FORM OF TERMINAL SUBLEASE BETWEEN TESORO ALASKA COMPANY AS LANDLORD AND TESORO ALASKA LOGISTICS LLC AS TENANT
Exhibit
10.19
FORM OF
BETWEEN
TESORO ALASKA COMPANY
AS LANDLORD
AND
TESORO ALASKA LOGISTICS LLC
AS TENANT
This Terminal Sublease (this “Sublease”) is entered into as of April [___], 0000,
xxxxxxx Xxxxxx Xxxxxx Company, a Delaware corporation (“Landlord”), and Tesoro Alaska
Logistics LLC, a Delaware limited liability company (“Tenant”).
WHEREAS, pursuant to that certain Ground Lease, dated as of April 25, 1992 (as may be
amended, modified or supplemented from time to time, the “Master Lease”), by and between
Alaska Railroad Corporation (the “Master Lessor”) and Landlord, as lessee, Landlord has
leased from Master Lessor that certain real property, together with all improvements located
thereon, situated in Anchorage, Alaska, commonly known as Anchorage Terminal 1 and more
particularly described on Exhibit A attached hereto and incorporated herein by reference
(“Landlord’s Property”). “Landlord’s Remaining Property” means the portion of
Landlord’s Property that will be retained by Landlord and not subject to this Sublease to Tenant.
WHEREAS, Tenant desires to lease from Landlord and Landlord desires to sublease to Tenant the
portion of Landlord’s Property commonly known as the Terminal and more particularly described on
Exhibit B attached hereto and incorporated herein by reference, together with all
improvements leased from Master Lessor situated thereon (the “Premises”). Improvements not
owned by Landlord include (i) the improvements previously owned by Landlord and being transferred
to Tenant by separate conveyance concurrently herewith; (ii) the transmix tank and pipelines,
utilities and equipment attached thereto owned by Tesoro Alaska Pipeline Company located at the
southeast corner of the land described on Exhibit B (the “Transmix Facilities”),
and (iii) the improvements retained by Master Lessor under the Master Lease.
WHEREAS, in order for Tenant to have access to the Premises for pedestrian and vehicular
ingress and egress and for certain utilities, Tenant may need to enter upon a portion of Landlord’s
Remaining Property.
WHEREAS, in order for Landlord to have access to Landlord’s Remaining Property, Landlord may
need to enter upon a portion of the Premises.
ARTICLE 1. DEMISE OF PREMISES AND ACCESS EASEMENT
1.01 Demise of Premises. In consideration of the mutual covenants and agreements of
this Sublease, and other good and valuable consideration, Landlord demises and subleases to Tenant,
and Tenant subleases from Landlord, the Premises, reserving unto Landlord (i) an easement
appurtenant to Landlord’s Remaining Property for the use, operation, maintenance, repair and
replacement of the Transmix Facilities, including without limitation an easement for ingress to and
egress from the portion of the Premises on which the Transmix Facilities are located (the
“Transmix Facilities Easement”) and (ii) an easement appurtenant to Landlord’s
Remaining Property for pedestrian and vehicular ingress and egress to and from the Landlord’s
Remaining Property over and across the portion of the Premises adjacent to Landlord’s Remaining
Property used by Tenant for pedestrian and vehicular ingress and egress to and from the Premises.
Tenant acknowledges that concurrently herewith, Landlord intends to sublease to Tesoro Alaska
Pipeline Company the portion of Landlord’s Remaining Property benefited by the Transmix Facilities
Easement.
1.02 Access Easement. Landlord grants Tenant an easement for pedestrian and vehicular
ingress and egress to and from the Premises and for utility access over and across Landlord’s
Remaining Property as reasonably needed by Tenant in order to operate the Premises. Landlord shall
have the right to designate a reasonable course through which Tenant and its employees, agents,
contractors and invitees must follow across Landlord’s Remaining Property in order to access the
Premises, and to otherwise establish reasonable restrictions upon Tenant’s use of Landlord’s
Remaining Property for access to the Premises.
1.03 Master Lease. This Sublease is and shall be subject to and subordinate to the
Master Lease. During the term of this Sublease and for all subsequent periods for obligations which
have arisen prior to the termination of this Sublease, Tenant does hereby expressly assume and
agree to perform and comply with, for the benefit of Landlord and Master Lessor, each and every
obligation of the Landlord under the Master Lease insofar as the same is applicable to the Premises
and the easements over the Landlord’s Remaining Property, other than the obligation to pay rent to
the Master Lessor. Tenant agrees to attorn to Master Lessor if Landlord defaults under the Master
Lease and if Tenant is notified of Landlord’s default and is instructed by Master Lessor to make
Tenant’s rental payments to Master Lessor. If for any reason the Master Lease is terminated,
including but not limited to a termination caused by Landlord’s default under the Master Lease,
this Sublease shall automatically terminate, and any obligations of Landlord to Tenant shall be
terminated.
ARTICLE 2. SUBLEASE TERM
2.01 Term. Unless terminated sooner as provided in this Sublease, the term of this
Sublease begins on the date of this Sublease and ends on December 31, 2011. Tenant may, at its
option, extend the term of this lease for three (3) additional lease terms of five (5) years each,
subject to all the provisions of this Lease; provided, however, that no extension of this Sublease
shall be for a term that ends after December 31, 2026, which is the last possible expiration date
of the Master Lease if all available extension options are exercised by Landlord thereunder. The
terms and conditions on which the extension options may be exercised shall be the same as those set
forth in Section 1.06 of the Master Lease; provided, however, that the written notice of exercise
shall be given not more than 395 days and not less than 210 days before the last day of the
previous Lease
Term. If Tenant exercises an extension option in accordance with this Lease, Landlord shall
exercise the applicable option to extend under the Master Lease.
2.02 Termination. This Sublease will terminate without further notice on the earlier
of (i) when the term specified in Section 2.01, as extended, expires, and (ii) if and when
Landlord’s right, title and interest in Landlord’s Property and/or Premises are terminated; and any
holding over by Tenant after that term expires will not constitute a renewal of this Sublease or
give Tenant any rights under this Sublease in or to the Premises.
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2.03 Holdover. If Tenant holds over and continues in possession of the Premises after
the Sublease term, Tenant will be considered to be occupying the Premises at will, subject to all
the terms of this Sublease.
2.04 Surrender of Premises. Tenant shall surrender the Premises by the end of the last
day of the Sublease term or any earlier termination date.
ARTICLE 3. RENT
3.01 Basic Rent. Tenant shall pay to Landlord in legal tender of the United States of
America seventy-eight percent (78%) of the Basic Rent payable by Landlord to Master Lessor from
time to time under the Master Lease, including without limitation the Basic Rent payable during any
extended lease term, without deduction and without notice or demand, and in equal quarterly
installments in advance on or before the first day of each calendar quarter, with partial periods
prorated on a daily basis.
ARTICLE 4. COMPLIANCE WITH LAWS
Tenant and its employees, agents and invitees shall comply with all applicable federal, state,
and local laws, rules, regulations and orders in use of the Premises. Tenant shall secure and
maintain current all required permits, licenses, certificates, and approvals relating to its use of
the Premises. Landlord shall comply with all applicable federal, state, and local laws, rules,
regulations and orders pertaining to the operation of Landlord’s Remaining Property and the
Premises to the extent reasonably necessary to enable Tenant to exercise its rights provided
hereunder.
ARTICLE 5. DEFAULT AND REMEDIES
5.01 Termination on Default. Except as otherwise specifically noted in this Sublease
to the contrary, if Tenant defaults in performing any covenant or term of this Sublease and does
not correct the default within thirty (30) days after receipt of written notice from Landlord to
Tenant, Landlord may declare this Sublease, and all rights and interest created by it, terminated;
provided, however, that in the event such default cannot, in the exercise of reasonable diligence,
be cured
within such thirty (30) day period, Landlord may not exercise its remedies under this Article
unless Tenant (i) fails to commence the cure of the default within such thirty (30) day period, or
(ii) thereafter fails to proceed with curative measures with reasonable diligence. If Landlord
elects to terminate, this Sublease will cease as if the day of Landlord’s election were the day
originally fixed in this Sublease for its expiration, and Landlord or its agent or attorney may
resume possession of the Premises.
5.02 Other Remedies. Any termination of this Sublease as provided in this Article 5
will not relieve Tenant from paying any sum or sums due and payable to Landlord under this Sublease
at the time of termination, or any claim for damages then or previously accruing against Tenant
under this Sublease. Any such termination will not prevent Landlord from enforcing the payment of
any such sum or sums or claim for damages by any remedy provided for by law, or from recovering
damages from Tenant for any default under this Sublease. All Landlord’s rights, options, and
remedies under this Sublease will be construed to be cumulative, and no one of them is exclusive of
the other. Landlord may pursue any or all such remedies or any other remedy or relief provided by
law, whether or not stated in this Sublease. No waiver by Landlord of a breach of any of the
covenants or conditions of this Sublease may be construed a waiver of any succeeding or preceding
breach of the same or any other covenant or condition of this Sublease.
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ARTICLE 6. QUIET ENJOYMENT
Landlord covenants that as long as Tenant observes the covenants and terms of this Sublease,
Tenant will lawfully and quietly hold, occupy, and enjoy the Premises during the Sublease term
without being disturbed by Landlord or any person claiming under Landlord, except for any portion
of the Premises that is taken under the power of eminent domain.
ARTICLE 7. GENERAL PROTECTIVE PROVISIONS
7.01 Right of Entry and Inspection. Tenant must permit Landlord or its agents,
representatives, or employees to enter the Premises at reasonable times and upon reasonable prior
notice for the purposes of inspection; determining whether Tenant is complying with this Sublease;
and maintaining, repairing, or altering the Premises in accordance with the terms hereof.
7.02 No Partnership or Joint Venture. The relationship between Landlord and Tenant is
at all times solely that of landlord and tenant and may not be deemed a partnership or a joint
venture.
7.03 No Waiver. No waiver by either party of any default or breach of any covenant or
term of this Sublease may be treated as a waiver of any subsequent default or breach of the same or
any other covenant or term of this Sublease.
7.04 Release of Landlord. If Landlord transfers all or part of the Premises and as a
part of the transaction assigns its interest as Landlord in this Sublease, then as of the effective
date of the assignment or transfer, Landlord will have no further liability under this Sublease to
Tenant, except with respect to liability matters that have accrued and are unsatisfied as of that
date. Underlying this release is the parties’ intent that Landlord’s covenants and obligations
under this Sublease will bind Landlord and its successors and assigns only during and in respect of
their respective successive periods of ownership of the fee.
ARTICLE 8. MISCELLANEOUS
8.01 Memorandum of Sublease. The parties agree not to place this Sublease of record,
but each party shall, at the request of the other, subject to the consent rights of the Master
Lessor, execute and acknowledge so that the same may be recorded a memorandum of sublease
containing such provisions as the requesting party shall reasonably request. The requesting party
shall pay all costs, taxes, fees and other expenses in connection with or prerequisite to
recording.
8.02 Delivery of Notices. All sums owed hereunder, notices, demands, or requests from
one party to another may be personally delivered or sent by mail, certified or registered, postage
prepaid, to the addresses stated below and are considered to have been given at the time of
personal delivery or of mailing:
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| If to Landlord: | If to Tenant: | |||||||
| Tesoro Alaska Company 00000 Xxxxxxxxx Xxxxxxx Xxx Xxxxxxx, Xxxxx 00000 Attn: Xxxxxxx X. Xxxxxx, Manager, Right of Way & Land Telecopy: (000) 000-0000 |
Tesoro Alaska Logistics LLC 00000 Xxxxxxxxx Xxxxxxx Xxx Xxxxxxx, Xxxxx 00000 Attn: Xxxxxxx X. Xxxxxx, Manager, Right of Way & Land Telecopy: (000) 000-0000 |
|||||||
A party may change its address for notice under this Section 8.02 by providing notice of such
change in accordance with this Section 8.02.
8.03 Parties Bound. This agreement binds, and inures to the benefit of, the parties
to this Sublease and their respective heirs, executors, administrators, legal representatives,
successors, and assigns.
8.04 Governing Law. This agreement is to be construed under the internal laws of the
State of Alaska.
8.05 Legal Construction. If any one or more of the provisions contained in this
Sublease are for any reason held to be invalid, illegal, or unenforceable in any respect, the
invalidity, illegality, or unenforceability will not affect any other provision of this Sublease,
which will be construed as if it had not included the invalid, illegal, or unenforceable provision.
8.06 Other Agreements.
(a). This Sublease and the other documents executed by Landlord and Tenant concurrently
herewith constitute the parties’ sole agreement with respect to the subject matter of this Sublease
and such agreements supersede any prior understandings or written or oral agreements between the
parties with respect to the subject matter of this Sublease.
(b). In the event of any conflict between the provisions of this Sublease and the provisions
of the Master Lease, the provisions of this Sublease shall control the respective rights and
obligations of Landlord and Tenant under this Sublease.
8.07 Amendment. No amendment, modification, or alteration of this Sublease is binding
unless in writing, dated subsequent to the date of this Sublease, and duly executed by the parties.
8.08 Rights and Remedies Cumulative. The rights and remedies provided by this
Sublease are cumulative, and either party’s using any right or remedy will not preclude or waive
its right to use any other remedy. The rights and remedies are given in addition to any other
rights the parties may have by law, statute, ordinance, or otherwise.
8.09 Attorney’s Fees and Costs. If, as a result of either party’s breaching this
Sublease, the other party employs an attorney to enforce its rights under this Sublease, then the
breaching or defaulting party will pay the other party the reasonable attorneys’ fees and costs
incurred to enforce this Sublease.
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8.10 Time of Essence. Time is of the essence of this Sublease.
8.11 Further Documents. Landlord and Tenant will from time to time and at any
reasonable time execute and deliver to the other party, when the other party reasonably requests,
other instruments and assurances approving, ratifying, and confirming this Sublease and the
leasehold estate created by it and certifying that this Sublease is in full force and that no
default under this Sublease on the other party’s part exists; or if the other party is in default
specifying in such instrument each such default.
8.12 Captions. The captions used in connection with the Articles and Sections of this
Sublease are for convenience only, and are not intended in any way to limit or amplify the meaning
of the language contained in this Sublease, or be used as interpreting the meanings and
provisions of this Sublease.
8.13 Construction. This Sublease shall not be strictly construed against either party.
[signature page follows]
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THIS SUBLEASE has been executed by the parties on the date and year first above written.
| LANDLORD: TESORO ALASKA COMPANY, a Delaware corporation |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| TENANT: TESORO ALASKA LOGISTICS LLC, a Delaware limited liability company |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[signature page to Sublease]
EXHIBIT A
Legal Description of Landlord’s Property
Said leasehold affects the following real property:
A parcel of land located within the ALASKA RAILROAD TERMINAL RESERVE, situated in the Anchorage
Recording District, Third Judicial District, State of Alaska, more particularly described as
follows:
Xxxx 00 xxx 00X xx xxx Xxxx xx Xxxxxxxxx Subdivision according to Plats Number 64-56 and 70-309,
respectively, on file in the office of the District Recorded, Anchorage Recording District, Alaska,
along with the unsubdivided lands adjacent to and Easterly of said Lots 10 and 11A. The boundaries
of said unsubdivided parcel are the East boundary line of said Lots 10 and 11A and the West
right-of-way line of the Anchorage Port Road (provided, however, there is reserved to the Railroad
a pipeline easement 40 feet wide which easement is located Westerly of and parallel and adjacent to
the West right-of-way of the aforesaid Anchorage Port Road).
A-1
EXHIBIT B
Legal Description of Premises
This Sublease affects the following real property:
A parcel of land located within Alaska Railroad Lease No. 4392 (recorded in Book 2267 on Page 547),
Alaska Railroad Terminal Reserve, Section 7, Township 13 North, Range 3 West, Seward Meridian,
Anchorage Recording District (A.R.D.), Third Judicial District, State of Alaska, and more
particularly described as follows:
Commencing at the Northeast corner of Xxx 00X, Xxxx xx Xxxxxxxxx Xxxxxxxxxxx, Xxxx No. 70-309
A.R.D. marked with a 2” Aluminum Cap, being on the West Right of Way (R.O.W.) line of Anchorage
Port Road and the TRUE POINT OF BEGINNING; thence S 07°19’49” W along said West R.O.W. line a
distance of 512.65 feet; thence N 82°40’12” W a distance of 84.66 feet; thence S 58°13’21” W a
distance of 74.22 feet; thence S 18°39’42” W a distance of 24.07 feet; thence S 12°49’23” W a
distance of 223.17 feet; thence N 89°09’28” W a distance of 20.88 feet; thence N 00°48’43” W a
distance of 12.18 feet; thence N 88°41’26” W a distance of 130.57 feet to the West property line of
Xxx 00, Xxxx xx Xxxxxxxxx Xxxxxxxxxxx, Xxxx No. 64-56 A.R.D; thence N 02°49’22” W along said West
property line being contiguous with the West Property line of said Lot 11A distance of 742.30 feet;
thence N 19°55’08” E along said West property line of Lot 11A a distance of 21.28 feet to the
Northwest corner of said Lot 11A, being on the South property line of Xxxxx X, Xxxx xx Xxxxxxxxx
Xxxxxxxxxxx, Xxxx Xx. 0000-00 A.R.D.; thence N 89°57’53” E along the property line of said Lot 11A
and said Tract G a distance of 450.60 feet to the Northeast corner of said Xxx 00X xxx xxx XXXX
XXXXX of BEGINNING.
Containing 258,960 Square Feet (5.945 Acres), more or Less
