**EXHIBIT 10.18.2**

** **

**SECOND AMENDMENT TO OFFICE LEASE**

**DATED JULY 18, 2005**

**BY AND BETWEEN ESCHELON TELECOM, Inc. (TENANT)**

**AND**

**ARI CENTRAL, LP AND DANARICENTRAL, LLC (COLLECTIVELY**

**LANDLORD)**

** **

This SecondAMENDMENT TO LEASE (“Second Amendment”) is made and entered into effective July15, 2005, by and between ARI CENTRAL, LP a Delaware limited partnership andDANARI CENTRAL, LLC a Delaware limited liability company (Collectively “Landlord”),and Eschelon Telecom, Inc., a Delaware Corporation (“Tenant)”).

 

R E C I T A L S:

 

A.        Landlord and Tenantentered into that certain Office Lease dated as of December 1, 1999, and FirstAmendment To Lease as of March 17, 2003, pursuant to which Landlord leased toTenant and Tenant leased from Landlord certain “Premises” as described in theLease, known as Suite 500 & 550 of the Building located at 2600 N. CentralAvenue, Phoenix, AZ 85004.

 

B.        Except as otherwise setforth herein, all capitalized terms used in this Second Amendment shall havethe same meaning as such terms in the Lease.

 

C.**       **Landlordand Tenant desire to add rentable square footage to the Premises.

 

NOW, THEREFORE, in consideration of the foregoing Recitals and mutualcovenants contained herein, and for good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the parties heretoagree as follows:

 

1.         Rentable Area ofExpanded Premises. The Expanded Premises, as built out per Exhibit Aattached hereto, shall comprise 1,923 rentable square feet in Suite 620.

 

2.         Target CommencementDate. The parties hereby agree that the Target Commencement Date shall beAugust 1, 2005. The lease shall commence upon substantial completion of theTenant Improvements and the Tenant taking occupancy of the premises.

 

3.**        **InitialBase Rent. Base Rent for the Expanded Premises shall be as follows:

 

 
| **Month**            | ** ** | **Annual Rate PSF** | ** ** | **Monthly   Amount** | ** ** | **Annual   Amount** | ** ** |
|----------------------|------------|---------------------|------------|----------------------|------------|---------------------|------------|
| 08/01/05 -  09-30-05 |       | $                   | 0.00       |                 | $          | 0.00                |       | $ | 0.00 |   |
| 10/01/05-01/31/06    |       | $                   | 16.50      |                 | $          | 2,644.13            |       | $ | 31,729.50 |   |
| 02/01/06  -04/31/07  |       | $                   | 17.00      |                 | $          | 2,724.25            |       | $ | 32,691.00 |   |
| 02/01/07-01/31/08    |       | $                   | 17.50      |                 | $          | 2,804.38            |       | $ | 33,652.5 |   |
| 02/01/08-01/31/09    |       | $                   | 18.00      |                 | 82,884.50  |                | $          | 34,614.00 |   |
| 02/01/09-  01/31/10  |       | $                   | 18.50      |                 | $          | 2,964.63            |       | $ | 35,575.50 |   |
| 02/01/10-05/15/10    |       | $                   | 19.00      |                 | $          | 3,044.75            |       | $ | 36,537.00 |   |

 

4.         Tenant Share ofOperating Expenses. Tenant’s share of operating expenses for the ExpandedPremises shall be 0.59%.

 

5.         Improvements.Landlord shall deliver to Tenant the Expanded Premises in as-is-where-iscondition.

 

6*.**        *No Further Modification. Except asset forth in this First Amendment, all of the terms and provisions of the Leaseshall remain in full force and effect.

 

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IN WITNESSWHEREOF, this Second Amendment of Lease has been executed as of the day andyear first above written.

 

“Landlord”

ARI CENTRAL, LP,**a DelawareLimited PartnershipDANARI CENTRAL, LLC a Delaware Limited Liability Company

 
| By:    | Adler Realty  Investments.* *Inc. |   |
|--------|----------------------------------------|--------|
| Title: | Manager                                |

 
|        |                      |
|--------|---------------------------|
| Title: | Executive Vice  President |   |
|        |                           |  |

 

“Tenant”

 

Eschelon Telecom, Inc.

A Delaware Corporation

 
| By:    | /s/ Michael A. Donahue     |   |
|--------|----------------------------|--------|
| Title: | V P Finance and  Treasurer |   |

 

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**EXHIBIT ‘A’**

** **

****

 

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**FIRST AMENDMENT TO LEASE**

** **

This FirstAmendment to Office Lease (“First Amendment”) is dated for reference purposesthis 17th day of March, 2003, between SOFI IV SIM OFFICE INVESTORSII, L.P., a Delaware limited partnership (“Landlord”) and ESCHELON TELECOM,INC., a Delaware corporation, formerly known as Advanced Telecommunications,Inc., a Delaware corporation (“Tenant”).

 

RECITALS

 

Landlord andTenant entered into that certain Office Lease, dated December 1, 1999 the “Lease”,covering the office space located at the 2600 Tower, located at 2600 NorthCentral Avenue, Phoenix, Arizona, 85004 (the “Project”), identified as Suite500 consisting of approximately 6,028 square feet, reduced pursuant to thisFirst Amendment to 5,545 square feet (the “Existing Premises”).

 

Pursuant to thisFirst Amendment, Tenant wishes to lease an additional approximately 9,391rentable square feet located adjacent to the Existing Premises (the “AdditionalPremises”) for a period of five (5) years and eight (8) months. Commencing onthe Additional Premises Commencement Date (as defined below), all references tothe “Premises” in the Lease and this First Amendment shall be deemed to refercollectively to the Existing Premises and the Additional Premises. The Leaseand this First Amendment are collectively referred to as the “Lease”. Upon theterms and conditions contained herein, and for other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged,Landlord and Tenant agree the Lease is amended as follows:

 

AGREEMENT

 

1.         EffectiveDate. The effective date of the Lease amendments set out in this FirstAmendment is March 17, 2003 (the “Effective Date”).

 

2.         DefinedTerms. Capitalized terms used but not defined herein shall have themeanings ascribed to them in the Lease.

 

3.         RevisedSummary of Basic Terms. Article I “Summary of Basic Terms” of the Lease ishereby amended and restated in its entirety with the amended and restated ArticleI “Summary of Basic Terms” attached as Schedule 1 attached hereto andincorporated herein by reference.

 

4.         Leaseof Additional Premises. Upon and subject to the terms and conditions as setforth in this First Amendment and the Lease, Landlord hereby leases to Tenantand Tenant hereby leases from Landlord those certain premises consisting ofapproximately 9,391 rentable square feet located on the fifth floor adjacent tothe Existing Premises, as depicted on Schedule 2 attached hereto and incorporatedby this reference and described herein as the Additional Premises. The term ofthe Lease, as it applies to the Additional Premises, shall commence upon theearlier of (a) the date of Substantial Completion of the Additional PremisesTenant Improvements, which is currently estimated to be June 1, 2003 (the “DeliveryDate”); (b) the date Tenant commences business operations in the AdditionalPremises; or (c) the date Substantial Completion of the Additional PremisesTenant Improvements would have occurred but for Tenant Delay (the foregoingterms are defined in Exhibit A). If Landlord does not tender

 

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possession of theAdditional Premises to Tenant on or before the Delivery Date, subject to ForceMajeure and Tenant Delay, Landlord will pay to Tenant an amount equal to$17,897.00 (the “Penalty Fee”) in cash within thirty (30) days of the DeliveryDate. If Landlord is unable to tender possession of the Premises to Tenant onor before the Delivery Date, the Lease, as it applies to the AdditionalPremises, remains in full force and effect and Landlord is not liable to Tenantfor any resulting loss or damage, except for the payment of the Penalty Fee;provided, however, that unless the delay is caused by Tenant Delay, AdditionalPremises Base Rent shall abate on a day-for-day basis for those days (after theDelivery Date) during which Landlord is unable to tender possession of theAdditional Premises to Tenant. The expiration date of the Lease, as it appliesto the Additional Premises, shall expire on February 1, 2009, unless soonerterminated pursuant to the provisions of the Lease (the “Additional PremisesTermination Date”). The “Additional Premises Term” of the Lease shall commenceon the Additional Premises Commencement Date and terminate on the AdditionalPremises Termination Date.

 

5.         AdditionalPremises Tenant Improvements. Tenant acknowledges, represents and agrees tothe following: (i) Tenant shall be responsible for making its own inspectionand investigation of the Additional Premises and other portions of theBuilding, (ii) Tenant shall be responsible for investigating and establishingthe suitability of the Additional Premises for Tenant’s intended use thereof,and all zoning and regulatory matters pertinent thereto, (iii) Tenant isleasing the Additional Premises “AS IS” based on its own inspection andinvestigation after the expiration of the thirty (30) day “punch list” periodand not in reliance on any statement, representation, inducement or agreementof Landlord or its agents, employees or representatives, except as expresslyset forth elsewhere in the Lease, (iv) the Additional Premises, upon theearlier of Tenant’s possession or Tenant’s entry into the Additional Premisesto construct or install improvements, were in good order and satisfactory condition,and (v) no rights to light or air over any property, whether belonging toLandlord or any other person, are granted to Tenant by this Lease.

 

Landlord shall perform the demolition, remodeling, replacement and/orinstallation work provided for on Exhibit A attached hereto (“AdditionalPremises Tenant Improvements”). For the purposes of the Lease, as it applies tothe Additional Premises, possession of the Additional Premises shall be deemeddelivered or tendered to Tenant, and accepted by Tenant (subject to Landlord’sobligation to complete Punch List items), upon Substantial Completion (as thoseterms are defined in Exhibit A) and Landlord has given Tenant written noticethereto.

 

6.         Parking.Article 3.9 of the Lease is hereby amended and replaced with the following:

 

Existing Premises:

 
| **#of   Spaces** | ** ** | **Parking Area** | ** ** | **Price per Space**           | ** ** | **Total  Price** |
|------------------|------------|------------------|------------|-------------------------------|------------|------------------|
| Up to 6          |       | open unreserved  |       | @ then current building rates |       |             |

 

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AdditionalPremises:

 

Landlord shalllicense vehicle parking spaces to Tenant and Tenant’s business on the followingterms and conditions:

 

Landlord shall provide eight (8) vehicular parkingspaces as exclusive parking spaces for Tenant and its employees in the parkinggarage portion of the Office Complex (“Reserved Covered Spaces”). This licenseis for Reserved Covered Spaces in the general parking area to be designated andredesignated from time to time by Landlord; provided, however, Landlord mayrequire Tenant to park in a specific location. Landlord shall not be liable toTenant for the failure of any of its tenants, invitees, employees, agents orcustomers or any third parties to comply with the designation of the ReservedCovered Spaces.

 

Landlord shall provide thirty-two (32) vehicularparking spaces on a covered unreserved basis for Tenant and its employees inthe unreserved portion of the parking garage portion of the Office Complex (the“Unreserved Covered Spaces”). This license is for Unreserved Covered Spaces inthe general parking area to be designated and redesignated from time to time byLandlord; provided, however, Landlord may require Tenant to park in a specificlocation. Landlord shall not be liable to Tenant for the failure of any of itstenants, invitees, employees, agents or customers or any third parties tocomply with the designation of the Unreserved Covered Spaces.

 

Landlord shall provide ten (10) vehicular parkingspaces on an unreserved basis for Tenant and its employees in the surfaceparking facility serving the Office Complex (“Surface Spaces”). This license isfor Surface Spaces in the unreserved portion of the surface parking lot to bedesignated and redesignated from time to time by Landlord; provided, however,Landlord may require Tenant to park in a specific location. Landlord shall notbe liable to Tenant for the failure of any of its tenants, invitees, employees,agents or customers or any third parties to comply with the designation of theSurface Spaces.

 

The parking fees for the Reserved Covered Spaces, theUnreserved Covered Spaces and the Surface Spaces, as they relate to theAdditional Premises, shall be abated for the first forty-one (41) months of theAdditional Premises Term hereof; provided, however, that all other chargesrelated to parking (such as charges for parking garage access devices and nameplates for reserved spaces) shall be paid for by Tenant upon receipt of invoicefrom Landlord. Thereafter, Tenant agrees to pay as a monthly fee for suchlicense of parking spaces payable on or before the first day of each month inadvance as follows: during the last twenty-four (24)

 

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months of theAdditional Premises Term, $1,000.00 each month for the parking spaces relatingto the Additional Premises. Tenant shall be entitled to fifty (50) hours ofparking validation each month for the Additional Premises Term at no charge toTenant. If the Lease, as it relates to the Additional Premises, is terminatedfor any reason, the Tenant’s license as to the parking spaces relating to theAdditional Premises shall be immediately revoked.

 

Only vehicles designated by Tenant to Landlord may beparked or stored therein; provided, however, that Tenant may change itsautomobile designations at any time upon written notice to Landlord or fortemporary use upon notification given to the garage attendant, if any. No morethan one automobile per space licensed hereunder shall be parked or storedunder Tenant’s rights hereunder at any one time.

 

This license is for self-service storage or parkingonly and does not include the rights to any additional services, which servicesmay be made available by Landlord from time to time at an additional charge.

 

It is understood that Landlord and its agents andemployees shall not be liable for loss or damage to any vehicle parked orstored by Tenant or under Tenant’s rights herein and/or to the contents thereofcaused by fire, theft, explosion, freezing of circulation system of anyautomobile, strikes, riots or by any other causes and Tenant (1) waives anyclaim against Landlord for and in respect thereto, and (2) hereby agrees toindemnify and defend Landlord against all claims for any loss or damage to anysuch vehicle or its contents from any cause whatsoever. It is further expresslyunderstood that the relationship between Landlord and Tenant with respect tothe parking spaces constitutes a license to use said garage subject to theterms and conditions herein only and that neither such relationship nor thestorage or parking of any automobile thereunder shall constitute a bailment norcreate the relationship of bailor and bailee.

 

In the event the garage referenced shall be damaged byfire or other casualty rendering it unusable by Tenant, the fee provided forherein shall be abated (pro rata based on the portion of the Tenant’s stallswhich are unusable) from the date ten (10) days after the date the garagebecomes unusable until it again becomes usable. Further, if all or any part ofthe garage is taken by eminent domain proceedings, Landlord shall be entitledto all of the award in the proceedings and may terminate this parkingarrangement in the event of a total taking or reduce the number of stallslicensed hereunder in proportion to the extent of any partial taking upon

 

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written notice toTenant. If the garage is damaged by fire or other casualty, Landlord will causeit to be repaired with due diligence.

 

Subject to the abatementprovided for in the preceding paragraph, Landlord shall have the right to closeany portion of the garage and deny access thereto in connection with anyrepairs or in an emergency, as it may require, without liability, cost orabatement of fee.

 

Tenant shall perform, observeand comply with such rules of the Office Complex as may be reasonably adoptedby Landlord in respect to the use and operation of said garage.

 

Tenant shall, when using theparking facilities of said garage, observe and obey all signs regarding firelanes and no parking zones, and when parking always park between designatedlines. Landlord reserves the right to tow away, or otherwise impound, at theexpense of the owner or operator, any vehicle which is improperly parked orparked in a no parking zone.

 

In the event a keyor other access device is supplied by Landlord to Tenant in connection with therights granted herein, Tenant will surrender such key or access device toLandlord upon termination of this Lease.

 

7.         Rightto Terminate. Provided that the Lease is then in full force and effect andTenant is not in default, on the date of exercise of this Option, after noticeand the expiration of any applicable grace period, Tenant may terminate theLease, as it applies to the Additional Premises, as of the last day of the 44thmonth following the Additional Premises Commencement Date (the “EarlyTermination Date”) subject to and in accordance with this Section 7. Toexercise such termination right, Tenant must (a) deliver written notice toLandlord that Tenant desires to terminate the Lease, as it applies to theAdditional Premises, as of the Early Termination Date at least ninety (90) daysprior to the Early Termination Date; and (b) immediately pay Landlord apayment, as each relates to the Additional Premises, equal to Landlord’s thenunamortized costs of the Additional Premises Tenant Improvements, movingallowance, leasing commissions and two (2) months Additional Premises Base Rentat the rate then in effect. If Tenant terminates the Lease, as it applies tothe Additional Premises, Landlord, at its sole cost and expense, shall restorethat portion of the demising wall that separated the Existing Premises from theAdditional Premises to its condition existing prior to the construction of theAdditional Premises and Tenant agrees to allow Landlord to temporarily occupythe Existing Premises in order to accomplish such construction.

 

8.         Tenant’sOption to Renew the Additional Premises Term.

 

(A)      Provided that the Lease isthen in full force and effect and Tenant is not in default, on the date ofexercise of this Option, after notice and the expiration of any applicablegrace period, Tenant shall have the option to extend the Additional PremisesTerm of the Lease for one

 

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(1) period ofthree (3) years (the “Additional Premises Extension Term”) by notice given toLandlord at least four (4), but no more than twelve (12), months prior to thetermination of the Additional Premises Term. The Additional Premises ExtensionTerm shall commence on the first day after the initial Additional Premises Termand shall expire on the third (3rd) anniversary of such day unlessthe Additional Premises Extension Term shall sooner end pursuant to the Lease.

 

(B)      The terms and conditionsshall be identical to those in the Lease that relate to the Additional Premisesexcept for the rental rate, which shall be determined in accordance withArticle 26.13 (1)(A) of the Lease.

 

9.         Tenant’sOption to Renew the Existing Premises Term: Article 26.13(1)(A) of theLease is hereby amended and replaced with the following:

 

(A)      Providedthat the Lease is then in full force and effect and Tenant is not in default,on the date of exercise of this Option, hereunder after notice and theexpiration of any applicable grace period, Tenant shall have the option toextend the Term for two (2) additional periods of five (5) years each (the “ExtensionTerm(s)”) by notice given to Landlord at least four (4), but no more thantwelve (12), months prior to the termination of the Term. The Extension Term(s)shall commence on the day after the initial Lease term and the prior ExtensionTerm (if any) expires (“Expiration Date(s)”) and shall expire on the fifth (5th)anniversary of the Expiration Date(s) unless the Extension Term(s) shall soonerend pursuant to this Lease.

 

10.       Signage.Article 14 of the Lease is hereby amended and replaced with the following:

 

ARTICLE 14. SIGNS

 

Landlord toprovide to Tenant (a) one building standard tenant identification sign adjacentto the entry door of the Premises and (b) standard building directory listingson the directories in the main lobby. In the event Landlord installs anexterior monument sign and provided Tenant, at its sole cost and expense,receives all necessary governmental and quasi-governmental approvals therefore,Landlord will allow Tenant, at Tenant’s sole cost and expense, to install onenon-illuminated sign on such exterior monument sign, which sign will be Tenant’sname, “subordinate” to Landlord’s building designation sign, if any. Tenantmust pay all governmental and other permit fees at its sole cost and expense,must remove same prior to termination of the Lease, and must repair and restoreany damage to the Building caused by such installation and/or removal. Any suchsign and the display of Tenant’s name thereon will be subject to the terms ofany restrictive covenants applicable thereto and all laws.

 

11.       HVAC.Article 27(A) of the Lease is hereby amended with the addition of thefollowing:

 

Subject tolimitations imposed by governmental rules, regulations and guidelinesapplicable thereto, Landlord shall provide HVAC when necessary for normalcomfort and normal office use in the Premises during Normal Business Hours. If

 

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Tenant uses HVACin excess of that supplied by Landlord pursuant to this Article 27(A), Tenantshall pay to Landlord, upon billing, the actual cost of such of such excessconsumption, provided, however, that after-hours HVAC usage shall be billed toTenant based upon rates as reasonably established by Landlord from time totime, which rates are currently estimated to be $8.50 per hour per Zone (ashereinafter defined). A zone covers approximately 1200 square feet (a “Zone”)and each floor contains 13 Zones. Tenant shall be entitled to a credit equal totwenty (20) hours excess HVAC usage each month for the Additional Premisesduring the Additional Premises Term. Any unused credits for any Zone in anymonth may not be carried forward or applied to any other Zone or any othermonth.

 

12.       MovingExpenses. The following is added as a new Article 36:

 

ARTICLE 36. MOVINGEXPENSES

 

In connection withTenant’s relocation of the Tenant’s personal property to the AdditionalPremises, Landlord will pay to Tenant an amount equal to $1.50 per rentable squarefoot of the Additional Premises. Such moving allowance will be paid by Landlordto Tenant in cash within 30 days of the Additional Premises Commencement Date.

 

13.       Storage.         Ifrequested by Tenant and to the extent available, Landlord to provide storagespace in the parking facilities portion of the Building, for Tenant’s exclusiveuse as storage for personal property used in connection with Tenant’s occupancyof the Premises. The location of the storage space will be determined byLandlord in its sole discretion. Tenant will pay Landlord annually $12.00 persquare foot of storage space for the storage space, payable monthly in advance,in equal installments at the same time and manner as Existing Premises BaseRent or Additional Premises Base Rent, as applicable.

 

14.       Brokerage.Article 24 of the Lease is hereby amended with the addition of the following:

 

“Landlord will payany brokers named in Section 1.16 in accordance with the applicable listingagreement for the Building.”

 

15.       OperatingCosts. With respect to the Additional Premises, for each calendar year,Tenant’s obligation to pay Operating Costs shall not increase, on an annual andcumulative basis, by an amount greater than five percent (5.0%) per yearfollowing the initial lease year.

 

16.       ExistingPremises Rentable Square Footage. The rentable square footage of theExisting Premises is hereby reduced from 6,028 to 5,545.

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed this FirstAmendment to the Lease on the date first written above.

 

 
|   | ** ** | **Landlord:**                                                             |
|--------|------------|---------------------------------------------------------------------------|
|   | ** ** | ** **                                                                |
|   |       | SOFI IV-SPM PORTFOLIO  XI, L.L.C., a   Delaware limited liability company |
|   |       |                                                                      |
|   |       | By:                                                                  | SOFI  IV-SPM Maricopa, L.P., General   Manager |
|   |       |                                                                      |   |
|   |       |                                                                      | By: | SOFI IV ARIZONA TRUST,   General Partner |
|   |       |                                                                      |   |   |
|   |       |                                                                      |   |   |
|   |       |                                                                      |   | By: | /s/ Mark M. Grumley |   |
|   |       |                                                                      |   | Name: | Mark M. Grumley |
|   |       |                                                                      |   | Title: | Vice President |
|        |            |                                                                           |  |  |  |  |  |

 

 

 
|   | ** ** | **Tenant:**                                                                                                                              |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------|
|   | ** ** | ** **                                                                                                                               |
|   |       | ESCHELON  TELECOMMUNICATIONS, INC., a Delaware corporation, formerly known as Advanced  Telecommunications, Inc., a Delaware corporation |
|   |       |                                                                                                                                     |   |
|   |       |                                                                                                                                     |   |
|   |       | By:                                                                                                                                      | /s/ Michael A. Donahue |   |
|   |       | Name:                                                                                                                                    | Michael A. Donahue |   |
|   |       | Its:                                                                                                                                     | V P Finance and  Treasurer |   |

 

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** **

**SCHEDULE 1**

** **

**ARTICLE 1 SUMMARY OFBASIC TERMS**

** **

1.1       TheExisting Premises: Suite #500 in the building consisting of approximately 5,545square feet of rentable area as illustrated on the attached Exhibit A; TheAdditional Premises: Suite #550 in the Building consisting of approximately9,391 rentable square feet of rentable area as illustrated on the attachedExhibit A. A floor plan for the floor(s) on which the Premises is located isattached as Exhibit A-l.

 

1.2       TheBuilding: The building is located at 2600 North Central Avenue, Phoenix,Arizona.

 

1.3       “Project”means the Building identified in Section 1.2, and all lands and facilities usedin connection with the Building as reasonably determined from time to time byLandlord. The Project consists of approximately 322,000 square feet of rentablearea.

 

1.4       Namesof Guarantors: None.

 

1.5       ExistingPremises Security Deposit: $12,000.00; Additional Premises Security Deposit: $0(see provisions of Article 4)

 

1.6       TheExisting Premises Term: Ten (10) years and four (4) months, beginning on theCommencement Date and ending on the Expiration Date; The Additional PremisesTerm: Five (5) years and eight (8) months, beginning on the Additional PremisesCommencement Date and ending on the Additional Premises Expiration Date.

 

1.7       ExistingPremises Commencement and Expiration Dates: January 15, 2000, and May 15, 2010,respectively, subject to the provisions of Exhibit A; Additional PremisesCommencement and Expiration Dates: June 1, 2003 and February 1, 2009.

 

1.8       ExistingPremises Base Rent:

 
| **Lease Year**                                         | ** ** | **Annual Base Rent** | ** ** | **Base Rent Per Square Foot** | ** ** | **Monthly Base Rent** | ** ** |
|--------------------------------------------------------|------------|----------------------|------------|-------------------------------|------------|-----------------------|------------|
| 1                                                      |       | $                    | 120,560.00 |                          | $          | 20.00/sq. ft.         |       | $ | 10,046.67 |   |
| 2                                                      |       | $                    | 124,176.80 |                          | $          | 20.60/sq. ft.         |       | $ | 10,348.07 |   |
| 3                                                      |       | $                    | 127,914.16 |                          | $          | 21.22/sq. ft.         |       | $ | 10,659.51 |   |
| Month 36 –  Additional Premises Commencement Date |       | $                    | 131,772.08 |                          | $          | 21.86/sq. ft.         |       | $ | 10,981.01 |   |
| Additional  Premises                                   |       | $                    | 121,213.70 |                          | $          | 21.86/sq. ft.         |       | $ | 10,101.14 |   |

 

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| **Lease Year**                     | ** ** | **Annual Base Rent** | ** ** | **Base Rent Per Square Foot** | ** ** | **Monthly Base Rent** | ** ** |
|------------------------------------|------------|----------------------|------------|-------------------------------|------------|-----------------------|------------|
| Commencement  Date – Month 42 |       |                 |       |                          |       |                  |       |
| 5                                  |       | $                    | 124,873.40 |                          | $          | 22.52/sq. ft.         |       | 10,406.12 |   |
| 6                                  |       | $                    | 128,644.00 |                          | $          | 23.20/sq. ft.         |       | $ | 10,720.33 |   |
| 7                                  |       | $                    | 132,525.50 |                          | $          | 23.90/sq. ft.         |       | $ | 11,043.79 |   |
| 8                                  |       | $                    | 136,517.90 |                          | $          | 24.62/sq. ft.         |       | $ | 11,376.49 |   |
| 9                                  |       | $                    | 140,621.20 |                          | $          | 25.36/sq. ft.         |       | 11,718.43 |   |
| 10                                 |       | $                    | 144,835.40 |                          | $          | 26.12/sq. ft.         |       | $ | 12,069.62 |   |

 

Additional Premises Base Rent:

 
| **Lease Months** | ** ** | **Annual Base Rent** | ** ** | **Base Rent Per Square Foot** | ** ** | **Monthly Base Rent** | ** ** |
|------------------|------------|----------------------|------------|-------------------------------|------------|-----------------------|------------|
| 01-08            |       | $                    | 0          |                          | $          | 0                     |       | $ | 0 |   |
| 09-20            |       | $                    | 154,951.50 |                          | $          | 16.50/sq. ft.         |       | $ | 12,912.63 |   |
| 21-32            |       | $                    | 159,647.00 |                          | $          | 17.00/sq. ft.         |       | $ | 13,303.92 |   |
| 33-44            |       | $                    | 164,342.50 |                          | $          | 17.50/sq. ft.         |       | $ | 13,695.21 |   |
| 45-56            |       | $                    | 169,038.00 |                          | $          | 18.00/sq. ft.         |       | $ | 14,086.50 |   |
| 57-68            |       | $                    | 173,733.50 |                          | $          | 18.50/sq. ft.         |       | $ | 14,477.79 |   |

 

1.9       Tenant’sProportionate Share: 1.72% for the Existing Premises and 2.92% for theAdditional Premises, consisting of the proportion that the rentable area of theExisting Premises or the Additional Premises, as applicable, bears to therentable area of the Project.

 

1.10     ExistingPremises Base Year: 2000; Additional Premises Base Year: 2003

 

1.11     Descriptionof Tenant’s Business: Executive and general office use, the installation,operation and maintenance of equipment and facilities in connection with Tenant’stelecommunication business, including but not limited to telecommunicationsswitch.

 

1.12     NormalBusiness Hours: 7:00 a.m. to 6:00 p.m., Monday through Friday, 8:00 a.m. to1:00 p.m. on Saturday.

 

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1.13     AdditionalPremises Tenant Improvement Allowance: Landlord to deliver the AdditionalPremises to Tenant “turnkey” per space plan prepared by Mittelstaedt Cooper& Associates dated January 8, 2003, using building standard materials (“OriginalPlan”). Notwithstanding anything to the contrary contained herein, Landlord’sobligation relating to the Additional Premises Tenant Improvements shall belimited to costs per Original Plan.

 

1.14     Landlordshall commence construction of the fifth floor common area remodel (“CommonArea Improvements”) within thirty (30) days after completion of the AdditionalPremises Tenant Improvements and shall, at Landlord’s sole expense, complete theCommon Area Improvements in a timely manner, subject to Force Majeure andTenant Delay.

 

1.15     AdditionalPremises Load Factor: 6%.

 

1.16     Tenant’sAddress for Pre-occupancy Notices:

 

730 2ndAvenue South, #1200Minneapolis, MN 55402

 

1.17     Landlord’sNotice Address:

 

Starwood AssetManagement 2525 East Camelback Road Suite 740Phoenix, AZ 85016 Attn.: Mark M. Grumley Phone: (602) 468-0112 Facsimile: (602) 468-1567

 

Copy to:

 

Rinaldi,Finkelstein & Franklin, LLC 591 West Putnam Avenue Greenwich, CT 06830 Attn.: Eric W. Franklin, Esq. Phone: (203) 422-7768 Facsimile: (203) 422-7868

 

Copy to:

 

CB Richard Ellis 2415 East Camelback Road Ground Floor Phoenix, AZ 85016 Attn.: Asset Service Phone: (602) 735-5445

 

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Facsimile: (602)735-5113

 

1.18     ExistingPremises Landlord’s designated broker: Scottsdale Property Manager 97, L.L.C;Additional Premises Landlord’s designated broker: CB Richard Ellis, Inc.

 

1.19     ExistingPremises Tenant’s designated broker: Eric Hamm, TELECOM Real Estate Services;Additional Premises Tenant’s designated broker: CRESA Partners

 

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**SCHEDULE “2”**

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**Floor Plan**

 

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**EXHIBIT “A”**

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**CONSTRUCTION OF ADDITIONALPREMISES TENANT IMPROVEMENTS**

** **

1.         Additional PremisesTenant Improvements. Landlord will cause to be constructed all AdditionalPremises Tenant Improvements. The Additional Premises Tenant Improvements willbe designed as described in this Exhibit A. The cost of constructing theAdditional Premises Tenant Improvements will include all of Landlord’s directand indirect costs in connection with the design and construction of theAdditional Premises Tenant Improvements initially to be constructed in theAdditional Premises, plus a percentage (not to exceed five percent [5%]) of thesum of all such direct and indirect costs for Landlord’s overhead and profit.Such costs of Landlord may include, without limitation, space planning costs,construction document preparation costs, design costs, construction drawingcosts, general conditions, construction costs and all costs Landlord incurs inconnection with obtaining permits for the Additional Premises TenantImprovements. The Additional Premises Tenant Improvements become the propertyof Landlord and a part of the Property immediately upon installation. Landlordagrees to use reasonable efforts to competitively bid the work for theconstruction of the Additional Premises Tenant Improvements.

 

2.         Additional PremisesTenant Improvement Allowance. Landlord will pay an amount equal to the costto deliver the Additional Premises to Tenant “turnkey” per space plan preparedby Mittelstaedt Cooper & Associates dated January 8, 2003, using buildingstandard materials (“Original Plan”) (the “Additional Premises ImprovementAllowance”), for the design and installation of the Additional Premises TenantImprovements. Landlord is not obligated to pay or incur any amounts that exceedthe Additional Premises Improvement Allowance. If the cost of the AdditionalPremises Tenant Improvements exceeds the Additional Premises ImprovementAllowance, then Tenant will pay the excess to Landlord in cash within ten (10)days after demand. Tenant will also pay all of Landlord’s costs (including lostrent) resulting from any Tenant Delay. If Landlord at any time reasonablyestimates that the cost of the Additional Premises Tenant Improvements willexceed the Additional Premises Improvement Allowance, Tenant shall immediatelydeposit with Landlord the amount by which the cost of the Additional PremisesTenant Improvements exceeds the Additional Premises Improvement Allowance.

 

3.         Space Plan.[Intentionally Deleted].

 

4.         Additional PremisesConstruction Drawings. Landlord will provide Tenant with the AdditionalPremises Construction Drawings and Specifications. Tenant will approve ordisapprove (specifically describing any reasons for disapproval) the AdditionalPremises Construction Drawings and Specifications in writing within three (3)business days after receiving them. Any failure by Tenant to timely deliversuch approval or disapproval is a Tenant Delay until received. If Tenantdisapproves the Additional Premises Construction Drawings and Specifications,Landlord will provide appropriately revised Additional Premises ConstructionDrawings and Specifications to Tenant for approval (or disapproval) on the samebasis as set forth above. If the review and approval process is not concluded(with Tenant having approved

 

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the AdditionalPremises Construction Drawings and Specifications) on or before          ,2003, then such delay is a Tenant Delay until Tenant’s approval is received.After Tenant’s approval, Landlord will submit the Additional PremisesConstruction Drawings and Specifications for permits and construction bids.Tenant will not withhold any approval except for reasonable cause and will notact in an arbitrary or capricious manner in connection with the review,revision, approval or disapproval of the Additional Premises ConstructionDrawings and Specifications. Tenant will not specify long lead time items thatwould delay Substantial Completion of the Additional Premises TenantImprovements.

 

5.         Change Orders.Tenant will immediately notify Landlord if Tenant desires to make any changesto the Additional Premises Tenant Improvements after Tenant has approved theAdditional Premises Construction Drawings and Specifications. If Landlordapproves the revisions, Landlord will notify Tenant of the anticipatedadditional cost and delay in completing the Additional Premises TenantImprovements that would be caused by such revisions. Tenant will approve ordisapprove the increased cost and delay within five (5) business days aftersuch notice. If Tenant approves, Landlord will prepare, and Landlord and Tenantwill execute, a Change Order describing the revisions and the anticipatedadditional cost and delay. Any delay relating to a request for revisions or aChange Order is a Tenant Delay. If the Change Order causes the cost of the AdditionalPremises Tenant Improvements to exceed the Additional Premises ImprovementAllowance (or if the cost of the Additional Premises Tenant Improvementsalready exceeds the Additional Premises Improvement Allowance), Tenant shallprepay the added costs of the Change Order.

 

6.         SubstantialCompletion: Punch List. As used in this Lease, “Substantial Completion”means the earlier to occur of the following: (a) the issuance of all finalunconditional approvals and green tags by the governmental authority exercisingjurisdiction over the Additional Premises Tenant Improvements signifying thefinal and unconditional acceptance and approval of the Additional PremisesTenant Improvements, (b) the date a Certificate of Occupancy is issued for theAdditional Premises, and (c) if a Certificate of Occupancy is not required, thedate Tenant is reasonably able to take occupancy of the Additional Premises;provided that if either (a), (b) or (c) is delayed or prevented because of workTenant is responsible for performing in the Additional Premises, “SubstantialCompletion” means the date that all of Landlord’s work which is necessary foreither (a), (b) or (c) to occur has been performed and Landlord has made theAdditional Premises available to Tenant for the performance of Tenant’s work.Within thirty (30) days after Substantial Completion, Landlord and Tenant willinspect the Additional Premises and develop a Punch List. Landlord will causethe items listed on the Punch List to be completed with commercially reasonablediligence and speed, subject to Tenant Delay and Force Majeure. If Tenantrefuses to inspect the Additional Premises with Landlord within the 30-dayperiod, Tenant is deemed to have accepted the Additional Premises as delivered.Tenant will not occupy the Additional Premises before Substantial Completionwithout Landlord’s prior written consent, which consent Landlord may grant,withhold or condition in its sole and absolute discretion. If Landlordconsents, during the early occupancy period Tenant may only install Tenant’sfurniture, fixtures and equipment in the Additional Premises and must complywith and observe all terms and conditions of this Lease (other than Tenant’sobligation to pay Additional Premises Base Rent).

 

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7.         Force Majeure. Asused in this Lease, “Force Majeure” means acts of God; strikes; lockouts; labortroubles; inability to procure materials; inclement weather; governmental lawsor regulations; casualty; orders or directives of any legislative,administrative, or judicial body or any governmental department; inability toobtain any governmental licenses, permissions or authorities (despitecommercially reasonable pursuit of such licenses, permissions or authorities);and other similar or dissimilar causes beyond Landlord’s reasonable control.

 

8.         Tenant Delay. “TenantDelay” means any delay caused or contributed to by Tenant, including, withoutlimitation, with respect to the Additional Premises Tenant Improvements, Tenant’sfailure to timely prepare or approve the Additional Premises ConstructionDrawings and Specifications, and any delay from any revisions Tenant proposesto approved Additional Premises Construction Drawings and Specifications. ATenant Delay excuses Landlord’s performance of any obligation related theretofor a period equal to (a) the duration of the act, occurrence or omission thatconstitutes the Tenant Delay, or (b) if longer, the period of delay actuallycaused by such Tenant Delay.

 

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