HomeMy WebLinkAboutResolution 2001-138 assignment and assumption of lease for tortolita preserve MARANA RESOLUTION NO. 2001-138
A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA,
AUTHORIZING THE APPROVAL OF THE ASSIGNMENT AND ASSUMPTION OF STATE
LAND COMMERCIAL LEASE NO. 03-105436 (TORTOLITA PRESERVE) FROM VISTOSO
PARTNERS, LLC, TO THE TOWN OF MARANA; AND AUTHORIZING EXECUTION AND
DELIVERY OF ALL NECESSARY INSTRUMENTS.
WHEREAS, the State Land Department previously awarded, through auction, to Vistoso
Partners, LLC, a 99-year lease for 2400 acres of land within what is known as the Tortolita Preserve;
and
WHEREAS, the Tortolita Preserve is adjacent to the Marana community of Dove Mountain
and provides haafing, mountain biking and equestrian opportunities for the community within riparian
and ironwood habitat; and
WHEREAS, the Town Council finds that it would be in the best interest of the Town's
residents to assume all of Vistoso Partners, LLC's, interest in the lease with the State Land
Department and to execute and accept an assigment of that Lease No. 03-105436; and
WHEREAS, the costs associated with assumption of this lease would be approximately
$850,000.00; and
WHEREAS, all of the costs associated with the assumption of the Tortolita Preserve lease
shall be paid by the developer of the Dove Mountain co~anity as previously approved by the Town
Council in a Development Agreement executed between Cottonwood Properties and the Town of
Marana.
NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of
Marana, Arizona, authorizing the assumption of State Land Commercial Lease No. 03-105436
(Tortolita Preserve) from Vistoso Partners, LLC, authoriz~g execution and delivery of an assignment
of the lease and any other documents necessary and proper to effectuate the transaction; and
authorizing the Mayor, Bobby Sutton, Jr., or the Town Manager, Michael Hein, or the Assistant
Town Manager, Michael Reuwsaat, to execute any and all said documents on behalf of the Town of
Marana.
PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this
ATTEST:16t~ day of October, 2001.~ ~, JR.
APPROVED AS TO FORM:
As Town Attorney and not personally
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F. ANN RODRI(~, RECORDER
RECORDED BY :~{J
DEPUTY RECORDER
7995 ROOE
:KET: 11663
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NO. OF PAGES: 2
SEQUENCE: 20012080631
10/26/2001
ASLEAS 16: 10
t
SMARA
TOWN OF MARANA
ATTN: TOWN CLERK
13251 N LON ADAMS RD
MARANA AZ 85653
MAIL
AMOUNT PAID $ 8.00
~arana,Puizona 85653
ASSIGNMENT AND ASSUMPTION OF LEASE
(Commercial Lease No. 03-105436)
For $10.00 and other valuable consideration, receipt of which is hereby acknowledged,
VISTOSO PARTNERS, L.L.C., an Arizona limited liability company ("Assignor"), the
successful bidder at the public auction held on October 25,2000 at 10:00 AM for Arizona State
Land Department Commercial Lease No. 03-105436 ("Lease") and the holder of all of the
lessee's rights under the Lease, hereby irrevocably sells, transfers and assigns to the TOWN OF
MARANA, an Arizona municipal corporation ("Assignee") all of Assignor's right, title and
interest in and to the Lease. Assignor represents and warrants to Assignee as follows:
(i) No default exists on the part of Assignor under the Lease as of the date ofthis
Assignment.
(ii) Assignor holds all rights oflessee under the Lease free and clear of all claims and
liens and has not previously sold, transferred, assigned or hypothecated any
interest in the Lease.
(iii) Assignor has the full right, power and authority to assign lessee's rights under the
Lease to Assignee.
By execution below, Assignee assumes and agrees to perform the obligations of Assignor under
the Lease which first accrue or arise after the date hereof.
This Assignment and the covenants and agreements shall be binding upon the insure to the
benefit of Assignor and Assignee and their respective successors in interest and assigns. This
Assignment is entered into in Arizona and shall be construed and interpreted under the laws of
the Arizona.
On the date that the Arizona State Land Department shall authorize the transfer and assumption
of rights and obligations under the Lease as described herein, but in no event later then October
19, 2001, Assignee shall pay the sum of Eight Hundred Fifty Thousand and 00/1 00 Dollars
($850,000) to Assignor. Assignor shall have no obligation to pay any rents under the Lease
which become due or payable after the date of this Assignment.
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The parties have executed this Assignment as of the 8th day of October, 2001.
ASSIGNOR:
ASSIGNEE:
By:
TOWN OF MARANA, an
Arizona municipal corporation
BY1ftttj 7 - -..
Title: --r;!1.1Jf'J rl(~1/:J A f.:9'G"J<'-
State of Arizona
)
: ss
County of Maricopa )
Subscribed, sworn to and acknowledged before me this ~ day of October, 2001 by Daryl A.
Wolfswinkel, the Manager of Vis to so Partners, L.L.c.
MARK FELIX
Notary Public - Arizona
MARICOPA COUNTY
My Commission Expires
MAACH 9, 2004
UJ<ut~
Notary Pu lC
N
State of Arizona )
: ss
County of Pima )
~}lbscribed, sworn to and acknowledged before me this ~ day of October, 2001 by
f!lJthIU!.L t. HE/AI as lOW /tI N AN "'~E~ .
~c~
Notar.y,~t?~L
NOTARY PUBLIC
STATE OF ARIZONA
\ . County of Pima
~~/ DIANE MANGIALARDI
My Appointment Expires 03-17-04
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11'. ANN RODRIGlT- RECORDER
RECORDED BY: V
DEPUTY RECORDER
7995 ROOE
Dr~ET: 11663
P 2743
NO. OF PAGES: 43
SEQUENCE: 20012080632
10/26/2001
ASLEAS 16:10
SMARA
TOWN OF MARANA
ATTN: TOWN CLERK
13251 N LON ADAMS RD
MARANA AZ 85653
MAIL
AMOUNT PAID $ 27.00
ASSIGNMENT OF COMMERCIAL LEASE
The State Land Commissioner hereby consents to the Assignment of Lease Number
03 - 105436-99 which expires on October 24, 2099
(Date of expiration)
and hereby orders that the lease and all rights therein are hereby assigned and
transferred to:
TO\VN OF l\iARANA
13291 N. Lon Adams
Marana, Az 85653
This assignment is made pursuant to application to assign the lease made by
ASSIGNOR(S):
VISTOSO PARTNERS, L.L.C., an Arizona limited liability company
and pursuant to application for the assumption of said lease made by ASSIGNEE(S):
TOWN OF MARANA
and in accordance with the laws of the State of Arizona and the rules of the State Land
Department.
This assignment is made without waiver or relinquishment of any rights of the State of Arizona which may
exist under the lease assigned and dGes not inir"ate any new rights to the assignee of this lease other than
the rights as are set forth in the existing lease. The assignee(s) hereby assumes and agrees to perform all
obligations of the lessee under the lease and accepts the lease subject to all existing terms and conditions.
!
Dated this 18th day of October
, 2001 .
State of Arizona
State Land Commissioner
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(SEAL)
By ~~J ~Kf.
Assg Comm #03 - 05/99
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COMMERCIAL LEASE NO. 03-105436-99
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Affiliated Entity. ...................................... 1
1.2 Change in Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Department.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.5 Impositions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.6 Improvements.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.7 Interest Rate. ......................................... 1
1.8 Leasehold Mortgagee. ..................................2
1.9 Parcel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.10 Premises............................................. 2
1.11 Rent.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2
PARCEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Definition.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Condition.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3
TERM ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Commencement: Expiration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 4
RENT ................................................................ 2
4.1 Annual Rent. ......................................... 2
4.2 Periodic Adiustment. ................................... 2
4.3 Periodic Adiustment of Annual Rent . . . . . . . . . . . . . . . . . . . . . . . 3
4.4 Interest: Penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.5 Notice and Demand. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.6 Sublease to Affiliated Entity: Imputed Rent ................. 3
4.7 Proration of Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
4.8 Prepayment of Annual Rent. .............................4
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ARTICLE 5
ADDITIONAL AMOUNTS .............................................. 4
5.1 Definition.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5.2 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
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COMMERCIAL LEASE NO. 03-105436-99
TABLE OF CONTENTS
5.3 Evidence.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
5.4 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.5 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 6
USE AND OCCUPANCY OF PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
6.1 Uses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6.2 Artifacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6.3 Native Plants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.4 Waste: Conformity to Law. ..............................6
6.5 Minerals.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.6 Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.7 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.8 Surrender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.9 Zoning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
6.10 Trespass.............................................. 7
6.11 Repair and Maintenance. ................................ 7
ARTICLE 7
EASEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7.1 Public Use Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7.2 Reservations.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 8
RECORDS ............................................................ 7
8.1 Record Keeping: Inspection. ............................. 7
ARTICLE 9
CONSTRUCTION AND IMPROVEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9.2 Prior Approval. ....................................... 8
9.3 Utilities: New Construction. ............................. 9
9.4 Annual Statement. .....................................9
9.5 Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
9.6 Subleases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
9.7 Insurance Proceeds. ................................... 10
9.8 Reimbursement: Amortization. .......................... 10
9.9 Use and Removal of Water. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
9.10 Improvements Dedicated to Public Use. ...................11
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COMMERCIAL LEASE NO. 03-105436-99
TABLE OF CONTENTS
ARTICLE 10
LIENS .............. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
10.1 Payment: Indemnity. .................................. 11
10.2 Notice.............................................. 11
10.3 Contest.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 11
INSURANCE AND INDEMNITY .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11.1 Indemnity.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11.2 Policies............................................. 12
11.3 Amounts........... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11.4 Blanket Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11.5 Copies.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 12
DAMAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12.1 Lessee's Obligations. .................................. 13
ARTICLE 13
TRADE FIXTURES AND PERSONAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . 13
13.1 Personal Propertv. .................................... 13
ARTICLE 14
ASSIGNMENTS AND SUBLEASES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14.1 Financing.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ; . . . . . . . 13
14.2 Other Assignments. ................................... 13
14.3 Subleases.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
14.4 Attornment. ........................................ 14
ARTICLE 15
CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
15.1 Definition: Division. .................................. 16
15.2 Termination... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
15.3 No Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
15.4 Temporary Taking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 16
LESSOR'S RIGHT TO PERFORM AND INSPECT ........................ 17
16.1 Right.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
16.2 Inspection.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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COMMERCIAL LEASE NO. 03-105436-99
TABLE OF CONTENTS
ARTICLE 17
DEFAULT AND REMEDIES ........................................... 18
17.1 Events.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
17.2 Remedies. .......................................... 19
17.3 Waiver. ............................................21
ARTICLE 18
HOLDING OVER..................................................... 21
18.1 No Holding Over. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
ARTICLE 19
MORTGAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
19.1 Definition.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
19.2 Filing............................................... 21
19.3 Preconditions.. . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
19.4 Conditions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
19.5 Limitations.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
ARTICLE 20
ENVIRONMENTAL MATTERS........................................ 26
20.1 Definition of Regulated Substances and Environmental Laws. . .26
20.2 Compliance with Environmental Laws. . . . . . . . . . . . . . . . . . . . . 26
20.3 Designated Compliance Officer. .........................27
20.4 Audit............................................... 27
20.5 Environmental Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
20.6 Indemnity for Environmental Damage. .................... 27
20.7 Scope of Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
20.8 Lessee's Participation in the Defense. ..................... 28
20.9 Restoration.......................................... 28
ARTICLE 21
ARBITRATION....................................................... 28
21.1 Jurisdiction.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
21.2 Request............................................. 28
21.3 Rules.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
21.4 Decision............................................ 29
21.5 Fees................................................ 29
21.6 Iniunctive Relief. ..................................... 29
21.7 Mandatory Arbitration. ................................ 29
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COMMERCIAL LEASE NO. 03-105436-99
TABLE OF CONTENTS
ARTICLE 22
MUTUAL CANCELLATION ...........................................29
22.1 Mutual Cancellation. .................................. 29
22.2 Proration of Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 23
MISCELLANEOUS ................................................... 30
23.1 Rights.............................................. 30
23.2 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
23.3 No Partnership. ......................................30
23.4 Quitclaim Upon Termination. ...........................30
23.5 Titles. ............................................. 30
23.6 Notices............................................. 30
23.7 No Promise To Sell. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
23.8 Cancellation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
23.9 Applicable Law. ..................................... 31
23.10 Amendment.......................................... 31
23.11 Attorneys' Fees. ......................................31
23.12 Execution. .......................................... 31
23.13 Severability.......................................... 31
23.14 Mortgagee Request. ..................................32
23.15 Memorandum. .......................................32
23.16 Cooperation.......................................... 32
23.17 Construction. ........................................ 32
23.18 Governing Law. ...................................... 32
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nereby certify that this instrUm80t
is a true .Mci cornPklle copy as shoMl
by \he Records of the /W.ona s.- '.. ,.. ~ii',
land DeplWtment. ~!
WITNESS rrPf ~e and ....... ' .
~daY of It J~"A )')~
STAlE NOCQMMISSK>N
BY:
AMENDMENT TO COMMERCIAL LEASE
STATE LAND DEPARTMEN
STATE OF ARIZONA
NO. 03-105436-99
The Commercial Lease between the State of Arizona, Lessor, and
VISTOSO PARTNERS L.L.C..an Arizona limited liability companv
Lessee, by mutual consent, has been amended as follows:
Revised Exhibit B Marana Rent schedule for Prepayment Calculation is
substituted for original Exhibit B. The original Exhibit B shows incorrect
NPV's (net present values) for the Annual Rent and respective Begin Year
columns. The original Exhibit B calculated the amount due at the end of each
year shown rather than at the beginning of each year as required by lease
paragraph 4.8 Prepayment of Annual Rent and by the respective Exhibit B
column headings.
This Commercial Lease Amendment, when executed by the State Land Commissioner (Lessor)
and the above mentioned Lessee and is affixed to the original Commercial Lease, shall be in
full force and effect. All other terms and conditions of the Commercial Lease shall remain in
full force and. effect.
STATE OF ARIZONA, LESSOR
Arizona State Land Commissioner
IN WITNESS HEREOF, the parties hereto have signed this Document effective the day and year set forth below.
,4~iav~/26/01
LESSEE t(aryl A. WoHswinkel Date
Manager
By: ~t.,:....) ~-bI.tJ1
Date
1
LESSEE
Date
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(SEAL)
~1l2l W. Warner Road, Suite 109
Address
~pe, Arizona 85284
City State Zip
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#4-Comm/ 9/92
COMMERCIAL LEASE NO. 03-105436-99
ARIZONA STATE LAND DEPARTMENT
THIS COMMERCIAL LEASE is entered into by and between the State of Arizona (as
"Lessor", acting by and through the Arizona State Land Department) and Vistoso Partners,
L.L.C., an Arizona Limited Liability Company (as "Lessee"). In consideration of the payment of
Rent and the performance by the parties of each of the provisions set forth herein, the parties
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Affiliated Entity. An Affiliated Entity for purposes of this lease shall mean a
partnership, corporation, trust or other legal entity controlled by or under common control of
Lessee. "Control," for these purposes, shall mean ownership of at least 25% of the stock, interest
in profits, or beneficial interest.
1.2 Change in Use. A change in the use of the Premises from a Permitted Use as
defined in Paragraph 6.1 to a use which is not a Permitted Use as defined in Paragraph 6.1
(Uses).
1.3 Default. As defined in Paragraph 17 .1 (Events).
1.4 Department. The Arizona State Land Department and any successor agency,
board or commission.
1.5 Impositions. All assessments and charges for utilities and communication
services, all assessments imposed pursuant to the development, construction and operation of any
project on the Parcel, all license, permit and other authorization fees, all taxes, duties, charges
and assessments of every kind and nature imposed by any public or governmental authority
pursuant to any current or subsequently enacted law, ordinance, regulation or order which during
the Term of the Lease become due, or imposed upon, charged against, measured by or become a
lien on (a) the Parcel; (b) any Improvements or personal property of the Lessee located on the
Parcel; (c) the interest of the Lessee in this Lease or in the proceeds received by Lessee from any
assignments and/or subleases ofthe Premises.
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6.
11.6
Improvements. As defined in Paragraph 9.1 (Definitions).
......
.......
1.7 Interest Rate. The rate of interest established pursuant to A.R.S. 937-241 (D) or
any successor statute.
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1.8 Leasehold Mortgagee. As defined in Paragraph 19.1 (Definition).
1.9 Parcel. As defined in Paragraph 2.1 (Definition).
1.10 Premises. The Parcel together with all rights and easements appurtenant thereto
as expressly granted by this Lease, Improvements, temporary or portable structures, and personal
property located on, below or above the Parcel.
1.11 Rent. "Rent" means Annual Rent, Base Rent, Percentage Rent, or any
combination thereof, including any and all payments required by Lessee to Lessor.
ARTICLE 2
PARCEL
2.1 Definition. Lessor hereby leases to Lessee for the Term, at the Rent, and in
accordance with the provisions set forth herein, the State Land in Pima County, Arizona
described in Exhibit "A" attached hereto (the "Parcel") for the uses and purposes specified in
Article 6 (Use & Occupancy of Premises) hereof.
2.2 Condition. Lessee has examined the physical condition of the Parcel, is familiar
with it, and takes it "as is". Lessor makes no express or implied warranties as to the physical
condition of the Parcel.
ARTICLE 3
TERM
3.1 Commencement; Expiration. The Term of this Lease shall be for a period of no
more than 99 years commencing on October 25,2000 "Commencement Date" and ending on
October 24,2099 "Expiration Date", unless sooner canceled or terminated as provided herein.
ARTICLE 4
RENT
4.1 Annual Rent. Lessee shall pay Annual Rent as provided herein to Lessor each
year in advance on the anniversary of the commencement date of this Lease for the use and
occupancy of the Parcel during the term of this Lease without offset or deduction, except as
provided hereafter, and without notice or demand. Annual Rent for Lease years one through five
shall be $432,000.00 per Lease year.
=J
4.2 Periodic Adjustment. Beginning with the 6th Lease year, Annual Rent shall be
subject to adjustment pursuant to paragraph 4.3 below.
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4.3 Periodic Adiustment of Annual Rent. For purposes of this Paragraph 4.3 the
following definitions shall apply:
(a) "Adjusted Annual Rent" means an amount, determined as of each
Adjustment Date [defined in subparagraph (b)], equal to the Annual Rent in effect for the prior
Lease year increased by a sum which reflects increases over each Adjustment Period as defined
in subparagraph (b).
(b) Effective as of the first day of the 6th Lease year (the "First Adjustment
Date"), Annual Rent shall be equal to the then applicable Adjusted Annual Rent. Thereafter,
Annual Rent shall be subject to adjustment each Sth anniversary of the First Adjustment Date for
the remainder of the Lease Term. Each date upon which Annual Rent shall be subject to
adjustment shall be referred to herein as an "Adjustment Date." Each five-year period
immediately preceding an Adjustment Date shall be referred to herein as an "Adjustment
Period." The Adjusted Annual Rent determined as of each Adjustment Date shall constitute the
new Annual Rent for each of the five ensuing Lease years. Beginning as of the first Adjustment
Date (first day of the 6th Lease year), and each subsequent Adjustment Date, the Annual Rent
shall be adjusted to equal the greater of (a) the then app}icable Adjusted Annual Rent plus 10%
of the then applicable Adjusted Annual Rent or (b) the then applicable Adjusted Annual Rent
plus the then applicable Adjusted Annual Rent times the cumulative percent change in the
Consumer Price Index - All Urban Consumers, U.S. City Average, for the preceding Adjustment
Period. This amount represents the new Annual Rent subject to adjustment under subparagraph
4.3 (a) and 4.3 (b).
4.4 Interest Penalty. Lessee shall pay a penalty of five percent (S%) plus interest on
any amount of delinquent Rent. Interest shall accrue daily on the delinquent amount and on the
penalty at the Interest Rate until paid.
4.S Notice and Demand. Unless the time for payment of Rent has previously been
extended, if Lessor has not received a Rent payment by the due date, the Lessor shall not be
entitled to exercise any right or remedy hereunder unless it has delivered to Lessee written notice
pursuant to A.R.S. S37-289 demanding that within thirty (30) days after the receipt of such notice
Lessee make such Rent payment and such thirty (30) day period has expired.
4.6 Sublease to Affiliated Entity; Imputed Rent. Should Lessee desire to sublease the
Premises to itself or to an Affiliated Entity, Lessee must first obtain written approval of the terms
and conditions of the proposed sublease from Lessor, regardless of whether a pre-approved form
of sublease is utilized, which approval shall not be unreasonably withheld, and a Fair Market
Rent shall be imputed to such a sublease for purposes of calculating Percentage Rent under this
Article. Lessee shall set forth in its application the Fair Market Rent to be imputed to the
proposed sublease, which determination Lessor may dispute, at Lessor's election, either
acc.ording to the arbitration provisions of Article 21 (Arbitration) of this Lease, or by obtaining
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an independent appraisal at Lessor's expense; such Rent as determined through arbitration or
appraisal shall be binding upon Lessor and Lessee for the purposes of imputing Rent under this
paragraph. Por the purposes of this paragraph, "Pair Market Rent" means the most probable rent
that the subject property would command ifit were exposed on the open market for a period of
time sufficient to attract a tenant who rents the property with full knowledge of the alternatives
available to him on the market.
4.7 Proration of Rent. Upon cancellation or termination of this Lease for any reason
Rent shall not be pro-rated unless specifically stipulated elsewhere in this document or by written
agreement of Lessor and Lessee.
4.8 Prepayment of Annual Rent. Prepaid Rent shall be calculated by discounting to a
present value, the amount of Annual Rents applicable to the Parcel for the remaining term of the
lease. The Rent Schedule upon which prepayment shall be determined shall be calculated in
accordance with this Article 4 and shall use a rental appreciation assumption of 2%. The
discount rate for prepayment shall be the lesser of7.405%, which is the June, 2000 calculation of
the 24 month moving average of the State of Arizona Treasurer's prevailing long-term interest
rate, or the prevailing long term interest rate established by the State of Arizona Treasurer's
Office on the date of approval by the Board of Appeals .cas provided in A.R.S. Section 37-295).
Notwithstanding the foregoing, in no event shall the discount rate used for a prepayment exceed
the maximum rate permitted by applicable law (current A.R.S. Section 37-295 (B) as of the date
of such prepayment). The Schedule for Prepayment of Rent Payments, to be utilized for
calculating the prepayment, is attached as Exhibit B of this lease document. The prepayment of
annual rent may be made only at the beginning of a lease year and only during the first ten years
of the lease term.
ARTICLE 5
ADDITIONAL AMOUNTS
5.1 Definition. In addition to the Annual Rent, Lessee shall also payor cause to be
paid all Impositions and all other costs, expenses, liabilities, obligations or other payments which
Lessee under this Lease assumes and agrees to pay, all of which are hereinafter referred to
individually and collectively as "Additional Amounts".
5.2 Payment. Lessee shall payor cause to be paid all Additional Amounts before any
interest, penalty, fine or cost accrues for nonpayment; provided, however, that if any Additional
Amount may by law be paid in installments, Lessee may pay such Additional Amounts in
installm~nts provided that such installments do not extend past the Expiration Date. Lessee shall
pay all such installments and any applicable interest at the time they become due and before any
further penalty or fine may be added thereto.
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. 5.3 Evidence. On request, Lessee shall provide Lessor with evidence of payment of
taxes on the Improvements, Removable Improvements, and personal property on the Parcel and
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other Impositions by governmental authorities. As to all other Additional Amounts, within a
reasonable period after Lessee's receipt of a written request, Lessee shall furnish to Lessor
pertinent official receipts or other proof satisfactory to Lessor evidencing the payment of any
Additional Amounts before the same become delinquent.
5.4 Interest. If Lessee fails to payor cause to be paid in accordance with this Article 5
any Additional Amounts, then Lessor shall have all the rights and remedies provided in
Paragraph 17.2 (Remedies) as in the case of nonpayment of Rent and in Paragraph 17.1 (Events)
including the right t6 interest at the Interest Rate on all such Additional Amounts, if and to the
extent paid by Lessor from and after the date of Lessee's nonpayment.
5.5 Taxes. Lessee shall timely pay and discharge, without deduction or abatement for
any cause, all duties, taxes, charges, assessments, impositions and payments, extraordinary as
well as ordinary, unforeseen as well as foreseen, of every kind and nature (under or by virtue of
any current or subsequently enacted law, ordinance, regulation or order of any public or
governmental authority), which during the Term are due, imposed upon, charged against,
measured by or become a lien on (i) any part of the premises; (ii) the interest of any of the parties
to this Lease or in proceeds received pursuant to this Lease; and (iii) the rent paid pursuant to this
Lease. Lessee shall have the right to contest any such t~es, assessments or other charges
provided that the fee interest of Lessor shall not thereby be encumbered. In event of sale or
exchange of fee title to a private party taxes and assessments payable under this paragraph shall
exclude all municipal, State or federal income, gift, estate inheritance or excess profit taxes
assessed against Lessor.
ARTICLE 6
USE AND OCCUPANCY OF PREMISES
6.1 Uses. The Premises shall be used solely and exclusively for "Permitted Uses",
Permitted Uses shall mean: (a) open space and park purposes which may be utilized to offset
potential impacts of economic development in the vicinity of the Parcel. Lessee at Lessee's
discretion may enter into agreements with other governmental entities to restrict and manage the
Parcel in a manner that is consistent with the Permitted Uses provided any such agreements are
not inconsistent with the provisions of this Lease. (b) Construction, operation and maintenance
of hiking, bicycling and equestrian trails constructed within sixty (60) months of the
commencement date hereof, provided the total cost of construction does not exceed fifty-
thousand ($50,000) dollars. (c) Parking facilities, restrooms and other ancillary facilities or trails
not constructed according to Paragraph 6.1 (b) as may be authorized by Lessor pursuant to
Paragrapp 9.2 of this Lease. All other uses are prohibited.
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6.2 Artifacts.
. (a) Pursuant to A.R.S. 9941-841 and 41-842, Lessee, Lessee's employees, and
Lessee's guests shall not excavate or collect any prehistoric or historic archaeological specimens
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on the Premises without a permit from the Director of the Arizona State Museum and written
approval of Lessor pursuant to the terms of this Lease. Lessee shall immediately report any
unpermitted excavation or collection or archaeological specimens on the Premises to the Arizona
State Museum and Lessor.
(b) Pursuant to A.R.S. 941-844, Lessee shall report to the Director of the
Arizona State Museum and Lessor any prehistoric or historic archaeological site, or
paleontological site, that is discovered on the Premises by Lessee, Lessee's employees, or
Lessee's guests, and-shall, in consultation with the Director of the Arizona State Museum and
Lessor, immediately take all reasonable steps to secure the preservation of the discovery.
6.3 Native Plants. Lessee shall not move, use, destroy, cut or remove or permit to be
moved, used, destroyed, cut or removed any cactus, protected native plants or products of the
land except that which is necessary for the use of the Parcel, and then only with the prior written
approval of Lessor, and such permission shall not be unreasonably withheld or delayed. lfthe
removal or destruction of plants protected under the Arizona Native Plant Law is necessary to the
use of the Parcel, Lessee shall also obtain the prior written approval of the Arizona Department
of Agriculture.
6.4 Waste; Conformity to Law. Lessee shall not conduct or permit to be conducted
any public or private nuisance on the Premises, nor commit or permit to be committed any waste
thereon. Lessee shall maintain the entire Premises in a clean and wholesome condition. Lessee
shall not use or permit the Premises be used in any manner that is not in conformity with all
federal, state, county, and municipal laws, rules, and regulations, unless Lessor determines and
advises Lessee in writing otherwise.
6.5 Minerals. Lessor excepts and reserves out of the Parcel all oil, gases, geothermal
resources, coal, ores, minerals, fossils, and fertilizers of every kind ,which may be in or upon the
Parcel, and the right to enter upon the Parcel to inspect, explore or extract any such items.
Lessee shall be entitled to reasonable compensation for any damages resulting from the exercise
of the rights reserved hereunder.
6.6 Ouiet Enjoyment. Lessee shall quietly have, hold and enjoy the Parcel during the
Term of this Lease so long as Lessee is in compliance with all the provisions of this Lease.
6.7 Inspection. Except as otherwise provided herein its duly authorized agents,
employees and representatives shall have the right to enter upon and inspect the Premises and all
improvements thereon at a reasonable time, and in a reasonable manner.
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6.8 Surrender. In the event this lease is not renewed, Lessee shall surrender peaceably
the possession ofthe Premises upon expiration of the Term of this Lease.
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6.9 Zoning. Lessee agrees to abide by the applicable provisions ofthe
zoning ordinances, unless Lessor determines and advises Lessee in writing otherwise. To the
extent consistent with the purpose of this lease, Lessor shall cooperate with lessee in obtaining
any necessary or desired site plan and design review approvals, stipulation modifications, use
permits and any other necessary governmental approvals and shall execute and deliver such
petitions, plans, applications or other documents as Lessee may from time to time reasonably
request to effect such governmental approvals. Lessee shall not rezone any part or all of the
Parcel without Lessor's written consent.
6.10 Trespass. Lessee shall report to Lessor and appropriate law enforcement
authorities any known or suspected trespass or waste committed on the Premises.
6.11 Repair and Maintenance. Lessor shall be under no obligation whatever to
maintain, repair, rebuild or replace any improvement on the Premises. Lessee shall, subject to
the provisions of Article 12 (Damage) and Article 15 (Condemnation) and at its own expense,
keep and maintain the Premises in good order, condition and repair in conformity with any
applicable governmental requirements and if applicable, those of the insurance underwriting
board or insurance inspection bureau having jurisdiction over the Premises.
ARTICLE 7
EASEMENTS
7.1 Public Use Interests.
(a) Lessor reserves the right to grant Rights of Way for public use interests in
a manner and under such conditions as determined by Lessor.
7.2 Reservations. Lessor reserves those rights as required in A.R.S. S 37-287, and
Lessee has those rights enumerated therein.
ARTICLE 8
RECORDS
8.1 Record Keeping; Inspection. Lessee shall make and keep for the Term of the
Lease and either (i) five years thereafter; or (ii) until the conclusion of any dispute concerning
this Lease, whichever is later, appropriate books and records concerning the operation of this
Lease including but not limited to Federal and State tax statements, receipts and other records.
Upon five (5) business days prior written notice Lessor, its duly authorized agents, employees
and representatives shall have the right at reasonable times during the Term of this Lease and for
either (i) five years thereafter; or (ii) until the conclusion of any dispute concerning this Lease,
whichever is later, to make reasonable examination of those books, records or other material in
order to obtain information which Lessor deems necessary to administer this Lease. Further,
,
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upon five (5) business days prior written notice Lessor, its duly authorized agents, employees and
representatives shall have the right at all times during the term of any sublease or any extension
thereof, and for either (i) five years thereafter; or (ii) until the conclusion of any dispute
concerning this Lease, whichever is later, to make reasonable examination of any sublessee's
books, records or other material which Lessor deems necessary in order to obtain information to
administer Article 4 (Rent) of this Lease.
ARTICLE 9
CONSTRUCTION AND IMPROVEMENTS
9.1 Definitions.
(a) "Improvement" means anything placed on or any disturbance of the Parcel
which is permanent in character, which is the result of labor or capital expended by Lessee, or by
his sublessees, successors or predecessors in interest, on the Parcel in its reclamation or
development, and which has enhanced the value of the land. Anything placed on or any
disturbance of the Parcel during the Term of this Lease which does not constitute an
"hnprovement" as defined herein will not be subject to reimbursement.
(b) "Removable Improvement" means anything not permanent in character
which is the result of labor or capital expended by the Lessee, his sub lessees, successors or
predecessors in interest on the Parcel.
(c) "Reimbursable Improvement" means an Improvement on or of the Parcel
(i) for which Lessee shall be reimbursed by a succeeding lessee pursuant to Arizona law, (ii)
which is not removable, and (iii) which is either authorized pursuant to the terms of this Lease or
has been preapproved in writing by Lessor prior to placement or disturbance.
(d) "Current Appraised Value" means the appraised value of a Reimbursable
hnprovement at the time Lessee is reimbursed.
(e) "Initial Construction" means those hnprovements constructed pursuant to
the final Development Plan (Site Plan) as approved by the appropriate jurisdiction.
(f) "Additional Construction" means Improvements on or of the Parcel
subsequent to Initial Construction.
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9.2 Prior Approval. Lessee shall not place or construct or permit to be placed or
I
constructed any hnprovement or Removable Improvement on or to the Premises, other than those
expressly authorized by Lessor consistent with the uses allowed under this Lease.
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All other Improvements are prohibited. Prior to applying for a building permit or prior to
beginning construction ifno permit is required, Lessee shall submit to Lessor a completed,
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current form known as an Application To Place Improvement ("Application"). No construction
shall begin until lessor approves in writing the Application. The Application shall include plans
and specifications (including but not limited to grading, construction and landscape plans)
showing the nature, location, approximate cost, and quality of the proposed Improvements.
Drainage and waste disposal plans must be submitted with the Application. Plans submitted
must be stamped by an Arizona registered engineer or architect. The work shall be completed by
an Arizona registered contractor. The location of completed Improvements, as built construction
plans stamped by an Arizona registered engineer or architect, and any other information required
by Lessor, shall be submitted to Lessor within thirty (30) days following the completion of
construction on Lessor's form known as Report Of Improvement Placed With Prior Approval.
Any Improvements placed on the Premises shall conform to existing laws and ordinances
applicable to construction and maintenance in the jurisdiction where the Premises are located,
unless Lessor determines and advises Lessee in writing otherwise.
9.3 Utilities: New Construction. Gas, electric, power, telephone, water, sewer, cable
television and other utility or service lines of every nature shall be placed and kept underground
unless Lessor grants prior written approval otherwise. All Improvements shall be of new
construction and no Improvements shall be moved from any other location onto the Premises
without Lessor's prior written approval.
9.4 Annual Statement. Within 180 days after each anniversary of the commencement
date of this Lease, Lessee shall file with Lessor a sworn statement setting forth the general
description of any Improvements placed on the Premises during the prior lease year and the
actual cash value of such Improvements. Lessee shall not be deemed to be in default hereunder if
the actual cash value is incorrect so long as Lessee made the determination in good faith.
9.5 Ownership. All Improvements constructed upon the Premises by Lessee shall be
the property of Lessee or any successor in interest to whom Lessee specifically conveys all or any
part of the Improvements, and shall, unless they become the property of Lessor, be subject to
assessment for taxes in the name of Lessee, the same as other property of Lessee. Within sixty
(60) days prior to or ninety (90) days following the expiration or termination of this Lease,
Lessee shall remove those Improvements which belong to it, have been previously approved by
Lessor in writing, are free of any liens and can be removed without causing injury to the Parcel.
At its option, Lessor may waive any of the above listed prerequisites to Lessee's removal of
Improvements on the Parcel. Lessee may, with Lessor's prior written approval and within the
time allowed for removal, sell its Improvements to the succeeding Lessee. Lessee's rights under
this Paragraph 9.5 shall survive any termination or cancellation of this Lease. Such surviving
rights shall not restrict Lessor's ability to release the land and are subject to A.R.S. SS 37-288 and
37-293. \
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9.6 Subleases. In connection with any sublease or assignment filed with Lessor,
Lessee may sell all of its right, title and interest in and to any and all Improvements and may
allow sublessees or assignees to construct Improvements, subject to the provisions of Paragraph
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6.1 (Uses) in which event the party that purchases or constructs such Improvements, and its
successors and assigns, except as may be set forth in any agreement between Lessee and such
party, shall thereafter be deemed to be the owner of Improvements with respect thereto, and shall
be subject to the requirements, and enjoy the benefits, of this Article as to such Improvements.
9.7 Insurance Proceeds. Subject to the rights of any pertinent Leasehold Mortgagees,
the owner of Improvements and Removable Improvements shall be entitled to any casualty
insurance or condemnation proceeds resulting from the destruction or taking of any
Improvements or Removable Improvements; provided, however, that the Lessee shall remain
obligated to pay to Lessor the Rent under Article 4 (Rent), and the provisions of Article 15
(Condemnation) shall govern the disposition of condemnation awards that include Lessor's
interest in the fee title to the Parcel.
9.8 Reimbursement; Amortization.
(a) For purposes of this Lease only, all Reimbursable Improvements
constructed on the Parcel during the term ofthis lease shall be fully amortized by Lessee, for
purposes of reimbursement under A.R.S. SS 37-242 and 37-293, according to the schedule set
forth in this Paragraph 9.8, unless otherwise agreed to i~ writing by Lessor and Lessee. Under no
circumstances shall any Improvements be. considered to have a value greater than zero upon the
Expiration Date of this Lease. This Paragraph is not applicable to valuation of Improvements in
the event of condemnation; the rights of Lessee to share in the net proceeds of any award in the
event of condemnation are set forth in Article 15 (Condemnation).
(b) The value of Improvements for purposes of Lessee's reimbursement shall
be the lesser of: (i) the unamortized cost of the Improvements as determined according to the
amortization schedule set forth in this Paragraph 9.8, or (ii) the Current Appraised Value of the
Parcelas improved by the Reimbursable Improvements less the Current Appraised Value of the
Parcel as vacant and available at its highest and best use. If the difference between the Current
Appraised Value as improved and as vacant is zero or less, the Improvements will have no
Current Appraised Value for purposes of reimbursement.
(c) The cost of Improvements constituting Initial Construction shall be
amortized on a straight line basis over a 20 year period, beginning in the Lease Year in which
construction is completed. Lessee shall provide written notice to Lessor within 30 days of
completion.
9.9 Use and Removal of Water. This Lease does not confer upon Lessee, its assignees
or sublessees, any express or implied rights to the use or removal of surface or ground water from
the Parcel.
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9.10 Improvements Dedicated to Public Use. Lessee shall have no right to
reimbursement for Improvements that are dedicated or otherwise committed or transferred to
public use.
ARTICLE 10
LIENS
10.1 Payment Indemnity. Lessee shall be responsible for payment of all costs and
charges for any work done by or for it on the Premises or in connection with Lessee's occupancy
thereof, and Lessee shall keep the Premises free and clear of all mechanics' liens and other liens
and encumbrances on account of work done for or authorized by Lessee or persons or entities
claiming under Lessee or bond over such liens according to State law. Lessee expressly agrees to
and shall indemnify and hold Lessor harmless against liability, damages, costs, attorney's fees
and all other expenses or loss on account of claims of lien or other encumbrances of laborers or
materialmen or others for work performed or materials or supplies furnished for or authorized by
Lessee or persons or entities claiming under Lessee. Further, any contracts between Lessee,
Lessee's assignee or sublessee, and any contractors or subcontractors shall expressly hold Lessor
harmless against any liability arising from such contracts, as described above.
10.2 Notice. Should any claims oflien or other encumbrances be filed against the
Parcel or any action purporting to affect the title to the Parcel be commenced, the party receiving
notice of such lien or action shall immediately give the other party written notice thereof.
10.3 Contest. Notwithstanding anything contained herein to the contrary, after written
notice to Lessor, Lessee may contest by appropriate legal proceeding, conducted in good faith
and with due diligence, the amount, validity or application, in whole or in part, of any
Imposition, legal requirement, lien, encumbrance, charge or any other adverse claim against all or
any part of the Premises provided that: (a) the fee interest of Lessor shall not thereby by
encumbered; and (b) Lessor shall not thereby become subject to any civil or criminal liability
whatsoever for Lessee's failure to comply.
ARTICLE 11
INSURANCE AND INDEMNITY
11.1 Indemnity. Except to the extent occurring or existing prior to the Commencement
Date hereof, Lessee hereby expressly agrees to indemnify and hold Lessor harmless, or cause
Lessor to be indemnified and held harmless, from and against all liabilities, obligations, damages,
penalties, claims, causes of action, costs, charges and expenses, including attorney's fees and
costs, wl1ich may be imposed upon or incurred by or asserted against Lessor by reason of any:
(a) accident, injury or damage to any person or property occurring on or about the Premises or
any portion thereof; (b) use, non-use or condition of the Premises or any portion thereof; or (c)
failure on the part of Lessee to perform or comply with any of the provisions of this Lease;
except that none of the foregoing shall apply to Lessor's intentional conduct or active negligence
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nor to the intentional conduct or active negligence of Lessor's agents, servants, contractors or
subcontractors. If any action or proceeding is brought against Lessor by reason of any such
occurrence, Lessee, upon Lessor's written request and at Lessee's expense, will resist and defend
such action or proceeding, or cause the same to be resisted either by counsel designated by
Lessee or where such occurrence is covered by liability insurance, by counsel designated by the
msurer.
11.2 Policies. Lessee,. at its expense, shall at all times during the Term of this Lease,
and any extension thereof, maintain in full force a policy or policies of commercial general
liability insurance, including property damage, written by one or more responsible insurance
companies licensed to do business in the State of Arizona, and each policy shall be written on an
occurrence basis, which insure Lessee and Lessor against liability for injury to persons and
property and death of any person or persons occurring in, on or about the Premises, or arising out
of Lessee's maintenance, use and occupancy thereof. All commercial general liability and
personal property damage policies shall contain a provision that Lessor, named as an additional
insured, shall be entitled to recovery under the policies for any loss occasioned to it, its servants,
agents and employees by reason of the negligence or wrongdoing of Lessee, its servants, agents
and employees or sublessee. Further, the policies shall provide that their coverage is primary
over any other insurance coverage available to the Lesspr, its servants, agents and employees.
All policies of insurance delivered to Lessor must contain a provision that the company writing
the policy shall give to Lessor ten (10) days notice in writing in advance of any cancellation or
lapse, or the effective date of any reduction in the amounts of insurance.
11.3 Amounts. The insurance as described in Paragraph 11.2 (Policies) herein shall
afford protection not less than $1,000,000 in combined single limits for bodily injury and
property damage liability and each liability policy or policies shall be written on an occurrence
, 'i . basis; provided, however, that the minimum amount of coverage for the above shall be adjusted
upward on Lessor's reasonable request to be made no more frequently than once every two (2)
years so that such respective minimum amounts of coverage shall not be less than the amounts
then required by statute or generally carried on similarly improved real estate in the County
herein described, whichever is greater. If at any time Lessee fails, neglects or refuses to cause
such insurance to be provided and maintained, then Lessor may, at its election, procure or renew
such insurance and any amounts paid therefor by Lessor shall be an additional amount due at the
next date Rent is due and payable.
11.4 Blanket Policy. Notwithstanding anything to the contrary in this Article, Lessee's
obligations to carry the insurance provided for herein may be brought within the coverage of a
so-called blanket policy or policies of insurance maintained by Lessee, provided, however, that
the coverage afforded Lessor will not be reduced by reason of the use of such blanket policy of
msurance.
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11.5 Copies. Copies of said policies shall be delivered to Lessor prior to Lessee's
occupancy of the Premises along with a current certificate of insurance. Lessee shall maintain
with Lessor a current certificate of insurance and a current copy of the policy during this lease.
ARTICLE 12
DAMAGE
12.1 Lessee's Obligations. lfthe Parcel or any building or other Improvement or
Removable Improvement located thereon is damaged or destroyed during the Term of this Lease,
Lessee may, but shall be under no obligation to, arrange, at its expense for the repair, restoration
and reconstruction of the same substantially to its former condition, but such damage or
destruction shall not terminate this Lease or relieve Lessee from its duties and liabilities
hereunder or, as Lessee may elect, for development and construction of a substantially different
project consistent with a permitted use approved by Lessor pursuant to Paragraph 6.10 (Change
in Use).
ARTICLE 13
TRADE FIXTURES AND PERSONAL PROPERTY
13.1 Personal Property. Any trade fixtures, signs, store equipment, and other personal
property installed in or on the Parcel by Lessee or any sublessee shall remain their property
subject to the provisions of this Lease. Lessee shall have the right, provided it is not then in
breach hereunder, at any time to remove any and all of the same, subject to the restrictions of
Paragraph 9.5 (Ownership).
ARTICLE 14
ASSIGNMENTS AND SUBLEASES
14.1 Financing. Without further approval by Lessor, Lessee shall have the right at any
time and from time to time during the Term of this Lease to assign or otherwise encumber by
way of mortgages, deeds of trust or other documents or instruments, all or any part of its right,
title and interest in and to this Lease to any person or entity for the purpose of obtaining
financing. An assignment pursuant to this Paragraph 14.1 shall not relieve Lessee of any
obligations hereunder. The provisions Paragraph 14.2 (Other Assignments) shall not in anyway
limit Lessee's right to obtain leasehold financing as set forth herein.
114.2 Other Assignments. With Lessor's prior written approval, which shall not be
unreasonably withheld or delayed, Lessee may at any time and from time to time during the Term
of this Lease assign all or any part of its rights, interest and obligations hereunder to all of the
Premises. Lessee shall request approval for any assignment by submitting an application
therefore on such forms as Lessor may require. Lessee shall not be deemed to have assigned its
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interests herein as a result of (a) any addition or withdrawal of a partner, if Lessee is a
partnership, (b) any change in stock ownership, if Lessee is a corporation, (c) any change in the
beneficial ownership, if Lessee is any other form of entity, or (d) assignment by Lessee of part or
all of its interest herein to an Affiliated Entity.
14.3 Subleases. So long as there is then no uncured default, Lessee may sublease
portions of the Premises with the prior written approval of Lessor upon submission of a copy of
the proposed sublease, which approval shall not be unreasonably withheld or delayed, provided
the following conditions are satisfied:
(a) No sublease shall relieve Lessee of its responsibility to pay and perform all
of its obligations hereunder;
(b) Lessee shall not be entitled under a sublease to collect rent which is
prepaid in excess of one year in advance, unless Lessee either: (i) prepays Rent for the portion of
the Parcel covered by the sublease, or (ii) provides Lessor with a letter of credit or other bond
which is in such form as is reasonably satisfactory to Lessor and secures payment to Lessor of the
pro rata portion of such prepaid rent which Lessor would be entitled to receive as Rent under this
Lease for the pertinent portion of the Premises;
(c) The proposed use ofthe portion of the Premises subject to the sublease
must be a Permitted Use under this Lease;
(d) The term of the sublease is for a period of not less than 2 years;
( e) Such sublease provides that any violation of any provisions of this Lease,
whether by act or omission, by a sublessee shall be a default under the sublease, entitling the
lessor thereunder to terminate such sublease and exercise other remedies as a result thereof;
(f) Such sublease contains the attornment provisions of Paragraph 14.4
(Attornment);
(g) Such sublease is an arms-length transaction negotiated in good faith and
provides for rental rates comparable to existing market rates; and
(h) Such sublease is on a form of lease which has been previously approved
by Lessor or is otherwise entered into upon terms and conditions which are reasonably
satisfactory to Lessor.
i
14.4 Attornment. Tfthis Lease is terminated prior to the expiration of its term, then, so
long as a sublessee complies with the terms and conditions set forth in its sublease, it shall attorn
thereunder directly to Lessor, Lessor shall attorn to such sublessee, including recognizing the
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rights of any lenders under the sublease, and Lessor shall not disturb such sublessee, in
accordance with the terms of the pertinent sublease; provided, however, that:
(a) Lessor's obligations thereunder shall be no greater and its rights no less
than those set forth in this Lease;
(b) No sublessee shall be required to make any payment to Lessor unless and
until such sublessee shall have received written notice from Lessor of the termination of this
Lease and direction that payments and performance thereafter be made directly to Lessor.
Thereafter, upon such sublessee's timely payment or performance to Lessor, Lessor shall not be
entitled to claim a default for not having received any corresponding payment or performance
from Lessee. If a sublessee, however, receives conflicting written notices demanding payment or
performance from Lessor and Lessee, such sublessee shall have the right to interplead such
payment and/or other matters in any court of competent jurisdiction, in which event such
sublessee shall not be deemed in default. Payment or performance when and as ordered by such
court shall constitute full performance. So long as a sublessee has made payment for
performance to Lessor or interpleaded such matters and is not subj ect to termination for default
of the pertinent sublease, Lessor shall not join that sublessee as a party defendant in any auction
or proceeding or take any other action for the purpose of terminating sublessee's interest and
estate because of any default under or termination of this Lease. Moreover, notwithstanding the
termination of this Lease, so long as Lessee has complied with the requirements hereof relating to
subleases, Lessor shall recognize any and all subleases entered into pursuant to the terms hereof
and any executory contracts to sublease pursuant to the terms hereof; provided, however, that any
and all benefits which would thereafter accrue to Lessee under the sublease shall belong to
Lessor;
( c) Lessor shall not be liable for any act or omission of any prior lessor
(including Lessee);
(d) Lessor shall not be subject to any offsets or defenses which the sublessee
may have against any prior lessor (including Lessee);
( e) Lessor shall not be bound by any payment in respect of rent, common area
expenses, or other additional charges, as described in the sublease, which the sublessee might
have paid for more than one rental period in advance to any prior lessor (including Lessee);
(f) Lessor shall not be bound by any agreement or modification of the
sublease made without the written consent of Lessor;
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(g) Lessor shall not be bound by any provision set forth in the sublease
requiring the sublessor to indemnify or hold the sublessee harmless;
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(h) Lessor shall not be bound by any covenant to undertake or complete any
construction of the Parcel or Premises or any portion thereof; and
(i) Lessor shall not be bound by any obligation to make any payment to the
sublessee.
ARTICLE 15
CONDEMNATION
15.1 Definition: Division. Lessor, any pertinent Leasehold Mortgagees and, if Lessee
is not in default, Lessee, shall cooperate in prosecuting and collecting their respective claims for
an award on account of a taking of all or any portion of the Premises and all damages or awards
(with any interest thereon) to which Lessor, Lessee or any pertinent Leasehold Mortgagees may
be entitled by reason of any taking of all or any portion ofthe Premises (herein referred to as
"Condemnation Proceeds"). In the event of the taking or condemnation by any competent
authority for any public or quasi-public use or purpose of all or any portion of the Premises at any
time during the Lease Term, the rights of Lessor, Lessee, or any Leasehold Mortgagees, to share
in the net proceeds of any award for land, buildings, improvements and damages upon any such
taking, shall be apportioned as follows:
(a) Lessee shall receive that portion attributed to the then fair market value of
the buildings and Improvements constructed thereon and Lessee shall receive the fair market
value immediately prior to such taking of Lessee's leasehold interest in the Leased Premises so
taken;
(b) Lessor shall receive the fair market value of its reversionary interest under
this Lease (exclusive of any value attributable to improvements).
The entire amount of the award, settlement or payment attributable to the value of buildings and
improvements shall belong to Lessee.
15.2 Termination. If the whole or materially all of the Premises shall be taken or
condemned, this Lease, at Lessee's option as set forth below, shall cease and terminate, and
Lessee's obligations to pay Rent, Additional Amounts and other charges hereunder shall be
apportioned as of the date of vesting of title in such taking or condemnation proceedings. For the
purposes of this Article, a taking or condemnation of materially all of the Premises, as
distinguished from a taking or condemnation of the whole of the Premises, means a taking of
such sco~e that the untaken portion of the Premises is not reasonably usable for Lessee's
purposes or insufficient to permit the restoration of the then existing Improvement thereon so as
to constitute Improvements capable of producing a proportionately fair and reasonable net annual
income, taking into consideration the payment of all operating expenses thereof including but not
limited to Rent and all other charges herein reserved, and after the performance of all covenants,
agreements and provisions herein provided to be performed by Lessee. The determination of
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what constitutes a fair and reasonable net annual income shall be governed by reference to the
average net annual income produced by the Premises during the five-year period immediately
preceding the taking (or, if the taking occurs during the first five years of the Lease Term, during
the Lease Term to date). As used above, the term "operating expenses" does not include
depreciation or income taxes. If there is any controversy as to whether materially all of the
Premises have been taken, the controversy shall be resolved by arbitration.
If materially all of the Premises are taken or condemned, then Lessee, at its option, upon
thirty (30) days prior notice to Lessor, given at any time within ninety (90) days after the vesting
of title in the condemnor, may cancel and terminate this Lease as to the entire Premises. The
Rent and other charges hereunder shall be prorated as of this date of termination.
15.3 No Termination. In the event of a partial taking or condemnation, i.e., a taking or
condemnation of less than materially all of the Premises, this Lease (except as hereinafter
provided) shall nevertheless continue, but the Rent for the Lease Year in which such
condemnation occurs shall be pro-rated as of the date of such condemnation and that portion of
the Rent attributable to that portion of the Premises so taken shall be credited to Lessee's
obligations next arising under this Lease, and the Rent shall thereafter be reduced proportionately
to reflect the loss of the land taken. In the event that th~re be any controversy over such
proportionate reduction in the Rent, the controversy shall be resolved by arbitration.
15.4 Temporary Taking. If the whole or any part of the Premises or of the Lessee's
interest under this Lease be taken or condemned by any competent authority for its or their
temporary use or occupancy for a period which is fewer than four (4) months, this Lease shall not
terminate by reason thereof and Lessee shall continue to pay, in the manner and at the times
herein specified, the full amounts of the annual rent and all other charges payable by Lessee
hereunder, and, except only to the extent that Lessee may be prevented from so doing pursuant to
the terms of the order of the condemning authority, to perform and observe all ofthe other terms,
covenants, conditions and obligations imposed upon Lessee under this Lease, as though such
taking or condemnation had not occurred. lfthe whole or any part of the Premises or the Lessee's
interest in this Lease be taken or condemned by a competent authority for its or their temporary
use or occupancy for a period which is in excess of 4 months, this lease may be terminated at the
option of Lessee upon notice given within thirty (30) days of the taking or condemnation.
Notwithstanding anything to the contrary herein, in the event of any temporary taking or
condemnation the Lessee shall, if this Lease has not been terminated as provided in this
Paragraph 15.4, be entitled to receive the entire amount of any award made for such taking or
condemnation, whether paid by way of damages, Rent or otherwise, unless such period of
temporary use or occupancy shall extend to or beyond the Expiration Date, in which case such
award shall be apportioned between the Lessor and the Lessee as of such Expiration Date.
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ARTICLE 16
LESSOR'S RIGHT TO PERFORM AND INSPECT
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16.1 Right. If a default occurs hereunder, then thirty (30) days with respect to
monetary defaults or forty-five (45) days with respect to nonmonetary defaults (or such additional
time as may be necessary to effect a cure in the exercise of reasonable diligence) after Lessee's
receipt of written notice of such default, Lessor may, but without being obligated to do so, cure
such default by making such payment or performing such act for the account and at the expense
of Lessee. No such payment or performance by Lessor shall operate to release or discharge
Lessee from any obligation hereunder. All sums paid by Lessor, pursuant to this Article 16 and
all reasonable costs and expenses (including reasonable attorneys' fees and costs). so incurred
shall constitute Additional Amounts payable by Lessee to Lessor on demand.
16.2 Inspection. Lessee acknowledges and agrees that Lessor and its authorized
representatives shall have the right to enter the Premises and any portion thereof at all reasonable
times following reasonable notice (but in no event less than forty-eight (48) hours prior notice,
except in case of emergency) to inspect for compliance with the terms of this Lease, and may
take all such action as may be necessary or appropriate for such purposes. Furthermore, Lessee
acknowledges and agrees that, at any time within one year prior to the Expiration Date and upon
reasonable notice, Lessor may enter the Premises or any portion thereof for the purpose of
showing the same to prospective tenants, purchasers or mortgagees and, with the prior approval
of Lessee, may display on the Premises advertisements .for sale or lease; provided, however, that
Lessor may only enter and inspect the structures after reasonable notice and during reasonable
business hours. No entry pursuant to this Section shall constitute an eviction.
ARTICLE 17
DEFAULT AND REMEDIES
17.1 Events. Default shall only be deemed to have occurred in the following situations
and Lessee shall not be deemed in default hereunder for the purpose of Lessor's exercise of any
right or privilege herein until the following applicable notice and grace period has expired:
(a) If Lessee fails to pay any installment of Rent any penalty or accrued
interest thereon as required by the provisions of Article 4 (Rent) and such failure continues for
thirty (30) days after the receipt of notice of default from Lessor, unless the time for the payment
has been previously extended pursuant to Paragraph 4.8 (Extension).
(b) If Lessee fails to perform or comply with any other Term of this Lease and
such failure continues for forty-five (45) days after the receipt of notice of default from Lessor;
provided, however, that with respect to any such failure which is of such nature that although
curable, ~t cannot, with due diligence and adequate resources, be cmed within forty-five (45)
days, a default shall not be deemed to exist if Lessee commences curing such failure within the
forty- five (45) day period and thereafter proceeds with reasonable diligence and action to
complete curing such failure.
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(c) To the extent then allowed by law, if Lessee files a voluntary petition in
bankruptcy which is not dismissed wifhin 90 days after the filing thereof; is adjudicated bankrupt
or insolvent; files any petitions or answers seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any present or future
federal, state or other statute, law or regulation; seeks, consents to, or acquiesces in the
appointment of any trustee, receiver, or liquidator of Lessee, or of all or any substantial part of its
respective property or of the pertinent portion of the Premises; makes any general assignments
for the benefit of creditors; or admits in writing its inability to pay its debts generally as they
become due.
(d) To the extent then allowed by law, if a petition is filed against Lessee
seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or
other similar relief under any present or future federal, state or other statute, law, or regulation,
which remains undismissed or unstayed for an aggregate of ninety (90) days (whether or not
consecutive), or if a trustee, receiver, or liquidator of Lessee, or of all or any substantial part of
its properties or of the Premises is appointed without the consent or acquiescence of Lessor and
such appointment remains unv4cated or unstayed for an aggregate of ninety (90) days (whether or
not consecutive).
17.2 Remedies. Subject to the notice and cure provisions set out in Paragraph 17.1
(Events) and the rights of any assignee, sublessee or Leasehold Mortgagee, if default exists,
Lessor may at its option, exercise, in addition to its rights at law or in equity, any of those
remedies set forth below:
(a) Lessor shall have the right, at its election, to reenter the Premises, or any
part thereof, either with or without process of law, and to expel, remove and put out Lessee and
persons occupying the Premises under Lessee, using such force as may be necessary in so doing,
to take full possession of and control over the Premises and to have, hold and enjoy the same and
to receive all rental income of and from the same. No reentry by Lessor shall be deemed an
acceptance of a surrender of this Lease, nor shall it absolve or discharge Lessee from any liability
under this Lease. Upon such reentry, all rights of Lessee to occupy or possess the Premises shall
cease and terminate.
(b) Lessor shall have the right, at its election, with or without reentry as
provided in subparagraph (a) immediately above, to give written notice to Lessee stating that this
Lease and the Term hereby demised shall terminate on the date specified by such notice, and
upon the date specified in such notice this Lease and the Term hereby demised and all rights of
Lessee hereunder shall terminate. Upon such termination, Lessee shall quit and peacefully
surrender to Lessor the Premises and the Improvements then situated hereon.
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(c) At any time and from time to time after such reentry, Lessor may relet the
Premises, or any part thereof, in the name of Lessor or otherwise, for such term or terms (which
may be greater or less than the period which would otherwise have constituted the balance of the
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Term of this Lease), and on such conditions (which may include concessions or free rental) as
Lessor, in its reasonable discretion, may determine and may collect and receive the rental
therefor. However, in no event shall Lessor be under any obligation to relet the Premises or any
part thereof, and Lessor shall in no way be responsible or liable for any failure to relet or for any
failure to collect any rental due upon any such reletting. Even though it may relet the Premises,
Lessor shall have the right thereafter to terminate this Lease and all of the rights of Lessee in or
to the Premises.
(d) - Unless Lessor shall have notified Lessee in writing that it has elected to
terminate this Lease, no such reentry or action in lawful detainer or otherwise to obtain
possession of the Premises shall relieve Lessee of its liability and obligations under this Lease;
and all such liability and obligations shall survive any such reentry. In the event of any such
reentry, whether or not the Premises, or any part thereof, shall have been relet, Lessee shall pay to
Lessor the entire Rental and all other charges required to be paid by Lessee up to the time of such
reentry of this Lease, and thereafter Lessee, until the end of what would have been the Term of
this Lease in the absence of such reentry, shall be liable to Lessor, and shall pay to Lessor, as and
for liquidated and agreed damages for Lessee's default:
i. The amount of Rent and Additional Amounts which would be
payable under this Lease by Lessee if this Lease were still in effect, less
ii. The net proceeds of any reletting, after deducting all of Lessor's
reasonable expenses in connection with such reletting, including without
limitation all reasonable repossession costs, brokerage commissions, legal
expenses, attorneys' fees, alteration and repair costs and expenses of preparation
for such reletting. Lessor's reasonable expenses of reletting shall not include the
cost of constructing any new Improvements on the Parcel nor shall any duty of
Lessor to mitigate damages be construed as obligating Lessor to construct new
Improvements on the Parcel.
Lessee shall pay such damages to Lessor annually on the date that payment of Rent is due, and
Lessor shall be entitled to recover from Lessee annually as the same shall arise. Lessee shall be
liable for such damages on an annual basis, whether or not in any prior Lease Year or Lease
Years the net proceeds described in subparagraph (ii) above shall have exceeded the Annual
Rental and Additional Amounts described in subparagraph (i) above.
( e) In the event of any breach or threatened breach by Lessee of any of the
terms, covenants or agreements contained in this Lease, Lessor shall have, in addition to any
specific remedies provided in this Lease, the right to invoke any right or remedy allowed by law
or in equity or by statute or otherwise, including the right to enjoin such breach or threatened
breach.
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17.3 Waiver. No waiver or breach of any Term of this Lease shall be construed as a
waiver of any succeeding breach of the same or any other term.
ARTICLE 18
HOLDING OVER
18.1 No Holding Over. There shall not be any holding over by Lessee or any assignee
or sublessee, upon the expiration or cancellation of this Lease for any reason. If nevertheless
there be any holding over by Lessee or any assignee or sublessee, the holding over shall give rise
to a tenancy at the sufferance of Lessor upon the same terms and conditions as are provided for
herein with a Rent for the holdover period commensurate with, but in no event less than, the
previous year's Rent.
ARTICLE 19
MORTGAGES
19.1 Definition. Any instrument including, but not limited to, a deed of trust,
mortgage, agreement for sale or other security device which creates an encumbrance on Lessee's
or any sublessee's leasehold interest, and which is filed with Lessor as set forth in this Article 19
(Mortgages), is herein referred to as a "Permitted Mortgage" unless it is held by an Affiliated
Entity, and the holder of the Permitted Mortgage is herein referred to as a "Leasehold
Mortgagee". In no event shall an Affiliated Entity be deemed a Leasehold Mortgagee.
19.2 Filing. No Leasehold Mortgagee shall be entitled to the rights set forth in this
Article 19 (Mortgages) until a true copy thereof is filed with Lessor. The term of any such
obligation secured by a Permitted Mortgage shall not be longer than the then remaining Term of
this Lease, as such may be extended.
19.3 Preconditions. Lessee, or any sublessee leasing under a sublease approved by
Lessor, from time to time during the Term of this Lease may make one or more Permitted
Mortgages upon their leasehold interests, or any fractional portion thereof without the prior
written consent of the Lessor; provided that:
(a) The Lessee, sublessee or the Leasehold Mortgagee shall promptly deliver
to the Lessor in the manner herein provided for the giving of notice to the Lessor, a true copy of
the Permitted Mortgage and of any assignment thereof and shall notify the Lessor of the address
of the Leasehold Mortgagee to which notices may be sent; and
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(b) Each Permitted Mortgage shall contain provisions permitting the
disposition and application of condemnation awards in the manner provided in this Lease.
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19.4 Conditions. With respect to any Permitted Mortgage filed in accordance with the
provisions of Paragraph 19.2 (Filing) hereof, the following provisions shall apply:
(a) Lessor, upon providing Lessee any notice of: (i) default under this Lease,
or (ii) a termination of this Lease, or (iii) a matter on which Lessor may predicate or claim a
default, shall at the same time provide a true copy of such notice to every Leasehold Mortgagee.
No such notice by Lessor to Lessee shall be deemed to have been duly given unless and until a
copy thereof has been so provided to every Leasehold Mortgagee that has filed a notice with
Lessor in accordance with Paragraph 19.2 (Filing). From and after such notice has been given to
a Leasehold Mortgagee, such Leasehold Mortgagee shall have the same period after the receipt of
such notice for remedying any default or acts or omissions which are the subject matter of such
notice or causing the same to be remedied, as is given Lessee. If an event of default is of a nature
that it can reasonably be cured, by lawful means, only by Leasehold Mortgagee obtaining actual
physical possession of the Premises, or any part thereof, the period for curing the default shall be
extended so long as (i) the Leasehold Mortgagee is pursing such self-help as is available under
applicable law or (ii) such Leasehold Mortgagee shall be diligently attempting to obtain, in a
court of competent jurisdiction, the right to actual physical possession of the Premises or any part
thereof, and the Leasehold Mortgagee cures all other events of default which are susceptible of
being cured by the Leasehold Mortgagee.
(b) Any Leasehold Mortgagee shall have the right to cure any default of
Lessee hereunder whether the same consists ofthe failure to pay Rent or any other sums due and
owing hereunder or the failure to perform any other matter or thing which the Lessee is hereby
required to do or perform, and the Lessor shall accept such performance on the part of the
Leasehold Mortgagee as though the same had been done or performed by the Lessee.
(c) Any Leasehold Mortgagee may, at the time of any damage or destruction,
by fire or otherwise, to all or any portion of the Premises or any property thereon, at no cost or
expense to Lessor, repair or replace the same, as the case may be.
(d) Lessor will take no action by reason of any default on the part of Lessee so
long as the periods for the Leasehold Mortgagee's opportunity to cure Lessee's defaults as set
forth herein have not run. In the event Lessor issues an order canceling this Lease, the order shall
not become final until any foreclosure action by a Leasehold Mortgagee, registered with Lessor
pursuant to Paragraph 19.2 (Filing) of this Lease, is finally resolved, if the Leasehold Mortgagee
does both of the following:
i
i. Within thirty (30) days of the date of issuance of a notice of
default, files written notice the Lessor of its intent to proceed with a foreclosure
action, and
ii. Within one hundred twenty days (120) of the date of issuance of a
notice of default, has commenced either a foreclosure action in court or a
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nonjudicial foreclosure of a deed of trust, and has provided Lessor with a certified
copy of the complaint or other document that officially commences the
foreclosure process, and thereafter prosecutes the foreclosure with reasonable
diligence.
Such Leasehold Mortgagee shall not be required to continue such possession or continue such
foreclosure or other proceedings ifthe default which would have been the reason for serving such
a notice shall be cured. In addition, so long as Lessor has provided notice and an opportunity to
cure to Lessee and any Leasehold Mortgagee as provided herein, nothing herein shall preclude
the Lessor from exercising any rights or remedies under this lease with respect to any other
default by the Lessee during any period of such forbearance. If the Leasehold Mortgagee holding
a Permitted Mortgage encumbering Lessee's leasehold interest or a purchaser at a foreclosure or
trustee's sale (a "Purchaser") shall acquire title to Lessee's leasehold interest by foreclosure, or by
assignment in lieu of foreclosure, or otherwise, and shall cure all defaults of Lessee which are
required to be cured by such Leasehold Mortgagee or Purchaser pursuant hereto, as the case may
be, then such defaults of Lessee or any prior holder of the Lessee's leasehold interests which are
not required to be cured by such Leasehold Mortgagee (or Purchaser) shall no longer be deemed
to be defaults hereunder.
( e) Any Leasehold Mortgagee or Purchaser of the Lessee's or, if applicable,
any sublessee's leasehold interest (or any portion thereof) may become the legal owner and holder
of all or a portion of this Lease or such sublease by judicial or non-judicial foreclosure of a
Permitted Mortgage or as a result of the assignment of this Lease or such sublease in lieu of
foreclosure without Lessor's consent, whereupon such Leasehold Mortgagee or Purchaser at a
foreclosure sale shall immediately become and remain liable under this Lease (or such sublease)
to the same extent as Lessee (or such sublessee), and any and all benefits that would thereafter
accrue to Lessee (or such sublessee) under this Lease (or such sublease) shall belong to such
Leasehold Mortgagee or Purchaser. In case any such Leasehold Mortgagee or Purchaser by
foreclosure of Lessee's interest becomes the owner and holder of this Lease, any of the same
events described in Paragraph 17.1 (Events) by such Leasehold Mortgagee or Purchaser shall
constitute a default, and Lessor shall be entitled to the same remedies, but only with respect to
that part or portion of the Premises held under this Lease by such Leasehold Mortgagee or
Purchaser. Nothing contained herein shall be construed or interpreted to preclude Lessor from
exercising any of its rights and remedies hereunder if Leasehold Mortgagee or Purchaser, within
the periods provided herein, fails to cure any event of default occurring after the Leasehold
Mortgagee or Purchaser acquires its interest herein.
(f) If such Leasehold Mortgagee or Purchaser is a trustee, each and every
obligation of such trustee shall be binding upon it solely in its fiduciary capacity and shall have
no force and effect against such trustee in its individual capacity.
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(g) Lessor shall upon request of a Leasehold Mortgagee execute, acknowledge :
and deliver to such Leasehold Mortgagee, an agreement prepared at the sole cost and expense D
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23
(excluding, however, the cost of any attorneys' fees incurred by Lessor) of Lessee, the Leasehold
Mortgagee or the sublessee if the Permitted Mortgage is on any sublessee's interest, in form
satisfactory to such Leasehold Mortgagee between Lessor, Lessee (or sublessee), and Leasehold
Mortgagee, agreeing to all of the provisions of this Section.
(h) Lessor agrees that the name of any Leasehold Mortgagee may be added as
an additional insured or to the "loss payable endorsement" or named under a standard mortgagee
clause of any and all insurance policies carried by Lessee (or sublessee, if applicable). The
proceeds arising from any insurance policies are to be held by a bank or trust company chosen by
such Leasehold Mortgagee which is authorized to do business in Arizona and has a net worth of
$10,000,000.00 or more (the "Depository"), and distributed pursuant to the provisions oftrus
Lease, or, subject to Lessor's prior approval, by the Leasehold Mortgagee whose Permitted
Mortgage encumbers Lessee's interest and is prior in lien to any other Leasehold Mortgagee, but
the Leasehold Mortgagee may reserve its right to apply to the mortgage debt all, or any part, of
Lessee's share of such proceeds pursuant to the Permitted Mortgage.
(i) Any Leasehold Mortgagee shall be given prompt notice by Lessor of any
arbitration proceedings or legal proceedings by the parties hereto involving obligations under this
Lease, and shall have the right to intervene therein and pe made a party to such proceedings, and
the parties hereto do hereby consent to such intervention. In the event that any Leasehold
Mortgagee shall not elect to intervene or become a party to such proceedings, the Leasehold
Mortgagee shall receive notice of, and a copy of, any award or decision made in said arbitration
proceedings which shall be binding on all Leasehold Mortgagees not intervening after receipt of
notice of arbitration.
(j) As to any Permitted Mortgage of Lessee's leasehold interest, Lessor
consents to a provision therein for an assignment of rents due from sublessee to the holder
thereof, effective upon any default under such Permitted Mortgage, subject to Lessee's or Lessor's
right to collect such rents. The holder thereof in any action to foreclose the same shall be entitled
to the appointment of a receiver.
(k) Nothing herein contained shall be deemed to impose any obligation on the
part of Lessor to deliver physical possession of the Premises to any Leasehold Mortgagee, or to
its nominee. Lessor agrees, however, that Lessor will, at the sole cost and expense of such
Leasehold Mortgagee, or its nominee, cooperate in the prosecution of summary proceedings to
evict the then defaulting Lessee (or sublessee, if applicable).
(1) Lessee may delegate irrevocably to any Leasehold Mortgagee holding a
Permitted Mortgage encumbering Lessee's leasehold interest the authority to exercise any or all
of Lessee's rights hereunder, but no such delegation shall be binding upon Lessor unless and until
either Lessee or said Leasehold Mortgagee gives to Lessor a true copy of a written instrument
effecting such delegation. Such delegation of authority may be effected by the terms of the
Permitted Mortgage itself, in which case the service upon Lessor of a true copy of the Permitted
'j"
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24
Mortgage in accordance with this Article 19 (Mortgages), together with a written notice
specifying the provision therein which delegates such authority to said Leasehold Mortgagee,
shall be sufficient to give Lessor notice of such delegation. The rights set forth in this paragraph
shall not affect, modify, or limit the rights of the Leasehold Mortgagee contained in this Lease or
Lessee's duties and obligations hereunder.
(m) No payment made to Lessor by a Leasehold Mortgagee shall constitute an
agreement that such payment is, in fact, due under the terms of this Lease. A Leasehold
Mortgagee having made any payment to Lessor pursuant to Lessor's wrongful, improper, or
mistaken demand shall be entitled to the return of any such payment or a portion thereof provided
such Leasehold Mortgagee shall have made demand therefor not later than one year after the date
of its payment.
(n) Lessor shall, without charge, at any time and from time to time hereafter,
within ten (10) days after written request of Lessee, any sublessee, or Leasehold Mortgagee to do
so, certify by written instrument duly executed and acknowledged to any Leasehold Mortgagee or
sublessee, Purchaser, assignee of any right, title or interest of Lessee in this Lease or proposed
Leasehold Mortgagee sublessee, Purchaser, or assignee of any right, title or interest of Lessee in
this Lease or any other person, firm, or corporation spe~ified in such request: (i) as to whether
this Lease has been supplemented or amended, and if so, the substance and manner of such
supplement or amendment; (ii) as to the existence of any default hereunder to the best of Lessor's
knowledge; (iii) as to the Commencement Date and Expiration Date of the Lease Term; (iv)
acknowledging that the lienholder is a Leasehold Mortgagee; (v) as to whether the Lessor has
assigned its interests or any portion thereof in this Lease and, to the best of its knowledge, as to
whether the Lessee has assigned it interests or any portion thereof in the Lease; (vi) certifying
that, to the best of Lessor's knowledge, there has been no violation of any law, ordinance or
governmental rule or regulation relating to the Premises; (vii) acknowledging that the creation of
the Permitted Mortgage or the Leasehold Mortgagee's acquisition of Lessee's interest in the
Premises by foreclosure or otherwise will not constitute an event of default under the Lease; and
(viii) as to any other matters as may be reasonably so requested. Any such certificate may be
relied upon by the Lessee and any other person, firm, or corporation to whom the same may be
exhibited or delivered.
(0) Nothing herein contained shall require any Leasehold Mortgagee or
Purchaser, as a condition to its exercise of rights, to cure any default of Lessee not reasonably
susceptible of being cured by such Leasehold Mortgagee or Purchaser, including but not limited
to, a default related to bankruptcy and insolvency and any other sections of this Lease that may
impose conditions of default not susceptible to being cured by a Leasehold Mortgagee or
Purchaser. Such failure to cure shall not constitute a default hereunder upon the Leasehold
Mortgagee or Purchaser taking possession of the Premises through foreclosure of the Leasehold
Mortgage or Deed-in-Lieu thereof.
1
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(P) So long as any Permitted Mortgage of Lessee's leasehold interest is in
existence, unless all Leasehold Mortgagees holding Permitted Mortgages of Lessee's leasehold
interest shall otherwise consent in writing, the fee title to the Premises and the leasehold estate of
Lessee therein created by this Lease shall not merge but shall remain separate and distinct,
notwithstanding the acquisition of such fee title by Lessee or by a third party, by purchase or
otherwise. In addition, this Lease shall not be terminated or modified by an agreement between
Lessor and Lessee without the consent of all Leasehold Mortgagees.
19.5 Limitations. This Lease grants to any Leasehold Mortgagee only those rights
expressly set forth herein, regardless of the terms of the Permitted Mortgages or other documents
executed in connection therewith.
ARTICLE 20
ENVIRONMENTAL MATTERS
20.1 Definition of Regulated Substances and Environmental Laws. For purposes of
this Lease, the term "Environmental Laws" shall include but not be limited to any relevant
federal, state, or local environmental laws, and the regulations, rules and ordinances, relating to
environmental matters, and publications promulgated pursuant to the local, state, and federal
laws and any rules or regulations relating to environmental matters. For the purpose of this
Agreement, the term "Regulated Substances" shall include but not be limited to substances
defined as "regulated substance," "solid waste," "hazardous waste," "hazardous materials,"
"hazardous substances," "toxic materials," "toxic substances," "inert materials," "pollutants,"
"toxic pollutants," "herbicides," "fungicides," "rodenticides," "insecticides," "contaminates,"
"pesticides," "asbestos," "environmental nuisance," "criminal littering," or "petroleum products"
as defined in Environmental Laws.
20.2 ~ompliance with Environmental Laws. Lessee/Permittee ("Lessee") shall strictly
comply with all Environmental Laws, including, without limitation, water quality, air quality,
and handling, transportation, storage, treatment, or disposal of any Regulated Substance on,
under, or from the Premises. Without limiting the foregoing, compliance includes that Lessee
shall: (i) comply with all reporting obligations imposed under Environmental Laws; (ii) obtain
and maintain all permits required by Environmental Laws and provided a copy to Lessor within
ten business days of receipt of the permit; (iii) provide copies of all documentation required by
Environmental Laws to Lessor within ten business days of Lessee's submittal and/or receipt of
the documentation; (iv) during the Term of this Lease, provide copies of all information it
receives or obtains regarding any and all environmental matters relating to the premises,
includin,g but not limited to environmental audits relating to the Premises regardless of the reason
for which the information was obtained or whether or not the information was required by
Environmental Laws; and (v) prevent treatment, storage, disposal, handling or use of any
Regulated Substances within the Premises without prior written authorization from Lessor.
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20.3 Designated Compliance Officer. Lessee at all times shall employ or designate an
existing employee, consultant or representative (the "Designated Compliant Officer") who is
responsible for knowing all Environmental Laws affecting Lessee and Lessee's business and
monitoring Lessee's continued compliance with applicable Environmental Laws. Upon request
by Lessor, Lessee shall make the Designated Compliance Officer available to discuss Lessee's
compliance, answer any questions, and provide such reports and confirming information as
Lessor may reasonably request.
20A Audit. At any time, Lessor may request the Lessee to provide an environmental
audit of the Premises performed by an Arizona registered professional engineer or an Arizona
registered geologist. Lessee shall pay the entire cost of the audit.
20.5 Environmental Assessment. At any time during the Term of the lease, Lessor may
require Lessee to obtain one Phase I environmental assessment of the Premises performed by an
Arizona registered professional engineer or an Arizona registered geologist. If, based upon the
Phase I environmental assessment or its own independent investigation, Lessor identifies any
possible violation of Environmental Laws or the terms oftrus Lease, Lessor may require Lessee
to conduct additional environmental assessments as Lessor deems appropriate for the purpose of
ensuring that the Premises are in compliance with Env~ronmental Laws. The Phase I assessment,
or any other assessment required by Lessor, shall be obtained for the benefit of both Lessee and
Lessor. A copy of the Phase I report shall be provided both to Lessee and Lessor. Lessor, in its
sole discretion, shall have the right to require Lessee to perform additional assessments of any
damage to the Premises arising out of any violations of Environmental Laws. If Lessee fails to
obtain any assessment required by Lessor, Lessee shall pay the entire costs of any and all
assessments required by Lessor, notwithstanding the expiration or termination of the Lease.
20.6 Indemnity for Environmental Damage. Lessee shall defend, indemnify and hold
Lessor harmless from and against any and all liability, obligations, losses, damages, penalties,
claims, environmental response and cleanup costs and fines, and actions, suits, costs, taxes,
charges, expenses and disbursements, including legal fees and expenses of whatever kind or .
nature (collectively, "claims" or "damages") imposed on, incurred by, or reserved against Lessor
in any way relating to or arising out of any non-compliance by Lessee, Lessee's successors or
sub lessees, with any Environmental Laws, the existence or presence from and after the
Commencement Date of any Regulated Substance, on, under, or from the Premises, and any
claims or damages in any way relating to or arising out of the removal, treatment, storage,
disposition, mitigation, cleanup or remedying of any Regulated Substance on, under, or form the
Premises by the Lessee, its agents, contractors, or subcontractors.
,
"
20.7 Scope of Indemnity. This indemnity shall include, without limitation, claims or
damages arising out of any and all violations of Environmental Laws regardless of any real or
alleged fault, negligence, willful misconduct, gross negligence, breach of warranty, or strict
liability on the part of any of the indemnitees. This indemnity shall survive the expiration or
-./
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termination ofthis Lease and/or transfer of all or any portion of the Premises and shall be
governed by the laws of the State of Arizona.
20.8 Lessee's Participation in the Defense. In the event any action or claim is brought
or asserted against Lessor which is or may be covered by tills indemnity, the Lessee shall fully
participate, at Lessee's expense, in the defense of the action or claim including but not limited to
the following: (i) the conduct of any required cleanup, removal or remedial actions and/or
negotiations, (ii) the conduct of any proceedings, hearings, and/or litigation, and (iii) the
negotiation and finalization of any agreement or settlement. Lessor shall retain the right to make
all final decisions concerning the defense.
20.9 Restoration. Prior to the termination of this Lease and in addition to those
obligations set forth in this Lease, Lessee shall restore the Premises by removing any and all
Regulated Substances. In addition, the restoration shall include, but not be limited to, removal of
all waste and debris deposited by the lessee. If the Premises or any portions thereof are damaged
or destroyed from the existence or presence of any Regulated Substance or if the Premises or any
portions thereof are damaged or destroyed in any way relating to or arising out of the removal,
treatment, storage, disposition, mitigation, cleanup or remedying of any Regulated Substance, the
Lessee shall arrange, at its expense, for the repair, remoyal, remediation, restoration, and
reconstruction to the Premises to the original condition existing on the date that the Lessee first
occupied the Premises, to the satisfaction of Lessor. In any event, any damage, destruction, or
restoration by Lessee shall not relieve Lessee from its obligations and liabilities under this Lease.
ARTICLE 21
ARBITRATION
21.1 Jurisdiction. The parties hereby agree that after Lessee has exhausted its
administrative remedies as may be required by law, all claims, disputes and other matters in
question hereunder shall be subject to arbitration as set forth below; provided, however, that the
arbitrators shall have no power to change any of the provisions of this Lease in any respect nor
shall they have any power to make an award of reformation and the jurisdiction of the arbitrators
is hereby expressly limited accordingly.
21.2 Request. Either party may serve the other with a written request for arbitration
which shall also specify the name and address of one person designated to act as arbitrator on
behalf of that party. Within thirty (30) days after the service of such request, the other party shall
give to the first party written notice specifying the name and address of the person designated to
act as ar~itrator on its behalf. If the other party fails to so notify the first party within the time
above specified, then the appointment of the second arbitrator shall be made by the first
arbitrator. The two arbitrators chosen shall meet within ten (10) days after the second arbitrator
is appointed and shall appoint a third arbitrator who shall be a competent, impartial person, and
in the event of their being unable to agree upon such appointment within ten( 1 0) days after the
time aforesaid, the said arbitrator shall be selected by the parties themselves if they can agree
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thereon within a further period of twenty (20) days. If the parties do not so agree, then either
party on behalf of both may request the American Arbitration Association to appoint such third
arbitrator. The person so appointed pursuant to this Article must be an attorney-at-law actively
engaged in the practice oflaw in Arizona for at least ten (10) years.
21.3 Rules. Said arbitration shall be conducted in accordance with the rules for
Commercial arbitration then in effect for the American Arbitration Association or any successor
organization thereto.
21.4 Decision. The arbitrators shall render their decision, upon the concurrence of at
least two of their number, within thirty (30) days after the appointment ofthe third arbitrator.
Their decision shall be in writing and counterpart copies shall be delivered to each of the parties.
A decision in which any two of the arbitrators acting hereunder concur may be appealed de novo
directly to the superior Court of Arizona, Maricopa County within thirty (30) days of the date of
the decision. Unless so appealed, such decision shall in all cases be final, binding and conclusive
upon the parties and judgment upon the decision may be entered by any court having jurisdiction
thereof.
21.5 Fees. Unless otherwise required by the ?ecision of the arbitrators, each party shall
pay the fees and expenses of the original arbitrator appointed by such party or in whose stead, as
above provided, such arbitrator was appointed, and the fees and expenses of the third arbitrator,
if any shall be borne equally by the parties. Each party shall bear the expense of its own counsel,
experts, and preparation and presentation of proof.
21.6 Iniunctive Relief. Nothing contained herein shall preclude either party from
obtaining temporary restraining orders or other injunctive relief issued by courts of law or equity
pending the outcome of arbitration pursuant hereto.
21.7 Mandatory Arbitration. To the extent applicable, Lessor and Lessee agree to
make use of mandatory arbitration pursuant to A.R.S. S 12-133.
ARTICLE 22
MUTUAL CANCELLATION
22.1 Mutual Cancellation. This lease may be terminated as to all or part of the parcel
prior to the expiration date upon written agreement signed by both Lessor and Lessee. The
agreement shall specify the terms and conditions of such a cancellation and may include but shall
not be limited to an acceleration of the fullortization of the improvements.
\
i
22.2 Proration of Rent. Upon cancellation or termination for any reason Rent shall not
be pro-rated unless specifically stipulated elsewhere in this document.
,....
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ARTICLE 23
MISCELLANEOUS
23.1 Rictus. This Lease grants Lessee only those rights expressly and unequivocally
granted herein and Lessor retains and reserves all other rights in the Premises.
23.2 Binding Effect. Each provision of this Lease shall extend to, be binding on and
inure to the benefit of not only Lessee but each of its respective heirs, administrators, executors,
successors and assigns. When reference is made in this Lease to either "Lessor" or "Lessee", the
reference shall be deemed to include, wherever applicable, the heirs, administrators, executors,
successors and assigns of the parties. This Lease shall be binding upon all subsequent owners of
the Premises, and of any interest or estate therein or lien or encumbrance thereon.
23.3 No Partnership. The relationship of the parties is that of Lessor and Lessee, and it
is expressly understood and agreed that Lessor does not in any way or for any purpose become a
partner of Lessee or a j oint venturer with Lessee in the conduct of Lessee's business or otherwise,
and that the provisions of any agreement between Lessor and Lessee relating to Rent are made
solely for the purpose of providing a method by which Rent is to be measured and ascertained.
23.4 Quitclaim Upon Termination. After the expiration, cancellation, or termination of
this Lease, Lessee shall execute, acknowledge and deliver to Lessor within thirty (30) days after
written demand from Lessor to Lessee, any document requested by Lessor quitclaiming any right,
title or interest in the Leasehold to Lessor or other document required by any reputable title
company to remove the cloud ofthis Lease from the Premises; provided, however, such
document shall not act to diminish or terminate any rights of the owner of Improvements to
remove the Improvements as set forth herein.
23.5 Titles. The titles to the Articles of this Lease are not a part of this Lease and shall
have no effect upon the construction or interpretation of any part of the Lease.
23.6 Notices. Any notice to be given or other document to be delivered to Lessee or
Lessor hereunder shall be in writing and delivered to Lessee or Lessor by depositing same in the
United States Mail, with prepaid postage thereon and addressed as follows:
i
...
TO Lessor: Arizona State Land Department
1616 West Adams Street - First Floor
Phoenix, Arizona 85007
6
TO Lessee: Address of Record, with a copy to all Leasehold Mortgagees
Lessee must notify Lessor by written notice of any change in address within thirty (30) days.
Lessor may, by written notice to Lessee, designate a different address. A copy of any notice to
G :\COMER\L T -LEASElFinals\03-1 05436Final. wpd
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Lessee shall also be given to all Leasehold Mortgagees. Notice shall be deemed given upon
delivery in case of personal delivery or five (5) days following deposit in the U.S. Mails.
23.7 No Promise To Sell. Lessee acknowledges that it has not been induced to enter
into this Lease by any promise from Lessor or any of its agents, servants or employees that the
Parcel will be offered for sale at any time.
23.8 Cancellation. Lessor may cancel this Lease within three (3) years of execution,
without penalty or further obligation, if any person significantly involved in initiating,
negotiating, securing, drafting or creating the Lease on behalf of Lessor or any of its departments
or agencies is, at any time while the Lease or any extension of the Lease is in effect, an employee
of any other party to the Lease in any capacity, or a consultant to any other party of the Lease
with respect to the subject matter of the Lease. The cancellation shall be effective when written
notice from the Governor is received by all other parties to the Lease unless the notice specifies a
later time. This provision is subject to the statutory rights of all Leasehold Mortgagees as
provided by law and the statutory limits on this right of cancellation.
23.9 Applicable Law. This lease is subject to all current and subsequently enacted
rules, regulations and laws applicable to State lands an~ to the rights and obligations of Lessors
and Lessees. No provision of this Lease shall create any vested right in Lessee except as
otherwise specifically provided in this Lease.
23.10 Amendment. This Lease may be amended only as permitted by law, in writing
and upon agreement by Lessor and Lessee.
23.11 Attornevs' Fees. In any action arising out of this Lease, the prevailing party is
entitled to recover reasonable attorneys' fees and costs in addition to the amount of any judgment,
costs and other expenses as determined by the court. In the case of Lessor, reasonable attorneys'
fees shall be calculated at the reasonable market value for such services when rendered by private
counsel, notwithstanding that it is represented by the Arizona Attorney General's Office or other
salaried counsel.
23.12 Execution. This document is submitted for examination. This is not an option or
offer to lease or grant a permit. This document shall have no binding effect on the parties unless
and until executed by Lessor (after execution by the Lessee), and a fully executed copy is
delivered to the Lessee.
i
23.13 Severability. If any provision of this Lease or any application thereof shall be
invalid or unenforceable, the Lease shall remain in full force and effect if such provision was not
a material inducement to the benefitted party and the remaining provisions permit the parties to
achieve the practical benefits of the arrangements contemplated hereby.
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23.14 Mortgag:ee Request. If any Leasehold Mortgagee to whom the Lessee proposes to
make a Permitted Mortgage on Lessee's leasehold interest shall require as a condition to making
any loan secured by such Permitted Mortgage that Lessor agree to amend this Lease, then Lessor
expressly agrees that it will make the requested amendments; provided that, the amendments do
not impair Lessor's interests and can be legally effected without conducting a public hearing or
advertising and offering this Lease as so amended at any public auction.
23.15 Memorandum. The parties shall execute and Lessee shall cause to be recorded, at
Lessee's option, a m-emorandum of this Lease suitable for recording purposes, in the Official
Records of Maricopa County, AIizona. The Lessee shall be responsible for preparing and
recording the necessary documents and all costs associated therewith.
23.16 Cooperation. The parties hereto agree to fully and reasonably cooperate so as to
allow Lessee to develop the Parcel consistent with this Lease and the applicable zoning. Lessor's
cooperation shall not include any obligation on the part of Lessor to expend any monies on behalf
of Lessee. Lessor's cooperation shall include, but not be limited to, cooperation by executing
applications and petitions for any zoning and rezoning in accordance with Article 6 (Use &
Occupancy of Premises), and cooperation by executing such other and further documents as may
be reasonably required by Lessee to carry out the intent. of the parties contemplated by this Lease.
23.17 Construction. The parties acknowledge that they have both had the benefit of
legal counsel in negotiating and drafting this lease. They therefore agree that, notwithstanding
anything contained herein to the contrary, this Lease and all of its terms, provisions and
conditions shall be construed fairly and not against either Lessor or the Lessee.
23.18 Governing Law. Since the parcel is situated in AIizona, this Lease shall be
governed by, construed and enforced in accordance with the laws of the State of Arizona. Any
legal proceeding arising out of this Lease shall be brought in the Superior Court of Arizona,
Maricopa County.
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32
Lessor:
Lessee:
State of Arizona
Arizona State Land Commissioner
VISTOSO PARTNERS, L.L.C., an
Arizona Limited Liability Company
By: ~Oela....l
Dat~' I /. )b.PlJ
f I~//)
By:/ d~_ _ :i-f/
DaryVA. W olfswinkel
Its: Manager Date: II - J 7 - 00
State of Arizona )
) ss.
County of Maricopa)
The foregoing instrument was acknowledged before me this n~ day of November,
2000, by Daryl A. Wolfswinkel, Manager, Vistoso Partners, L.L.C., an Arizona Limited Liability
Company.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
~
M RKF
Notary Public - Arizona
MARICOPA COUNTY
My Commission Expires
MARCH 9. 2004
State of Arizona )
) ss.
County of Maricopa)
The foregoing instrument was ac~wled~ed before me this ,;) () ~ay of N;i.)t.;~,
2000, by \J/1rY/eS J... IldAff1S , as co6j1::n;rs;-oAJe~ ,of the Arizona State Land
Department for the State of Arizona.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
MYCommissionExpires:t1d~~ ,,"00/ ~LUH- ~ f1'3~
Notary Public
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@ OFFICIAL SEAL
.. 1 '.. ~ SHARON M. BARNARD
. . NOTARY PUBUC. ARIZONA
. ..;' MARICOPA COUNTY
. My Comm. Ex/.iires Oct. 29, 2001
G:\COMER\LT.LEASNinals\03-105436FI~~' 33
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ARIZONA STATE LAND DEPARTMENT
LEGAL DESCRIPTION FORM
SUBMITTED TO:
REFERENCE:
STEPHEN S.:;MPLE
03-1054:36
THIS IS TO CERTIFY THA T THIS
LEGAL DESCRIPTION WAS
PREPARED UNDER MY DIRECTION.
THE ENGINEERING AND MAPPING SECTION HEREBY SUBMITS
THE LEGAL DESCRIPTION OF LANDS REQUIRED
AND LOCATED IN:
S E C. 2 0 - 2 9 T W P. l l S R G E. l? P CO. P T M Zl
LEGAL DESCRIPTION:
THE SOUTHEF.ST QUF3TER (SE1/4)
SOuiE, ~~~GE 12 EF.ST, GILA AND SFLT
ARI ZONF. .
CONTAINING 160.00 ACRES MORE OR LESS.
OF SECTION 20,
RIV"'ER MERIDIF_1\f,
TO"V-iNSHIP 11
PIMA COUNTY,
"
THE SOuiH HFLF (Sl/2) OF SECTION 21, TOw~SHIP 11 SOUTH, ~~~GE
12 EAST, GILA A..l\jl) SF..LT RIVER MERIDIAN, PIM.~ COUNTY, F..RIZONA.
CONTAINING 319.17 ACRES MORE OR LESS.
THE SOuiH F~F OF THE SOUTH HALF (Sl/2S1/2) OF SECTION 22,
TOWNSHIP 11 SOUTH, RP~GE 12 EAST, GIL~ F~ SALT RIVER MERIDIh~,
PIMA COUNTY, ARI ZONF. .
. CONTF.INING 15.9.47 ACRES MORE OR LESS.
THE SOUTH F~F OF THE SOUTH KZlLF (Sl/2S1/2) OF SECTION 23,
TOw~SHIP 11 SOUTH, RP~GE 12 EAST, GILA .~ SALT RIV"'ER MERIDIAN,
PIMA COUNTY, F..RIZONA.
CONTAINING 160.43 ACRES MORE OR LESS.
ALL OF SECTION 27, TOWNSHIP 11 SOUTH, RANGE 12 EAST, GILA AND
SALT RIVER MERIDLZl.N, PIM.~ COUNTY, ARIZONA.
CONTAINING 64:0.00 ACRES MORE OR LESS.
~..LL OF SECTION 28, TOWNSHIP 11 SOUTH, RF~GE 12 EAST, GILA AND
SALT RIVER MERIDI.~~, PIMA COUNTY, A..~IZONA.
CONTAINING 640.00 ACRES MORE OR LESS.
\THE EAST HFLF (E1/2) OF SECTION 29, TOw~SHIP 11 SOUTH, Rfu~GE
12 EAST, GILA AND SpLT RIVER MERIDIF~, PIMF. COUNTY, ?RIZONA.
CONTAINING 320.00 ACRES MORE OR LESS.
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TOTF..L CONTAINING 2399.0/ ACRES MORE OR LESS
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