**Exhibit10.16.2**

 

**SECONDAMENDMENT TO OFFICE LEASE**

This SecondAmendment to Office Lease (this “Second Amendment”) is made and enteredinto by and between **EOS ACQUISITION I, LLC,**aDelaware limited liability company (“Landlord”) andsuccessor-in-interest to Parkside Salt Lake Corporation, a Delaware corporation(“Original Landlord”), and **ESCHELONTELECOM, INC.,**a Delaware corporation f/k/a AdvancedTelecommunications, Inc. (the “Tenant”), effective on and as of the dateon which Landlord executes this Second Amendment, as set forth on the signaturepage hereto (the “Effective Date”).

**WITNESSETH**

WHEREAS, Landlord(or its predecessor-in-interest) and Tenant entered into that certain OfficeLease dated December 28, 1999 (the “Original Lease”), as subsequently amendedby that certain Amendment to Lease dated April 28, 2005 (the “FirstAmendment”) (the Original Lease, as amended by the First Amendment, beinghereinafter collectively referred to as the “Lease”) pursuant to whichLandlord leases to Tenant certain premises containing approximately 18,669square feet of Rentable Area designated as Suites 110, 280 and 380 in thebuilding commonly known as the Parkside Tower Building (the “Building”)having an address of 215 South State Street, Salt Lake City, Utah (the “ExistingPremises”); and

WHEREAS, Landlordand Tenant desire to further expand the size of the Premises and amend certainterms and provisions of the Lease, all as more particularly providedhereinbelow;

NOW, THEREFORE,pursuant to the foregoing, and in consideration of the mutual covenants andagreements contained in the Lease and herein, the Lease is hereby modified andamended as set out below:

1. DefinedTerms. All capitalized terms used herein shall have the same meaning asdefined in the Lease, unless otherwise defined in this Second Amendment.

2. Expansion ofPremises. Effective on and as of the date (the “Second ExpansionCommencement Date”) which is the earlier of (i) the date that the SecondExpansion Improvements are Substantially Completed, or (ii) the date the SecondExpansion Improvements would have been Substantially Completed except forTenant Delays, or (iii) the date that Tenant, or any person occupying any ofthe Second Expansion Premises with Tenant’s permission, commences businessoperations from any portion of the Second Expansion Premises, or (iv) October1, 2006, and continuing through the expiration of the term of the Lease(currently scheduled to expire on July 14, 2012), the Premises shall beexpanded to include (i) an additional approximately 1,000 square feet ofRentable Area to be added to the portion of the Premises designated as Suite100 in the Building and more fully shown and described on the floor planattached hereto as Exhibit A and made a part hereof for all purposes(the “Suite 110 Expansion Space”), and (ii) an additional approximately2,400 square feet of Rentable Area, designated as Suite 101 in the Building,and more fully shown and described on the floor plan attached hereto as ExhibitB and made a part hereof for all purposes (the “Suite 101 ExpansionSpace”) (the Suite 110 Expansion Space and the Suite 101 Expansion Spacebeing collectively sometimes referred to herein as the “Second ExpansionPremises”). Landlord and Tenant hereby

1

----

 

acknowledge and agreethat, commencing on the Second Expansion Commencement Date and continuingthroughout the remainder of the term of the Lease, the Premises (inclusive ofthe Existing Premises and the Second Expansion Premises) shall be deemed toconsist of approximately 22,069 square feet of Rentable Area in the Building.As used in this Paragraph 2’ the terms “Second Expansion Improvements”and “Substantial Completion” or “Substantially Completed” and “TenantDelay” are defined in the attached Exhibit C Work Letter. Upon theoccurrence of the Second Expansion Commencement Date, Landlord and Tenant agreeto execute a written confirmation of the actual date corresponding to theSecond Expansion Commencement Date.

Landlord and Tenantunderstand and agree that the expansion of the Premises to include the Suite110 Expansion Space satisfies the expansion option granted to Tenant in Paragraph8 of the First Amendment, and, accordingly, Paragraph 8 of the FirstAmendment is hereby deleted in its entirety and is of no further force oreffect.

3. Basic AnnualRent. Effective on and as of the Second Expansion Commencement Date (“SECD”)and continuing through the remainder of the existing term of the Lease(scheduled to expire on July 14, 2012), the Basic Annual Rent payable withrespect to the Suite 110 Expansion Space and the Suite 101 Expansion Spaceshall be as follows (it being understood and agreed that the Basic Annual Rentpayable with respect to the Existing Premises shall remain as set forth in Paragraph4 of the First Amendment):
| **Suite  Number  (or space)** | ** ** | **Total  Rentable  Square  Feet** | ** ** | **Period**        | ** ** | **Annual Base  Rent per  Square Foot** | ** ** | **Monthly  Base Rent** | ** ** | **Annual Base  Rent** | ** ** |
|------------------------------------|------------|-----------------------------------|------------|-------------------|------------|-------------------------------------------------------|------------|-----------------------------|------------|----------------------------|------------|
|                               |       |                              |       |              |       |                                                  |       |                        |       |                       |       |
| Suite 110  Expansion Space         |       | 1,000                             |       | SECD-7/14/07      |       | $                                                     | 12.88      |                        | $          | 1,073.33                   |       | $ | 12,880.00 |   |
|                               |       |                              |       | 07/15/07-07/14/08 |       | $                                                     | 13.27      |                        | $          | 1,105.83                   |       | $ | 13,270.00 |   |
|                               |       |                              |       | 07/15/08-07/14/09 |       | $                                                     | 13.67      |                        | $          | 1,139.17                   |       | $ | 13,670.00 |   |
|                               |       |                              |       | 07/15/09-07/14/10 |       | $                                                     | 14.08      |                        | $          | 1,173.33                   |       | $ | 14,080.00 |   |
|                               |       |                              |       | 07/15/10-07/14/11 |       | $                                                     | 14.50      |                        | $          | 1,208.33                   |       | $ | 14,500.00 |   |
|                               |       |                              |       | 07/15/11-07/14/12 |       | $                                                     | 14.94      |                        | $          | 1,245.00                   |       | $ | 14,940.00 |   |

 

2

----

 
| ** **                 | ** ** | ** ** | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
|----------------------------|------------|------------|------------|-------------------|------------|------------|------------|------------|------------|------------|------------|
| Suite 101  Expansion Space |       | 2,400      |       | SECD-09/30/07     |       | $          | 23.00      |       | $          | 4,600.00   |       | $ | 55,200.00 |   |
|                       |       |       |       | 10/01/07-09/30/08 |       | $          | 23.69      |       | $          | 4,738.00   |       | $ | 56,856.00 |   |
|                       |       |       |       | 10/01/08-09/30/09 |       | $          | 24.40      |       | $          | 4,880.00   |       | $ | 58,560.00 |   |
|                       |       |       |       | 10/01/09-09/31/10 |       | $          | 25.13      |       | $          | 5,026.00   |       | $ | 60,312.00 |   |
|                       |       |       |       | 10/01/10-09/30/11 |       | $          | 25.88      |       | $          | 5,176.00   |       | $ | 62,112.00 |   |
|                       |       |       |       | 10/01/11-07/14/12 |       | $          | 26.66      |       | $          | 5,332.00   |       | $ | 63,984.00 |   |

 

4. AdditionalRent. Effective on and as of the Second Expansion Commencement Date, Tenant’sPercentage, to be used in calculating Tenant’s Share of Direct Expenses payableas Additional Rent in accordance with the provisions of Section 3 of theLease (as heretofore amended), shall be amended and shall be equal to 11.6084%(22,069 rsf/190,112 rsf).

5. Parking.Notwithstanding anything in the Lease to the contrary, commencing on the SecondExtension Commencement Date and continuing thereafter through the expiration ofthe Extension Period, Tenant shall have the right to use four (4) coveredreserved parking spaces at a rate of $85.00 per space per month in locationsdesignated by Landlord, twenty-six (26) covered unreserved parking spaces at arate of $65.00 per space per month in locations designated by Landlord, fifteen(15) unreserved spaces on the surface lot adjacent to the Building at a rate of$18.00 per space per month, and one (1) reserved space in the Buildingcontractor lot at no charge to Tenant.

6. Condition ofthe Premises. Tenant is currently in possession of the Existing Premisesand Tenant agrees to accept the Existing Premises and the Second ExpansionPremises in their existing “AS-IS”, “WHERE-AS” and “WITH ALL FAULTS” conditionthroughout the expiration of the Extension Period and Landlord shall have noobligations whatsoever to perform any improvements or refurbishments theretothroughout the remainder of the Extension Period; provided, however,notwithstanding the foregoing to the contrary, (i) Landlord agrees, at its solecost and expense, to perform the Suite 110 Expansion Improvement (as defined inExhibit “C” attached hereto) in the Suite 110 Expansion Space, and (ii)subject to the terms of Exhibit “C” attached hereto, Landlord agrees toprovide Tenant with an improvement allowance of up to Thirty-Nine Thousand TwoHundred Twenty and No/100 Dollars ($49,025.00) (the “Second ExpansionAllowance”) to be applied to the cost of performing the Suite 101 Expansion

3

----

 

Improvements (as saidterm is defined on Exhibit “C” attached hereto) in the Suite 101Expansion Space in accordance with and subject to the terms of said Exhibit “C”.

7. Terminationof Cancellation Option. Landlord and Tenant hereby agree that cancellationoption set forth in Paragraph 9 of the First Amendment is herebyterminated, deleted in its entirety and is of no further force or effect.

8. Broker.Tenant warrants that it has had no dealings with any broker or agent other thanCB Richard Ellis, Inc. (“Broker”) in connection with the negotiation orexecution of this Second Amendment, and Tenant agrees to indemnify Landlord andhold Landlord harmless from and against any and all costs, expenses orliability for commissions or other compensations or charges claimed by anybroker or agent, other than Broker, with respect to this Second Amendment orthe transactions evidenced hereby.

9. Miscellaneous.With the exception of those terms and conditions specifically modified andamended herein, the herein referenced Lease shall remain in full force andeffect in accordance with all its terms and conditions. In the event of anyconflict between the terms and provisions of this Second Amendment and theterms and provisions of the Lease, the terms and provisions of this SecondAmendment shall supersede and control.

10. Counterparts/FacsimileSignatures. This Second Amendment may be executed in any number of counterparts,each of which shall be deemed an original, and all of such counterparts shallconstitute one agreement. To facilitate execution of this Second Amendment, theparties may execute and exchange facsimile counterparts of the signature pagesand facsimile counterparts shall serve as originals.

 

***[SIGNATURE PAGE TO FOLLOW]***

4

----

 

SIGNATURE PAGE OFSECOND AMENDMENT TO OFFICE LEASEBY AND BETWEENEOS ACQUISITION I, LLC, AS LANDLORDANDESCHELON TELECOM, INC., AS TENANT

IN WITNESSWHEREOF, the parties hereto have executed this Second Amendment on therespective dates set forth below to be effective for all purposes, however, asof the Effective Date set forth above.

 
|            | **LANDLORD:**                                                     | ** **                                         |
|------------|-------------------------------------------------------------------|----------------------------------------------------|
|       |                                                              |                                               |
| ** ** | **EOS ACQUISITION I, LLC,  a Delaware limited liability company** |
| ** ** | ** **                                                        |
| ** ** | **By:**                                                           | **KBS Realty Advisors, LLC,**                      |
| ** ** | ** **                                                        | **a Delaware limited liability company  as agent** |
| ** ** | ** **                                                        | ** **                                         |
| ** ** | ** **                                                        | ** **                                         |
| ** ** | ** **                                                        | **By:**                                            | **/s/ David L. Kray** | ** ** |
| ** ** | ** **                                                        | ** **                                         | **David L. Kray,  Senior Vice President** |
| ** ** | ** **                                                        | ** **                                         | ** ** |
| ** ** | ** **                                                        | **Date:**                                          | **  10/5/, 2006** | ** ** |
|            |                                                                   |                                                    |  |  |  |  |  |

 

 
|            | **TENANT:**                                         | ** **                     |
|------------|-----------------------------------------------------|--------------------------------|
|       |                                                |                           |
| ** ** | **ESCHELON TELECOM, INC.,  a Delaware corporation** |
| ** ** | ** **                                          |
| ** ** | ** **                                          |
| ** ** | **By:**                                             | **/s/ Michael A Dorchin**      | ** ** |
| ** ** | **Name:**                                           | **Michael A Dorchin**          | ** ** |
| ** ** | **Title:**                                          | **VP Finance & Treasurer** | ** ** |
| ** ** | ** **                                          | ** **                     | ** ** |
| ** ** | **Date:**                                           | **9/29, 2006**                 | ** ** |
|            |                                                     |                                |  |  |

 

5

----

**EXHIBITA**

**FLOORPLAN OF THE SUITE 110 EXPANSION SPACE**

**[ATTACHED]**

A-1

----

 

----

**EXHIBITB**

**FLOORPLAN OF THE SUITE 101 EXPANSION SPACE**

**[ATTACHED]**

B-1

----

 

 

----

**EXHIBIT C**

**WORK LETTER**

**THISWORK LETTER**is attached as Exhibit C to the SecondAmendment to Office Lease between **EOSACQUISITION I, LLC,**a Delaware limited liability company, asLandlord, and **ESCHELON TELECOM, INC.,**aDelaware corporation, as Tenant, and constitutes the further agreement betweenLandlord and Tenant as follows:

(a)           SecondExpansion Improvements.

                (i)            Landlord agrees to furnish orperform, at Landlord’s sole cost and expense, those items of construction andthose improvements to the Suite 110 Expansion Space described and depicted onthe plans attached as Schedule 1 to this Exhibit C (the “Suite110 Expansion Improvements”).

                (ii)           Landlord, at Tenant’s sole cost andexpense, agrees to furnish or perform those items of construction and those improvementsto the Suite 101 Expansion Space (the “Suite 101 Expansion Improvements”)specified in the Final Plans to be agreed to by Landlord and Tenant as setforth in Paragraph (b) below; provided, however, Landlord shall pay forthe cost of such Suite 101 Expansion Improvements up to the extent of SecondExpansion Allowance as set forth in Paragraph (e) below.

                (iii)          The Suite 110 Expansion Improvementsand the Suite 101 Expansion Improvements are hereinafter sometimes referredcollectively as the “Second Expansion Improvements”.

(b)           Space Planner.  Landlord has retained a space planner (the “SpacePlanner”) to prepare certain plans, drawings and specifications (the “TemporaryPlans”) for the construction of Suite 101 Expansion Improvements to beinstalled in the Suite 101 Expansion Space by a general contractor selected byLandlord pursuant to this Work Letter. Tenant shall deliver to Space Plannerwithin ten (10) days after the execution of this Second Amendment all necessaryinformation required by the Space Planner to complete the Temporary Plans.Tenant shall have five (5) business days after its receipt of the proposedTemporary Plans to review the same and notify Landlord in writing of anycomments or required changes, or to otherwise give its approval or disapprovalof such proposed Temporary Plans. If Tenant fails to give written comments toor approve the Temporary Plans within such five (5) business day period, thenTenant shall be deemed to have approved the Temporary Plans as submitted.Landlord shall have five (5) business days following its receipt of Tenant’scomments and objections to redraw the proposed Temporary Plans in compliancewith Tenant’s request and to resubmit the same for Tenant’s final review andapproval or comment within five (5) business days of Tenant’s receipt of suchrevised plans. Such process shall be repeated twice and if at such time finalapproval by Tenant of the proposed Temporary Plans has not been obtained, thenLandlord shall complete such Temporary Plans, at Tenant’s sole cost andexpense, and it shall be deemed that Tenant has approved the Temporary Plans.Once Tenant has approved or has been deemed to have approved the TemporaryPlans, then the approved (or deemed approved) Temporary Plans shall

C-1

----

be thereafter known asthe “Final Plans”. The Final Plans shall include the complete and final layout,plans and specifications for the Suite 101 Expansion Space showing all doors,light fixtures, electrical outlets, telephone outlets, wall coverings, plumbingimprovements (if any), data systems wiring, floor coverings, wall coverings,painting, any other improvements to the Suite 101 Expansion Space beyond theshell and core improvements provided by Landlord and any demolition of existingimprovements in the Suite 101 Expansion Space. The improvements shown in theFinal Plans shall (i) utilize Landlord’s building standard materials andmethods of construction, (ii) be compatible with the shell and coreimprovements and the design, construction and equipment of the Suite 101Expansion Space, and (iii) comply with all applicable laws, rules, regulations,codes and ordinances.

(c)           Bids.  As soon as practicable following the approvalof the Final Plans, Landlord shall (i) obtain a written non-binding itemizedestimate of the costs of all Suite 101 Expansion Improvements shown in theFinal Plans as prepared by a general contractor selected by Landlord, and (ii)if required by applicable law, codes or ordinances, submit the Final Plans tothe appropriate governmental agency for the issuance of a building permit orother required governmental approvals prerequisite to commencement ofconstruction of such Suite 101 Expansion Improvements (“Permits”).Tenant acknowledges that any cost estimates are prepared by the generalcontractor and Landlord shall not be liable to Tenant for any inaccuracy in anysuch estimate. Within five (5) business days after receipt of the writtennon-binding cost estimate prepared by the general contractor, Tenant shalleither (A) give its written approval thereof and authorization to proceed withconstruction or (B) immediately request the Space Planner to modify or revisethe Plans in any manner desired by Tenant to decrease the cost of the Suite 101Expansion Improvements. If Tenant is silent during such five (5) business dayperiod, then Tenant shall be deemed to have approved such non-binding costestimate as set forth in Clause (A) above. If the Final Plans are revisedpursuant to Clause (B) above, then Landlord shall request that the generalcontractor provide a revised cost estimate to Tenant based upon the revisionsto the Final Plans. Such modifications and revisions shall be subject toLandlord’s reasonable approval and shall be in accordance with the standardsset forth in Paragraph (b) of this Work Letter. Within ten (10) businessdays after receipt of the general contractor’s original written cost estimateand the description, if any, of any Tenant Delay, Tenant shall give its finalapproval of the Final Plans to Landlord which shall constitute authorization tocommence the construction of the Suite 101 Expansion Improvements in accordancewith the Final Plans, as modified or revised. Tenant shall signify its finalapproval by signing a copy of each sheet or page of the Final Plans anddelivering such signed copy to Landlord.

(d)           Construction.  Landlord shall commence construction of theSuite 101 Expansion Improvements within ten (10) days following the later of(i) the approval of the Final Plans, or (ii) Landlord’s receipt of anynecessary Permits. Landlord shall diligently pursue completion of constructionof the Suite 101 Expansion Improvements and use its commercially reasonableefforts to complete construction of the Suite 101 Expansion Improvements assoon as reasonably practicable. Notwithstanding anything in this SecondAmendment or in this Work Letter to the contrary, Second Expansion Allowance,as specified in Paragraph 6 of this Second Amendment, shall be used onlyfor the construction of the Suite 101 Expansion Improvements, and if constructionof the Suite 101 Expansion Improvements is not completed within three (3)months following the Effective Date of this Second Amendment (“ConstructionTermination Date”), then Landlord’s obligation to provide the SecondExpansion Allowance, as specified in

C-2

----

Paragraph 6of this Second Amendment, shall terminate and become null and void, and Tenantshall be deemed to have waived its rights in and to said Second ExpansionAllowance.

(e)           Second Expansion Allowance.  Subject to the terms and provisions of thisWork Letter, Landlord shall pay the cost of the Suite 101 ExpansionImprovements (“Work”) up to the amount of the Second ExpansionAllowance. If the amount of the lowest qualified bid to perform the Workexceeds the Second Expansion Allowance, Tenant shall bear the cost of suchexcess and shall pay the estimated cost of such excess to Landlord prior tocommencement of construction of such Suite 101 Expansion Improvements and afinal adjusting payment based upon the actual costs of the Suite 101 ExpansionImprovements shall be made when the Second Expansion Improvements arecompleted. If the cost of the Work is less than such amount, then Tenant shallnot receive any credit whatsoever for the difference between the actual cost ofthe Work and Second Expansion Allowance. All remaining amounts due to Landlordshall be paid upon the earlier of Substantial Completion of the Suite 101Expansion Improvements or presentation of a written statement of the sums due,which statement may be an estimate of the cost of any component of the Work.The cost of the permits, working drawings, hard construction costs, mechanicaland electrical planning, fees, permits, general contract overhead, and acoordination fee payable to Landlord equal to five percent (5%) of the actualcosts of construction and such costs or permits, fees, planning and contractoroverhead shall be payable out of the Second Expansion Allowance and shall beincluded in the cost of the Work. The cost of the Work shall not include anyother fees payable to Landlord.

(f)            Change Order.  If Tenant shall desire any changes to theFinal Plans, Tenant shall so advise Landlord in writing and Landlord shalldetermine whether such changes can be made in a reasonable and feasible manner.Any and all costs of reviewing any requested changes, and any and all costs ofmaking any changes to the Suite 101 Expansion Improvements which Tenant mayrequest and which Landlord may agree to shall be at Tenant’s sole cost andexpense and shall be paid to Landlord upon demand and before execution of thechange order. In no event shall Landlord be obligated to perform any Suite 101Expansion Improvements which would extend the construction period past theConstruction Termination Date, unless such extension was mutually agreed to inwriting by Landlord and Tenant prior to the commencement of said construction.If Landlord approves Tenant’s requested change, addition, or alteration, theSpace Planner, at Tenant’s sole cost and expense, shall complete all workingdrawings necessary to show the change, addition or alteration being requestedby Tenant.

(g)           Substantial Completion.  “Substantial Completion” ofconstruction of the Second Expansion Improvements shall be defined as the dateupon which the Space Planner or other consultant engaged by Landlord determinesthat the Second Expansion Improvements have been substantially completed exceptfor Punch List items (defined below), unless the completion of suchimprovements was delayed due to any Tenant Delay (defined below), in which casethe date of Substantial Completion shall be the date such improvements wouldhave been completed, but for the Tenant Delays. The term “Punch List”items shall mean items that constitute minor defects or adjustments which canbe completed after occupancy without causing any material interference withTenant’s use of the Second Expansion Premises. After the completion of theSecond Expansion Improvements, Tenant shall, upon demand, execute and deliverto Landlord a letter of acceptance of improvements performed on the SecondExpansion Premises. The term “Tenant Delay” shall include, withoutlimitation, any delay in the completion of construction of

C-3

----

Second ExpansionImprovements resulting from (i) Tenant’s failure to comply with the provisionsof this Work Letter, (ii) any additional time as reasonably determined byLandlord required for ordering, receiving, fabricating and/or installing itemsor materials or other components of the construction of Second ExpansionImprovements, including, without limitation, mill work, (iii) delay in workcaused by submission by Tenant of a request for any change order (definedbelow) following Tenant’s approval of the Final Plans, or for theimplementation of any change order, or (iv) any delay by Tenant in timelysubmitting comments or approvals to the Temporary Plans or Final Plans. Thefailure of Tenant to take possession of or to occupy the Second ExpansionPremises (or any portion thereof) shall not serve to relieve Tenant ofobligations arising on the Second Expansion Commencement Date or delay thepayment of rent or other sums payable by Tenant under and as set forth in theLease.

C-4

----

**SCHEDULE 1 TO EXHIBIT “C”**

**DESCRIPTION OF SUITE 110 EXPANSION IMPROVEMENTS**

**[ATTACHED]**

C-1

----

----

| **BROKERAGE  SERVICES** Office Buildings

 

 

 

 

 

July 21, 2006 | **CBRE**  CB RICHARD ELLIS

CB Richard Ellis  2755 East Cottonwood Parkway  Suite 100  Salt Lake City, UT 84121  T 801 947 3925  F 801 947 3954  scott.wilmarth@cbre.com

 

**Scott  Wilmarth**Senior Vice President  Office Buildings/Corporate  Services |
|-------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Mr. Phil Sparks**Eschelon Telecom, Inc.**7007 SW Cardinal Lane, Suite 135Portland, OR 97224

**RE:         LEASE PROPOSAL FOR ESCHELON TELECOM ATTHE PARKSIDE TOWER**

Dear Phil:

On behalf of the Parksideoffice building, we would like to thank you for your patience over the last fewmonths as we have worked through the sale of the building. Eschelon Telecom isa valued tenant of the Parkside Tower and we are excited about the prospect ofexpanding their presence in the building.
| **Landlord:**          | Parkside Salt Lake Corporation                                                                                                                                                                                                                                                                                              |
|------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **             |                                                                                                                                                                                                                                                                                                                        |
| **Tenant:**            | Eschelon Telecom, Inc.                                                                                                                                                                                                                                                                                                      |
| ** **             |                                                                                                                                                                                                                                                                                                                        |
| **Proposed Premises:** | Eschelon Telecom currently occupies Suite 110 (1,150  RSF) on the first floor. This suite will be increased in size by  approximately 1,000 RSF. The new total will be 2,150 RSF.   This proposal addresses Eschelon Telecom lease of the remaining balance of  the first floor, which consists of approximately 2,400 RSF. |
| ** **             |                                                                                                                                                                                                                                                                                                                        |
| **Term:**              | Five (5) years and eleven (11) months.                                                                                                                                                                                                                                                                                      |
| ** **             |                                                                                                                                                                                                                                                                                                                        |
| **Commencement:**      | October 1, 2006 or upon substantial completion of  Tenant Improvements. Fidelity Investments currently leases the space through  8/31/06.                                                                                                                                                                                   |
| ** **             |                                                                                                                                                                                                                                                                                                                        |
| **Base Rent:**         | Suite 110; $12.88 per rentable square foot, Full  Service. The lease rate will increase annually by 3% on the anniversary of the  Master Lease which is August 31st. 

 

Suite 101; $23.00 per rentable square foot, Full  Service. The lease rate will increase 3% annually.                                         |
| ** **             |                                                                                                                                                                                                                                                                                                                        |
| **Tenant Improvement** | ** **                                                                                                                                                                                                                                                                                                                  |
| **Allowance:**         | Per the terms of the Master Lease, the Landlord  agrees to deliver the expansion of Suite 110 in the same condition as the  original premises.                                                                                                                                                                              |

 

----

Lease Proposal July 21, 2006
|                        | For Suite 101, the Landlord agrees to provide a  Tenant Improvement Allowance equal to $20.00/USF ($25 x 1,961 = $49,025.00).                                |
|------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Cancellation of        |                                                                                                                                                         |
| Termination Right:     | Tenant agrees to cancel any termination right as  outlined in existing master lease.                                                                         |
|                   |                                                                                                                                                         |
| **Access:**            | Shall be 24 hours / 7 days.                                                                                                                                  |
| ** **             |                                                                                                                                                         |
| **Parking:**           | The Tenant shall have the right to increase their  parking allocation by up to six (6) unreserved parking stalls at the then  current rate for the building. |
| ** **             |                                                                                                                                                         |
| **A.D.A. Compliance:** | All tenant, core and shell improvements shall be in  full compliance with the American Disabilities Act and the responsibility of  the Landlord.             |
| ** **             |                                                                                                                                                         |
| **Representation:**    | CB Richard Ellis represents the Landlord in this  transaction.                                                                                               |

If this proposal is ofinterest to you, we are prepared to continue provide professional spaceplanning and interior design services to assess your physical needs, and helpyou understand how the building can accommodate your requirements.

**Thisletter/proposal is intended solely as a preliminary expression of generalintentions and is to be used for discussion purposes only. The parties intendthat neither shall have any contractual obligations to the other with respectto the matters referred herein unless and until a definitive agreement has beenfully executed and delivered by the parties. The parties agree that thisletter/proposal is not intended to create any agreement or obligation by eitherparty to negotiate a definitive lease/purchase and sale agreement and imposesno duty whatsoever on either party to continue negotiations, including withoutlimitation any obligation to negotiate in good faith or in anyway other than atarm’s length. Prior to delivery of a definitive executed agreement, and withoutany liability to the other party, either party may (1) propose different termsfrom those summarized herein, (2) enter into negotiations with other partiesand/or (3) unilaterally terminate all negotiations with the other party hereto.**
| Sincerely,              |   |
|-------------------------|--------|
|                    |   |
|  CB RICHARD  ELLIS |   |
|                    |   |
|                    |   |
| /s/ Scott Wilmarth      |   |   |
| Scott Wilmarth          |   |
|                         |        |  |

 
| Cc:    | David Cook   |
|--------|--------------|
|   | David Kray   |
|   | Peter Mette  |
|   | Douglas Rush |
|   | Aaron Jones  |

 

----

Lease Proposal July 21, 2006
| ACCEPTED THIS 15th DAY OF August, 2006. |                       |   |
|----------------------------------------------|----------------------------|--------|
|                                         |                       |   |
| For:                                         | Eschelon Telecom, Inc.     |   |   |   |
|                                         | TENANT                     |   |   |   |
|                                         |                       |   |   |
| By:                                          | /s/ Michael A. Dorchin     |   |   |   |
|                                         | Michael A. Dorchin         |   |   |   |
|                                         |                       |   |   |   |
| Its:                                         | VP Finance & Treasurer |   |   |   |

 

----