exv10w12



 






Exhibit 10.12




LEASE AGREEMENT




     LEASE AGREEMENT made this 24th day of October, 2005, by and between WESTERN REFINING COMPANY,
L.P., a Delaware limited partnership, whose address is 6500 Trowbridge Drive, El Paso, Texas 79905
(hereinafter referred to as “Lessor”), and TRANSMOUNTAIN OIL COMPANY, L.C., a Texas limited
liability company, whose address is 6767 Gateway West, El Paso, Texas 79925 (hereinafter referred
to as “Lessee”).



W I T N E S S E T H:




     In consideration of the mutual covenants and agreements hereinafter set forth, Lessor and
Lessee agree and covenant as follows:



ARTICLE I. DEMISE OF PREMISES; QUIET ENJOYMENT




     Section 1.01 Premises.



     Subject to and upon the terms, conditions, covenants and undertakings hereinafter set forth,
Lessor does hereby demise and lease to Lessee, and Lessee does hereby lease from Lessor, 11,658.00
square feet of space, more or less, in the building located upon the real property described on
Exhibit “A” appended hereto; such space being outlined in red on Exhibit “B” appended hereto and
being referred to herein as the “Premises” or “Leased Premises”.



     Section 1.02 Condition of Premises.



     To the best of Lessor’s knowledge and belief, the Premises complies with the building codes
that were in effect at the time constructed and also with all applicable laws, covenants and
restrictions of record, regulations, and ordinances in effect on the date hereof, provided,
however, the same does not apply to the use to which Lessee will put the Premises or any
alterations or installations therein made or to be made by Lessee. By Lessee’s acceptance of
possession of the Premises, Lessee acknowledges that it has fully inspected the Premises and on the
basis of such inspection, Lessee accepts the Premises and the improvements situated thereon,
“AS-IS” and as suitable (in its present condition) for purposes for which the same are leased.
Lessee fully understands and agrees that there are no warranties, either express or implied, other
than the warranties, if any, which are set forth in writing in this Lease, and that neither Lessor
nor any agent of Lessor, has made any representation or warranty with respect to the Premises or
any portion thereof, or with respect to the suitability of the same for the conduct of Lessee’s
business. Lessee further acknowledges that Lessor has no obligation to perform any work or to
complete any improvements on or about the Premises. LESSEE HEREBY STIPULATES AND EXPRESSLY
UNDERSTANDS AND AGREES THAT THERE ARE NO IMPLIED WARRANTIES OF FITNESS, SUITABILITY, USE OR
MERCHANTABILITY WHICH ARE A PART OF THIS LEASE.



     Section 1.03 Quiet Enjoyment.



     Lessor covenants and agrees that upon Lessee paying rent and performing all of the covenants
and conditions herein set forth, Lessee shall and may peaceably and quietly have, hold and enjoy
the Premises hereby demised, for the term herein provided.



 









 





ARTICLE II. TERM/MEMORANDUM




     Section 2.01 Primary Term of Lease.



     Subject to the provisions set forth in Section 2.40 below, the Primary Term of this Lease
shall be for a period of ten (10) years, commencing December 1, 2005 and terminating November 30,
2015 (the “Primary Term”).



     Section 2.02 Renewal Terms.



     Provided Lessee is not in default at the end of the Primary Term of this Lease, Lessee shall
have and is hereby granted by Lessor the right and option to extend the term of this Lease for a
period of five (5) years from and after the expiration of the Primary Term of this Lease (the
“First Renewal Term”) upon the same terms, covenants and conditions as are contained in this Lease.
To exercise its right to extend the term of this Lease throughout the First Renewal Term, Lessee
shall give Lessor written notice of such election one hundred eighty (180) days prior to the
expiration of the Primary Term. Should Lessee exercise its option to extend the term of this Lease
throughout the First Renewal Term, provided Lessee is not in default at the end of the First
Renewal Term, Lessee shall have and is hereby granted the right and option to extend the term of
this Lease for an additional period of five (5) years from and after the expiration of the First
Renewal Term of this Lease (the “Second Renewal Term”) upon the same terms, covenants and
conditions as are contained in this Lease. Should Lessee elect to exercise its option to extend
the term of this Lease throughout the Second Renewal Term, Lessee shall give Lessor written notice
of such election one hundred eighty (180) days prior to the expiration of the First Renewal Term.



     Section 2.03 Memorandum.



     At the request of either Lessor or Lessee, the parties shall execute a Memorandum of Lease in
form and substance reasonably satisfactory to Lessor and Lessee.



     Section 2.04 Termination.



     Lessor reserves the right to terminate this Lease and the obligations of Lessor and Lessee
hereunder by issuing to Lessee a notice of termination terminating this Lease on a specified date,
which date will be no less than one (1) year from and after the date of the issuance of such
termination notice.



ARTICLE III. RENT AND SECURITY DEPOSIT




     Section 3.01 Monthly Base Rent During Primary Term.



     During the Primary Term of this Lease, and subject to adjustment as provided below, Lessee
shall pay to Lessor, without demand and without deduction, abatement or setoff, the sum of
$6,800.50 per month on or before the first day of each calendar month.



     Section 3.02 Adjustment of Monthly Base Rent.



     At the end of the first five (5) years of the Primary Term of this Lease, being November 30,
2010, and on the last day of the Primary Term and, should Lessee exercise its option to renew the
Primary Term of this Lease for the First Renewal Term and, if applicable, the Second Renewal



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Term, the Monthly Base Rent provided for in Section 3.01, as adjusted, shall be adjusted to reflect
any increase in the Consumer Price Index as hereinafter provided (the “CPI”). The adjusted Monthly
Base Rent for the second five (5) years of the Primary Term and, if applicable, the First Renewal
Term and the Second Renewal Term, shall be obtained by multiplying the Monthly Base Rent provided
for in Section 3.01, on an annualized basis, by a fraction, the numerator of which is the index
number for the first month of the second five (5) years of the Primary Term of this Lease and, if
applicable, the First Renewal Term and the Second Renewal Term, in the column for “All Items”
(unadjusted) in the table entitled “Consumer Price Index for all Urban Consumers”, “index base:
1982-1984 = 100)” “U.S. City Average” Published monthly by the Bureau of Labor Statistics of the
United States Department of Labor in the monthly Labor Review (said table being herein referred to
as the “CPI-U”), and the denominator of which is the CPI-U for the first full month of the first
year of the Primary Term of this Lease. The Adjusted Base Rent as so determined shall be the Base
Rent for the Premises during the second five (5) years of the Primary Term of this Lease and, if
applicable, the First Renewal Term and the Second Renewal Term, effective as of the first day of
the second five (5) years of the Primary Term and, if applicable, the First Renewal Term and the
Second Renewal Term. Notwithstanding the foregoing calculation, the Adjusted Base Rent shall in no
event be less than the Base Rent set forth in Section 3.01. Lessee shall continue payment of the
Monthly Base Rent in effect for the preceding five (5) years of the Primary Term and, if
applicable, the First Renewal Term and the Second Renewal Term, until notified by Lessor of any
increase in such Monthly Base Rent. Lessor shall provide such notification as soon as practical
after the commencement of the second five (5) years of the Primary Term and, if applicable, the
First Renewal Term and the Second Renewal Term. Such notification shall include a Memorandum
showing the calculations used by Lessor in determining the New Monthly Base Rent. On the first day
of the calendar month immediately following Lessee’s receipt of such notice, Lessee shall commence
payment of the New Monthly Base Rent specified in the notice, and shall also pay to Lessor, with
respect to the months of the second five (5) years of the Primary Term and, if applicable, the
First Renewal Term and the Second Renewal Term, which have already expired at the time of such
notice, the excess, if any, of the required Monthly Base Rent specified in the notice over the
monthly amounts actually paid by Lessee.




     If the “CPI-U” is discontinued, the “Consumer Price Index for Urban Wage Earners and Clerical
Workers” (“CPI-W”) for “All Items”, unadjusted, (index base: 1982-84 = 100), the “U.S. City
Average”, published monthly in the Monthly Labor Review by the Bureau of Labor Statistics of the
United States Department of Labor shall be used for making the computation in this Section 3.02.
If the “CPI-W” is discontinued, comparable statistics on the purchasing power of the consumer
dollar published by the Bureau of Labor Statistics of the United States Department of Labor shall
be used for making the computation in this Section 3.02. If the Bureau of Labor Statistics shall
no longer maintain statistics on the purchasing power of the consumer dollar, comparable statistics
published by a responsible financial periodical or recognized authority selected by the Landlord
shall be used for making the computation in this Section 3.02. If the base year “(1981-84 = 100)”
or other base year used in computing the CPI-U (or CPI-W if applicable) is changed, the figures
used in making the adjustment in this Section 3.02 shall be changed accordingly, so that all
increases in the “CPI-U” (or CPI-W if applicable) are taken into account notwithstanding any such
change in the base year.



     Section 3.03 Security Deposit.



     Lessee has deposited the sum of $6,800.50 as a Security Deposit (the “Deposit”) with Lessor to
secure Lessee’s performance of its obligations hereunder. If Lessee defaults under any of the
terms of this Lease, Lessor may, after giving written notice to Lessee as provided in Section 12.03



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hereunder, and without prejudice to Lessor’s other remedies, apply part or all of the Deposit to
cure Lessee’s default. Should part or all of the Deposit be applied to cure a default by Lessee,
within ten (10) days after demand therefor, Lessee shall replenish the Deposit by paying the amount
of the Deposit applied to cure such default to Lessor. Any part of the Deposit not used by Lessor
as provided above shall be returned to Lessee within ten (10) days after the termination of the
Lease.



ARTICLE IV. TAXES, ASSESSMENTS AND UTILITIES




     Section 4.01 Taxes and Assessments.



     Lessee shall pay, as and when the same shall become due and payable, all taxes and other
assessments of whatsoever kind and nature which have been or may be levied against the personal
property owned by Lessee and located in or about the Premises.



     Section 4.02 Ad Valorem Taxes.



     Lessor shall pay all real estate taxes applicable to the real property described on Exhibit
“A”. As used herein, the term “Real Property Taxes” shall include any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any license fee, commercial rental
tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate
taxes) imposed upon the real property described on Exhibit “A” by any authority having the direct
or indirect power to tax, including any city, state or federal government, or any school,
agricultural, sanitary, fire, street, drainage or other improvement district thereof, levied
against any legal or equitable interest of Lessor in the real property described on Exhibit “A”.



     Section 4.03 Utilities/Security.



     Lessee shall pay and discharge, in addition to the rent herein reserved, all charges by any
public or private utility or others for gas, water, sewage, electric power or telephone or other
services furnished to or placed upon the Premises during the Primary Term and any Renewal Term
hereof, including any utility deposits which may be required and shall hold Lessor harmless
therefrom.



ARTICLE V. CASUALTY INSURANCE, LIABILITY INSURANCE,

POLICY REQUIREMENTS AND INDEMNIFICATION




     Section 5.01 Fire and Casualty Insurance.



     Lessee, at its sole cost and expense, shall throughout the Primary Term and any Renewal Term
of this Lease keep or cause to be kept all property of Lessee located in or upon the Premises
insured for Lessee’s benefit against loss or damage by fire and against loss or damage by other
risks embraced by “extended coverage” and against civil commotions, riots, vandalism, malicious
mischief in such an amount as Lessee may require.



     Lessor shall throughout the Primary Term and any Renewal Term of this Lease keep the Leased
Premises insured for the benefit of Lessor and any mortgagee of the Premise, as its interest may
appear, against loss or damage by fire, and against loss or damage by other risks embraced by
“extended coverage” and against civil commotions, riots, vandalism and malicious mischief in such
amounts and with such companies as Lessor, in its sole discretion may determine.



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     In connection therewith, Lessee agrees not to carry a stock of goods or do anything in or
about the Premises which increases the casualty insurance rates applicable to the Premises or the
building in which the Premises are located without the prior written consent of Lessor. Should
Lessor consent to any use of the Premises by Lessee which increases insurance rates upon the
Premises or the building in which the same are located, Lessee agrees to pay as additional rent any
increase in the premium(s) for insurance against loss by fire or extended coverage risk resulting
from such use of the Premises by Lessee.



     Section 5.02 Liability Insurance.



     Lessee, at its sole cost and expense, shall throughout the Primary Term and any Renewal Term
of this Lease provide and keep in force for the benefit of Lessor and Lessee, commercial liability
insurance in an amount not less than $l,000,000.00 for bodily injury arising out of any one
occurrence, $2,000,000.00 aggregate and $500,000.00 for property damage arising out of any one
occurrence.



     Section 5.03 Policy Requirements.



     All such policies of insurance shall be written by insurance companies authorized to do
business in the State of Texas and shall be written by companies approved by Lessor, such approval
not to be unreasonably withheld. Certificates of insurance shall be delivered to Lessor. Each
such certificate shall contain (i) a statement of the coverage provided by the policy; (ii) a
statement of the period during which the policy is in effect; (iii) a statement that the annual
premium or the annual deposit premium for such policy has been paid in advance; (iv) a statement
naming Lessor as an additional insured; and (v) an agreement by the insurance company issuing such
policy that the policy will not be canceled or reduced in any amount for any reason whatsoever
without at least fifteen (l5) days prior written notice to Lessor.



ARTICLE VI. REPAIRS AND ALTERATIONS




     Section 6.01 Lessor’s Obligation.



     Lessor shall, at Lessor’s sole cost and expense, keep and maintain in good condition and
repair the structural portion of the improvements constituting a part of the Premises, including
the roof, exterior walls (except glass or other breakable materials used in the structural portion
thereof), foundation and concrete floors; provided, however, Lessor shall be under no obligation to
make any repairs which become necessary or desirable by reason of the act or negligence of Lessee,
its agents, officers, employees or invitees, or until Lessor has received written notice from
Lessee of the necessity for such repairs. Except in the case of an emergency, Lessee shall notify
Lessor in writing upon the discovery by it of any condition with respect to which Lessor is
obligated to repair and Lessor agrees to make such repairs within fifteen (l5) days thereafter. In
the event of an emergency, Lessee shall notify Lessor in writing thereof and shall have the right
to proceed immediately to repair the condition and Lessor shall reimburse Lessee for the cost
reasonably incurred by Lessee for which Lessor is responsible.



     Section 6.02 Lessee’s Obligation.



     Lessee shall throughout the Primary Term and any Renewal Term of this Lease, at its own cost
and expense, keep, maintain and preserve or cause to be kept, maintained and preserved, the
Premises (including, but not limited to, the parking area utilized by Lessee, the interior of the



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improvements constituting the Premises, exterior entrances to the Premises, all glass and windows
of any type and all partitions, doors, fixtures, equipment and appurtenances of the Premises,
including electrical, heating, plumbing, air conditioning and sprinkler fixtures utilized by
Lessee) in good order, condition and repair, making replacements thereof as may be necessary. At
the end of the Primary Term or any Renewal Term of this Lease, Lessee shall return the Premises to
Lessor in good order, condition and repair, normal wear and tear excepted.




     Section 6.03 Alterations.



     Lessee shall not make any alterations, changes, replacements, improvements and additions in
and to the Premises, without the written consent of Lessor being first had and obtained. Any such
alterations, additions or replacements, except with respect to furniture, furnishings, equipment,
fixtures and other personal property, shall at once become a part of the Premises and accordingly
be the property of Lessor.



     Section 6.04 Right of Entry and Inspection.



     Lessee shall permit Lessor or Lessor’s duly authorized agent, employee or representative to
enter upon the Premises at all reasonable times for the purpose of inspecting the same or making
such repairs therein as may be required for the safety and preservation thereof, which right to
make repairs shall, however, be subject to each and every provision contained in this Lease
applicable to repairs, and Lessor agrees that except for emergencies, Lessor will give Lessee ten
(10) days notice before making any repairs to the Premises.



ARTICLE VII. PROHIBITED USE/HAZARDOUS MATERIALS




     Section 7.01 Prohibition on Uses; Compliance.



     Lessee may not occupy or use, or permit any portion of the Premises to be occupied or used for
any business or purpose which is unlawful or deemed to be extra-hazardous on account of fire, or
permit anything to be done which would in any way increase Lessor’s risk of owning the Premises or
insuring the building (exclusive of additions and alterations made by Lessee) against fire or other
casualty. Lessee further agrees to (i) comply with all laws, statutes, ordinances, rules, orders,
restrictions, guidelines and regulations (state, federal, municipal and other agencies or bodies
having any jurisdiction thereof) relating to the use, condition or occupancy of the Premises; (ii)
conduct its business and control its agents, employees, invitees, and visitors in such manner as
not to create any nuisance, or interfere with, annoy or disturb any adjacent owners or occupants;
and (iii) comply with and observe all laws, rules and regulations of governmental authorities
exercising jurisdiction relating to the use, operation or development of the Premises.



     Should Lessor lease any other space in the building located upon the real property described
on Exhibit “A” to a third party tenant, Lessor agrees to cause any such third party tenant to agree
to: (i) comply with all laws, statutes, ordinances, rules, orders, restrictions, guidelines and
regulations (state, federal, municipal and other agencies or bodies having jurisdiction thereof)
relating to the use, condition or occupancy of the premises; (ii) conduct its business and control
its agents, employees, invitees and visitors in such a manner as not to create any nuisance, or
interfere with, annoy or disturb any adjacent owners or occupants; and (iii) comply with and
observe all laws, rules and regulations of governmental authorities exercising jurisdiction
relating to the use, operation or development of the Premises.



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     Section 7.02 Hazardous Materials.



     Except for lawful, ordinary and general office supplies and chemicals typically used in the
ordinary course of business of Lessee and other uses within commercial properties, such as copies
toner, liquid paper, glue, ink and common household cleaning materials (some or all of which may
constitute “Hazardous Materials” as defined below), Lessee agrees not to cause or permit any
Hazardous Materials to be brought upon, stored, used, handled, generated, released, disposed of on,
in, under or about the Premises by Lessee, its agents, employees, subtenants, assignees,
contractors, or invitees (collectively, “Lessee’s Parties”), without the prior written consent of
Lessor, which consent shall not be unreasonably withheld or delayed provided Lessee complies with
all laws regarding the use, storage and disposition of any such Hazardous Materials. Upon the
expiration or sooner termination of this Lease, Lessee agrees to remove from the Premises, at its
sole cost and expense, any and all Hazardous Materials, including any equipment or systems
containing Hazardous Materials which are installed, brought upon, stored, used, generated or
released upon, in or under the Premises or any portion thereof by Lessee or any of Lessee’s
Parties. To the fullest extent permitted by law, Lessee agrees to promptly indemnify, protect,
defend and hold harmless Lessor and Lessor’s partners, officers, directors, employees, agents,
successors and assigns (collectively, “Lessor’s Indemnified Parties”) from and against any and all
claims that Lessor may be liable for, suffer, incur, or pay arising out of any Hazardous Materials
brought upon, stored, used, handled, generated, released, disposed of on, in, under or about the
Premises by the Lessee parties. Lessee must comply with all clean-up, removal, repair,
detoxification or the remediation requirements of the Texas Commission on Environmental Quality and
the Environmental Protection Agency, and each of its successor agencies and authorities, or any
other state agency, or federal agency of competent jurisdiction, in rendering the Premises safe
from injury or death and caused by any Hazardous Materials being brought upon, stored, used,
handled, generated, released, disposed of on, in, under or about the Premises by Lessee Parties.
For purposes of this Section 7.02 “Hazardous Materials” includes and means (a) any “hazardous
waste” as defined by the Resource Conservation and Recovery Act of 1976, as amended from time to
time, and regulations promulgated thereunder; (b) any “hazardous substances” as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time
to time, and regulations promulgated thereunder; (c) any oil, petroleum products, and its
by-products; and (d) any substance that is or becomes regulated by any federal, state or local
governmental authority having jurisdiction or regulatory power over environmental matters
pertaining to the Land or the improvements located thereon or the use and occupancy thereof.
Lessee’s covenants contained in this Section 7.02 will survive the expiration or earlier
termination of this Lease.



ARTICLE VIII. LIENS




     Section 8.01 Liens.



     With respect to any alterations in or upon the Premises made by Lessee, Lessee shall pay or
cause to be paid the total cost and expense thereof and shall not suffer or permit to be enforced
against the Premises or any part of it any mechanic’s, materialman’s, contractor’s or
subcontractor’s lien arising from any such work, however it may arise. However, Lessee may in good
faith and at its expense contest the validity of any such asserted lien, claim or demand. In such
an event, Lessee shall defend and indemnify the Lessor against any liability and loss of any type
arising out of any alterations, improvements or changes to the improvements on the Premises by
Lessee together with reasonable attorneys’ fees and all costs and expenses incurred by Lessor in
negotiating, settling, defending or otherwise protecting against such claims.



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     Section 8.02 Right to Discharge Lien.



     If Lessee does not protect the Premises against any such liens and a final judgment is
rendered against Lessee by a court of competent jurisdiction for the foreclosure of a mechanic’s,
materialman’s, contractor’s or subcontractor’s lien claim, and if Lessee fails to stay the
execution of judgment by lawful means or to pay the judgment, Lessor shall have the right, but not
the obligation, to pay or otherwise discharge, stay or prevent the execution of any such judgment
or lien or both. Lessee shall reimburse Lessor for all sums paid by Lessor and attributable to
work ordered by Lessee under this paragraph, together with Lessor’s reasonable attorneys’ fees and
costs, plus interest on those sums, fees and costs, at the rate of twelve percent (12%) per annum
from the date of payment until the date of reimbursement.



ARTICLE IX. DESTRUCTION OF IMPROVEMENTS

BY FIRE OR OTHER CASUALTY




     Section 9.01 Damage or Destruction.



     During the Primary Term and any Renewal Term hereof, should the improvements constituting a
part of the Premises be damaged or destroyed, in whole or in part, by fire or other casualty,
Lessee shall give prompt notice thereof to Lessor, and Lessor, at its own cost and expense, shall
promptly repair, replace and rebuild the same, at least to the extent of the value and as nearly as
practical to the character of the buildings or improvements existing immediately prior to such
time.



     Section 9.02 Abatement of Rent.



     Should the improvements upon the Premises be damaged or destroyed, in whole or in part, by
fire or other casualty, the rent due hereunder pursuant to Article III shall equitably abate.



     Section 9.03 Right of Termination.



     Should the improvements constituting a part of the Premises be damaged or destroyed, in whole
or in part, by fire or other casualty during the Primary Term or any Renewal Term of this Lease,
either Lessor or Lessee shall have the right to cancel this Lease by giving the other written
notice of such election within thirty (30) days after the date of any such damage or destruction.
In such an event, this Lease shall terminate as of the date of such destruction and the insurance
proceeds received or receivable under any policy of insurance shall be paid to and retained by
Lessor. All rents and other charges payable under this Lease shall be prorated and paid to the
date of such termination.



ARTICLE X. CONDEMNATION




     Section 10.01 Termination Upon Condemnation.



     Upon condemnation of part or all of the Premises, Lessee’s obligation to pay rent and other
charges hereunder shall terminate on the date of taking, but Lessee’s interest in the leasehold
shall continue until the taking is completed by deed, contract or final order of condemnation.



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     Section 10.02 Distribution of Award for Condemnation.



     Upon condemnation of part or all of the Premises, all sums, including damages and interest,
awarded for the fee, leasehold or both shall be distributed and disbursed to Lessor.



ARTICLE XI. SUBORDINATION AND ATTORNMENT




     Section 11.01 Subordination.



     All of the rights of Lessee hereunder are and shall be subject and subordinate to the lien of
any mortgage or mortgages now or hereafter placed upon the Premises or any part thereof, except
Lessee’s property or trade fixtures, and to any and all renewals, modifications, consolidations,
replacements and extensions or substitutions of any such mortgage or mortgages. In confirmation of
such subordination, Lessee agrees to promptly execute and deliver any instrument that the holder of
any such mortgage may request to evidence such subordination.



     Section 11.02 Attornment.



     If the interest of Lessor under this Lease shall be transferred by reason of foreclosure or
other proceeding for the enforcement of a mortgage, Lessee shall be bound to the purchaser under
all the terms, covenants and conditions of this Lease for the balance of the Primary Term or any
Renewal Term hereof, with the same force and effect as if the purchaser were Lessor under this
Lease, and Lessee does hereby attorn to the purchaser, including any mortgagee if it be the
purchaser, as its Lessor, said attornment to be effective and self-operative without the execution
of any further instrument upon purchaser’s succeeding to the interest of Lessor under this Lease.
The respective rights and obligations of Lessee and purchaser upon such attornment, to the extent
of the then remaining balance of the Primary Term or any Renewal Term of this Lease, shall be and
are the same as now set forth herein.



ARTICLE XII. DEFAULT




     Section 12.01 Events of Default.



     Each of the following events shall be a default by Lessee and a breach of this Lease:




     (a) Abandonment or surrender of the Premises or of the leasehold estate, or
failure or refusal to pay when due any installment of rent or any other sum
required by this Lease to be paid by Lessee, or to perform as required or
conditioned by any other covenant or condition of this Lease;




     (b) The subjection of any right or interest of Lessee in the Premises to
attachment, execution or other levy, or seizure under legal process;




     (c) The appointment of a receiver to take possession of the Premises or
improvements or of Lessee’s interest in the leasehold estate or of Lessee’s
operation on the Premises for any reason;




     (d) An assignment by Lessee for the benefit of creditors;



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     (e) The adjudication that Lessee is a bankrupt by a court of competent
jurisdiction; and




     (f) The commencement of any proceeding by Lessee for the purpose of hindering
or delaying any of its creditors under or pursuant to the bankruptcy laws of the
United States.



     Section 12.02 Noncurable Defaults.



     Upon the occurrence of those defaults described in Subsections 12.01(d), 12.01(e) or 12.01(f)
above, this Lease shall forthwith and without notice terminate and all rights of Lessee hereunder
shall cease subject to the provisions of Section 12.04 hereof.



     Section 12.03 Curable Defaults; Notice.



     In the event Lessor shall determine that Lessee is in breach or violation hereof in any manner
except noncurable defaults described in the preceding section, before invoking any remedy
hereunder, Lessor shall give written notice thereof to Lessee and Lessee shall have ten (10) days
after receipt of such notice within which to correct or cure such breach or default if the same
pertains to the payment of rent, taxes or other payment of money, and (30) days after receipt of
notice within which to correct or cure such breach or default if it pertains to acts or omissions
other than the payment of money plus such additional period that is reasonably required for the
curing of such default provided Lessee has promptly commenced the curing of the same and diligently
pursues the same.



     Section 12.04 Lessor’s Remedy.



     In the event of a default by Lessee hereunder which shall remain uncured after the required
notices have been given pursuant to this Lease and for such time as provided herein, Lessor may at
once thereafter or any times subsequent during the existence of such breach or default (a) exercise
its rights to the Deposit as provided in Section 3.03 above or (b) enter into and upon the Premises
or any part thereof and repossess the same, expelling therefrom Lessee and all personal property of
Lessee (which property may be removed and stored at the cost of and for the account of Lessee),
using such force as may be necessary, and (c) either (i) terminate this Lease by notice, or (ii)
without terminating this Lease, relet the Premises or any part thereof upon such terms and
conditions as shall appear advisable to Lessor. If Lessor shall proceed in accordance with the
last mentioned alternative (ii) and the amounts received from reletting of the Premises during any
month or part thereof be less than the rent due and owing from Lessee during such month or part
thereof under the terms of this Lease, Lessee shall pay such deficiency to Lessor immediately upon
calculation thereof.



     Section 12.05 Lessor’s Right to Cure Default.



     If Lessee shall be in default hereunder, Lessor shall have the right with or without prior
notice to Lessee to make any payment or perform any act required of Lessee under any provision of
this Lease and, in exercising such right, to incur necessary or incidental costs and expenses,
including reasonable attorney’s fees. All payments made and all costs and expenses incurred by
Lessor in connection with any exercise of such right, together with interest thereon at the rate of
twelve 12%) per annum from the respective dates of making such payments or the incurring of such
costs and expenses, shall be reimbursed by Lessee immediately upon demand. Notwithstanding the



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foregoing, nothing herein shall imply any obligation on the part of Lessor to make any payment or
perform any act required of Lessee.



     Section 12.06 Default by Lessor.



     If Lessor defaults in the observance or performance of any term, covenant or condition
required to be performed by it under this Lease, Lessee may, after not less than (10) days notice
to Lessor, except in the case of any emergency, remedy such default by any necessary action, and in
connection with such remedy may pay all expenses; all sums expended or obligations incurred by
Lessee in connection therewith shall be paid by Lessor to Lessee within ten (10) days after demand
therefor.



     Section 12.07 Unavoidable Default or Delay.



     Any prevention, delay, nonperformance or stoppage due to any of the following causes shall
excuse nonperformance for a period equal to any such prevention, delay, nonperformance or stoppage,
except the obligations imposed by this Lease for the payment of rent, taxes, insurance or
obligations to pay money that are treated as rent. The causes referred to above are strikes,
lockouts, labor disputes, failure of power, acts of God, acts of public enemies of this State or of
the United States, riots, insurrections, civil commotions, inability to obtain labor or materials
or reasonable substitutes for either, governmental restrictions or regulations or control,
casualties not contemplated by insurance provisions of this Lease, or other causes beyond the
reasonable control of the party obligated to perform.



     Section 12.08 Waiver.



     No waiver of any default shall constitute a waiver of any other breach or default, whether of
the same or any other covenant or condition. No waiver, benefit, privilege or service voluntarily
given or performed by either party shall give the other any contractual right by custom, estoppel
or otherwise. The subsequent acceptance of rent pursuant to this Lease shall not constitute a
waiver of any preceding default by Lessee other than default in the payment of the particular
rental payment so accepted, regardless of Lessor’s knowledge of the preceding breach at the time of
accepting the rent, nor shall acceptance of rent or other payment after termination constitute a
reinstatement, extension or renewal of the Lease or revocation of any notice or other act by
Lessor.



ARTICLE XIII. ASSIGNMENT; SUBLETTING




     Section 13.01 No Right of Assignment.



     Lessee, without the prior written approval of Lessor, shall not have the right to assign or
otherwise transfer Lessee’s interest in this Lease and the estate created by this Lease or any part
thereof.



     Section 13.02 No Right to Sublet.



     Lessee shall not have the right to sublease, assign, mortgage or encumber this Lease without
first obtaining Lessor’s prior written approval. Should Lessee desire to assign its interest under
this Lease or sublet the Premises, Lessee shall bear all costs and expenses incurred by Lessor in
reviewing and approving or disapproving the proposed assignment or sublease. Should Lessor approve
a proposed sublease, if the total rent or other consideration payable to Lessee in connection



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with such sublease exceeds the rent payable to Lessor pursuant to this Lease for the Premises or
the portion thereof covered by the proposed sublease, then Lessee shall pay to Lessor as additional
rent fifty percent (50%) of such excess as the same becomes due and payable to Lessee. In
connection therewith, Lessee, from time to time upon request by Lessor, shall provide Lessor an
accounting with respect to the amounts payable by the subtenant under any such sublease and, in
conjunction therewith, Lessor or Lessor’s duly authorized agent, shall have access to Lessee’s
books and records with respect to such subletting during normal business hours.



     In the event Lessor consents to an assignment or sublease by Lessee of this Lease, or any part
thereof, such assignment or subletting shall in no event or manner be deemed a release of the
liability of Lessee hereunder, as Lessee shall remain fully liable and responsible pursuant to all
of the terms hereof regardless of such assignment or sublease.



ARTICLE XIV. RIGHT OF FIRST REFUSAL — OPTION TO LEASE




     Section 14.01 Right of First Refusal.



     During the Primary Term and any Renewal Term of this Lease, Lessee shall have the right of
first refusal to lease the adjacent 1,153 and 1,906 square feet of space within the building which
are crosshatched on Exhibit “B” attached hereto (the “Additional Spaces”). If, during the Primary
Term or any Renewal Term of this Lease, Lessor receives an offer to lease all or any part of the
Additional Spaces (the “Offer”) and desires to accept the Offer, Lessor shall notify Lessee in
writing of the receipt of the Offer therein enclosing a copy of the Offer and Lessee shall have ten
(10) days after the receipt of such notice to either: (i) elect to lease the Additional Spaces or
so much thereof as is covered by the Offer on the same terms and conditions conveyed in the Offer;
or (ii) waive such right of first refusal by written notice or relinquish such right of first
refusal by failing to respond to Lessor within said ten (10) day period. In the event that Lessee
elects to lease the Additional Spaces or so much thereof as is covered by the Offer, Lessee shall
deliver a written notice of such election to Lessor within the ten (10) day period and shall
thereafter take possession of the Additional Spaces as contemplated in the Offer. If Lessee elects
to lease the Additional Spaces or so much thereof as contemplated in the Offer, Lessee’s notice of
such election shall be accompanied by one (1) month’s rent in advance. Upon receipt, Lessor will
cause a Lease Agreement to be prepared for execution by both Lessor and Lessee embodying the terms
of the Offer.



     Section 14.02 Option to Lease.



     During the Primary Term and any Renewal Term of this Lease and provided Lessor shall not have
leased the Additional Spaces, Lessee shall have the option to lease the Additional Spaces. To
exercise such option, Lessee shall give Lessor written notice of the exercise of its option to
lease the Additional Spaces or a portion thereof. Should Lessee lease the Additional Space or a
portion thereof, the Additional Spaces shall be leased upon the same terms and conditions as are
contained in this Lease. Upon receipt of such written notice exercising Lessee’s option to lease
the Additional Spaces or a portion thereof, Lessor shall cause a Lease covering the Additional
Spaces or a portion thereof to be prepared for execution by Lessor and Lessee.



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ARTICLE XV. EXPIRATION OF THE TERM




     Section 15.01 Peaceful Surrender.



     Upon the expiration of the Primary Term or any Renewal Term of this Lease, Lessee shall
peacefully surrender and vacate the Premises and leave the same in broom-clean condition, and
Lessor may reenter and take possession of such Premises and all remaining improvements and eject
all parties in possession or eject some and not others or eject none.



     Section 15.02 Holding Over.



     Following the expiration of the Primary Term or any Renewal Term of this Lease, should Lessee
have failed to have surrendered and vacated the Premises, such shall give rise to a month-to-month
tenancy upon the same terms and conditions as are provided herein, except the Monthly Base Rent
shall be equal to two hundred percent (200%) of the Monthly Base Rent payable pursuant to Section
3.01.



ARTICLE XVI. MISCELLANEOUS




     Section 16.01 Time of the Essence.



     Time is and shall be deemed of the essence in respect of the performance of each provision of
this Lease.



     Section 16.02 Binding Effect; Successors or Assigns.



     All of the terms, provisions, covenants and conditions of this Lease shall inure to the
benefit of and be binding upon the undersigned parties, their successors, assigns, legal
representatives, heirs, executors and administrators.



     Section 16.03 Notices.



     All notices provided to be given under this Lease shall be given by certified or registered
mail, return receipt requested, postage fully prepaid, addressed Lessor and Lessee at the addresses
above referenced.



     The address of either party hereinabove set forth may be changed from time to time by giving
written notice to that effect.



     Any notice deposited as above provided shall be conclusively deemed to have been received by
the party to whom the same is addressed within forty-eight (48) hours if deposited in the same
state as the addressee and within ninety-six (96) hours if deposited in a state other than the
addressee.



     Section 16.04 Law Governing.



     The laws of the State of Texas shall govern the validity, performance and enforcement of this
Lease.



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     Section 16.05 Gender and Number.



     Words of any gender used in this Lease shall be held and construed to include any other
gender, and words in the singular number shall be held to include the plural, and vice versa,
unless the context otherwise requires.



     Section 16.06 Entire Agreement.



     This Lease contains all of the agreements and conditions made between the parties hereto and
may not be modified orally or in any manner other than by agreement in writing signed by the
parties hereto or their respective successors in interest.



     Section 16.07 Captions.



     The captions of the various articles and the sections of this Lease are for convenience and
ease of reference only and do not define, limit, augment or describe the scope, context or intent
of this Lease or any part or parts of this Lease.



     Section 16.08 Severability.



     The invalidity or illegality of any provision shall not affect the remainder of this Lease.



     Section 16.09 Attorneys’ Fees.



     If either party brings any action or proceeding to enforce, protect or establish any right or
remedy, the prevailing party shall be entitled to recover reasonable attorneys’ fees.



     EXECUTED the day and year first above written.



	 	 	 	 	 	 	 
	 	 	WESTERN REFINING COMPANY, L.P., a Delaware

limited partnership
	 
	 	 	 	 	 	 
	 	 	BY:	 	REFINERY COMPANY, L.C., its General
Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Scott Weaver
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Scott Weaver
	 

	 	 	 	Title:
	 	Chief Administrative Officer






LESSOR





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	 	 	TRANSMOUNTAIN OIL COMPANY, L.C., a Texas

limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Terrance D. Calhoun
	 

	 	 	 	 
	 

	 	Name:
	 	Terrance D. Calhoun
	 

	 	Title:
	 	VP






LESSEE





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