligated to restore the surface where the Storage Tank System was removed to grade (including restoration of the asphalt or other Improvements damaged by such removal, if any) consistent with the condition of the surface and Improvements prior to such removal. Notwithstanding anything herein to the contrary, if there is a Material Release after the fifteenth (15 ^th ) Lease Year which results from a material failure in the Storage Tank System, then Tenant shall have the right to remove the Storage Tank System in order to remediate the Premises in compliance with the appropriate governmental authorities, and in such case, Tenant shall not have the obligation to replace the Storage Tank System (regardless of whether Tenant has exercised the next five-year option) but shall be obligated to restore the surface where the Storage Tank System was removed to grade (including restoration of the asphalt or other Improvements damaged by such removal, if any) consistent with the condition of the surface and Improvements prior to such removal. Any removal and replacement of the Storage Tank System shall be performed in accordance with all laws as required by Section 4.3, including all Environmental Laws as required by this Section 4.6. If there are any Hazardous Materials on, at or under the Premises at the time of such removal and replacement, then Tenant shall remediate such Hazardous Materials as otherwise required by this Section 4.6.

4.6 Resolution of Environmental Matters at Expiration or Termination of Tenancy .

(a) Tenancy Close-Out Environmental Assessment and Report . Not later than (i) thirty (30) days prior to the expiration of the Lease or (ii) ninety days after an earlier termination of the tenancy, whichever may apply, Tenant shall submit to the Landlord (i) a copy of all of Tenant’s records relating to obligations under this Article IV, and (ii) a report of any

 

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environmental assessment pursuant to ASTM and/or prevailing industry standards, conducted by a qualified, and adequately insured consultant firm, to (1) identify and assess the presence of Hazardous Materials on, in, at, and, where information indicates migration of Hazardous Materials off site and it is practical to do so, off site of the Premises; (2) all records relating to the determination of the integrity and tightness of all Storage Tank Systems on the Premises; and (3) determine any needed remedial actions needed or pending regulatory obligations performance or resolution of which is required to comply with Environmental Laws or restore the Premises as set forth in this Section 4.7. Tenant shall secure on behalf of Landlord the ability of the Landlord to rely upon the report and be named as an additional insured under the consultant’s insurance policies. Tenant shall update and supplement such report as needed through the date of the end of the tenancy to reflect any change in conditions or new information pertaining to the methodology or findings of the report. Tenant shall not be in default under this Lease for failure to complete the matters in this paragraph if Tenant is actively and diligently pursuing such matters.

(b) Remedial and Corrective Actions; Closure of Storage Tank Systems : Not later than (i) the expiration of the Lease, (ii) six (6) months after the earlier termination of the Lease, (iii) or such longer time as is approved in writing by Governmental Authorities, if any is required, or as may be necessary to complete such corrective action in compliance with Governmental Authorities, and in any event, as consented to by Landlord, which consent shall not be unreasonably withheld, Tenant shall provide Landlord with written evidence and assurances that, as of the date of the end of the tenancy, or as soon as reasonably practicable thereafter, the Premises and any Storage Tank Systems left at the Premises comply (or will comply if any remediation is required) with all Environmental Laws and, where applicable, any required regulatory closures or NFA Letter have been obtained. Upon delivery of the evidence required hereunder, Tenant shall no longer have any indemnity obligations under this Lease with respect to any new suit or claim brought against Landlord or the Premises after the end of the Term regarding any Release that occurred on the Premises during the Term.

4.7 Right to Contest . Tenant may, at its sole cost and expense, contest, or cause to be contested, by appropriate legal proceedings conducted in good faith and with due diligence, the application of laws, ordinances, statutes or regulations to the Premises, including the application of Environmental Laws or Environmental Requirements to the Premises, provided Tenant indemnifies and holds Landlord harmless from any expenses (including reasonable attorney’s fees) or liability arising out of such contest, and posts any bond or security required by law in connection with such contest.

4.8 Sewage . Tenant shall not discharge or permit to be discharged from the Premises any sewage other than that which is normal waste water for the business conducted by Tenant on, in or from the Premises. Any sewage which is produced or generated in connection with the use or operation of the Premises shall be handled and disposed of by Tenant as required by and in compliance with all applicable local, state and federal laws, ordinances and rules or regulations.

4.9 Survival . The provisions of this Article IV shall survive expiration or termination of the tenancy but nothing herein shall obligate Tenant for any environmental conditions first existing on the Premises after the date of expiration or termination of Tenant’s tenancy hereunder.

 

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ARTICLE V.

TAXES AND ASSESSMENTS

5.1 Real Estate Taxes and Assessments . From and after the Effective Date and continuing throughout the Term of this Lease Tenant’s obligations with respect to Real Estate Taxes (as hereinafter defined) shall be as follows:

(a) As used herein, “ Real Estate Taxes ” shall mean all taxes, assessments and other governmental impositions and charges of every kind and nature whatsoever, extraordinary as well as ordinary, and each and every installment thereof which during the Term hereof or prior to the Term of the Lease shall be or have been charged, laid, levied, assessed, or imposed upon, or arise in connection with, the use, occupancy or possession of the Premises or any part thereof, including, without limitation, ad valorem real and personal property taxes, and all taxes charged, laid, levied, assessed or imposed in lieu of or in addition to any of the foregoing by virtue of all present or future laws, ordinances, requirements, orders, directions, rules or regulations of federal, state, county and municipal governments and of all other governmental authorities whatsoever.

(b) Tenant shall pay directly to the taxing authorities all Real Estate Taxes on or before the date such Real Estate Taxes are due and payable. Landlord, with Tenant’s cooperation, shall cause the taxing authorities to deliver all bills for Real Estate Taxes directly to Tenant or should any taxing authority refuse to deliver a tax bill directly to Tenant, Landlord shall deliver said tax bill to Tenant no later than twenty (20) days after receipt from the taxing authority. Upon written request from Landlord, Tenant shall deliver to Landlord evidence of the payment of the Real Estate Taxes for the calendar year no later than twenty (20) days after the date Tenant has paid the Real Estate Taxes.

(c) Reserved .

(d) Landlord agrees that Tenant has the first right to manage and conduct all negotiations of the Real Estate Taxes and shall also have the right to contest the validity or the amount of any Real Estate Taxes by such appellate or other proceedings as may be appropriate in the jurisdiction, and may, if applicable, defer payment of such obligations if payment would operate as a bar to such contest, and, if applicable, pay same under protest, or take such other steps as Tenant may deem appropriate, provided, however, that Tenant indemnifies Landlord from any expense (including reasonable attorney’s fees) or liability arising out of such contest, pursues such contest in good faith and with due diligence, posts any bond or security required by law in connection with such contest, gives Landlord written notice of its intention to contest, and takes no action which shall cause or allow the institution of any foreclosure proceedings or similar action against the Premises. Landlord shall, at Tenant’s expense, cooperate in the institution and prosecution of any such proceedings initiated by Tenant, if so requested by Tenant, and shall execute any documents which Landlord may reasonably be required to execute and shall make any appearances which Landlord may reasonably be required to make in connection with such proceedings. Further provided, that if Landlord receives any letters or communications from any taxing entity regarding the purchase price of the Premises paid by Landlord, or any other purchaser, or any request or information regarding the appraisal of the Premises, Landlord shall promptly forward such communications to Tenant for Tenant to

 

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respond. Landlord agrees not to respond directly to such requests, but rather to forward all such requests to Tenant.

(e) If Tenant elects not to institute proceedings to contest the validity or the amount of any Real Estate Taxes, Landlord may do so, after giving Tenant fifteen (15) days prior written notice, and Tenant shall cooperate and shall make any appearances which Tenant may reasonably be required to make in such proceedings but shall not be obligated to incur any expense in connection therewith; provided, however, that Landlord pursues such contest in good faith and with due diligence and Landlord shall take no action which shall cause or allow the institution of any foreclosure proceedings or similar action against the Premises which might result in the termination of this Lease.

(f) Should any of the proceedings referred to in the preceding two paragraphs (d) and (e) of this Section 5.1 result in reducing the total annual Real Estate Taxes, Tenant shall be entitled to receive all refunds by the taxing authorities attributable to the Premises for any period for which Tenant has paid Real Estate Taxes after deducting therefrom payment of all of the reasonable expenses incurred by Landlord and Tenant, if any, incurred in any such proceeding in which a refund is paid. If no refund shall be secured in any such proceeding, the party instituting the proceeding shall bear the entire cost, or