exv10w1



 



Exhibit-10.1



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.




OFFICE SUBLEASE




by and between




Apex 7720 North Dobson, L.L.C.,

an Arizona limited liability company




“Landlord”




and




Medicis Pharmaceutical Corporation,

a Delaware corporation




“Tenant”




July 26, 2006




Salt River Pima-Maricopa Indian Community




Maricopa County, Arizona














 







CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.




TABLE OF CONTENTS




	 	 	 	Page
	1. DRAWINGS, SPECIFICATIONS, APPROVALS AND CONSTRUCTION: CORE AND SHELL OF
PREMISES AND PHASE I IMPROVEMENTS
	 	 	1	 
	 
	 	 	 	 
	2. DRAWINGS, SPECIFICATIONS, APPROVALS AND CONSTRUCTION: TENANT IMPROVEMENTS
	 	 	2	 
	 
	 	 	 	 
	3. POSSESSION
	 	 	10	 
	 
	 	 	 	 
	4. DEFINITIONS AS USED IN THIS LEASE
	 	 	11	 
	 
	 	 	 	 
	5. BASE RENT
	 	 	14	 
	 
	 	 	 	 
	6. ADDITIONAL RENT
	 	 	14	 
	 
	 	 	 	 
	7. RENT ADJUSTMENT PAYMENT
	 	 	15	 
	 
	 	 	 	 
	8. HOLDING OVER
	 	 	16	 
	 
	 	 	 	 
	9. BUILDING SERVICES
	 	 	16	 
	 
	 	 	 	 
	10. CONDITION OF THE PREMISES
	 	 	18	 
	 
	 	 	 	 
	11. USES PROHIBITED
	 	 	19	 
	 
	 	 	 	 
	12. COMPLIANCE WITH LAWS
	 	 	20	 
	 
	 	 	 	 
	13. ALTERATIONS AND REPAIRS
	 	 	20	 
	 
	 	 	 	 
	14. ABANDONMENT
	 	 	23	 
	 
	 	 	 	 
	15. ASSIGNMENT AND SUBLETTING
	 	 	23	 
	 
	 	 	 	 
	16. SIGNS
	 	 	24	 
	 
	 	 	 	 
	17. DAMAGE TO PROPERTY — INJURY TO PERSONS
	 	 	25	 
	 
	 	 	 	 
	18. DAMAGE OR DESTRUCTION
	 	 	26	 
	 
	 	 	 	 
	19. ENTRY BY LANDLORD
	 	 	26	 
	 
	 	 	 	 
	20. INTENTIONALLY OMITTED
	 	 	27	 
	 
	 	 	 	 
	21. DEFAULT
	 	 	27	 
	 
	 	 	 	 
	22. RULES AND REGULATIONS
	 	 	29	 
	 
	 	 	 	 
	23. NON REAL ESTATE TAXES
	 	 	29	 
	 
	 	 	 	 
	24. LANDLORD’S FINANCIAL ARRANGEMENTS
	 	 	29	 
	 
	 	 	 	 
	25. EMINENT DOMAIN
	 	 	29	 
	 
	 	 	 	 
	26. SUBORDINATION
	 	 	30	 
	 
	 	 	 	 
	27. WAIVER
	 	 	31	 
	 
	 	 	 	 
	28. INABILITY TO PERFORM
	 	 	31	 
	 
	 	 	 	 
	29. SUBROGATION
	 	 	31	 
	 
	 	 	 	 
	30. SALE BY LANDLORD
	 	 	31	 
	 
	 	 	 	 
	31. RIGHTS OF LANDLORD TO PERFORM
	 	 	31	 
	 
	 	 	 	 
	32. ATTORNEYS’ FEES
	 	 	32	 






i









 





CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.




TABLE OF CONTENTS

(continued)




	 	 	 	Page	 
	33. ESTOPPEL CERTIFICATE
	 	 	32	 
	 
	 	 	 	 
	34. INTENTIONALLY OMITTED
	 	 	32	 
	 
	 	 	 	 
	35. NOTICE
	 	 	32	 
	 
	 	 	 	 
	36. INTENTIONALLY OMITTED
	 	 	33	 
	 
	 	 	 	 
	37. RIGHTS RESERVED
	 	 	33	 
	 
	 	 	 	 
	38. SATELLITE DISH
	 	 	34	 
	 
	 	 	 	 
	39. REAL ESTATE BROKER
	 	 	34	 
	 
	 	 	 	 
	40. MISCELLANEOUS PROVISIONS
	 	 	34	 
	 
	 	 	 	 
	41. REPRESENTATIONS AND WARRANTIES
	 	 	38	 
	 
	 	 	 	 
	42. HAZARDOUS SUBSTANCES
	 	 	38	 
	 
	 	 	 	 
	43. SUCCESSORS AND ASSIGNS
	 	 	39	 
	 
	 	 	 	 
	44. EMPLOYMENT OPPORTUNITY
	 	 	39	 
	 
	 	 	 	 
	45. OPTION TO EXTEND
	 	 	40	 
	 
	 	 	 	 
	46. RIGHT OF FIRST OFFER REGARDING SALE OF LANDLORD’S INTEREST
	 	 	41	 






Appendix “A” – Depiction of Medicis Development




Appendix “A-1” – Site Plan of Riverwalk Project




Appendix “A-2” – Conceptual Design of Buildings Approved by Tenant




Appendix “B” – Facility Alteration Procedure




Appendix “C” – Rules and Regulations




Appendix “D” – Tenant Information Manual/Outline Performance Specifications




Appendix “D-1” – Development Schedule




Appendix “D-2” – Description of General Contractor’s Overhead and Profit Fee




Appendix “E” – Subordination Agreement




Appendix “F” – Bank of America SNDA




ii









 







CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.







OFFICE SUBLEASE




LEASE SCHEDULE




	 	 	 	 	 
	1.

	 	Date of Lease:
	 	July 26, 2006
	 
	 	 	 	 
	2.

	 	Landlord:
	 	Apex 7720 North Dobson, L.L.C., an Arizona limited liability company
	 
	 	 	 	 
	3.

	 	Tenant:
	 	Medicis Pharmaceutical Corporation, a Delaware corporation
	 
	 	 	 	 
	4.

	 	Guarantor:
	 	Not applicable
	 
	 	 	 	 
	5.

	 	Premises Address:
	 	7720 North Dobson Road, Scottsdale, Arizona 85256
	 
	 	 	 	 
	6.

	 	Riverwalk Project:
	 	The 187-acre, mixed-use, master-planned, office and retail center generally located at the
northeast corner of Indian Bend Road and the Loop 101 Freeway, within the boundaries of the Salt
River Pima-Maricopa Indian Community, in Maricopa County, Arizona, known as “Riverwalk Arizona”.
A general site plan (the “Site Plan”) of the
Riverwalk Project is attached hereto as Appendix
“A-1”. The Site Plan shows, among other things, the principal improvements that comprise or are
contemplated to comprise the Riverwalk Project. Tenant agrees that the Site Plan is tentative
and that Landlord shall have the right at all times, in its sole discretion, but subject to the
terms hereof, to change the size, location, elevation, nature and/or use of any portion or all of
the common areas of the Riverwalk Project, the Riverwalk Project or any part thereof as Landlord
may from time to time determine, including the right to change the size thereof, to erect
buildings thereon, to sell or lease part or parts thereof, to change the location and size of the
landscaping and buildings within the Riverwalk Project and to make additions to, subtractions
from or rearrangements of such buildings, provided that Landlord shall not materially change the
size, location or projected configuration of the Medicis Development without Tenant’s consent,
which consent may be withheld in Tenant’s reasonable discretion. In addition, unless consented
to in writing by Tenant, which consent shall not be unreasonably withheld, no material change
shall be made (i) in the number, visibility or location of primary entrances or exits to or from
the Medicis Development, (ii) in the configuration, location, or number of parking spaces within
the Medicis Development, (iii) in the pattern of traffic flow within the Medicis Development,
(iv) to the proposed floor plans reviewed by Tenant as of the date of this Lease, or (v) to the
architectural style and design of the Medicis Development.
	 
	 	 	 	 
	7.

	 	Medicis Development:
	 	The real property comprised of approximately 22.7 acres, inclusive of the Buildings and
Improvements, as depicted on Appendix “A” –
Depiction of Medicis Development attached hereto,
together with the easements, rights, privileges and appurtenances thereto. The Medicis
Development is contemplated to be developed in two (2) phases (respectively, “Phase I” and “Phase
II”). The Medicis Development shall be accessed via Dobson Road.
	 
	 	 	 	 
	8.

	 	Premises:
	 	The “Premises” shall mean the entire 3-story building located in Phase I, comprised of
approximately 150,000 Rentable Square Feet (as defined herein). In addition, Landlord may also
develop a second 3-story building within the Medicis Development, in accordance with the terms of
a separate agreement (the “Phase II Building”). The Phase II Building is to be a replica (in all
material respects) of the Premises. The Premises and the Phase II Building are sometimes
referred to herein collectively as the “Buildings”.
	 
	 	 	 	 
	9.

	 	Intentionally Omitted.	 	 






1









 








CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.







	 	 	 	 	 
	10.

	 	Phase I Improvements:
	 	All improvements and structures within
Phase I other than the Premises now or at
any time hereafter constructed and/or
situated within Phase I during the Term of
this Lease, and any and all replacements,
additions and substitutions thereto,
including (a) all on-site improvements,
including approximately 675 parking spaces
(inclusive of up to approximately 262
parking spaces within a parking deck),
which parking spaces include a total of 240
covered stalls located within the parking
deck and under parking canopies), parking
lot lighting, driveways, landscaping and a
water feature, site signage, onsite
grading, access roads paving, curbs,
directional signs, other governmentally
required improvements, underground
electrical lines, telephone lines, water
lines, sewer lines and other utility lines,
and screen walls, and (b) all off-site
improvements, including, but not limited
to, offsite grading, offsite road
improvements (including sidewalks, medians,
crosswalks and landscaping), offsite water
and drainage systems, offsite lighting,
offsite underground electric, telephone,
water, sewer and other utility lines and
other offsite improvements for the benefit
of Phase I.
	 
	 	 	 	 
	11.

	 	Permitted Use:
	 	General office use, provided that Tenant
shall have the right to use a portion of
the Premises, not to exceed 10,000 RSF, as
a lab/testing area (the “Lab”), upon
obtaining Landlord’s written approval, not
to be unreasonably withheld, conditioned or
delayed, and subject to the terms of
Article 42 of this Lease. The Lab shall be
used strictly for research, product
development and product testing and shall
in no event be used for post-development
production of products for sale. Tenant
shall also have the right to use portions
of the Premises for a deli/café (the
“Deli”), a workout/exercise facility (the
“Workout Facilities”), and other specialty
areas, defined below. Landlord shall, at
no cost to Landlord, reasonably cooperate
with Tenant in Tenant’s efforts to obtain
Community approval of the materials Tenant
intends to use in the operation of the Lab.
The Premises are to be used for the
Permitted Use, and for no other purpose
without the prior written consent of
Landlord.
	 
	 	 	 	 
	12.

	 	Term:
	 	*** beginning on the
Commencement Date (as defined below).
Landlord reasonably estimates that, subject
to an inability to perform (as described in
Article 28), (a) Landlord shall have
substantially completed construction of the
shell and core of Premises (the “Shell and
Core”) five hundred fifty (550) days after
Landlord’s receipt of the Approval Letter
(as defined in Section 1.C.), and (b)
Landlord shall have substantially completed
the interior tenant improvements to the
Premises that Landlord is obligated to
perform pursuant to the terms of this Lease
(the “Tenant Improvements”) three hundred
fifty (350) days after Tenant’s Architect
(as defined in Section 2.A.) obtains all
necessary permits for the Tenant
Improvements, Tenant covenanting to cause
Tenant’s Architect to use commercially
reasonable and diligent efforts to apply
for and pursue such permits promptly
following Landlord’s approval of Tenant’s
Construction Plans (as defined in Section
2.A.). For purposes hereof, the
"Commencement Date” of the Term shall be
the later of (a) the date that Landlord’s
construction obligations under this Lease
with respect to the Premises and Phase I
Improvements (which expressly excludes
Tenant’s Specialty Construction Work and
any other work contracted for directly by
Tenant), have been substantially completed
(subject only to completion of punchlist
items that do not materially interfere with
Tenant’s occupancy of the Premises and use
of the Improvements, as evidenced by the
issuance of a temporary or final
certificate of occupancy or its equivalent
from the Community, (b) all utilities and
services required by this Lease to be
installed by Landlord are available,
operational and ready for the provision of
services, and (c) the date Landlord
delivers the Premises to Tenant; provided
that Tenant shall have no obligation to
accept the Premises from Landlord during
the last three (3) weeks of the months of
December, March, June and September (each,
a “Blackout Period”). If Landlord offers
delivery of the Premises to Tenant during a
Blackout Period, Tenant shall have the
right, in its sole and absolute discretion,
to refuse acceptance until the first
available date for coordination of Tenant’s move-in following the






2









 





CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.








	 	 	 	 	 
	 

	 	 	 	expiration of the
applicable Blackout Period. If Tenant elects, in its sole and
absolute discretion, to accept the Premises during any Blackout
Period, Tenant shall be deemed to have accepted the Premises
upon the actual date of the delivery of the Premises, subject to
the further terms of this Lease. The “Expiration Date” shall be
the last day of the month which is *** after the
Commencement Date. Once Landlord receives the certificate of
occupancy or its equivalent and delivers the Premises to Tenant,
Landlord shall advise Tenant of the actual Commencement Date and
Expiration Date of the Term, and if requested by either party,
the parties shall promptly confirm such dates in writing.
	 
	 	 	 	 
	13.

	 	Jurisdiction in which
the Riverwalk Project
is located:
	 	The Salt River Pima-Maricopa Indian Community,
County of Maricopa, State of Arizona.
	 
	 	 	 	 
	14.

	 	Base Rent:	 	 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Dollars Per	 	 	 	 
	 	 	Rentable Square	 	 	 	 
	Year During Term	 	Foot Per Annum ***	 	Annual Base Rent****	 	Monthly Base Rent
	***
	 	$	*	**	 	$	*	**	 	$	*	**
	***
	 	$	*	**	 	$	*	**	 	$	*	**
	***
	 	$	*	**	 	$	*	**	 	$	*	**
	***
	 	$	*	**	 	$	*	**	 	$	*	**
	***
	 	$	*	**	 	$	*	**	 	$	*	**
	***
	 	$	*	**	 	$	*	**	 	$	*	**
	***
	 	$	*	**	 	$	*	**	 	$	*	**
	***
	 	$	*	**	 	$	*	**	 	$	*	**
	***
	 	$	*	**	 	$	*	**	 	$	*	**
	***
	 	$	*	**	 	$	*	**	 	$	*	**
	***
	 	$	*	**	 	$	*	**	 	$	*	**
	***
	 	$	*	**	 	$	*	**	 	$	*	**








 




			
	*	 	Landlord has agreed to abate all Base Rent and Operating Costs during *** of the Term.
	 
	**	 	Landlord has agreed to abate Base Rent and Operating Costs for 25,000 RSF of the Premises
during *** of the Term.
	 
	***	 	Included in the Base Rent rental rate is an annual expense stop of $*** per RSF (the
“Expense Stop”) for Operating Costs (as defined in Section 4.E.(i)). Tenant shall
pay to Landlord on a monthly basis, as Additional Rent, in addition to Base Rent, an amount
equal to Operating Costs in excess of the Expense Stop, subject to the further terms of this
Lease.
	 
	****	 	Base Rent is calculated using 150,000 RSF for the Premises. If the actual RSF of the
Premises is more or less than 150,000 RSF (to be determined by Landlord’s Architect [as
defined in Section 1.D.], subject to Tenant’s right to measure the Premises
described in Section 4.C.), the Base Rent shall be increased or decreased based on
the rental rates set forth in this Section 14 of the Lease Schedule.





	 	 	 	 	 
	15.	 	Addresses for Purpose of Notice:
	 
	 	 	 	 
	 

	 	Landlord:
	 	c/o The Alter Group, Ltd.
	 

	 	 	 	5500 West Howard Street
	 

	 	 	 	Skokie, IL 60077
	 

	 	 	 	Attention: Mr. Ronald Siegel
	 

	 	 	 	Fax No.: (847) 676-4318
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Lawrence M. Freedman
	 

	 	 	 	Ash, Anos, Freedman & Logan, L.L.C.
	 

	 	 	 	77 West Washington Street, Suite 1211






3









 








CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





	 	 	 	 	 
	 

	 	 	 	Chicago, IL 60602
	 

	 	 	 	Fax No.: (312) 346-1390
	 

	 	 	 	and

	 

	 	 	 	Samuel F. Gould
	 

	 	 	 	Alter Asset Management, L.L.C. (“Management Agent”)
	 

	 	 	 	1980 Springer Drive
	 

	 	 	 	Lombard, IL 60148
	 

	 	 	 	Fax No.: (630) 620-3606






	 	 	 	 	 
	 	 	With a copy to Landlord’s Lender, if any, of any default notice to Landlord or other notice
required to be delivered by Lender.
	 
	 	 	 	 
	 

	 	ADDRESS FOR

RENT PAYMENTS

ONLY:
	 	The Alter Group
	 

	 	 	 	P.O. Box 70259
	 

	 	 	 	Chicago, IL 60673-0259
	 
	 	 	 	 
	 

	 	Tenant:
	 	(a) Prior to Commencement Date:
	 

	 	 	 	Medicis Pharmaceutical Corporation
	 

	 	 	 	8125 North Hayden Road
	 

	 	 	 	Scottsdale, Arizona 85258-2463
	 

	 	 	 	Attention: Robert Curwin
	 

	 	 	 	Fax No.: (602) 778- 6029
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Jennings, Strouss & Salmon, PLC
	 

	 	 	 	201 E. Washington Street, 11th Floor
	 

	 	 	 	Phoenix, AZ 85004-2385
	 

	 	 	 	Attn: George Esahak-Gage, Esq.
	 

	 	 	 	Fax No.: (602) 495-2616
	 
	 	 	 	 
	 

	 	 	 	(b) Subsequent to Commencement Date:
	 

	 	 	 	Medicis Pharmaceutical Corporation
	 

	 	 	 	7720 North Dobson Road
	 

	 	 	 	Scottsdale, Arizona 85256
	 

	 	 	 	Attn: Legal Department
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Medicis Pharmaceutical Corporation
	 

	 	 	 	7720 North Dobson Road
	 

	 	 	 	Scottsdale, Arizona 85256
	 

	 	 	 	Attn: Mr. Robert Curwin
	 
	 	 	 	 
	16.

	 	Security Deposit:
	 	Not applicable.
	 
	 	 	 	 
	17.

	 	Master Lease:
	 	That certain Business Lease B-704 dated January 15, 2003, by and between certain allotted landowners
of land within the Salt River Pima-Maricopa Indian Community, as lessor, and Apex Park at Pima,
L.L.C., an Arizona limited liability company, as lessee, and all extensions, modifications,
replacements (including any “Substitute Lease”, as defined
in Article 8 of the Master Lease) and
renewals thereof. Tenant acknowledges receipt of the Master Lease and any amendment executed prior
to the Date of this Lease.
	 
	 	 	 	 
	18.

	 	Master Lessor:
	 	The Lessor under the Master Lease, or its successor-in-interest.
	 
	 	 	 	 
	19.

	 	Community:
	 	The Salt River Pima-Maricopa Indian Community, a federally recognized Indian tribe.
	 
	 	 	 	 
	20.

	 	Secretary:
	 	The Secretary of the Interior, United States Department of the Interior, or his or her authorized
representative, including the Superintendent and the Community in the exercise of its authority under its self-governance compact with the
United States of America pursuant to the Indian Self Determination and
Education Assistance Act, as amended.






4









 







CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.








	 	 	 	 	 
	21.

	 	Superintendent:
	 	The Superintendent, Field Administrator, Coordinator or other officer in charge of the Salt
River Agency, Bureau of Indian Affairs.
	 
	 	 	 	 
	22.

	 	Brokers:
	 	The Alter Group, Ltd., CB Richard Ellis, Inc., and Cushman & Wakefield of Arizona.
	 
	 	 	 	 
	23.

	 	Appendices:
	 	Appendix “A” – Depiction of Medicis Development
	 

	 	 	 	Appendix “A-1” – Site Plan of Riverwalk Project
	 

	 	 	 	Appendix “A-2” – Conceptual Design of Buildings Approved by Tenant
	 

	 	 	 	Appendix “B” – Facility Alteration Procedure
	 

	 	 	 	Appendix “C” – Rules and Regulations
	 

	 	 	 	Appendix “D” – Tenant Information Manual/Outline Performance Specifications
	 

	 	 	 	Appendix “D-1” – Development Schedule
	 

	 	 	 	Appendix “D-2” – Description of General Contractor’s Overhead and Profit Fee
	 

	 	 	 	Appendix “E” – Subordination Agreement
	 

	 	 	 	Appendix “F” – Bank of America SNDA
	 
	 	 	 	 
	24.

	 	Special Provisions:	 	 
	 
	 	 	 	 
	 

	 	A. Parking:
	 	The parking ratio for the Premises shall be 4.5 parking spaces per
1,000 RSF of the Premises (the “Parking Ratio”). Tenant shall have the exclusive right
to use a parking deck that shall include approximately 275 parking spaces. The Phase I
Improvements also shall include 124 parking canopies. All parking canopies shall have
sufficient under-canopy lighting. Additional on-grade parking canopies may be added to
the Improvements by Landlord at Tenant’s request, subject, however, to Landlord’s prior
written consent, which consent shall not be unreasonably withheld, and Community
approval, and the cost of such canopies shall be paid by Tenant within ninety (90) days
of the Commencement Date or the completion date of the canopies, whichever is later,
or, at Tenant’s sole election, shall be added to Base Rent and amortized on a level pay
debt service basis starting on the first anniversary of the Commencement Date or
completion date, as applicable, over the then-remaining Term of this Lease, with
interest at eight percent (8%) per annum. If Landlord consents to adding additional
on-grade parking canopies, the corresponding adjustment to Base Rent shall be reflected
in an amendment to this Lease to be executed by Landlord and Tenant. Except as
expressly provided herein, the cost of Tenant’s parking is included in the Base Rent,
regardless of whether the spaces are reserved or unreserved or covered or uncovered.
	 
	 	 	 	 
	 

	 	B. Option to Extend:
	 	 Two (2) option(s) to extend the Term for five (5) years each,
subject to the terms of Article 45 below. Notwithstanding any provision of
this Lease to the contrary, the Term shall not extend beyond the term of the Master
Lease and Tenant shall not be entitled to exercise an option to further extend this
Lease should the exercise of such option cause the Term to extend beyond the
termination date of the Master Lease.






NOTE: Unless otherwise expressly specified herein, all time periods in this Lease shall be
calculated using calendar days (rather than business days).



[Remainder of page intentionally left blank.]





5









 




CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.




L
E A S E




     THIS LEASE MADE and entered into as of the date set forth on the Lease Schedule as Date of
Lease, which Lease Schedule is appended to this Lease and is specifically incorporated by reference
herein, by and between Landlord and Tenant as set forth in the Lease Schedule.



W
I T N E S S E T H:




Demise




     A. Landlord does hereby lease to Tenant and Tenant hereby lets from Landlord, the Premises set
forth in the Lease Schedule, which are to be constructed within the Medicis Development within the
Riverwalk Project.



     B. Such letting and hiring is upon and subject to the terms, covenants and conditions herein
set forth and Tenant and Landlord covenant as a material part of the consideration for this Lease
to keep and perform each and all of said terms, covenants and conditions by them to be kept and
performed and that this Lease is made upon the condition of such performance.



1.




DRAWINGS, SPECIFICATIONS, APPROVALS AND CONSTRUCTION: CORE AND SHELL OF

PREMISES AND PHASE I IMPROVEMENTS




     A. Landlord shall obtain, on behalf of Tenant, all necessary third-party approvals of this
Lease and the development of the Medicis Development (except that Tenant shall obtain all permits
for the Tenant Improvements) from the Community and any other entity having jurisdiction or control
over the Riverwalk Project, including approval from the Design Review Committee (“DRC”) of the
Community for the contemplated development and operations within the Medicis Development. Landlord
and Tenant acknowledge and agree that Landlord has provided to Tenant and Tenant has approved the
size and conceptual design of the Buildings as attached hereto as Appendix “A-2”, the
depiction of the Medicis Development attached hereto as Appendix “A”, the Site Plan of the
Riverwalk Project attached hereto as Appendix “A-1”, and the Outline Performance
Specifications attached hereto as Appendix “D” (collectively, the “Conceptual Designs”).



     B. Landlord shall prepare schematic designs and drawings of the Medicis Development for
submission to the DRC (the “DRC Plans”). The DRC Plans shall include the Premises, the Phase II
Building, the pedestrian bridge that is contemplated to connect the Buildings on the second
(2nd) or (3rd) floor of the Buildings (the “Pedestrian Bridge”), landscape
plans, elevations and exterior finishes for the Medicis Development. Concurrently with Landlord’s
delivery of the DRC Plans to the DRC, Landlord shall deliver the DRC Plans to Tenant. Tenant shall
have the right to review and approve (which approval shall not be unreasonably withheld,
conditioned or delayed) the DRC Plans, provided that Tenant’s review shall be limited to a
determination that the DRC Plans are in general conformance with the Conceptual Designs. Tenant
shall have ten (10) business days after receipt of the DRC Plans to approve the DRC Plans.
Tenant’s failure to respond to Landlord within such ten (10) business day period shall be deemed
approval of the DRC Plans by Tenant. If the DRC requires material modifications to the DRC Plans,
then Tenant shall have the right to review the revised DRC Plans for general conformance with the
Conceptual Plans until the Approval Letter described in Section 1.C below is obtained.



     C. Tenant acknowledges and agrees that approval of the DRC Plans by the Community shall be
evidenced by a letter (the “Approval Letter”) to be obtained by Landlord from the DRC, Landlord
covenanting to (i) provide a copy of such letter to Tenant promptly upon Landlord’s receipt of such
letter from the DRC, and (ii) use commercially reasonable efforts to obtain the Approval Letter as
soon as reasonably possible. Landlord and Tenant acknowledge and agree that Landlord shall have no
obligation to request DRC approval of any element of the Medicis Development that is not in
compliance with Community ordinances, the Riverwalk Project sign criteria, DRC approvals for the
overall development of the Riverwalk Project and other applicable Laws. Tenant acknowledges that
the approval of the DRC set forth in the Approval Letter may be subject to certain stipulations.
If Tenant does not object to such stipulations by written notice to Landlord within ten (10)
business days after Tenant’s receipt of the Approval Letter, the stipulations set forth in the
Approval Letter shall be binding upon Tenant. Tenant acknowledges that if, after Landlord’s
receipt of the Approval Letter, Tenant shall change the Conceptual Designs and/or the DRC Plans,
Landlord may be required to re-submit revised DRC Plans to the DRC and if such resubmission is
required, the Commencement Date shall be accelerated by the number of days in the period between
the receipt by Landlord of Tenant’s request to change the Conceptual Designs and/or the DRC Plans
and the date Landlord receives the second Approval Letter, if
that request actually delays the construction of the



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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





Premises (excluding de minimus delays)
(Landlord covenanting to use commercially reasonable efforts to obtain the second Approval Letter
as soon as reasonably possible) and Tenant shall pay the actual and reasonable costs incurred by
Landlord in preparing and submitting to the DRC revised DRC Plans, including any inflationary
construction costs associated with such delay. Once Landlord has obtained permits from the
Community for the construction of the Medicis Development, Tenant shall have no further right to
change the Conceptual Designs and/or DRC Plans.



     D. Following receipt of the Approval Letter, Landlord shall engage PHArchitecture (the
“Landlord’s Architect”) to prepare the plans and specifications for the construction of the Shell
and Core and the Phase I Improvements. Such plans and specifications shall include (but are not
limited to) grading and paving plans, drainage plans, lighting plans, landscape plans, building
plans and lobby designs (excluding lobby finishes to be designed by Tenant’s Architect) and shall
be suitable (i) to obtain bids for the work described in such plans and specifications, (ii) to
obtain permits from the Community for the work described in such plans and specifications, and
(iii) for submission to the contractors performing the work described in such plans and
specifications. All plans and specifications prepared on behalf of Landlord shall be in accordance
with those certain Outline Performance Specifications dated May 11, 2006, set forth in Appendix
“D”. All plans and specifications prepared by or on behalf of Landlord for the construction of
the Shell and Core and the Phase I Improvements shall be referred to herein collectively as the
“Plans and Specifications”. The Plans and Specifications shall be submitted concurrently to (y)
the Community to obtain any necessary permits for the work described in the Plans and
Specifications and subcontractors for bids, and (z) to Tenant for confirmation that the Plans and
Specifications are in general conformance with the DRC Plans, which confirmation shall not be
unreasonably withheld, conditioned or delayed. Landlord acknowledges that Tenant has hired a
tenant representative/construction manager (JKA Realty Advisors, Mr. James Aungst @
jaungst@cox.net) to assist in Tenant’s review of the Plans and Specifications. Tenant shall
provide Landlord with notice whether the Plans and Specifications conform with the DRC Plans within
ten (10) days after the date Tenant receives the Plans and Specifications from Landlord, and once
approved, the Plans and Specifications shall thereafter be referred to as the “Approved Plans and
Specifications”.



     E. (i) The Core and Shell and Phase I Improvements shall be constructed by Landlord in
accordance with the Approved Plans and Specifications, using the Weitz Company (the “General
Contractor”). Promptly following Landlord’s receipt of the Approval Letter and permits from the
Community for the construction of the Core and Shell and the Phase I Improvements, Landlord shall
commence construction of the Core and Shell and the Phase I Improvements and shall diligently
complete construction of the Shell and Core and the Phase I Improvements pursuant to the schedule
attached hereto as Appendix “D-1”.



          (ii) Except as hereinafter set forth, Landlord shall have no obligation to perform or pay for
the construction of the Shell and Core and/or Phase I Improvements except as expressly included in
the Approved Plans and Specifications. If Tenant wishes to amend the Conceptual Designs, DRC Plans
and/or the Approved Plans and Specifications to include additional work or to modify any part of
the Conceptual Designs, DRC Plans and/or the Approved Plans and Specifications (the “Additional
Work”), Tenant shall make such request in a detailed written notice delivered to Landlord’s
Representatives (as defined in Section 2.I.). Landlord shall provide to Tenant written
cost and time estimates for the Additional Work. If Tenant shall fail to provide notice in writing
whether it approves such estimates within five (5) business days after receipt thereof, Tenant
shall be deemed to have abandoned its request for such Additional Work, and Landlord shall have no
obligation to proceed with such Additional Work. If Tenant approves in writing the estimates of
the costs of the Additional Work, Landlord agrees to perform such Additional Work at Tenant’s sole
cost and expense. All costs associated with the Additional Work shall be subject to a five percent
(5%) Landlord administrative fee. If Tenant shall not have approved the estimated cost of the
Additional Work, Tenant may submit a revised request for such Additional Work and the parties shall
repeat the foregoing procedures. Once Landlord has fully paid the Landlord’s Contribution, as
defined below, if additional charges remain unpaid for Additional Work, Tenant shall pay to
Landlord the cost of such Additional Work within ten (10) days after receipt of an invoice therefor
(which invoice may be sent by Landlord only after substantial completion of such Additional Work).
In addition, the estimated date of Landlord’s delivery of (i) the Shell and Core, and (ii) the
Tenant Improvements each shall be extended by a period equal to the additional estimated time, if
any, required to complete such Additional Work, as included in Landlord’s time estimates, and the
Commencement Date shall be accelerated by the number of days delay attributable to the Additional
Work, as reasonably determined by Landlord.




2.

DRAWINGS, SPECIFICATIONS, APPROVALS AND CONSTRUCTION:

TENANT IMPROVEMENTS




     A. Tenant has contracted directly with the architectural design firm of DMJM H&N, Inc.
(“Tenant’s Architect”), which is approved by Landlord. Tenant’s Architect first shall prepare a
space plan for the Tenant



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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





Improvements (the “Space Plan”), which Space Plan shall be submitted to
Landlord in general conformance with the time periods included in the development schedule attached
hereto as Appendix “D-1” so that the parties may timely complete their respective
construction obligations. Landlord shall, within fifteen (15) days after receipt of the Space
Plan, inform Tenant, in writing, of the required revisions or corrections thereto that are
necessary because the Space Plan is incompatible with the Approved Plans and Specifications for the
construction of the Shell and Core. Following Landlord’s approval of the Space Plan, Tenant’s
Architect shall prepare plans and specifications for the Tenant Improvements in accordance with the
approved Space Plan (“Tenant’s Construction Plans”). Tenant’s Construction Plans also shall be
prepared in conformance with the requirements of the Tenant Information Manual (attached hereto as
Appendix “D”), and shall include (i) reflected ceiling plans, (ii) dimensioned
partition and door location plans, (iii) finish plans, (iv) furniture partition layout plans, (v)
telephone and electrical plans noting any special lighting and power load requirements, (vi) HVAC
design criteria and all security and communications information, (vii) detail plans, (viii)
mechanical, plumbing and electrical and (ix) structural and engineering drawings and calculations,
if required, and shall be suitable in all respects for bidding, permitting and construction. In
no event shall Tenant’s Construction Plans include any fencing, barrier or other obstruction or
take any action that prohibits access to and/or through the Medicis Development (other than the
Premises) by other tenants or occupants of the Riverwalk Project and their agents, employees or
invitees. Landlord shall provide to Tenant an allowance (the “Plan Allowance”) for space planning
and programming services in the amount of Eleven Cents ($.11) per RSF of the Premises. (Landlord
and Tenant acknowledging and agreeing that the amount of such Plan Allowance shall be adjusted
based on the determination of the actual RSF of the Premises by Landlord’s Architect, subject to
Tenant’s right to measure the Premises included in Section 4.C. below). The Plan Allowance
shall be in addition to Landlord’s Contribution (defined in Section 2.E.(i) below). All
other fees payable with respect to Tenant’s Construction Plans shall be included in Landlord’s
Contribution. All aspects of the preparation of Tenant’s Construction Plans shall be coordinated
through Landlord so that Landlord may ensure the quality and timeliness of the delivery of Tenant’s
Construction Plans.



     B. (i) Tenant shall submit Tenant’s Construction Plans to Landlord in general conformance with
the time periods included in the development schedule attached hereto as Appendix “D-1” so
that the parties may timely complete their respective construction obligations. Landlord shall
have fifteen (15) days after receipt of Tenant’s Construction Plans to review and approve Tenant’s
Construction Plans or to provide to Tenant, in writing, required revisions or corrections thereto
(i) that are necessary to conform to the Space Plan, or (ii) if the proposed Tenant Improvements:
(a) are not consistent with the architectural character of the Premises, (b) include floor to
ceiling demountable partitions and all infrastructure associated with such installation, (c)
include indirect lighting attached to movable, furniture partitions, (d) include significant areas
of raised computer flooring and underfloor, cabling, electrical distribution and ductwork
(excluding Tenant’s proposed data center), (e) do not include the entire Premises, (f) in
Landlord’s reasonable judgment will adversely affect the structure of the Premises, the heating,
air-conditioning and ventilating system or electrical, mechanical, plumbing or other lines, systems
or base building circuitry, (g) in Landlord’s reasonable judgment will materially increase
Landlord’s costs of operating and maintaining the Premises, (h) would modify the appearance of the
Premises, (i) would adversely affect the safety of the Premises or the life-safety systems in the
Premises, or (j) would, in Landlord’s reasonable judgment, violate the terms of any applicable
zoning or building laws or ordinances or other governmental orders or requirements; provided,
however, that the foregoing are merely examples of reasons for which Landlord may request changes
and modifications to Tenant’s Construction Plans or withhold its approval thereof and shall not be
deemed exclusive of any permitted reasons for reasonably withholding consent, whether similar or
dissimilar to the foregoing examples. In the event Landlord shall not inform Tenant of such
desired revisions or corrections to Tenant’s Construction Plans within such fifteen (15) day
period, then Tenant’s Construction Plans shall be deemed approved and accepted for the purposes
hereof.



          (ii) In the event Landlord shall inform Tenant of required revisions or corrections to
Tenant’s Construction Plans in accordance with the immediately preceding paragraph, Tenant shall
revise the same and shall submit revised Tenant’s Construction Plans to Landlord for Landlord’s
approval. Landlord shall have five (5) days after receipt of such revised Tenant’s Construction
Plans to review and approve Tenant’s Construction Plans or to provide to Tenant, in writing,
required revisions or corrections thereto. Tenant shall thereafter revise the revised Tenant’s
Construction Plans until approved by Landlord. Landlord shall have, in each instance, five (5) days
after receipt of each revised set of Tenant’s Construction Plans to review and approve or comment
thereon. In the event Landlord shall not inform Tenant of such desired revisions or corrections to
any of the revised Tenant’s Construction Plans within said five (5) days, then the applicable
revised Tenant’s Construction Plans shall be deemed approved and accepted for the purposes hereof.




     C. Tenant acknowledges that Landlord does not assume any responsibility whatsoever for the
detailed design of any structure or structures, or for any violation of any applicable Laws
included in Tenant’s Construction Plans or with respect to any work performed by Tenant or Tenant’s
Engineers (as defined hereafter), agents, contractors or representatives, although Landlord and its
employees and agents shall, only as a courtesy to Tenant, but without assuming any responsibility,
advise Tenant of any known or suspected violations of Law or defects in



F-3









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





design or
structures of
which they become aware. Tenant shall not make any material change in Tenant’s Construction Plans
once the same are approved by Landlord, except as permitted in Section 2.E.(iii).



     D. (i) Landlord and Tenant acknowledge and agree that Tenant shall have the right to include
certain special features in Tenant’s Construction Plans, including, but not limited to, one (or if
permitted by applicable fire regulations, more) internal stairwells, facilities for computers, a
lounge, lunchrooms, the Deli, the Workout Facilities, a telephone equipment room, file rooms,
security cameras and related equipment, access control equipment (interior and exterior to the
Premises and the Medicis Development), a lobby water feature and the Lab. Landlord shall coordinate
with Tenant’s security consultant to integrate Tenant’s security system into the base building
systems of the Premises. Notwithstanding the foregoing, Landlord and Tenant acknowledge and agree
that (a) certain fire and life safety systems must be installed separately from Tenant’s security
system, and (b) the installation of all special features shall be subject to scheduling
limitations, as described in Section 2.G.(ii).



          (ii) Tenant shall promptly repair, at its sole cost and expense, any damage done to the
Premises and to any electrical, mechanical, HVAC, sprinkler, life safety and other operating system
serving the Premises or common areas appurtenant to the Premises that are caused by or arise out of
the installation, maintenance, operation and repair by Tenant or its contractor of Tenant’s cabling
and related telecommunications equipment. Tenant waives all liabilities, claims, damages, losses,
demands, causes of action, suits, proceedings, judgments and expenses against Landlord arising
from the following: (i) any personal injury, bodily injury, or property damage occurring in or at
the Premises in connection with the installation of and use by Tenant of Tenant’s cabling; and/or
(ii) business interruption or loss of use of the Premises suffered by Tenant in connection with the
installation of and use by Tenant of Tenant’s cabling. Tenant shall remove, at Tenant’s sole cost
and expense, (a) all cabling from the ceiling and, if legally required, other areas of the
Premises, and (b) equipment installed by or on behalf of Tenant or its assignees or sublessees from
the risers, telecommunications closets and/or the Premises by no later than the expiration or
thirty (30) days after Landlord’s earlier termination of this Lease or Tenant’s right to possession
of the Premises. All damages and injury to the risers, telecommunications closets, the Premises
caused by such removal shall be repaired by Tenant, at Tenant’s sole expense.




          (iii) To the fullest extent permitted by Law, Tenant shall, at Tenant’s sole cost and expense,
indemnify Landlord, Management Agent, the Master Lessor, the Community, the Secretary and the
United States (collectively, “Landlord Indemnitees”) for, from and against any notices, claims,
demands, obligations, injuries to any person, costs and expenses (including reasonable attorneys’
fees), liabilities, or causes of action whatsoever (collectively, “Losses”) arising out of,
claimed, charged or incurred by or against any of them from (i) any personal injury, bodily injury
or property damage whatsoever occurring in the Deli and Workout Facilities; and/or (ii) the use or
occupancy, or manner of use or occupancy, or conduct or management of the Deli and/or Workout
Facilities. Tenant’s indemnification obligations shall not apply to Losses caused by the
negligence or willful misconduct of the Landlord Indemnitees or their employees or agents. The
indemnification provided in this Section 2.D. (iii) shall survive any expiration or earlier
termination of this Lease or Tenant’s right to possession of the Premises as a result of an event
of default by Tenant.




          (iv) Tenant agrees that in connection with the installation of Tenant’s security cameras, any
necessary roof penetrations as may be permitted by Landlord shall be performed by Landlord’s
roofing contractor (at Tenant’s sole cost and expense, but at rates no greater than those the
contractor charges Landlord). Such cameras shall be installed, maintained and operated by Tenant
in compliance with all applicable Laws, the cameras and all related equipment shall be maintained
by Tenant so that the appearance of such cameras and equipment is one of good order and condition,
and any damage to the same that adversely affects the appearance of the cameras and equipment or
any damage to the Premises shall be promptly repaired, and Landlord and its employees and agents
shall have the right, upon reasonable request from time to time, to view and access the videos
obtained from such cameras during normal working hours, but only in connection with ongoing
security-related investigations. At the expiration or earlier termination of this Lease, or any
termination of Tenant’s right to possession of the Premises following an uncured default or upon
Tenant’s vacation or abandonment of the Premises, Tenant shall, at Tenant’s sole cost and expense,
remove all security cameras and related equipment installed by Tenant, repair any and all damage
caused to the Premises by such removal, and pay to Landlord, on demand, the cost and expense to
restore the Premises to its condition existing prior to the installation of such cameras and
related equipment. If Tenant fails to promptly perform its maintenance obligations hereunder or
remove such cameras and related equipment and repair such damage, upon prior reasonable notice to
Tenant, Landlord shall have the right to do so at Tenant’s sole cost and expense as Additional
Rent. In connection with the installation, operation and removal of the security cameras, Tenant
hereby expressly indemnifies, defends and holds harmless the Landlord Indemnitees for, from and
against any Losses arising
out of, claimed, charged or incurred by or against any of them in connection with Tenant’s
installation, maintenance, monitoring, failure to monitor, operation, discontinuance of operation
and/or removal of the security cameras not caused by the negligence or willful misconduct of the
Landlord Indemnitees or their employees or agents. The indemnification provided in this
Section 2.D.(iv) shall survive any expiration or earlier termination of this Lease or
Tenant’s right to possession of the Premises as a result of an event of default by Tenant. At the
time Landlord reviews Tenant’s plans for the installation of Tenant’s security equipment,


F-4









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





Landlord
shall advise Tenant in writing as to what equipment must be removed by Tenant at the expiration or
earlier termination of this Lease (Tenant to repair any damage caused by such removal). If those
portions of the security system not designated by Landlord as equipment to be removed are in
reasonably good working condition at the expiration or termination of this Lease, Tenant shall have
the option of leaving such equipment in place and conveying it to Landlord through an appropriate
bill of sale or other instrument, and Tenant shall have no further obligations to Landlord
regarding such conveyed equipment, except with respect to Losses arising from Tenant’s installation
and operation of such security equipment prior to such conveyance.




     E. (i) The Tenant Improvements shall be constructed by the General Contractor (Weitz) in
accordance with the fee structure described in Appendix “D-2”. Notwithstanding any
provision of this Lease to the contrary, Landlord’s contribution to the cost of the Tenant
Improvements shall in no event exceed *** Dollars ($***) per RSF of the Premises, which equals ***
Dollars ($***), based on 150,000 RSF in the Premises (which amount shall be adjusted based on the
determination of the actual RSF of the Premises by Landlord’s Architect, subject to Tenant’s right
to measure the Premises included in Section 4.C.) (together with allowances for lobby,
landscaping and other improvements as included in Appendix “D”) (“Landlord’s
Contribution”). Notwithstanding any provision of this Lease to the contrary, if Tenant’s
Construction Plans provide for the improvement of less than all of the Premises (regardless of
whether Tenant plans to improve the remainder of the Premises in the future), Landlord’s
Contribution shall be an amount equal to *** Dollars ($***) multiplied by the number of RSF of the
Premises to be improved in accordance with Tenant’s Construction Plans (which amount shall be
adjusted based on the determination made by Landlord’s Architect of the actual RSF of the Premises
improved in accordance with Tenant’s Construction Plans, subject to Tenant’s right to measure the
Premises included in Section 4.C.). Further notwithstanding any provision of this Lease to
the contrary, the first *** Dollars ($***) of the *** Dollars ($***) used to calculate Landlord’s
Contribution shall be applied to the hard costs, as more particularly described in Section
2.E.(v) below. The remaining *** Dollars ($***) per RSF may be allocated towards soft costs
and/or “long lead” hard cost items that are pre-approved by Landlord, and payment by Landlord for
such items shall only occur when delivery to the job site is complete. With respect to any such
long lead hard cost items for which payment must be made before delivery of such item to the
Premises, Tenant shall make such payment and if funds are available from Landlord’s Contribution at
the completion of the Tenant Improvements, Landlord shall reimburse Tenant for such payment from
Landlord’s Contribution. Landlord’s Contribution shall be applicable to architectural and
engineering fees, all fees associated with plan review, permitting and development fees, and hard
construction costs (except as specifically provided in this Lease), and all materials or utilities
supplied by Landlord, the General Contractor or their agents in connection with the construction of
the Tenant Improvements.



          (ii) Landlord shall provide to Tenant estimates of the costs of constructing the Premises and
Phase I Improvements provided to Landlord by the General Contractor (the “Contractor’s Proposal”)
for Tenant’s prior written approval, such approval not to be unreasonably withheld, conditioned or
delayed. Subject to Tenant’s prior written approval, such approval not to be unreasonably
withheld, conditioned or delayed, Landlord shall have the right to convert the contract with the
General Contractor into a so-called “lump sum” contract once a final price has been determined and
approved by Tenant for the construction of the Premises and Phase I Improvements.




          (iii) Except as hereinafter set forth, Landlord shall have no obligation to perform or pay for
Tenant Improvements except as expressly included in Tenant’s Construction Plans. If Tenant wishes
to amend Tenant’s Construction Plans to include additional Tenant Improvement work or to modify any
part of Tenant’s Construction Plans (“Additional Tenant Improvement Work”), Tenant shall make such
request in a detailed written notice delivered to Landlord’s Representatives. Landlord shall
provide to Tenant written cost and time estimates for such Additional Tenant Improvement Work. If
Tenant shall fail to provide notice in writing of whether it approves Landlord’s estimates within
five (5) business days after receipt thereof, Tenant shall be deemed to have abandoned its request
for such Additional Tenant Improvement Work and Landlord shall have no obligation to proceed with
such Additional Tenant Improvement Work. If Tenant approves in writing the estimates of the costs
of the Additional Tenant Improvement Work within such five (5) business day period, Tenant shall
have Tenant’s Architect prepare plans and obtain permits, if required, for such Additional Tenant
Improvement Work and Landlord agrees to perform such Additional Tenant Improvement Work at Tenant’s
sole cost and expense. All costs associated with the Additional Tenant Improvement Work to be
performed by Landlord shall be subject to a five percent (5%) Landlord administrative fee. If
Tenant provides notice that it does not approve the estimates of the cost of the Additional Tenant
Improvement Work, Tenant may submit a revised request for such Additional Tenant Improvement Work
and the parties shall repeat the foregoing procedures. Tenant shall pay to Landlord the cost of
such Additional Tenant
Improvement Work within ten (10) days after receipt of an invoice therefor, which invoice may
be sent by Landlord only after substantial completion of such Additional Tenant Improvement Work.
In addition, the estimated date of Landlord’s delivery of the Tenant Improvements shall be extended
by a period equal to the estimated time to complete such Additional Tenant Improvement Work, as
included in the approved estimates, and the Commencement Date shall be accelerated by the number of
days delay attributable to the Additional Tenant Improvement Work, as reasonably determined by
Landlord.




F-5









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.






          (iv) Landlord shall obtain competitive bids for all subcontracts for construction of the
Tenant Improvements in excess of Twenty-Five Thousand Dollars ($25,000.00) from a list of
subcontractors submitted to Tenant for approval, such approval not to be unreasonably withheld,
conditioned or delayed. Once all such bids have been received by Landlord, Landlord shall submit
to Tenant for approval (such approval not to be unreasonably withheld, conditioned or delayed) a
schedule of subcontractor bids approved by Landlord. Tenant shall advise whether it approves such
schedule within five (5) business days after submission of same to Tenant by Landlord. Tenant’s
failure to provide that notice to Landlord within such period shall be deemed approval by Tenant of
such schedule.




          (v) Tenant shall be solely responsible for any cost of construction of the Tenant Improvements
in excess of Landlord’s Contribution (“Tenant’s Contribution”). Tenant’s Contribution shall be
paid by Tenant to Landlord in installments, within fifteen (15) days after Landlord’s written
request therefor (which requests shall not be made more often than monthly), following funding and
payment of Landlord’s Contribution made by Landlord for the costs of constructing the Tenant
Improvement Work that exceeds Landlord’s Contribution for the Premises. Such installments shall
be in an amount equal to the cost of draw payments made by Landlord. Hard costs shall not include
the cost of procurement and/or installation of furniture, furniture and/or demountable partitions,
indirect lighting mounted to furniture and/or demountable partitions or significant areas of raised
computer flooring (excluding, however, Tenant’s proposed data center), including all infrastructure
associated with such installations.




     F. Provided that the contract with the General Contractor shall not have been converted to a
lump-sum contract pursuant to Section 2.E.(ii), Tenant and its advisors, at Tenant’s
expense, shall have the one-time right upon fifteen (15) days’ prior written notice to Landlord
(the “Review Notice”), to be given only within sixty (60) days after the date the Premises shall be
deemed to be ready for Tenant’s occupancy (as described in Section 3.C.), to review
Landlord’s books and records relating to the cost of the Tenant Improvements, provided that at the
time Tenant delivers the Review Notice Tenant shall not be default of any of the terms, covenants
or provisions of this Lease. Tenant shall have ninety (90) days after delivery of the Review
Notice to complete Tenant’s review of Landlord’s books and records concerning the cost of the
Tenant Improvements at Landlord’s main accounting office. The nature and content of such review
shall be strictly confidential. Tenant, for itself and on behalf of its employees and agents,
shall not disclose the information obtained from the review to any other person or entity
including, without limitation, any other tenant in the Riverwalk Project or any employee or agent
of any such tenant in the Riverwalk Project, provided, however, Tenant shall be permitted to
divulge the information obtained from the review in connection with any administrative or judicial
proceedings in which Tenant is involved. If Tenant shall not timely send a Review Notice, Tenant
shall be deemed to have waived its right to review Landlord’s books and records relating to the
cost of the Tenant Improvements.



     G. (i) In Tenant’s Construction Plans, Tenant may designate certain areas within the Premises
as “specialty areas”, such as the data center, Lab, Deli and meeting or training rooms with special
electronic or communication equipment (the “Meeting Rooms”), and the Workout Facilities, Landlord
and Tenant acknowledging and agreeing that an area shall not be designated as a “specialty area” if
such area is integrated into and/or adversely affects base building systems. Tenant shall have the
right to specify the subcontractors and the related designers and mechanical engineers to perform
work directly contracted for by Tenant or Tenant’s agent to be used for specialty areas (“Tenant’s
Specialty Construction Work”), subject to Landlord’s prior written approval of any such designated
subcontractor, designer or mechanical engineers, such approval not to be unreasonably withheld,
conditioned or delayed. Landlord shall notify Tenant of Landlord’s approval or disapproval within
five (5) business days following submission by Tenant to Landlord of the name of a proposed
subcontractor, designer or mechanical engineer. It shall be reasonable for Landlord to withhold
its consent to any subcontractor, designer or mechanical engineer that (a) is not licensed, (b) is
not of good reputation, (c) does not have a demonstrated capability to perform quality workmanship,
(d) does not have the financial capacity to complete the applicable work, (e) is not experienced in
performing work of the type contemplated in similar class office buildings, (f) is not familiar
with mid-rise construction to the extent relevant, (g) is not capable of working in harmony with
other contractors and professionals in the Premises, (h) does not have good labor and minority
relations, and/or (i) is not bondable (even though bonds may not be required). Tenant has
contracted directly with Mechanical Designs, Inc. and McGrew Engineering, Inc. with respect to
mechanical (HVAC and plumbing) and electrical, which firms are approved by Landlord. If, in
Landlord’s reasonable opinion, any work contracted for directly by Tenant will affect base building
systems or the
structural elements of the Premises, Landlord may engage other engineers to review such
proposed work, and the reasonable out-of-pocket cost of such review (“Review Costs”) shall also be
borne by Tenant. Subject to the foregoing, the mechanical, plumbing and electrical subcontractors
selected by Landlord (which subcontractors have been approved by Tenant) shall perform both
construction of the Shell and Core and the Tenant Improvements. All Tenant’s Specialty
Construction Work and all other work performed in the Premises pursuant to contracts entered into
directly by Tenant, shall be performed pursuant to the Tenant Information Manual attached hereto as
Appendix “D” and the Approved Plans and Specifications. Tenant shall deliver to Landlord
copies of all contracts proposed to be executed by Tenant for all



F-6









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





work in the Premises contracted
for directly by Tenant, which contracts shall require the applicable contractor to comply with the
requirements of the Tenant Information Manual. Tenant’s Architect shall obtain all required
building permits and otherwise comply with all laws and governmental rules and regulations with
respect to or in any manner applicable to all work in the Premises contracted for directly by
Tenant.



          (ii) Tenant shall coordinate, and cause its contractors, representatives and agents to
coordinate with Landlord, the General Contractor and their designated agents regarding the
performance of all work in the Premises contracted for directly by Tenant, including the use of the
Premises loading bay, the delivery of materials and labor for the Premises and the elimination of
rubbish and construction debris. Each party shall cause its respective architects, contractors and
subcontractors to furnish to the other party and its architects, contractors, subcontractors and
other agents from time to time such information as may be reasonable in connection with the
construction of the Premises and Phase I Improvements. Tenant shall require all contractors and
subcontractors performing work on behalf of Tenant to provide protection against damage to the
Premises and work of others to an extent that is satisfactory to Landlord in the reasonable
exercise of its discretion. In any event, however, if such damage shall occur, and shall have been
caused directly by Tenant or its contractors or any of their respective subcontractors, agents,
employees or invitees, Tenant shall promptly restore and repair, or cause its contractor to
promptly restore and repair, such damage. If Tenant, its contractors or their agents have not
commenced the cure of such damage within fifteen (15) days after written notice from Landlord of
the damage, Landlord or the General Contractor may, at Landlord’s option, repair any such damage at
Tenant’s cost and Tenant shall reimburse Landlord within fifteen (15) days of receipt by Tenant of
an itemized invoice with supporting backup documentation, and such sums shall bear interest from
the date fifteen (15) days after the invoice to the date of reimbursement at the rate of eight
percent (8%) per annum computed on the actual number of days elapsed during the period for which
interest is being charged.




          (iii) Landlord shall make available to Tenant for the performance of Tenant’s Specialty
Construction Work, at no charge, electric power (Tenant acknowledging that the electric power
available at the Premises prior to the delivery of the Premises to Tenant shall be temporary and
limited to amounts reasonably anticipated by the General Contractor to be adequate for the
construction of the Premises and that Landlord and/or the General Contractor shall have no
obligation to provide additional electric power) and dumpster space.




          (iv) The Commencement Date shall not be extended because of (A) Tenant’s failure to comply
with any monetary or construction-related deadline, (B) Tenant’s request for revisions to the
Conceptual Plans and/or DRC Plans, (C) Tenant’s request for Additional Work or Additional Tenant
Improvement Work, (D) Tenant’s request for materials, finishes, or installations as part of the
Approved Plans and Specifications that are so called long-lead items, provided the same are
identified by Landlord at the time of Landlord’s approval of Tenant’s Construction Plans (Landlord
covenanting to use commercially reasonable efforts to identify all such long-lead items, but if an
item requested by Tenant is not so identified, but causes a delay, the Commencement Date shall not
be extended), (E) postponement of any work at Tenant’s request, or (F) delays in Tenant’s Specialty
Construction Work or any other work contracted for directly by Tenant. Landlord and Tenant each
agrees to use good faith reasonable efforts to counter the effect of any delay caused by the other
party or by other events or conditions; however, neither party shall be obligated to expend any
additional amounts in such efforts (such as by employing overtime labor) unless the delaying party
agrees in advance to bear any incremental cost associated with such efforts (whether or not such
efforts are ultimately successful).




          (v) Tenant shall advise Landlord of the cost of Tenant’s Specialty Construction Work.
Landlord shall make partial payments of Landlord’s Contribution with respect to Tenant’s Specialty
Construction Work within twenty-five (25) days after receipt by Landlord of written request
therefor from Tenant, not more often than monthly, which requests each shall include (a) such
contractors’ affidavits, sworn statements, partial and final waivers of lien, architect’s
certificates and any other documentation or Tenant or contractor undertakings that may be
reasonably requested by the title insurance company insuring the Premises (the “Title Company”) for
the purpose of insuring over such mechanics’ lien claims or rights thereto, (b) approval of
Landlord’s lender, (c) certification from the General Contractor and from Tenant’s Architect that
the portion of the work for which payment is being sought has been completed in accordance with the
Approved Plans and Specifications, and (d) Tenant’s written acceptance of the applicable work.
Following receipt of the requested payment, Tenant shall be estopped from making any claim
against Landlord with respect to the applicable work. Notwithstanding any provision of this
Section 2.G.(iv) to the contrary, no portion of Landlord’s Contribution shall be paid
unless and until the Title Company shall insure over any and all mechanics’ lien claims, or rights
to assert same, as a result of Tenant’s Specialty Construction Work applicable to such requested
payment, by customary pending disbursement endorsements and interim mechanics’ lien certifications.




     H. (i) The Approved Plans shall include plans for the installation of one or more back-up
generators (collectively, the “Generators”), with an associated above-ground fuel storage tank, on
a site adjacent to the Premises, as shown on Appendix “A” or as otherwise mutually approved
by Landlord and Tenant (the “Generator



F-7









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





Site”). Landlord’s Contribution shall be applicable to the
cost of the Generators and improvement of the Generator Site, provided, however, that (in
accordance with Section 2.E.(i) above) because the Generators are a long lead item, if
payment is required for the Generators prior to delivery of the Generators to the Premises, Tenant
shall make such payment for the Generators, and if funds are available from Landlord’s Contribution
at the completion of the Tenant Improvements, Landlord shall reimburse Tenant for such payment from
Landlord’s Contribution. The Generators shall not constitute the Premises’ emergency power system
without Tenant’s prior written consent. At Landlord’s request, Tenant shall provide to Landlord
copies of any permits, inspection reports, licenses, service contracts, maintenance logs and other
documentation regarding the operation and maintenance of the above-ground storage tank installed on
the Generator Site.



          (ii) Tenant shall contract directly for all maintenance and repairs of the Generators and
Generator Site. In connection with such maintenance and repairs, Tenant shall adopt such
commercially reasonable procedures required by Landlord so as to minimize disruption to other
activities occurring at adjacent buildings, including periodic testing of the Generator(s). The
foregoing notwithstanding, access to the Generator Site shall be limited to Landlord, Tenant and
their respective authorized employees, contractors and agents. Following completion of the Tenant
Improvements, Landlord shall have no obligation, responsibility or liability whatsoever if the
Generators fail and/or Generator Site is inadequate in any respect not caused by the negligence or
willful misconduct of Landlord or its employees or agents. If at any time during the Term of this
Lease, including any renewal thereof, Tenant shall fail to maintain the Generator Site (but not the
Generators, provided that Tenant shall ensure that the Generator(s) appear to be in good condition
and repair) to Landlord’s reasonable satisfaction, then upon not less than fourteen (14) days’
prior written notice, Landlord shall have the right to take such corrective measures as Landlord
deems necessary or prudent and Tenant shall reimburse Landlord for such reasonable sums expended by
Landlord, if the Tenant has not cured or commenced the cure of that maintenance and is diligently
pursuing such cure. Those funds expended by Landlord in conjunction with the repair or maintenance
of the Generator Site shall be payable by Tenant within fifteen (15) days of receipt by Tenant of
an itemized invoice with supporting backup documentation, and shall bear interest from the date
fifteen (15) days after the invoice to the date of reimbursement at the rate of eight percent (8%)
per annum computed on the actual number of days elapsed during the period for which interest is
being charged.




          (iii) Upon removal of the Generators, Tenant agrees, at its sole cost and expense, to take
whatever steps Landlord may reasonably request to restore the Generator Site to its condition as of
the Commencement Date, reasonable wear and tear excepted. Such obligation of restoration shall
survive the expiration or termination of this Lease or Tenant’s right to possession of the
Premises. Upon the expiration or sooner termination of this Lease or Tenant’s right to possession
of the Premises, Tenant agrees to promptly remove the Generators from the Generator Site and to
restore the Generator Site to its condition as of the Commencement Date.




          (iv) Tenant acknowledges, agrees and confirms that if as a consequence of the installation of
any improvements upon the Generator Site pursuant to this Section 2.H., including the
Generators, the taxes imposed on the land upon which the Generator Site is located increase due to
the installation of improvements on the Generator Site, then Tenant shall be responsible for such
increase in taxes. Written evidence establishing such increased tax assessment shall be provided
by Landlord to Tenant and Tenant shall pay to Landlord as additional rent such incremental tax
amount upon demand.




     I. Landlord and Tenant each hereby designate a representative (each, a “Representative”) who
shall have the power and authority to make any and all decisions regarding the matters described in
this Article 1 on behalf of the respective parties and to designate other representative(s)
on their behalf. Notices to a Representative shall be given in accordance with Article 35
below. Unless a party is otherwise advised in writing by the other, their respective
representatives shall be as follows:



	 	 	 	 	 
	 

	 	Landlord:
	 	John Coletta

Vice President 

The Alter Group, Ltd. 

5500 W. Howard Street

Skokie, IL 60077
	 
	 

	 	 	 	
Kent Moe 

Senior Vice President 

The Alter Group, Ltd. 

2525 E. Camelback Road 

Suite 285

Phoenix, AZ 85016
	 
	 

	 	Tenant:
	 	Robert Curwin






F-8









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.




	 	 	 	 	 
	 

	 	 	 	Vice President

or

Kristine Olson 

Office Services Manager 

Medicis Pharmaceutical Corporation 

8125 N. Hayden Road 

Scottsdale, AZ 85258
	 
	 	 	 	 
	 

	 	 	 	James Aungst 

Principal 

JKA Realty Advisors 

3319 E. Sequoia Drive 

Phoenix, AZ 85050






F-9









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.




3.

POSSESSION




     A. (i) If Landlord, for any reason whatsoever, cannot deliver possession of the Premises to
Tenant on the estimated Commencement Date (as the same may be adjusted pursuant to the terms of
this Lease), this Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for
any loss or damage resulting therefrom, except as expressly provided herein. In the event of any
delay in the Commencement Date (as the same may be adjusted), the rent provided for herein shall
not commence until the actual Commencement Date (so long as Tenant is not responsible for such
failure or delay), and the Term shall be extended accordingly. Landlord shall use commercially
reasonable efforts to deliver the Premises to Tenant on or before the estimated Commencement Date
(as the same may be adjusted).



          (ii) Subject to Article 28 and delays caused by Tenant, if Landlord fails to deliver
the Premises to Tenant within thirty (30) days after the estimated Commencement Date (as the same
may be adjusted pursuant to the change order process described in the Workletter), for each one (1)
day between (a) the date that is thirty (30) days after the estimated Commencement Date (as the
same may be adjusted), and (b) and the actual Commencement Date (each such day, a “Day of Delay”),
Tenant shall be entitled to an amount equal to the Base Rent payable for each Day of Delay
multiplied by 1.5 times the daily Base Rent owed commencing in the thirteenth (13th) month of the
Lease Term or whenever the Rent Abatement period ends, whichever is later (the “Delay Payment”).
At Tenant’s option, the Delay Payment shall be paid by Landlord to Tenant within thirty (30) days
after the actual Commencement Date, or Landlord shall apply the Delay Payment against future
payments of Base Rent as such payments first come due under the terms of this Lease.




          (iii) In addition to the right to receive the Delay Payment, if Landlord fails to deliver the
Premises to Tenant on or before the date that is nine (9) months after the estimated Commencement
Date (as the same may be adjusted by any change order submitted in accordance with the terms of
this Lease, subject to Article 28 and delays caused by Tenant, Tenant thereafter shall have
the right to terminate this Lease by delivering written notice of termination to Landlord within
thirty (30) days after the expiration of such nine (9) month period, in which event this Lease
shall terminate upon Landlord’s receipt of such notice and the parties shall have no further
obligation or liability to the other. Tenant’s failure to deliver notice of termination to
Landlord within such thirty (30) day period shall be deemed a waiver by Tenant of the right to
terminate this Lease pursuant to this Section 3.A.(iii).




     B. (i) Landlord shall provide Tenant, its agents, suppliers, contractors and workmen
reasonable access to the Premises prior to the Commencement Date (“Tenant’s Early Access”) for the
purpose of installing Tenant’s telephone and computer wiring and systems, security system wiring
and hardware, furniture and equipment, the Lab, the Deli, the Workout Facilities, the Meeting Room
wiring and equipment, the data center, the Generators and similar work, and to generally prepare
the Premises for occupancy. As a condition of such early access, Tenant shall deliver to Landlord
certificates of the insurance Tenant is required to maintain hereunder. Tenant acknowledges and
agrees that Tenant’s Early Access shall be subject to all of the terms, covenants, conditions and
provisions of this Lease, except as to the covenant to pay Base Rent and Additional Rent, and
further agrees that in connection with Tenant’s Early Access Landlord shall not be liable in any
way for any injury, loss or damage which may occur to any property placed in the Premises by
Tenant, the same being strictly at Tenant’s sole risk, except due to the negligence or willful
misconduct of Landlord or its agents, employees or invitees. In connection with such installation
by Tenant, Tenant acknowledges that Tenant’s Early Access will be shared with Landlord while
Landlord is in the process of completing the Premises and the Phase I Improvements in accordance
with schedule attached hereto as Appendix “D-1” and will be phased through a mutually
agreed upon schedule on a floor-by-floor basis. Tenant and Landlord shall reasonably cooperate
with each other in coordinating such early access so as not to delay or otherwise interfere with
the completion of the Premises and the Phase I Improvements by Landlord but to allow completion of
Tenant’s preparations prior to the Commencement Date. In connection therewith, each party and its
employees and agents agrees to use commercially reasonable efforts not to damage or harm in any way
the Premises and Phase I Improvements or any of Tenant’s property, and each shall indemnify, defend
and hold harmless the other for, from and against any such Losses caused by that party or its
agents, employees, servants or contractors. Early access shall not advance the Commencement Date
or the Expiration Date, nor change the date upon which Tenant’s obligation to pay Base Rent
commences.



          (ii) If at any time Tenant’s Early Access shall unreasonably delay, in Landlord’s reasonable
discretion, or interfere with the completion of Landlord’s construction of the Premises, Landlord
shall have the right to suspend Tenant’s Early Access right upon not less than forty-eight (48)
hours written notice, provided, however, that such termination shall be void if Tenant shall,
within such forty-eight (48) hour period, cure such




F-10









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





delay or
interference and/or provide such assurances to Landlord as Landlord shall have reasonably
requested that such problem will not occur again.




     C. The Premises shall be deemed to be ready for Tenant’s occupancy if only minor or
insubstantial details of construction or mechanical adjustments remain to be done in the Premises
or any part thereof, or if the delay in the availability of the Premises or any part thereof for
occupancy shall be due to work contracted for directly by Tenant, Tenant’s Specialty Construction
Work, Additional Work or Additional Tenant Improvement Work required or made by Tenant in the
layout or finishing of the Premises. Whether or not the Premises are ready for occupancy shall be
determined by the Jurisdiction in which the Riverwalk Project is located as set forth in the Lease
Schedule, which shall evidence same by authorizing Tenant’s occupancy thereof, which authorization
shall be in the form of written permission to occupy, which written permission may be in the form
of a temporary or final certificate of occupancy or its equivalent. It is further understood that
prior to initial occupancy, the parties shall jointly inspect the Premises and prepare a “punch
list” of incomplete items to be completed by Landlord within a reasonable time after occupancy not
to exceed sixty (60) days, subject to Landlord’s inability to perform (as described in Article
28), provided, however, that if any punch list item cannot be completed within such sixty (60)
day period and Landlord is diligently attempting to complete such punch list item, the time period
to complete the same shall be reasonably extended for so long as is reasonably necessary to
complete the punch list item, but in no event longer than an additional forty-five (45) days,
subject to an inability to perform (as described in Article 28). If occupancy is initially
obtained through a temporary certificate of occupancy, Landlord shall use commercially reasonable
and diligent efforts to obtain the permanent certificate of occupancy (or its equivalent issued by
the Community) as soon as possible and to promptly remedy the items on the punch list to Tenant’s
reasonable satisfaction.



     D. Tenant shall execute a confirmation of the Commencement Date and the Expiration Date in
such form as Landlord may reasonably request within ten (10) days after requested. Tenant’s
failure to execute and deliver to Landlord such written confirmation within ten (10) days after
request shall constitute acceptance and acknowledgment by Tenant that the Commencement Date set
forth in Landlord’s request for confirmation thereof is true and correct, without exception.



4.

DEFINITIONS AS USED IN THIS LEASE




     A. The term “Commencement Date” is the date of the beginning of the Term as set forth in the
Lease Schedule.



     B. The terms “Rentable Square Feet” or “RSF” and “Usable Square Feet” or “USF” shall be
determined in accordance with BOMA International’s Standard Method for Measuring Floor Area in
Office Buildings, ANSI/BOMA Z65.1-1996 (“BOMA”). Landlord and Tenant acknowledge and agree that,
in accordance with BOMA, because Tenant is the sole occupant of the Premises, Rentable Square Feet
shall be deemed to be Usable Square Feet with respect to the Premises.



     C. If Tenant wishes to have the Premises measured, which measurement shall be performed by
Tenant’s Architect, Tenant shall deliver written notice (the “Measurement Notice”) to Landlord on
or before the date that is sixty (60) days prior to the estimated delivery of the Premises to
Tenant, as adjusted, and shall complete such measurement within thirty (30) days after delivery of
such Measurement Notice. If Tenant shall fail to deliver to Landlord the Measurement Notice within
such sixty (60) days period, Tenant shall be deemed to have waived its right to cause the Premises
to be measured. Tenant shall cause such measurement to be promptly completed and its architect to
provide written notice of its determination of the Rentable Square Footage of the Premises to
Landlord within thirty (30) days after the date of Tenant’s Measurement Notice. If Landlord shall
dispute the determination of Tenant’s architect, Landlord and Tenant shall select an independent
architect licensed in the State of Arizona and who is reasonably acceptable to both Landlord and
Tenant to measure the Premises and whose determination shall be final and binding on both parties
for all purposes of this Lease. The expenses of the third architect shall be borne by the party
whose calculations are farthest from the calculations determined by that third architect.



     D. The term “Taxes” means any and all taxes of every kind and nature whatsoever which Landlord
shall pay or become obligated to pay during a calendar year (regardless of whether such taxes were
assessed or became a lien during, prior or subsequent to the calendar year of payment) because of
or in connection with the ownership, leasing and operation of the Medicis Development including
without limitation, real estate taxes, personal property taxes, sewer rents, water rents, special
assessments, transit taxes, legal fees and court costs charged for the protest or reduction of
property taxes and/or assessments or an increase therein in connection with the Premises, whether
any such taxes are imposed by the United States, the Community, the state or other local or tribal
governmental municipality, tribe, authority or agency or any political subdivision of any thereof
in the Jurisdiction in which the Riverwalk Project is located. Taxes shall not include any net
income, capital stock, estate or inheritance taxes.



F-11









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.



     E. (i) The term “Operating Costs” means any and all expenses, costs and disbursements (other
than Taxes as defined in Section 4.D.) of every kind and nature whatsoever incurred by
Landlord in connection with the management, maintenance, operation and repair of the Medicis
Development, including, without limitation, interior and/or exterior energy costs (including but
not limited to the cost of electricity, steam, water, fuel, heating, lighting and air
conditioning), easement maintenance expenses, including assessments applicable to the Medicis
Development established by any Declaration as hereinafter defined, costs of maintaining the
Pedestrian Bridge (if constructed), any and all common area expenses in the development in which
the Medicis Development is located, including, but not limited to, landscaping and other
maintenance of properties (including any other irrigation systems shared with any other property)
which benefit the Medicis Development, a property management fee equal to three and one-half
percent (3 1/2 %) of all rent receipts collected by Landlord, and insurance costs related to the
Premises (including but not limited to fire, extended coverage, liability, workers’ compensation
and elevator insurance, as well as all deductibles paid by Landlord for damages and injuries
covered by policies of insurance maintained for the Medicis Development) and routine repairs,
maintenance and interior and/or exterior decorating, wages, salaries, and benefits (including but
not limited to, so-called fringe benefits, such as social security taxes, unemployment insurance
taxes, costs for providing coverage for disability benefits, costs of any pensions,
hospitalization, welfare or retirement plans, or any other similar or like expenses or any other
cost or expense which Landlord pays or incurs to provide benefits for employees directly engaged in
the operation, management, maintenance or repair of the Medicis Development) of employees working
at the Medicis Development on a full or part-time basis (excluding those above the level of Medicis
Development or building manager), uniforms, supplies, sundries, sales or use taxes on supplies or
services, landscape replacement, snow removal, parking lot repairs, legal and accounting costs and
expenses, roof repairs, insurance deductibles, exterminating, HVAC system maintenance, security
services, security systems maintenance, overhead doors maintenance, expenses of the maintenance and
repair of the Pedestrian Bridge (if constructed) or other expenses which Landlord shall be or
become obligated to pay in respect of a calendar year regardless of when such Operating Costs were
incurred or any other expense or charge whether or not hereinbefore mentioned which in accordance
with generally accepted accounting or management principles respecting first class buildings in the
Jurisdiction in which the Medicis Development is located would be considered as an expense of
managing, operating, maintaining or repairing the Medicis Development. If Tenant shall elect, by
delivering written notice to Landlord, to have Landlord assume responsibility for janitorial,
cleaning and day porter services to the Premises and/or the purchase of janitorial and cleaning
supplies for use in the Premises, the cost to Landlord of all such janitorial, cleaning and day
porter services and/or janitorial and cleaning supplies shall be included in Operating Costs. For
purposes of this subparagraph, “the development in which the Medicis Development is located” shall
be deemed to refer to any portion(s) of the real property subject to the Master Lease containing
common areas and/or utilities and/or services benefiting the Medicis Development, including any and
all of the Medicis Development encompassed by, without limitation, any declaration of easements,
reciprocal easement agreements, and/or protective covenants, conditions and/or restrictions
(collectively, “Declaration”) affecting the Medicis Development.



          (ii) Operating Costs shall not include:




               (a) Except as expressly permitted in Section 4.E.(iii) below, the cost of alterations,
capital improvements, equipment replacements, and other items which under generally accepted
accounting principles are properly classified as capital expenditures.



               (b) Leasing commissions and/or expenses and advertising
and promotional expenses.



               (c) Legal fees or other professional or consulting fees in connection with the negotiation of
tenant leases.



               (d) The cost of repairs or replacements incurred by reason of fire or other casualty or
condemnation to the extent that either (1) Landlord is compensated therefor through proceeds of
insurance, warranty, indemnity from or the responsibility of third parties or condemnation awards;
(2) Landlord failed to obtain insurance against such fire or casualty, if insurance was available
at a commercially reasonable rate, against a risk of such nature at the time of same; or (3)
Landlord is not fully compensated therefor due to the coinsurance provisions of its insurance
policies on account of Landlord’s failure to obtain a sufficient amount of coverage against such
risk. Notwithstanding the foregoing, Landlord’s reasonable insurance deductibles are Operating
Costs.



               (e) Compensation paid to officers or executives of Landlord above the level of the Premises,
Medicis Development or Riverwalk Project property manager.



               (f) That portion of salaries and other compensation of service personnel to the extent such
salaries and compensation are applicable and relate to performance of services by such personnel
other than in connection with the management, operation, repair, or maintenance of the Premises or
the Medicis Development.



F-12









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.



               (g) Legal fees, accounting fees, and other expenses incurred specifically in connection with
disputes with Tenant, its assignees or sublessees, or associated with the enforcement of the terms
of this Lease with Tenant, its assignees or sublessees, or the defense of Landlord’s title or
interest in the Premises or any part thereof.



               (h) Interest and principal payments on mortgages,
financing charges or other debt service.



               (i) Depreciation.



               (j) Property management fees paid for any month in excess of three and one-half percent (3 1/2
%) of all rent receipts (including, but not limited to, Base Rent and Additional Rent) and other
revenues of the Medicis Development collected during such month.



               (k) Rental and other related expenses incurred in leasing air conditioning systems, elevators
or other equipment ordinarily considered to be of a capital nature, except (i) when such equipment
is used in providing janitorial and maintenance services and is not permanently affixed to the
Premises, and (ii) when such equipment is rented on a temporary basis for repairs or maintenance.



               (l) Landlord’s general corporate overhead and general
administration expenses.



               (m) Ground rents.



               (n) Reserves.



               (o) Costs incurred by Landlord in the repairs, capital additions, alterations or replacements
made or incurred to rectify or correct defects in design, materials or workmanship in connection
with any portion of the Premises and/or Phase I Improvements.



               (p) Amounts paid to itself or related or affiliated person or entity in excess of prevailing
market rates for comparable goods or services.



               (q) Works of art.



               (r) Fines and penalties, unless caused by the acts or omission of Tenant.



               (s) Costs resulting from the negligence or willful misconduct of any Landlord Indemnitee or
their respective employees or agents, including without limitation, the failure to adhere to
reasonable and typical management practices and typical preventative maintenance programs in
comparable office buildings in Scottsdale.



               (t) Janitorial, cleaning and day porter services and/or janitorial and cleaning supplies for
use in the Premises, unless and until Tenant shall elect, by delivering written notice to Landlord,
to have Landlord assume responsibility for janitorial, cleaning and day porter services to the
Premises and/or the purchase of janitorial and cleaning supplies for use in the Premises.



          (iii) Provided however:




               (a) The cost of any capital improvements to the Premises made after the date of construction
of the Premises which (1) actually result in a reduction of Operating Costs in excess of the cost
of such capital improvement or (2) which are required under any governmental, Community or other
tribal laws, regulations, or ordinances which were not applicable to the Premises as of the date of
the construction of the Premises, amortized on a level pay debt service basis over the useful life
of such improvement, with interest at eight percent (8%) per annum shall be included in Operating
Costs. The cost of any capital improvements to the Premises made after the completion of
construction of the Premises which are required to be made to the Premises to comply with the
provisions of the Americans with Disabilities Act enacted after the Commencement Date, amortized on
a level pay debt service basis over fifteen (15) years with interest at eight percent (8%) per
annum also shall be included in Operating Costs.



               (b) Exclusive of Operating Costs over which Landlord has no control, all other Operating Costs
set forth in Section 4.E. shall be considered “Controllable Costs” for purposes of the
following limitation. For each and every calendar year after the first calendar year of the Term
of the Lease, the increment of Additional Rent applicable to the Premises which is based upon
Controllable Costs shall not exceed one hundred five percent (105%) of the Controllable Costs for
the immediately preceding calendar year, calculated on a cumulative
basis, except that Landlord may add expense “line items” which may have not been incurred in
prior years if they are reasonable and customary or increase services to the Premises. Landlord
shall separately compute those items of Operating Costs over which Landlord has no control which
are limited to Taxes, insurance costs,



F-13









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





energy and utility costs (including, without limitation,
electricity, sewer and water), trash removal costs, security costs, costs subject to increase by
governmental requirements, owner’s association fees, repairs and replacement such as, but not
limited to, landscape replacement and repairs and maintenance (but not replacements) of the roof.
Landlord and Tenant agree that there will be no limitation on Tenant’s obligation hereunder for
increases in such Operating Costs over which Landlord has no control (including non-recurring
Operating Costs). To the extent that vendor, manufacturer, contractor or other warranties are in
effect for computer systems, elevators, heating and air conditioning equipment, or other equipment
or components of the Controllable Costs shall exclude those costs and expenses.



5.

BASE RENT




     A. Except as otherwise provided herein, Tenant shall pay as initial Base Rent to Landlord the
Annual Base Rent as set forth in the Lease Schedule in equal monthly installments in advance on the
first day of the first full calendar month and on the first day of each calendar month thereafter
during the Term, and at the same rate for fractions of a month if the Term shall begin on any day
except the first day or shall end on any day except the last day of a calendar month.



     B. Any rent (whether Base Rent or Additional Rent) or other amount due from Tenant to Landlord
under this Lease not paid when due shall incur a late fee equal to four percent (4%) of the amount
not paid when due, but the payment of such late fee shall not excuse or cure any default by Tenant
under this Lease, provided, however, that no late fee shall be imposed with respect to any portion
of the Base Rent or Additional Rent that (i) is paid within five (5) business days after Tenant’s
receipt of a written notice from Landlord, (ii) the first late payment in any twelve (12) month
period if the amount due is paid within five (5) business days after Tenant’s receipt of a written
notice from Landlord, and (iii) no late charges on amounts other than Base Rent or Additional Rent
shall be imposed unless Tenant fails to make payment for those charges after the fifth
(5th) day following the date Landlord has delivered written notice of that delinquency
to Tenant. Tenant acknowledges that such late charge represents a fair and reasonable estimate of
the costs Landlord will incur by reason of late payments by Tenant. The acceptance by Landlord of a
late charge and payment of Base Rent and Additional Rent due shall constitute a waiver of Tenant’s
default with respect to such overdue amount, and shall prevent Landlord from exercising any of the
other rights and remedies available to Landlord. The covenants herein to pay rent (both Base Rent
and Additional Rent) shall be independent of any other covenant set forth in this Lease.



     C. Except as otherwise expressly provided herein, Base Rent and all of the rent provided
herein shall be paid without demand, offset, deduction or abatement in lawful money of the United
States of America to Alter Asset Management, L.L.C., 1980 Springer Drive, Lombard, IL 60148 or as
designated from time to time by written notice from Landlord. The Management Agent has full and
complete authority to act on behalf of Landlord in connection with all dealings with Tenant,
provided however, that the Management Agent shall not have the power to amend or modify the terms
of this Lease.



6.

ADDITIONAL RENT




     A. The Annual Base Rent does not include amounts attributable to any amount of Operating Costs
or Taxes. Landlord and Tenant acknowledge and agree that the “Expense Stop” for the purposes of
this Lease is $7.14 RSF, excluding any costs for janitorial and/or day porter services. It is
agreed between the parties hereto that, in addition to the Base Rent provided for herein, Tenant
shall also pay in each year during the Term of this Lease, as Additional Rent, all Operating Costs
in excess of the Expense Stop for each calendar year or partial calendar year, prorated as of the
Commencement Date (as to the first year) and as of the Expiration Date (as to the last year) of the
Term for the first and last years of the Term. Notwithstanding the foregoing, Tenant shall not
have to pay Operating Costs during and relating to the first twelve (12) months following the
Commencement Date.



     B. The term “Additional Rent” shall refer to Operating Costs, Taxes and any other monetary
obligations payable by Tenant to Landlord under the terms of this Lease in addition to Base Rent.
Landlord shall have the same remedies for the failure to pay Additional Rent as for the nonpayment
of Base Rent.



     C. In addition to Base Rent and Additional Rent, Tenant shall pay to Landlord, together with
the monthly installments of Base Rent and payments of Additional Rent, an amount equal to any
governmental or tribal taxes, including, without limitation, any sales, rental, occupancy, excise,
possessory, use or transactional privilege taxes assessed or levied upon Landlord with respect to
the amounts paid by Tenant to Landlord hereunder, as well as all taxes assessed or imposed
upon Landlord’s gross receipts or gross income from leasing the Premises to Tenant, including,
without limitation, transaction privilege taxes, possessory taxes, education excise taxes, any tax
now or hereafter



F-14









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





imposed by the State, the United States, the Community, or any other governmental
or tribal municipality, tribe, authority or agency, or any political subdivision of any thereof in
the Jurisdiction in which the Riverwalk Project is located, and any taxes assessed or imposed in
lieu of or in substitution of any of the foregoing taxes. Such taxes shall not, however, include
any franchise, gift, estate, inheritance, conveyance, transfer or net income tax assessed against
Landlord. Landlord shall consult with Tenant on an annual basis with respect to whether to contest
the valuation of the Premises or any of the improvements related thereto for purposes of any taxes
or assessments, and Landlord shall contest the valuation at Tenant’s reasonable request and the
costs of that contest shall be Operating Costs.



     D. Tenant shall pay prior to delinquency all taxes, charges or other governmental or tribal
impositions assessed against or levied upon all fixtures, furnishings, and other personal property
owned by Tenant. Whenever possible, Tenant shall cause all such items to be assessed and billed
separately from the other property of Landlord. In the event any such items shall be assessed and
billed with the other property of Landlord, Tenant shall pay Landlord its share of such taxes,
charges or other governmental or tribal impositions within ten (10) days after Landlord delivers a
statement and a copy of the assessment or other documentation showing the amount of impositions
applicable to Tenant’s property. Subject to Tenant’s timely payment of impositions as required
herein, Tenant may contest those taxes, charges or impositions in good faith.



7.

RENT ADJUSTMENT PAYMENT




     A. Prior to the commencement of the Term, Landlord shall deliver to Tenant a written statement
setting forth Landlord’s good faith estimate of Taxes and Operating Costs (a “Taxes and Operating
Cost Statement”) for the remainder of the calendar year in which the Term commences. Thereafter,
prior to January 1 of each subsequent calendar year, or from time to time during each subsequent
calendar year, Landlord shall deliver an estimated Taxes and Operating Cost Statement pertaining to
each such forthcoming calendar year. Commencing with the first month to which an estimate applies
and on the first day of each calendar month thereafter during the Term, Tenant shall pay
one-twelfth (1/12th) of Taxes and Operating Costs as estimated by Landlord (prorated for
any partial calendar month). On or before the first day of June of each calendar year after the
initial year of the Term, Landlord shall furnish to Tenant a written statement showing in
reasonable detail actual Operating Costs and Taxes for the preceding year for which such statement
is furnished and showing the amount, if any, of rental adjustment due for such year.



     B. On the monthly rental payment date (the “adjustment date”) next following Tenant’s receipt
of each such annual statement, Tenant shall pay to Landlord as Additional Rent an amount equal to
the sum of Taxes and Operating Costs shown on each such annual statement less the amount, if any,
of the total estimated Additional Rent paid by Tenant during the preceding calendar year.



     C. In the event that any such settlement required above indicates that the total Additional
Rent paid by Tenant during the preceding calendar year exceeds the actual Additional Rent or
Tenant’s Share of the Additional Rent, as applicable, for such calendar year, Landlord shall credit
the amount of such excess against any amounts of Additional Rent next falling due under this Lease
as long as Tenant is not then in default of any of the terms and provisions of this Lease. Tenant
shall not be entitled to a credit by reason of actual Operating Costs in any year of the Lease Term
being less than the Expense Stop.



     D. The Taxes and Operating Cost Statement shall be prepared in accordance with generally
acceptable cash basis accounting principles. Tenant, using either its own employee or its
certified public accountant, shall have the right to inspect at reasonable times and in a
reasonable manner, at Landlord’s office in the Phoenix metropolitan area, such of Landlord’s books
of account and records as pertain to or contain information concerning the items included in
Operating Costs and Taxes for that year in order to verify the amounts thereof. Any and all
information obtained through Tenant’s inspection with respect to financial matters (including,
without limitation, costs, expenses, income) and any and all other matters pertaining to Landlord
and/or the Riverwalk Project as well as any compromise, settlement or adjustment reached between
Landlord and Tenant relative to the results of any such inspection shall be held in strict
confidence by Tenant and its officers, agents, and employees; and Tenant shall cause its certified
public accountant and any of its officers, agents, and employees to be similarly bound. If Tenant
shall dispute any item or items included in the Operating Costs or Taxes for such year, and such
dispute is not resolved by the parties within ninety (90) days after such statement is delivered to
Tenant, then either party may at its sole expense, within thirty (30) days thereafter, request that
a firm of independent certified public accountants mutually selected by Landlord and Tenant
(“Independent Review”) render to the parties an opinion as to whether or not the disputed item or
items should have been included in the Operating Costs and/or Taxes for such year; and the opinion
of such firm on such matter shall be conclusive and binding upon both parties, provided however, it
shall be a
further condition of Tenant’s right to conduct an Independent Review that the firm conducting the
Independent Review shall not be retained upon the basis of all or a portion of its fees being
contingent based upon the results of the Independent Review. Landlord and Tenant agree that the
firm’s opinion shall be confidential and shall not be disclosed to any other party whatsoever,
provided, however, Tenant shall be permitted to



F-15









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





divulge the contents of such opinion in connection
with any administrative or judicial proceedings in which Tenant is involved. In the event such
Independent Review discloses that the amount due from Tenant was overstated in excess of three
percent (3%) on an annualized basis, Landlord shall bear the reasonable cost of such Independent
Review. In all other cases, Tenant shall bear the cost of such Independent Review. Tenant’s
employee(s), agents and certified public accountants may examine the records of Landlord supporting
the Taxes and Operating Cost Statement at Landlord’s or the Management Agent’s office during normal
business hours within two (2) years after the Taxes and Operating Statement is furnished. Unless
Tenant takes written exception to any item within one (1) year after the furnishing of the Taxes
and Operating Statement (which shall be noted on the item as “paid under protest”), such Statement
shall be considered as final and accepted by Tenant. Tenant shall promptly tender payment for any
undisputed items and shall tender payment for any disputed items within ten (10) days after the
resolution of any such dispute.



     E. In no event shall any rent adjustment result in a decrease of the Base Rent as set forth in
the Lease Schedule.



     F. In the event of the termination of this Lease by expiration of the stated Term or for any
other cause or reason whatsoever prior to the determination of rental adjustment as hereinabove set
forth, Tenant’s agreement to pay Additional Rent accrued up to the time of termination shall
survive the expiration or termination of this Lease.



8.

HOLDING OVER




     A. Tenant shall have the right to hold over after the expiration of the Term of this Lease for
up to six (6) months provided that if Tenant wishes to hold over, Tenant shall have delivered to
Landlord written notice of Tenant’s wish to hold over at least nine (9) months prior to the
Expiration Date setting forth the number of months that Tenant wishes to hold over (the “Hold Over
Notice”). Any hold over in excess of six (6) months after the Expiration Date shall require
Landlord’s prior written consent, which consent may be withheld in Landlord’s sole and absolute
discretion. Such holding over shall not constitute an extension of this Lease, but shall be
subject to all of the terms of this Lease. During (a) the first three (3) months of such holding
over, Tenant shall pay Base Rent at one hundred ten percent (110%) of the rate payable in the last
month of the Term of this Lease; (b) the second (2nd) three (3) months (that is, the
fourth (4th) through sixth (6th) months of such holding over), Tenant shall
pay Base Rent at one hundred twenty-five percent (125%) of the rate payable for the last month of
the Term of this Lease; and (c) for any period after the expiration of the sixth (6th)
month of such holding over to which Landlord consents, Tenant shall pay Base Rent at one hundred
fifty percent (150%) of the rate payable for the last month of the Term of this Lease. In addition
to the adjusted Base Rent obligations noted above, Tenant shall continue to owe its proportionate
share of Additional Rent at the rate payable in the last month of the Term of this Lease.



     B. Should Tenant (a) hold over after the early termination of this Lease (rather than hold
over after the Expiration Date), or (b) hold over after the Expiration Date without having timely
provided the Hold Over Notice to Landlord, or (c) hold over after the sixth (6th) month
after the Expiration Date without the prior written consent of Landlord, by lapse of time or
otherwise, Tenant shall become a tenant from month-to-month only upon each and all of the terms
herein provided as may be applicable to such month-to-month tenancy and any such holding over shall
not constitute an extension of this Lease; provided, however, during such holding over, Tenant
shall pay Base Rent at one hundred twenty-five percent (125%) for the first three (3) months and
thereafter at one hundred fifty percent (150%) of the rate payable for the month immediately
preceding said holding over, and in addition, Tenant shall pay Landlord the Additional Rent and all
actual direct damages sustained by reason of Tenant’s holding over. Tenant shall not be liable for
consequential, punitive, special or similar damages by reason of that holding over.



9.

BUILDING SERVICES




     A. Landlord agrees to furnish to the Premises during reasonable hours (the “Building Hours”)
(7:00 A.M. to 6:00 P.M. Mondays through Fridays and 8:00 A.M. to 2:00 P.M. on Saturdays), except
for the following legal “Holidays”: Memorial Day, July 4th, Labor Day, Thanksgiving,
Christmas and New Year’s Day, and subject to any rules and regulations promulgated by Landlord,
passenger and freight elevator service to the extent applicable, heat and air conditioning in
accordance with the design for such systems and as required in Landlord’s reasonable judgment for
the comfortable use and occupancy of the Premises, subject to scheduling by Landlord.
Notwithstanding the foregoing,
Tenant shall have the right to use the Premises 24 hours per day, 7 days per week, and to provide
for uninterrupted power, cooling and ventilation systems for its data room and other equipment at
all times, provided that the actual cost of all building services used by Tenant outside of
Building Hours shall be shall be paid for by Tenant within ten (10) days after receipt of a bill
from Landlord for such after-hours costs. Except with respect to janitorial and day porter
services, which services shall be provided by Tenant at its expense, Landlord agrees to maintain



F-16









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





and operate the Premises in the manner and to the standard of other first class office buildings in
the Jurisdiction in which the Riverwalk Project is located and in accordance with applicable Laws,
subject to Tenant’s obligations in Section 10.B. and Article 13.



     B. Window washing of all windows (inside and out) in the Premises, at such times as shall be
required in the sole judgment of Landlord, provided however, that the inside and outside windows
shall be washed no less than three (3) times per year.



     C. Neither Landlord nor Landlord’s members, managers, shareholders, officers, directors,
partners, beneficiaries, or other owners nor any company, firm or individual, operating,
maintaining, managing or supervising the plant or facilities furnishing the services included in
Landlord’s energy costs, nor the Master Lessor, the Community, the Secretary or the United States,
nor any of their respective agents, beneficiaries, or employees, shall be liable to Tenant, or any
of Tenant’s employees, agents, customers or invitees or anyone claiming through or under Tenant,
for any Losses because of any interruption or discontinuance at any time for any reason in the
furnishing of any of such services, or any other service to be furnished by Landlord as set forth
herein (except to the extent any of the foregoing is caused by their gross negligence or willful
misconduct) nor shall any such interruption or discontinuance relieve Tenant from full performance
of Tenant’s obligations under this Lease. Notwithstanding anything stated above to the contrary,
in the event that essential utility services to the Premises are interrupted for a consecutive
period of three (3) or more days as the result of the negligence or willful misconduct of Landlord
or its agents and such interruption substantially interferes with Tenant’s use of all or a
substantial portion of the Premises for the conduct of its business, then, as its sole and
exclusive remedy, Tenant’s obligation to pay Base Rent and Additional Rent to Landlord under this
Lease shall be abated or reduced, commencing on that third (3rd) day until sufficient
utility services are restored, in the proportion that the floor area of the Premises that Tenant is
prevented from using and does not use, bears to the total floor area of the Premises.



     D. Landlord and Tenant acknowledge and agree that electric service to the Premises shall not
be separately metered. Electricity shall not be furnished by Landlord, but except as otherwise
hereinafter provided, shall be furnished by the approved electric utility company serving the area
(“Electric Service Provider”). Landlord shall permit Tenant to receive such service direct from
such public utility company at Tenant’s cost, and shall permit Landlord’s wire and conduits, to the
extent available, suitable and safely capable, to be used for such purposes. Landlord shall not
interfere with provisions of utilities to the Premises, and because Tenant shall pay for its
electricity to the Premises, Landlord shall not impose any restrictions on Tenant’s ability to
consume that electricity, except as provided in this Section 9.D., and any rules and
regulations promulgated by Landlord shall conform to these provisions. Tenant shall make all
necessary arrangements with the Electric Service Provider for metering and paying for electric
current furnished by it to Tenant and Tenant shall pay for all charges for electric current
consumed on the Premises during Tenant’s occupancy thereof. The electricity used during the
performance of the making of alterations or repairs in the Premises, and for the operation of the
Premises’ air conditioning system at times other than as provided herein; or the operation of any
special air conditioning systems which may be required for data processing equipment, the Lab or
for other special equipment or machinery installed by Tenant, shall be paid for by Tenant. Tenant
shall make no alterations or additions to the electric equipment and/or appliances without the
prior written consent of Landlord in each instance, which consent shall not be unreasonably
withheld. The Premises shall be equipped with demand switches or other means of obtaining after
hours heat and air conditioning on a zone-by-zone basis without making prior arrangements with
Landlord. Tenant covenants and agrees to use commercially reasonable efforts to assure that at all
times its use of electric current shall never exceed the capacity of the feeders to the Premises
or the risers or wiring installed thereon. Tenant will not, without the written consent of
Landlord, use any apparatus or device in the Premises to connect to electric current (except
through existing electrical outlets in the Premises) or water pipes, any apparatus or device for
the purpose of using electric current or water. If Tenant shall require water or electric current
in excess of that which is respectively obtainable from existing water pipes or electrical outlets
and normal for use of the Premises as general office space and for the other special purposes noted
in this Lease, Tenant shall first procure the consent of Landlord, which Landlord may not
unreasonably refuse. If Landlord consents to such excess water or electrical requirements, Tenant
shall pay all costs including but not limited to meter service and installation of facilities
necessary to furnishing such excess capacity.



     E. (1) To the extent permitted by law, Tenant, if it shall separately pay for its electric
services, and if not, Landlord, shall have the right at any time and from time to time during the
Term to either contract for service from a different company or companies other than the Electric
Service Provider as of the Date of this Lease (each such company hereinafter described as an
"Alternate Service Provider”) or continue to contract for service from the Electric Service
Provider. If Tenant shall not pay separately for its electric service and Landlord shall contract
with an Alternate Service
Provider, Landlord shall pay any capital charges and other expenses incurred in changing to an
Alternate Service Provider, and those charges and expenses shall not be included in Operating
Expenses.



          (2) The parties shall cooperate with each other, the Electric Service Provider, and any
Alternate Service Provider at all times, and as reasonably necessary, shall allow each party,
Electric Service Provider and any


F-17









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





 Alternate Service Provider reasonable access to the Premises’
electric lines, feeders, risers, writing, and any other machinery within the Premises or the
Medicis Development.




     F. (1) Tenant shall have the right to install one or more wireless intranets, Internet and
communications networks (also known as “Wi-Fi”) within the Premises for the use of Tenant and its
employees (the “Network”) subject to all the other provisions of this Lease as are applicable.



          (2) Tenant shall not solicit, suffer or permit other tenants or occupants of the Medicis
Development to use for a profit the Network or any other communications service, including, without
limitation, any wired or wireless Internet service that passes through, is transmitted through, or
emanates from the Premises other than Tenant’s affiliates, assignees or sublessees.




          (3) Tenant agrees that Tenant’s communications equipment and the communications equipment of
Tenant’s service providers and contractors located in or about the Premises including, without
limitation, any antennas, switches or other equipment (collectively, “Tenant’s Communications
Equipment”) shall be of a type and, if applicable, a frequency that is not expected to cause radio
frequency, electromagnetic, or other interference to any other party or any equipment of any other
party including Landlord. In the event that Tenant’s Communications Equipment causes or is
believed to cause any such interference, upon receipt of notice from Landlord of such interference,
Tenant will take commercially reasonable steps necessary to correct and eliminate the interference.
If the interference is not eliminated, Tenant, Landlord and the other affected parties agree to
work together to develop a mutually satisfactory solution to the issue. Notwithstanding the
foregoing, Landlord acknowledges that in the event of a conflict between Tenant’s Communications
Equipment serving a Building in which Tenant leases at least two-thirds (2/3rds) of the RSF of the
Premises and that of any other tenant of Landlord in the Medicis Development, Tenant shall have the
primary rights over that of the others.




     G. Tenant shall be, at Tenant’s sole cost and expense, solely responsible for furnishing and
managing janitorial service (including janitorial supply purchases), cleaning and day porter
services to the Premises, comparable to the standard janitorial, cleaning and day porter services
furnished by other first class office buildings in the Jurisdiction in which the Riverwalk Project
is located. Notwithstanding the foregoing, Tenant may elect, by delivering written notice to
Landlord, to have Landlord assume responsibility for janitorial and cleaning services to the
Premises and/or the purchase of janitorial and cleaning supplies for use in the Premises, in which
event the cost to Landlord of all such janitorial, cleaning and day porter services and/or
janitorial and cleaning supplies shall be included in Operating Costs.



     H. The Management Agent shall request Tenant’s involvement in the selection and planning of
any seasonal or temporary decorations for the Premises. The Management Agent shall submit to
Tenant, for Tenant’s approval, which approval shall not be unreasonably withheld, conditioned or
delayed, seasonal or temporary interior and exterior decorations. Tenant shall provide written
approval within five (5) business days after receipt of Management Agent’s request for Tenant’s
consent to any proposed decoration plans. Tenant’s failure to provide written approval or
disapproval (Tenant agreeing that any disapproval shall include specific comments to the proposed
plans) shall be deemed to be an approval of the proposed plans. The cost of approved decorations
shall be included in Operating Costs.



10.

CONDITION OF THE PREMISES




     A. Subject to “punch lists” heretofore referred to and subject to latent defects, by taking
possession of the Premises, Tenant shall be deemed to have agreed that the Premises were as of the
date of taking possession, in good order, repair and condition. Notwithstanding the foregoing,
Landlord’s liability to Tenant regarding latent defects shall be limited to the repair and/or
replacement, as the case may be, of defective materials and workmanship and, in no event, shall
Landlord be liable for special or consequential damages. Landlord shall have no obligation with
respect to latent defects (which shall mean defects that are not reasonably discoverable by Tenant
upon a reasonable inspection of the Premises) in the Premises unless Tenant gives Landlord written
notice of defective materials or workmanship prior to the date which is two (2) years after the
Commencement Date. No promises of Landlord to alter, remodel, decorate, clean or improve the
Premises and no representation or warranty, express or
implied, respecting the condition of the Premises has been made by Landlord to Tenant, unless the
same is contained herein or made a part hereof. Tenant hereby waives all claims against the
Master Lessor, the Community, the Secretary and the United States arising from the condition of the
Premises and agrees to hold the Master Lessor, the Community and the United States free and
harmless from liability for any loss, damage or injury arising from the use of the Premises by
Tenant, together with all costs and expenses in connection therewith, except if caused by the
negligent or willful misconduct of the Master Lessor, the Community, the Secretary or the United
States.



F-18









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.



     B. The parties acknowledge that the Americans With Disabilities Act of 1990 (42 U.S.C. Section
12101 et seq.) and regulations and guidelines promulgated thereunder, as all of the same may be
amended and supplemented from time to time (collectively referred to herein as the “ADA”) establish
requirements under Title III of the ADA (“Title III”) pertaining to business operations,
accessibility and barrier removal, and that such requirements may be unclear and may or may not
apply to the Premises depending on, among other things: (1) whether Tenant’s business operations
are deemed a “place of public accommodation” or a “commercial facility,” (2) whether compliance
with such requirements is “readily achievable” or “technically infeasible,” and (3) whether a given
alteration affects a “primary function area” or triggers so-called “path of travel” requirements.
Landlord represents that the Premises as of the date of construction and the tenant improvements
installed in the Premises by Landlord as of the Commencement Date, comply with Title III and shall
continue to comply with those requirements throughout the term of this Lease, as it may be
extended, except as provided in the next sentence. Tenant shall be responsible for all Title III
compliance and costs in connection with the Premises (including structural work, if any, and
including leasehold improvements or other work to be performed in the Premises under or in
connection with this Lease) to the extent that same arises out of matters specific to Tenant’s
Permitted Use of the Premises, including Tenant’s operation (if applicable) of the Lab, Deli,
Workout Facilities, Meeting Rooms and other specialty areas, and/or resulting from alterations,
improvements and/or additions to the Premises made by Tenant.



     C. Tenant acknowledges the particular relevance and applicability of Federal and Community
laws pertaining to the protection and preservation of historic and archeological resources on
Indian lands, which are widespread throughout the Community. Such laws include, without
limitation, the Historic Preservation Act of 1966, the Archeological Resources Protection Act of
1979, the Native American Graves Protection and Repatriation Act of 1991, and the Community’s
Antiquities Ordinance of 1986, Code § 19-1 et seq. Tenant agrees to strict compliance with such
laws for purposes of Tenant’s Permitted Use of the Premises and alterations made to the Premises by
Tenant and further agrees, during the Lease Term, to notify the Community’s department responsible
for cultural and environmental resources immediately upon the discovery or reasonable suspicion of
the presence of archeological resources within the Premises. If during the construction of the
Premises Landlord learns of the presence of historic or archeological resources, Landlord shall
promptly notify Tenant of that discovery. If the discovery has a reasonable chance, in Landlord’s
reasonable opinion, of delaying the Commencement Date by more than nine (9) months, Tenant may
elect to exercise its termination rights under Section 3.A(iii) of this Lease at that time
unless Landlord can provide reasonable assurances to Tenant of its ability to complete the
construction within nine (9) months of the Commencement Date (as adjusted for change orders).



11.

USES PROHIBITED




     Tenant shall not use, or permit the Premises or any part thereof to be used, for any purpose
or purposes other than the Permitted Use as specified the Lease Schedule. If Tenant uses the
Premises for any use inconsistent with the provisions of this Lease, without the prior written
permission of Landlord and the Community, and such misuse continues for more than thirty (30) days
following notice of default from Landlord, the use will constitute a default and breach of this
Lease. No additional use shall be made or permitted to be made of the Premises, nor acts done,
which will cause a cancellation of any insurance policy covering the Premises, or any part thereof
in effect on the Commencement Date, nor shall Tenant sell, or permit to be kept, used or sold, in
or about the Premises, any article which may be prohibited by Landlord’s commercially reasonable
insurance policies. If any additional use made or permitted to be made to the Premises, or acts
done by Tenant, result in an increase in the existing rate of insurance upon the Premises, such
additional cost shall be borne solely by Tenant. Landlord hereby acknowledges and agrees that no
increase in the cost of Landlord’s insurance or cancellation of any insurance policy covering the
Premises shall result from Tenant’s use of the Premises for the Permitted Use of the Premises.
Tenant shall not commit or suffer to be committed, any material waste upon the Premises, or any
public or private nuisance or other act or thing which may disturb the quiet enjoyment of any other
tenant in the Riverwalk Project, nor, without limiting the generality of the foregoing, shall
Tenant allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose.
Tenant agrees at all times to use commercially reasonable efforts to cause the Premises to be
operated in material compliance with all federal, tribal, Community, state, local or municipal
laws, statutes, ordinances, and rules and regulations, including but not limited to those relating
to zoning, environmental protection, health, and safety (collectively, “Laws”). Tenant further
agrees to promptly cure any such violation at its own expense, and shall furthermore defend and
indemnify Landlord Indemnitees, for, from and against any and all Losses incurred as a result of
any violation of any of the foregoing. Tenant shall upon request of Landlord certify in writing
that it is in material compliance with applicable Laws for the preceding year. At the request of
Landlord, Tenant shall submit to Landlord, or shall make available for inspection and copying upon
reasonable notice and at reasonable times, any or all of the documents and materials prepared by or
for Tenant pursuant to any environmental law or regulation or submitted to any governmental
regulatory agency in conjunction therewith. Landlord Indemnitees and their respective
representatives shall have access to the Premises at all reasonable times to inspect, at their
expense, the same to confirm that Tenant is using the Premises in accordance with all Laws. Tenant
shall, at the request of Landlord and at Landlord’s expense, conduct such testing and analysis as
is necessary to ascertain whether Tenant is using the Premises in compliance with



F-19









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





all Laws,
provided however, (i) Landlord shall not request that Tenant conduct such tests unless required by
the Community or if Landlord has a reasonable suspicion that Tenant may be in violation of the
foregoing Laws, and (ii) if Tenant is found to be in violation, Tenant shall reimburse Landlord for
the actual and reasonable costs of such testing and analysis. Said tests shall be conducted by
qualified independent experts chosen by Tenant and subject to Landlord’s reasonable approval.
Copies of reports of any such tests shall be provided to Landlord. The provisions within this
paragraph shall survive termination of this Lease and shall be binding upon and shall inure to the
benefit of the parties hereto, the Master Lessor, the Community, the Secretary and their respective
successors and assigns, and mortgagees thereof.



12.

COMPLIANCE WITH LAWS




     A. Tenant shall not use the Premises or permit anything to be done in or about the Premises
which in any material way conflicts with any Laws now in force or which may hereafter be enacted or
promulgated, the violation of which would result in a liability to any Landlord Indemnitee. Tenant
shall, at its sole cost and expense, promptly comply with all Laws now in force or which may
hereafter be in force and with the requirements of any board of fire underwriters or other similar
body now or hereafter constituted relating to or affecting the condition, use or occupancy of the
Premises, excluding structural changes and changes to electrical and mechanical systems serving the
Premises not related to or affected by Tenant’s improvements or acts. The judgment of any court of
competent jurisdiction or the admission of Tenant in an action against Tenant whether Landlord be a
party thereto or not, that Tenant has violated any Laws shall be conclusive of that fact as between
Landlord and Tenant.



     B. At all times that Tenant shall operate the Deli, Lab and/or Workout Facilities, Tenant
shall maintain and comply with all applicable licenses and permits for such operations and Tenant
shall provide to Landlord a copy of all such licenses and permits and renewals of the same
throughout the Term of the Lease.



13.

ALTERATIONS AND REPAIRS




     A. Tenant shall, at its own expense, maintain the Premises in a clean, neat and sanitary
condition, and shall keep the Premises and every part thereof (including, without limitation, all
fixtures, alterations, improvements, systems and equipment in or exclusively serving the Premises
whether installed by Landlord or Tenant) in good repair and tenantable condition, and shall
promptly and adequately repair all damage to the Premises under the supervision and with the
approval of Landlord and within a reasonable period of time as specified by Landlord, loss by
ordinary wear and tear, fire and other casualty excepted. If Tenant does not do so promptly and
adequately within thirty (30) days following written notice from Landlord of its request that
Tenant do so, Landlord may, but need not, make such repairs and Tenant shall pay Landlord
immediately upon request by Landlord. Tenant hereby waives all rights to make repairs at the
expense of Landlord as provided by any law, statute or ordinance now or hereafter in effect, except
that (i) in an emergency when damage to Tenant’s property or personnel is imminent, if Tenant is
unable to contact Landlord or its property managers despite the exercise by Tenant of reasonable
efforts, or if Tenant is able to contact Landlord and/or its property managers, but the party
contacted advises Tenant that such party is unable to take immediate action, or (ii) if Tenant
notifies Landlord of a repair it claims to be necessary (provided that such repair is Landlord’s
obligation under this Lease) and such claim is not disputed by Landlord, and Landlord does not
repair it within thirty (30) days following written notice from Tenant of its request that Landlord
do so (or such longer period of time as may be reasonably required to cure a matter which, due to
its nature, cannot reasonably be remedied within thirty (30) days provided that Landlord is
pursuing such remedy diligently), then in either event Tenant may take such reasonable steps,
including repair, as are necessary for Tenant’s continued use and enjoyment of the Premises or to
protect property and/or personnel, and, within twenty (20) days after receipt by Landlord of an
invoice and supporting documentation showing Tenant’s actual and reasonable costs of such necessary
steps, Landlord shall reimburse Tenant for such actual and reasonable costs. To the extent not
covered by insurance that Landlord carries or is required by the terms of this Lease to carry,
Tenant shall pay for any repairs to the Premises and/or the Riverwalk Project made necessary by any
negligence or carelessness of Tenant or its employees or invitees (notwithstanding anything to the
contrary contained in this Lease).



     B. Tenant may not do any work (“Alterations”) in the Premises such as, but not limited to,
erecting permanent partitions, making alterations or additions, nailing, boring or screwing into
the ceilings, walls or floors without
the consent of Landlord in each and every instance, provided however, that a cosmetic Alteration
such as painting, decorating, wallpapering, carpeting or hanging pictures does not require notice
to or the approval of Landlord and provided further, Landlord’s consent shall not be unreasonably
withheld, conditioned or delayed in cases of non-cosmetic Alterations. Under such circumstances
however, compliance with this Section 13.B. is required. The decision of Landlord to
refuse such consent shall be conclusive. It shall not be unreasonable for Landlord to withhold its
approval of any Alteration which impacts structure or any building system, penetrates the roof,
would interfere with adjacent tenants, or which would otherwise result in requiring additional
improvements to the Premises and/or the



F-20









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





Riverwalk Project. In no event shall Tenant have the right
to install any fencing, barrier or other obstruction or take any action that prohibits access to
and/or through the Medicis Development (other than the Premises) by other tenants or occupants of
the Riverwalk Project and their agents, employees or invitees. In the event Landlord grants the
requested approval, Tenant shall be responsible for the cost of any such Alteration, as well as the
cost of any improvements to the Premises and/or the Riverwalk Project required as the result
thereof. In order to obtain such consent, Tenant shall furnish Landlord: (i) plans and
specifications for the Alterations (which Tenant warrants are in conformance with all applicable
Laws and consistent in all respects with the aesthetics and the following “Systems” of the
Premises: electrical, heating, ventilating, air-cooling, plumbing/fire protection and structural)
prepared at the expense of Tenant, by the Building engineers, or at the reasonable discretion of
Landlord, other engineers acceptable to Landlord, (ii) affidavits from such engineers stating that
the Alterations will not in any way adversely affect any Systems in the Premises, (iii) names and
addresses of contractors (“Contractors”) and subcontractors (“Subcontractors”), (iv) copies of
contracts with Contractors and Subcontractors which shall provide, among other things, that no
changes, amendments, extras or additional work are permitted without the consent of Landlord, and
(v) evidence of insurance coverage reasonably acceptable to Landlord. In addition, Tenant shall
comply with any and all additional procedures and requirements set forth on Appendix “B” in
connection with any such Alterations. Landlord reserves the right to deny any Contractor or
Subcontractor entry to the Premises but the failure of Landlord to exercise this right shall not be
deemed an approval of either the financial stability or quality of workmanship of any such
Contractor or Subcontractor.



     C. If Landlord grants such consent, all Alterations shall be performed at the sole expense of
Tenant, in a workmanlike manner and materials furnished shall be of a like quality to those in the
Building. If the Alterations involve any Systems, such shall be performed under the supervision of
Landlord and by contractors selected by Landlord. If the Alterations do not involve Systems, such
shall be performed under the supervision of Landlord. Subsequent to the granting of the consent by
Landlord but before the commencement of the Alterations or delivery of any materials onto the
Premises, Tenant shall furnish Landlord: (i) necessary permits, and/or other approvals required by
the Community, (ii) sworn Contractor affidavits listing all subcontracts with suppliers of
materials and/or labor, with whom Contractors have contractual relations for the Alterations, and
setting forth a summary of such contractual relationships, (iii) Subcontractor affidavits, (iv) if
such Alterations cost Fifty Thousand Dollars ($50,000.00) or more, (1) for credit-worthy tenants
(to be determined reasonably by Landlord) indemnification in the form of an irrevocable Letter of
Credit in a sum equal to the total value of the Alterations, and (2) for all other tenants,
indemnification in the form of cash in a sum equal to the total value of the Alterations, (v)
certificates of insurance from all Contractors and Subcontractors performing labor or furnishing
materials, insuring against any and all claims, costs, damages, liabilities and expenses which may
be reasonably requested by Landlord. The certificates of insurance required, in addition to any
other requirements of Landlord, must evidence coverage in amounts and from companies satisfactory
to Landlord and may be cancelable only with ten (10) days’ advance notice to Landlord. All
commercial general liability insurance policies shall name as additional insureds Landlord, the
Master Lessor and their respective agents, members and beneficiaries, if any, thereunder, and
Management Agent, and any other parties reasonably requested by Landlord, all as their interests
may appear. If Landlord consents or supervises, such shall not be deemed a warranty as to the
adequacy of the design or workmanship or quality of the materials and Landlord hereby disavows any
responsibility and/or liability for such. Additionally, under no circumstances shall Landlord have
any responsibility to repair or maintain any portion of the Alterations which either does not
function or ceases to function.



     D. Prior to the commencement or construction of any Alterations, Tenant shall give the Master
Lessor and the Secretary ten (10) days’ advance notice in writing of its intention to begin such
construction, repair or alteration, in order that non-responsibility notices may be posted and
recorded as may be provided by any applicable Laws. Nothing contained in this Lease shall be
construed as an obligation of the Secretary or Master Lessor to post such non-responsibility
notices. If required by the Community, in lieu of satisfying the requirement set forth in
Section 13.C.(iv) above, Tenant shall post a payment bond and/or a performance bond in the
amount of the total value of the Alterations assuring lien free completion in accordance with
approved plans and specifications. Such bonds shall be for the mutual benefit of, Landlord, the
Master Lessor, the Secretary and Tenant and shall be issued in the names of Landlord, the Master
Lessor, the Secretary and Tenant, as obligees and beneficiaries. Prior to the date Tenant
commences construction of any Alterations, Tenant shall submit evidence satisfactory to Landlord
and the Secretary that such bonds have been issued. During construction of the Alterations, upon
receipt by Landlord of waivers of mechanics’ liens and percentage completion certificates from
Tenant, Contractors and the architect, Landlord shall disburse the funds deposited pursuant to
Section 13.C.(iv)(2) to the joint order of Tenant and Contractors.



     E. Upon completion of the Alterations, and prior to final payment, Tenant shall (a) file or
record in the office of the County Recorder where the Medicis Development is located and post upon
the Premises, if and as may be required by Law, a Notice of Completion, (b) obtain the written
approval of Landlord for the quality of the Alterations, and (c) furnish Landlord with: (i)
Tenant, Contractors, and architectural completion affidavits, (ii) full and final waivers of lien,
(iii) receipted bills covering all labor and materials expended and used, (iv) other appropriate
documents evidencing completion of the Alterations, (v) as-built plans of the Alterations, and (vi)
a copy of any required Notice of Completion.



F-21









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.



     F. Tenant shall pay Landlord’s direct, out-of-pocket operating expenses for after-hours,
overtime elevator and/or hoist expenses incurred by Landlord in connection with any improvements to
the Premises, including base building work, but only to the extent that Tenant requests after-hours
work. Tenant shall cooperate with Landlord in scheduling such use.



     G. If the Alterations are being done near the Commencement Date, Tenant agrees to commence
payment of Base Rent and all Additional Rent upon the date and in the manner provided in this Lease
notwithstanding any delay in completing the Alterations or the Premises which may result from the
performance of the Alterations by Tenant or its Contractors.



     H. Tenant shall procure, or cause to be procured, and pay for all permits, licenses,
approvals, certificates and authorizations necessary to the prosecution and completion of the
Alterations. All Alterations shall be done in strict accordance with all Laws and requirements of
any applicable board of underwriters or fire rating bureau and all municipal, state, tribal,
federal and other authorities having jurisdiction. Where drawings and specifications conflict with
the law, the law is to be followed. Tenant shall promptly notify the respective departments or
official bodies when the Alterations are ready for inspection and shall, at once, do all work
required to remove any violations or to comply with such inspections, without additional charge to
Landlord. Tenant shall perform, or cause to be performed, all work necessary to obtain approvals
from authorities mentioned above without additional cost to Landlord.



     I. Except with respect to the initial construction of the Premises, Tenant agrees to
reimburse Landlord for actual, out-of-pocket sums expended for examination and approval of the
architectural and mechanical plans and specifications. Such reimbursement shall exclude, however,
cost of any of Landlord’s employees (including a fee for overhead), but include cost of any
“third-party” consultants, architects, engineers, attorneys, or other consultants. In addition,
except with respect to the initial construction of the Premises, Landlord reserves the right to
charge Tenant a fee for services to review plans and specifications, to review work as it
progresses, to evaluate that work in place is consistent with approved plans, and to prepare a
final inspection and punchlist. The amount of the fee shall be the greater of two percent (2%) of
the cost of the work or at least $104.00 per hour, or such other reasonable rate as may be
established from time to time by Landlord. Such fee shall be established prior to commencement of
the Alterations.



     J. [Intentionally omitted]



     K. Tenant hereby agrees to indemnify and hold the Master Lessor, the Community, the Secretary,
the United States and their respective agents and employees harmless for, from and against any and
all Losses which may arise out of or be connected in any way with the construction of the
Alterations. Tenant hereby agrees to indemnify and hold Landlord and its members, mortgagees,
Management Agent and their respective agents and employees harmless for, from and against any and
all Losses which may arise out of or be connected in any way with the construction of the
Alterations, except to the extent the same result from the negligence or willful misconduct of
Landlord or its members, managers, Management Agent or their respective agents and employees. Any
mechanic’s lien (or any notice preliminary to lien) filed against the Premises, or the Riverwalk
Project, for the Alterations or materials claimed to have been furnished to Tenant shall be
discharged of record (or paid if a notice be served) by Tenant within ten (10) days after filing
(or service) at the expense of Tenant, provided however, that if Tenant has on deposit with
Landlord one hundred fifty percent (150%) of the lien in cash and otherwise holds Landlord harmless
and indemnifies Landlord, Tenant may contest the lien, but only so long as Tenant diligently
prosecutes such lien contest. Nothing contained in this Lease shall be construed as a waiver of
the immunity of trust or restricted property from mechanic’s liens while the Premises are in a
trust or restricted status or provide any governmental agency a right to tax Landlord.



     L. All building-standard additions, decorations, fixtures, hardware, non-trade fixtures and
all permanent improvements, in or upon the Premises (including, but not limited to, floor to
ceiling demountable partitions and all infrastructure associated with such installation, indirect
lighting attached to movable furniture partitions, areas of raised computer flooring and
underfloor, cabling, electrical distribution and ductwork), whether placed there by Tenant or
Landlord, shall, unless Landlord requests their removal at the time Landlord consents to the
applicable Alteration, become the property of Landlord and shall remain upon the Premises at the
termination of this Lease by lapse of time or otherwise without compensation, allowance or credit
to Tenant. If, upon the request of Landlord, Tenant does not remove said additions, decorations,
fixtures, hardware, non-trade fixtures and improvements, Landlord may remove them and
Tenant shall pay the expense of such removal to Landlord upon demand. Tenant may request in
writing at the time it submits its plans and specifications for an Alteration to Landlord
(including Tenant’s Construction Plans), that Landlord notify Tenant whether Landlord will require
that Tenant shall, on the election of Landlord, remove, at the termination of this Lease, such
Alteration or any particular portion thereof and Landlord shall notify Tenant on or before it
approves such plans as to whether or not it will require removal. Notwithstanding the foregoing,
Tenant shall be permitted to remove any of the equipment, fixtures and improvements in any of the
special areas as well as the security system and the Generators, provided that Tenant promptly
repairs any damage caused by such removal.



F-22









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.



     M. Unless otherwise agreed by Landlord and Tenant in writing, all of the foregoing work shall
be performed either by or under the direction of Landlord, but at the cost of Tenant.



     N. Tenant shall, at the termination of this Lease or Tenant’s right to possession of the
Premises, surrender the Premises to Landlord in as good condition and repair as reasonable and
proper use thereof will permit, loss by ordinary wear and tear, fire or other casualty excepted.



     O. The Premises and the Riverwalk Project are within the political boundaries of the Community
and the Laws of the Community do not provide lien rights to any person or entity that would
otherwise have lien rights under Arizona Laws, including, contractors, architects, engineers,
subcontractors and suppliers (the “Service Providers”). Notwithstanding any provision in this
Lease or the Master Lease to the contrary, Service Providers do not have rights under this Lease,
the Master Lease or the Laws of the State of Arizona to obtain, file or record any laborers,
materialmen’s, mechanic’s or other similar lien or claim against any personal property, the
Premises or the Riverwalk Project. Tenant will include this Section 13.O. in each Service
Provider contract for those who provide services in excess of $10,000 per year that would
reasonably be expected to seek to impose a lien on the Premises.



14.

ABANDONMENT




     All trade fixtures and Tenant’s personal property shall be removed upon the expiration or
termination of this Lease or Tenant’s right to possession of the Premises, provided however, that
Tenant shall be responsible for the repair of any damage caused to the Premises by the removal of
such trade fixtures and personal property. In the event Tenant fails to remove such trade fixtures
and personal property upon the expiration or sooner termination of this Lease or Tenant’s right to
possession of the Premises under this Lease, such fixtures and property shall, at the option of
Landlord, be deemed abandoned by Tenant to Landlord as if voluntarily conveyed by Tenant to
Landlord by a bill of sale, provided that Tenant was not prevented by Landlord from removing that
property.



15.

ASSIGNMENT AND SUBLETTING




     A. Tenant shall not assign, hypothecate, encumber or mortgage or otherwise transfer this
Lease, or any interest therein and shall not sublet the Premises or any part thereof, or any right
or privilege appurtenant thereto, or suffer any other person to occupy or use the Premises, or any
portion thereof, without the written consent of Landlord first had and obtained, which consent
shall not be unreasonably withheld, conditioned or delayed. For purposes of this Section, the term
"transfer” shall also include, and all of the foregoing provisions shall apply to: (i) the
conversion, merger or consolidation of Tenant into a limited liability company or limited liability
partnership, (ii) if Tenant is a partnership or limited liability company, the withdrawal or
change, voluntary, involuntary or by operation of law, of a majority of the partners or members, or
a transfer of a majority of partnership or membership interests, within a twelve (12) month period,
or the dissolution of the partnership or company, and (iii) if Tenant is a closely held corporation
(i.e., whose stock is not publicly held and not traded through an exchange or over the counter),
the dissolution, merger, consolidation or other reorganization of Tenant, or within a twelve (12)
month period: (a) the sale or other transfer of more than an aggregate of forty-nine percent (49%)
of the voting shares of Tenant (other than to immediate family members by reason or gift or death)
or (b) the sale of more than an aggregate of forty-nine percent (49%) of Tenant’s net assets.
Notwithstanding the foregoing, provided that Tenant is not then in default under this Lease, Tenant
shall have the right, without approval from Landlord, but only after written notice to Landlord and
providing Landlord with a fully executed copy of the assignment and assumption agreement or
sublease agreement, as applicable, to sublease all or a portion of the Premises or assign its
interest in this Lease (i) to any person or entity (a “Person”) that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under common control with
Tenant; (ii) in the event of the merger or consolidation of Tenant with another Person; (iii) in
the event of a sale or transfer of all or substantially all of the stock of Tenant or all or
substantially all of Tenant’s assets; or (iv) to any franchisee or licensee of Tenant, provided
that immediately following the events enumerated in clauses (i) to (iii) above, the tangible net
worth of the assignee (in the event of an assignment) calculated in accordance with generally
accepted accounting principles, consistently applied, is not less than the tangible net worth,
calculated in accordance with generally accepted accounting
principles, consistently applied, of Tenant immediately prior to the events described in clauses
(i) through (iii) above or the Commencement Date, whichever is lower (collectively, the “Permitted
Transfers”). No Permitted Transfer, or other assignment or subletting transaction, shall relieve
Tenant of liability under this Lease. As used herein, the term “Control” shall mean ownership of
fifty-one percent (51%) or more of the voting securities or rights of the controlled entity.
Tenant agrees all advertising by Tenant or on Tenant’s behalf in any general circulation newspaper
with respect to the leasing or subletting of the Premises or any part thereof or assignment of this
Lease, must offer the space for lease at a rental not less than that for which comparable space in
the Medicis Development is then being offered by Landlord for rent or not advertise the rental rate
for such space.



F-23









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.



     B. Except for assignments and subleases to affiliates or subsidiaries as provided in the
immediately preceding paragraph, Tenant shall, by notice in writing, advise Landlord of its
intention from on and after a stated date (which shall not be less than sixty (60) days after the
date of Tenant’s notice) to assign or to sublet any such part of all of the Premises for the
balance or any part of the Term. Tenant’s said notice shall state the name and address of the
proposed subtenant, the proposed subtenant’s intended use of the Premises, and shall include the
potential subtenant’s most current certified financial statement, and a true and complete copy of
the proposed assignment or sublease shall be delivered to Landlord with said notice. Landlord will
not unreasonably withhold its consent to Tenant’s assigning or subletting the space covered by its
notice. Landlord will not offer to or enter into a lease for space within the Building or other
office premises within the Riverwalk Project with a proposed subtenant of Tenant with whom Tenant
has had significant leasing negotiations leading to the preparation of a letter of intent and/or
draft lease within six (6) months prior to the date Landlord offers or enters into such lease
unless Landlord obtains Tenant’s prior written consent to such offer/lease, which consent Tenant
shall not unreasonably withhold; provided, however, that the foregoing restriction shall not apply
to a proposed lessee of Landlord with whom Landlord has independently commenced leasing discussions
prior to the date Tenant commenced subleasing negotiations with such proposed lessee (which
independent discussions shall be verified by reasonable written evidence provided by Landlord to
Tenant upon request by Tenant). Landlord and Tenant acknowledge and agree that it shall be
reasonable for Landlord to withhold its consent if (i) Tenant is then in default under this Lease,
(ii) the proposed assignee or sublessee (a “Transferee”) shall not be of sound financial net worth
(meaning the financial ability to perform its obligations under this Lease or sublease, as
applicable, as reasonably determined by Landlord) at the time of the assignment or sublease, or
shall not have sufficient liquid capital to properly operate its business, (iii) the business
skills, experience or reputation of the proposed Transferee are insufficient to reasonably assure
Landlord of a successful business operation at the Premises, or (iv) the proposed use is not
permitted under the Master Lease or this Lease. Landlord’s consent to any assignment or subletting
pursuant to this Section 15.B., shall be subject to the following: (v) Any Transferee
shall expressly assume all the obligations of this Lease on Tenant’s part to be performed; (vi)
such consent if given shall not release Tenant of any of its obligations (including, without
limitation, its obligation to pay rent) under this Lease; (vii) Tenant agrees specifically to pay
over to Landlord, as Additional Rent, one-half (1/2) of all sums received by Tenant under the terms
and conditions to such assignment or sublease, which are in excess of the amounts otherwise
required to be paid pursuant to this Lease less Tenant’s actual and reasonable costs of such
assignment or sublease; (viii) a consent to one assignment, subletting, occupation or use shall be
limited to such particular assignment, sublease or occupation and shall not be deemed to constitute
Landlord’s consent to an assignment or sublease to or occupation by another person; and (ix) the
Transferee is not (nor, immediately prior to such assignment or sublease, as applicable, was not) a
tenant or occupant in the Medicis Development or any other building owned or operated by Landlord
or any affiliate thereof, in the Riverwalk Project unless that Transferee continues to lease or
occupy the then existing space in the Riverview Project. Any such assignment or subletting without
such consent shall be void and shall, at the option of Landlord, constitute a default under this
Lease. Tenant will pay all of Landlord’s costs associated with any such assignment or subletting
including but not limited to reasonable legal fees.



     C. Notwithstanding the foregoing, Tenant shall have the right, without Landlord’s prior
consent, but only after written notice to Landlord, to enter into small space subleases (not to
exceed one half (1/2) of a floor in each instance), but such subleases shall be effective only after
written notice to Landlord and providing Landlord with a fully executed copy of the sublease.



16.

SIGNS




     Except as provided in this Lease, Landlord shall retain absolute control over the exterior
appearance of the Premises. Tenant shall not install, or permit to be installed, any drapes,
shutters, signs, lettering, advertising, or any items that will in any way, in the sole opinion of
Landlord, adversely alter the appearance of the Premises from adjacent streets or the exterior
appearance of the Premises as viewed from the streets adjacent to the Premises, except for any
notices required by Law and signs relating to compliance with safety or security monitoring.
Notwithstanding the foregoing, but subject in all events to the comprehensive sign package as
approved by the Community and Landlord, Landlord shall install, at Tenant’s cost, subject to
reimbursement from Landlord’s Contribution (if any portion of Landlord’s Contribution
remains unapplied at the time Tenant’s signage is installed), (a) Tenant’s name and logo on the top
fascia of the Premises and no other name shall appear thereon so long as Tenant is not in default
under this Lease beyond any applicable notice and cure period, (b) Tenant’s name and logo on a
monument sign serving the Medicis Development (the location of such monument sign and Tenant’s
panel on such monument sign shall be determined by Landlord in its sole but reasonable discretion),
and (c) Premises address directional signage throughout the Riverwalk Project. Subject to the
comprehensive sign criteria for the Riverwalk Project and the prior written approval of the
Community and Landlord, Tenant shall have the right to install and maintain such signage as Tenant
shall elect throughout the Premises and Phase I Improvements.



F-24









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.



17.

DAMAGE TO PROPERTY - INJURY TO PERSONS




     A. Tenant, as a material part of the consideration to be rendered to Landlord under this
Lease, to the fullest extent permitted by law, hereby waives all claims, except to the extent
caused by or resulting from the non-performance of Landlord, the willful or negligent act or
omission of Landlord, or its agents, servants or employees, which Tenant or Tenant’s successors or
assigns may have against Landlord, or its agents, servants or employees for loss, theft or damage
to property and for injuries to persons in, upon or about the Premises from any cause whatsoever.
Tenant will hold Landlord, and its agents, servants and employees exempt and harmless for, from and
against and on account of any damage or injury to any person, or to the goods, wares, and
merchandise of any person, arising from the uses of the Premises by Tenant or arising from the
failure of Tenant to keep the Premises in good condition as herein provided except to the extent
the non-performance by Landlord or negligence of Landlord, or its agents, servants or employees
contributes thereto. Neither Landlord nor its agents, servants or employees shall be liable to
Tenant for any damage by or from any act or negligence of any assignee or subtenant of Tenant, or
by any owner or occupant of adjoining or contiguous property. Except to the extent covered by
insurance that Tenant or Landlord carries or is required to carry pursuant to the terms of this
Lease, Tenant agrees to pay for all damage to the Premises, as well as all damage to tenants or
occupants thereof caused by Tenant’s misuse or neglect of the Premises, its apparatus or
appurtenances or caused by any licensee, contractor, agent or employees of Tenant.



     B. Particularly, but not in limitation of the foregoing paragraph, all property belonging to
Tenant in the Premises shall be there at the risk of Tenant or such other person only, and the
Landlord Indemnitees or their respective agent, servants or employees (except in case of
non-performance by a Landlord Indemnitee or their respective employees or agents or their negligent
or willful act or omission) shall not be liable for: damage to or theft of or misappropriation of
such property; nor for the loss of or damage to any property by theft or otherwise, by any means
whatsoever, nor for any injury or damage to persons or property resulting from fire, explosion,
falling plaster, steam, gas, electricity, snow, water or rain which may leak from any part of the
Premises or from the pipes, appliances or plumbing works therein or from the roof, street or
subsurface or from any other place or resulting from dampness or any other cause whatsoever; nor
for interference with the light or other incorporeal hereditaments, nor for any latent defect in
the Premises. Tenant shall give prompt notice to Landlord in case of fire or accidents in the
Premises or of known defects therein or in the fixtures or equipment.



     C. In case any action or proceeding be brought against a Landlord Indemnitee by reason of any
obligation on Tenant’s part to be performed under the terms of this Lease, or arising from any act
or negligence of Tenant, or of its agents or employees, Tenant, upon notice from a Landlord
Indemnitee shall defend the same at Tenant’s expense by counsel reasonably satisfactory to the
Landlord Indemnitees. In case any action or proceeding be brought against Tenant by reason of any
obligation of Landlord’s part to be performed under the terms of this Lease, or arising from any
act or negligence of Landlord, or of its agents or employees, Landlord, upon notice from Tenant,
shall defend the same at Landlord’s expense by counsel reasonably satisfactory to the Tenant.



     D. Tenant shall maintain in full force and effect during the Term of this Lease (including any
period prior to the beginning of the Term during which Tenant has taken possession and including
also any period of extension of the Term in which Tenant retains possession), in responsible
companies approved by Landlord as are rated A-VII or better in the then current edition of the
Best’s Insurance Guide, (i) Special Form Causes of Loss Property Coverage covering all Tenant’s
property in, on or about the Premises, with full waiver of subrogation rights against Landlord, the
Master Lessor, the Community and the Secretary in an amount equal to the full replacement cost of
such property, and (ii) commercial general liability insurance insuring the Premises against all
claims, demands or actions for injury to or death of any one person in an amount of not less than
two million dollars ($2,000,000.00) and for bodily injury including death or property damage in an
amount no less than five million dollars ($5,000,000.00) combined single limit of liability per
occurrence and in the aggregate or such other amounts as Landlord may reasonably require from time
to time. Tenant’s insurance deductibles shall be in amounts comparable, in Landlord’s reasonable
judgment, to deductibles maintained by tenants of similar office buildings in the Scottsdale,
Arizona market. Landlord shall maintain in full force and effect during the Term of this Lease
Special Form Causes of Loss Property Coverage for the full replacement cost of the Premises, and
the contents belonging to Landlord therein, commercial generally liability insurance, including
elevator coverage, insuring Landlord against all claims,
demands or actions for bodily injury including death or property damage in an amount no less than
five million dollars ($5,000,000.00) combined single limit of liability per occurrence and in the
aggregate, and worker’s compensation insurance, the premiums for which shall be included in
Operating Costs. That insurance shall be with responsible companies as are rated A-VII or better
in the then current edition of the Best’s Insurance Guide.



     E. All such policies of Tenant shall name Landlord, any mortgagees of Landlord, the Master
Lessor, and all other parties designated by Landlord as additional insured parties. Landlord’s
policy of commercial general liability insurance covering the Premises shall name Tenant as an
additional named insured. All insurance policies shall indicate that at least thirty (30) days’
prior written notice shall be delivered to all additional insured parties by the insurer prior to



F-25









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





termination or cancellation of such insurance and Tenant and Landlord with respect to Landlord’s
policy of commercial general liability insurance shall provide certificates of insurance, not less
than ten (10) days prior to the Commencement Date, evidencing the aforesaid coverage to all insured
parties. Such certificates shall: (i) be on ACORD Form 27 or such other form approved or required
by Landlord, (ii) state that such insurance coverage may not be changed, canceled or non-renewed
without at least thirty (30) days’ prior written notice to Landlord and to Tenant with respect to
Landlord’s policy of commercial general liability insurance, and (iii) include, as attachments,
originals of the additional insured endorsements to the commercial general liability policies
required above. Tenant shall provide renewal certificates to Landlord and Landlord shall provide
renewal certificates to Tenant with respect to Landlord’s policy of commercial general liability
insurance at least thirty (30) days prior to expiration of such policies. Except as expressly
provided to the contrary herein, coverage hereunder shall apply to events occurring during the
policy year regardless of when a claim is made. Except as provided to the contrary herein, any
insurance carried by Landlord or Tenant shall be for the sole benefit of the party carrying such
insurance. Failure of Tenant to provide the insurance coverage set forth in subparagraphs (i),
(ii) and (iii) in the immediately preceding paragraph shall entitle Landlord to either (a) treat
said failure as a default and/or (b) obtain such insurance and charge Tenant the premiums therefor
plus interest thereon as Additional Rent. Tenant shall not violate or permit a violation of any of
the conditions or terms of any such insurance policies and shall perform and satisfy all reasonable
requirements of the insurance company issuing such policies. With respect to any insurance policy
procured to comply with any financial assurance requirement imposed by any Community, state or
federal law or regulation, or to any other casualty, property, or environmental impairment
insurance purchased by Tenant, such policy or policies shall name Landlord, any mortgagees of
Landlord and the Master Lessor as additional insured parties.



18.

DAMAGE OR DESTRUCTION




     In the event the Premises are damaged by fire or other insured casualty and the insurance
proceeds have been made available therefore to Landlord by the holder or holders of any mortgages
or deeds of trust covering the Premises, the damage shall be repaired by and at the expense of
Landlord to the extent such insurance proceeds available therefor, provided such repairs can, in
Landlord’s reasonable opinion, be made within two hundred seventy (270) days after the occurrence
of such damage without the payment of overtime or other premiums. Landlord shall commence repairs
promptly following receipt of permits for such repairs, Landlord covenanting to use commercially
reasonable efforts to obtain such permits promptly following the casualty. Until such repairs are
completed, the rent shall be abated to the extent the Premises are rendered untenantable. If
repairs cannot, in Landlord’s reasonable opinion be made within two hundred seventy (270) days,
Landlord shall notify Tenant within forty-five (45) days of the occurrence of such damage of its
determination, in which event, or in the event such repairs are commenced but are not substantially
completed within two hundred seventy (270) days of the date of such occurrence, either party may,
by written notice to the other given within ten (10) days after Landlord’s notification or the
expiration of said two hundred seventy (270)-day period, as the case may be, cancel this Lease as
of the date of the occurrence of such damage. In addition, if Landlord notifies Tenant that it
expects to complete repairs within the two hundred seventy (270) day period noted above, but, if
despite Landlord’s good faith and diligent efforts, it becomes apparent that those repairs will not
be completed within that period, then Landlord shall promptly notify Tenant of that circumstance
and Tenant shall have the right to terminate this Lease by written notice to Landlord given within
ten (10) days after Landlord’s notification. Except as provided in this Section, there shall be no
abatement of rent and no liability of Landlord by reason of any injury to or interference with
Tenant’s business or property arising from any such fire or other casualty or from the making or
not making of any repairs, alterations or improvements in or to any portion of the Premises or in
or to fixtures, appurtenances and equipment therein not caused by Landlord or its agents’
negligence or willful misconduct. Tenant hereby waives any statutory or common law rights of
termination which may arise by reason of any partial or total destruction of the Premises. Tenant
understands that Landlord will not carry insurance of any kind on Tenant’s furniture or furnishings
or on any fixtures or equipment removable by Tenant under the provisions of this Lease and that
Landlord shall not be obliged to repair any damage thereto or replace the same not caused by the
negligence or willful misconduct of Landlord or its employees or agents. Landlord shall not be
required to repair any injury or damage caused by fire or other cause, or to make any repairs or
replacements to or of improvements installed in the Premises by or for Tenant not caused by the
negligence or willful misconduct of Landlord or its employees or agents.



19.

ENTRY BY LANDLORD




     Landlord, the Master Lessor, the Community, the Secretary, and their respective agents shall
have the right to enter the Premises at all reasonable times (upon reasonable notice except in
cases of emergency or to supply service required to be provided by Landlord or Tenant hereunder)
for the purpose of examining or inspecting the same, to supply janitorial services and any other
service required to be provided by Landlord to Tenant hereunder or any other tenants, to show the
same to prospective purchasers or tenants of the Premises, and make such alterations, repairs,
improvements, or additions, whether structural or otherwise, to the Premises as Landlord may deem
necessary or desirable, or to post and keep posted thereon notices of non-responsibility or such
other notices which they may deem to



F-26









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





be proper for the protection of their interest in the
Premises. In the event notice of entry is required, Tenant shall have the right to accompany any
such persons in its discretion. Subject to Tenant’s right to require an escort, such parties may
enter by means of a master key without liability to Tenant except for any failure to exercise due
care for Tenant’s property and without affecting this Lease. Such parties shall use reasonable
efforts on any such entry not to unreasonably interrupt or interfere with Tenant’s use and
occupancy of the Premises.



20.

INTENTIONALLY OMITTED




21.

DEFAULT




     A. The occurrence of any one or more of the following events will constitute an event of
default on the part of Tenant:



          (i) Tenant fails to pay any installment of rent (whether Base Rent or Additional Rent) or any
other sum required to be paid hereunder, or any part thereof when due, which failure is not cured
within five (5) business days after written notice thereof by Landlord to Tenant, or




          (ii) Tenant defaults in the prompt and full performance of any other (i.e. other than payment
of rent or any other sum) covenant, agreement or condition of this Lease and such other default
continues for a period of thirty (30) days after written notice thereof from Landlord to Tenant
(unless such other default involves a hazardous condition, in which event it shall be cured
forthwith), provided however in the event such default cannot be cured within a period of thirty
(30) days and Tenant is diligently attempting to cure such default, the time period to cure same
shall be reasonably extended for so long as is reasonably necessary to cure the default; provided,
however, that the violation by Tenant of the provisions of Article 44 shall not constitute
an event of default on the part of Tenant, or




          (iii) The leasehold interest of Tenant is levied upon under a final non-appealable execution
or attachment by process of law, or Tenant abandons the Premises, or




          (iv) The bankruptcy or insolvency of Tenant that is not set aside after thirty (30) days.




     B. Upon the occurrence of an event of default under this Lease by Tenant, Landlord may,
without prejudice to any other rights and remedies available to a landlord at law, in equity or by
statute, exercise one or more of the following remedies, all of which shall be construed and held
to be cumulative and non-exclusive: (a) Terminate this Lease and re-enter and take possession of
the Premises, in which event, Landlord is authorized to make such repairs, redecorating,
refurbishments or improvements to the Premises as may be necessary in the reasonable opinion of
Landlord acting in good faith for the purposes of reletting the Premises and the costs and expenses
incurred in respect of such repairs, redecorating and refurbishments and the expenses of such
reletting (including brokerage commissions) shall be paid by Tenant to Landlord within five (5)
days after receipt of Landlord’s statement; or (b) Without terminating this Lease, re-enter and
take possession of the Premises; or (c) Without such re-entry, recover possession of the Premises
in the manner prescribed by any statute relating to summary process, and any demand for rent,
re-entry for condition broken, and any and all notices to quit, or other formalities of any nature
to which Tenant may be entitled, are hereby specifically waived to the extent permitted by law; or
(d) Without terminating this Lease, Landlord may relet the Premises as Landlord may see fit without
thereby voiding or terminating this Lease, and for the purposes of such reletting, Landlord is
authorized to make such repairs, redecorating, refurbishments or improvements to the Premises as
may be necessary in the reasonable opinion of Landlord acting in good faith for the purpose of such
reletting, and if a sufficient sum is not realized from such reletting (after payment of all costs
and expenses of such repairs, redecorating and refurbishments and expenses of such reletting
(including brokerage commissions) and the collection of rent accruing therefrom) each month to
equal the Annual Base Rent and Additional Rent payable hereunder, then Tenant shall pay such
deficiency each month within ten (10) days after receipt
of Landlord’s statement; provided, however, Landlord may first lease Landlord’s other available
space and shall not be required to accept any tenant offered by Tenant or to observe any
instructions given by Tenant with respect to any such reletting; or (e) Landlord may declare
immediately due and payable all the remaining installments of Annual Base Rent and Additional Rent,
and such amount, less the fair rental value of the Premises for the remainder of the Term, shall be
paid by Tenant within ten (10) days after receipt of Landlord’s statement. Landlord shall not by
re-entry or any other act, be deemed to have terminated this Lease, or the liability of Tenant for
the total Annual Base Rent and Additional Rent reserved hereunder or for any installment thereof
then due or thereafter accruing, or for damages, unless Landlord notifies Tenant in writing that
Landlord has so elected to terminate this Lease. Upon an event of default, Tenant shall also pay
to Landlord all costs and expenses reasonably incurred by Landlord, including court costs and
reasonable attorneys’ fees, in retaking or otherwise obtaining possession of the Premises, removing
and storing all equipment, fixtures and personal property on the Premises and otherwise enforcing
any of Landlord’s rights, remedies or recourses arising as a result of an event of default. All of
the remedies



F-27









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





granted to Landlord in this Lease in the event Tenant commits an event of default are
in addition to all other rights or remedies available to a landlord at law, in equity or by
statute, including, without limitation, the right to seize and sell all goods, equipment and
personal property of Tenant located in the Premises and apply the proceeds thereof to all due and
unpaid Annual Base Rent, Additional Rent and other amounts owing under this Lease. All rights,
options and remedies available to Landlord shall be construed and held to be cumulative, and no one
of them shall be exclusive of the other. In illustration and not limitation of the preceding
sentence, if an event of default under Section 21.A. occurs, Landlord and Tenant expressly
agree that (a) Landlord may, at its option, either (i) exercise its rights of self-help set forth
in this Lease to recover possession of the Premises without judicial process, or (ii) pursue its
speedy remedies available under the forcible entry and detainer Laws of the Community, the State of
Arizona, or any other competent jurisdiction, to recover possession of the Premises, and that (b)
any judgment obtained in a court of the Community, of the Maricopa County Superior Court of the
State of Arizona, or any other court of competent jurisdiction, awarding possession of the Premises
to Landlord, may be enforced by either (i) judicial process or (ii) Landlord exercising its
self-help remedy of re-entering and re-taking possession of the Premises without further judicial
process or hearing (Tenant hereby expressly waiving any and all rights to such judicial process and
hearing).



     C. Tenant hereby waives all claims for damages which may be caused by the re-entry of Landlord
and taking possession of the Premises or removing or storing the furniture and property as herein
provided, and will save Landlord harmless for, from and against any liability, loss, costs or
damages occasioned Landlord thereby, and no such re-entry shall be considered or construed to be a
forcible entry.



     D. Nothing herein contained shall limit or prejudice the right of Landlord to provide for and
obtain as damages by reason of any such termination of this Lease or of possession an amount equal
to the maximum allowed by any statute or rule of law in effect at the time when such termination
takes place, whether or not such amount be greater, equal to or less than the amounts of damages
which Landlord may elect to receive as set forth above.



     E. In addition to the late charge described in Section 5.B. above, if any installment
of Annual Base Rent or Additional Rent is not paid promptly when due, it shall bear interest at the
rate of four percent (4%) per annum; provided, however, this provision shall not relieve Tenant
from any default in the making of any payment at the time and in the manner required by this Lease.



     F. As reflected in Paragraph 14 of the Lease Schedule, as an inducement to Tenant
entering into this Lease, Landlord has agreed to (i) abate all Base Rent and Operating Costs during
the *** of the Term, and (ii) abate Base Rent and Operating Costs during the
*** of the Term with respect to 25,000 RSF of the Premises (together, the
"Rent Abatement”). If this Rent Abatement had not been given, Tenant would be responsible for
paying Landlord (A) Base Rent in the additional amount of (1) $*** during the *** (approximately $*** per month) of the Term (calculated on the basis of $*** per RSF of the
Premises per annum), and (2) $*** during the *** (approximately $*** per
month) of the Term (calculated on the basis of $*** per 25,000 RSF per annum), plus (B) the
additional amount of Additional Rent otherwise payable (1) during the *** of
the Term for the entire Premises, and (2) during the *** of the Term for
25,000 RSF of the Premises. Landlord’s agreement to provide the Rent Abatement to Tenant is
expressly conditioned upon Tenant’s full and faithful performance of the material terms, covenants
and conditions of this Lease. In the event of an uncured default under the terms of this Lease by
Tenant (after receipt of any required written notice and the expiration of any applicable cure
period), the Rent Abatement shall automatically be deemed deleted from this Lease and of no
further force and effect, and the entire amount of the Rent Abatement (i.e., $*** plus Additional
Rent otherwise payable (y) during the *** of the Term for the entire Premises,
plus (z) during the *** of the Term, for 25,000 RSF of the Premises, plus
applicable rental tax) shall be immediately due and payable by Tenant to Landlord. The acceptance
by Landlord of any payment or cure of the default which initiated the operation of this paragraph
shall be deemed a waiver by Landlord of the provisions of this paragraph. For purposes of this
subsection 21.F, an obligation shall not be deemed to be material unless it results in
actual damages to Landlord in excess of $***; provided that Landlord shall not claim as damages any
amounts paid during the cure period and any damages covered or to be covered by insurance.



     G. In the event of a breach, default or noncompliance hereunder by Landlord, Tenant agrees,
before exercising any right or remedy available to it under this Lease or at Law, to give Landlord
written notice of the claimed breach, default or noncompliance. If prior to its giving such notice
Tenant has been notified in writing (by way of notice of assignment of rents and leases, or
otherwise) of the address of a lender, mortgagee or trustee which has furnished financing that is
secured by a Mortgage, concurrently with giving the notice to Landlord, Tenant agrees to also give
notice by registered mail to such lender, mortgagee or trustee. For the thirty (30) days following
such notice (or such longer period of time as may be reasonably required to cure a matter which,
due to its nature, cannot reasonably be remedied within thirty (30) days provided that Landlord is
pursuing such remedy diligently), Landlord shall have the right to cure the breach, default or
noncompliance involved. Any such lender, mortgagee and/or trustee may cure such default within the
same thirty (30) day period if said lender, mortgagee and/or trustee has commenced and is
diligently pursuing the actions or remedies necessary to cure the breach, default or noncompliance
involved (including, but not



F-28









 






CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





limited to, commencement and prosecution of proceedings to foreclose
or otherwise exercise its rights against Landlord under its Mortgage or other security instrument,
if necessary to effect such cure), in which event Tenant shall not be entitled to exercise any
right or remedy available to it under this Lease or at Law so long as such actions or remedies are
being diligently pursued by said lender, mortgagee and/or trustee. In no event shall Tenant have
the right to terminate this Lease as a result of Landlord’s default and Tenant’s remedies shall be
limited to an injunction and/or Tenant’s actual damages. Further, Tenant shall have no right of
self-help to perform repairs or any other obligation of Landlord except as expressly permitted
herein, and shall have no right to withhold, set-off, or abate Base Rent or Additional Rent except
as expressly permitted herein, and Tenant hereby expressly waives the benefit of any Law to the
contrary. If Tenant fails to give notice to Landlord and any lender, mortgagee and/or trustee of a
default within twelve (12) months of the occurrence of the events pursuant to which the default
arises or would occur with notice as provided above, thereafter Tenant shall have no right to deem
the same a default hereunder; provided that with respect to claims related to Landlord’s failure to
repair and/or replace a latent defect in accordance with Section 10.A. of this Lease, if
Tenant fails to give such notice within three (3) years after the Commencement Date, thereafter
Tenant shall have no right to deem such failure by Landlord a default hereunder.



22.

RULES AND REGULATIONS




     The rules and regulations attached hereto and marked Appendix “C”, as well as such
reasonable rules and regulations as may be hereafter adopted by Landlord for the safety, care and
cleanliness of the Premises and the preservation of good order thereon, are hereby expressly made a
part hereof, and Tenant agrees to obey all such rules and regulations. The violation of any such
rules and regulations by Tenant which are not cured or complied with thirty (30) days after receipt
of written notice of violation from Landlord shall be deemed a default under this Lease by Tenant,
affording Landlord all those remedies set out in this Lease. Landlord agrees all rules and
regulations shall be uniformly enforced. In addition to all other liabilities for breach of any
covenants of Appendix “C”, Tenant shall pay to Landlord all damages caused by such breach
and shall also pay to Landlord as Additional Rent an amount equal to any increase in insurance
premiums caused by such breach. Any violation of Appendix “C” may be restrained by
injunction. Landlord shall have the right to make such reasonable rules and regulations as
Landlord or its Management Agent may from time to time adopt on such reasonable notice to be given
as Landlord may elect. In the event a conflict between rules and this Lease occurs, this Lease
shall control, provided, however, that the lack of a provision in this Lease covering the subject
matter of the rule or regulation shall not be deemed a “conflict” for purposes of this sentence.
Landlord shall use commercially reasonable efforts to enforce provisions of Appendix “C” or
any rules and regulations hereafter adopted in a reasonable and non-discriminatory manner.



23.

NON REAL ESTATE TAXES




     During the Term hereof, Tenant shall pay prior to delinquency all taxes assessed against and
levied upon fixtures, furnishings, equipment and all other personal property of Tenant contained in
the Premises, and Tenant shall cause said fixtures, furnishing, equipment and other personal
property to be assessed and billed separately from the real property of Landlord. In the event any
or all of Tenant’s fixtures, furnishings, equipment and other personal property shall be assessed
and taxed with Landlord’s real property, Landlord shall provide to Tenant a written statement that
shall include the amount of such taxes applicable to Tenant’s property and an explanation of the
equitable determination of Tenant’s share of such assessment and Tenant shall pay to Landlord its
share of such taxes within ten business (10) days after delivery to Tenant by Landlord of such
statement.



24.

LANDLORD’S FINANCIAL ARRANGEMENTS




     Landlord shall obtain construction financing through Bank of America, N.A. (“B of A”) (or
other financial institution) on commercially reasonable terms, as determined by Landlord in its
sole and absolute discretion, in connection with constructing the Premises. Promptly following
Landlord’s receipt of written notice from Tenant that Tenant’s Architect has obtained all necessary
permits for the Tenant Improvements, Landlord shall cause such lender to provide to Tenant a
subordination, non-disturbance and attornment agreement (“SNDA”) in the form attached hereto as
Appendix “F”. If Landlord obtains construction financing through a lender other than B of
A, Landlord shall cause such other lender to provide an SNDA to Tenant in a form equivalent to
Appendix “F” and in any event no less favorable to Tenant than the SNDA attached as
Appendix “F”. If Landlord’s financing is not in place prior to Landlord’s commencement of
construction of the Premises, Landlord and Tenant shall discuss such other assurances as may be
available.



25.

EMINENT DOMAIN




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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.






     If a substantial part of the Premises shall be lawfully taken or condemned or conveyed in lieu
thereof (or conveyed under threat of such taking or condemnation), for any public or quasi-public
use or purpose, the Term of this Lease shall end upon and not before the date of the taking of
possession by the condemning authority and without apportionment of the award. Tenant hereby
assigns to Landlord Tenant’s interest, if any, in such award and specifically agrees that any such
award shall be the entire property of Landlord in which Tenant shall not be entitled to share.
Tenant further waives any right to challenge the right of the condemning authority to proceed with
such taking. Rent shall be apportioned as of the date of such termination. If less than a
substantial part of the Premises shall be so taken or condemned (or conveyed under threat of such
taking or condemnation), or if the grade of any street adjacent to the Premises is changed by any
competent authority and such taking or change of grade makes it necessary or desirable to
substantially remodel or restore the Premises, Landlord shall have the right to cancel this Lease
upon not less than one hundred eighty (180) days’ notice prior to the date of cancellation
designated in the notice. No money or other consideration shall be payable by Landlord to Tenant
for the right of cancellation, and Tenant shall have no right to share in any condemnation award or
in any judgment for damages or in any proceeds of any sale made under any threat of condemnation or
taking. Tenant shall have the right to separately pursue its own award for the leasehold
improvements installed at Tenant’s expense, Tenant’s fixtures and personal property, and Tenant
shall be entitled to relocation expenses and any award payable with respect to the goodwill of the
business conducted on the Premises by Tenant, provided that no such claims shall diminish
Landlord’s award or the award of Landlord’s lender.



26.

SUBORDINATION




     A. Landlord has heretofore and may hereafter from time to time execute and deliver mortgages
or trust deeds in the nature of a mortgage, both referred to herein as “Mortgages” against the land
and Premises, or any interest therein. This Lease is subject and subordinate to the Master Lease
and to all renewals, modifications, consolidations, replacements and extensions thereof, copies of
which shall be furnished to Tenant promptly following their adoption, and to all Mortgages now or
hereafter placed upon the Riverwalk Project, and all other encumbrances and matters of public
record now or hereafter applicable to the Riverwalk Project. Tenant shall have the right to
consent (such consent not to be unreasonably withheld, conditioned or delayed) to any and to all
renewals, modifications, consolidations, replacements and extensions of the Master Lease that
directly and adversely affect Tenant’s occupancy of the Premises. In the event of a conflict
between this Lease and the Master Lease, the provisions of the Master Lease shall govern.
According to the terms of the Master Lease, any termination of the Master Lease, by cancellation or
otherwise, shall not serve to cancel this Lease, but shall operate as an assignment to Master
Lessor of this Lease, and, provided Tenant is not in default under this Lease, Master Lessor shall
honor this Lease and shall not disturb the tenancy of Tenant. Any mortgagee or trustee under any
Mortgage may elect to make this Lease prior to the lien of its Mortgage by written notice to
Tenant, and if the mortgagee or trustee under any prior Mortgage shall require, this Lease shall be
prior to any subordinate Mortgage. Except as expressly provided to the contrary herein, the
provisions of this Section shall be self-operative; however, if requested by the Master Lessor or
the mortgagee or trustee under any Mortgage, Tenant will promptly execute and deliver such
agreement or agreements as may be reasonably required by the Master Lessor or such mortgagee or
trustee under any Mortgage whereby Tenant agrees to subordinate its interest in this Lease to the
Master Lease or to said Mortgages, as applicable, and to any and all advances made thereunder and
to the interest thereon, and to all renewals, replacements, modifications and extensions thereof,
provided however that any such subordination shall provide that so long as Tenant is not in default
hereunder, its tenancy shall not be disturbed. Promptly following Landlord’s receipt of written
notice from Tenant that Tenant’s Architect has obtained all necessary permits for the Tenant
Improvements, Landlord shall cause to be delivered to Tenant an SNDA from any and all existing
mortgagees in the form attached hereto as Appendix “F” and from any and all existing ground
lessors in a form reasonably satisfactory to Tenant. Further, Landlord shall cause future
mortgagees or ground lessors, if any, to deliver to Tenant for execution by the parties its
customary SNDA in a form reasonably satisfactory to Tenant; provided, however, it shall not be a
default by Landlord or a defense to the
enforceability of this Lease in favor of Tenant if Landlord is unable to obtain delivery of such a
SNDA to Tenant (but instead this Lease will not be subordinated). Tenant shall not be required to
subordinate its interest to future lien holders or ground lessors unless Tenant is first provided
with an SNDA reasonably satisfactory to both Tenant and such persons.



     B. It is further agreed that (i) if any Mortgage shall be foreclosed (a) the liability of the
mortgagee or trustee thereunder or purchaser at such foreclosure sale or the liability of a
subsequent owner designated as Landlord under this Lease shall exist only so long as such trustee,
mortgagee, purchaser or owner is the owner of the Premises and such liability shall not continue or
survive after further transfer of ownership; and (b) upon request of the mortgagee or trustee,
Tenant will attorn, as Tenant under this Lease, to the purchaser at any foreclosure sale under any
Mortgage, and Tenant will execute such instruments as may be necessary or appropriate to evidence
such attornment; and (ii) this Lease may not be modified or amended so as to reduce the rent or
shorten the term provided hereunder, or so as to adversely affect in any other respect to any
material extent the rights of Landlord, nor shall this Lease be canceled or surrendered without the
prior written consent, in each instance of the mortgagee or trustee under any Mortgage. Tenant
hereby waives the provisions of any Laws (now or hereafter adopted) which may give or purport to
give Tenant any right or election to terminate or otherwise adversely affect this Lease or Tenant’s
obligations hereunder if foreclosure or power of



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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





sale proceedings are initiated, prosecuted or
completed. It is understood that Tenant’s tenancy shall not be disturbed so long as Tenant is not
in default under this Lease.



27.

WAIVER




     The waiver of Landlord or Tenant of any breach of any term, covenant or condition herein
contained shall not be deemed to be a waiver of such term, covenant or condition or any subsequent
breach of the same or any other term, covenant, or condition herein contained. The acceptance of
rent hereunder shall not be construed to be a waiver of any breach by Tenant of any term, covenant
or condition of this Lease. No acceptance of a lesser amount of rent shall be deemed a waiver of
Landlord’s right to receive the full amount due, nor shall any endorsement or statement on any
check or payment or any letter accompanying such check or payment be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right
to recover the full amount due. The acceptance of rent, or of the performance of any other term or
provision from, or providing directory listings or services for, any person or entity other than
Tenant shall not constitute a waiver of Landlord’s right to approve any transfer. No delivery to,
or acceptance by, Landlord or its agents or employees of keys, nor any other act or omission of
Tenant or Landlord or their agents or employees, shall be deemed a surrender, or acceptance of a
surrender, of the Premises or a termination of this Lease, unless stated expressly in writing by
Landlord. It is understood and agreed that the remedies herein given to Landlord shall be
cumulative, and the exercise of any one remedy by Landlord shall not be to the exclusion of any
other remedy. It is also agreed that after the service of notice or the commencement of a suit or
judgment for possession of the Premises, Landlord may collect and receive any monies due, and the
payment of said monies shall not waive or affect said notice, suit or judgment.



28.

INABILITY TO PERFORM




     This Lease and the obligation of either party to perform all of its covenants and agreements
hereunder, except the obligations imposed with regard to payment of Base Rent, Additional Rent and
other charges to be paid by Tenant under this Lease (which shall not be excused), shall be excused,
and the party shall not be in default hereunder because the party is unable to fulfill its
obligations under this Lease or to supply or is delayed in supplying any service expressly or by
implication to be supplied or is unable to make, or is delayed in making any tenant improvement,
repair, additions, alterations, or decorations or is unable to supply or is delayed in supplying
any equipment or fixtures if the party is prevented or delayed from so doing by reason of any
outside cause whatsoever beyond the reasonable control of the party, including, but not limited to,
shortages in materials, shortages in labor, strikes or labor troubles, delays in the permitting
process caused solely by the permitting authority, riots, civil disturbances, acts of God or
terrorism, energy shortages, inclement weather (including rain), governmental preemption in
connection with a national emergency or by reason of any rule, order, or regulation of any
department or subdivision thereof of any government agency or by reason of the conditions of supply
and demand which have been or are affected by war or other emergency.



29.

SUBROGATION




     The parties hereto agree to have any and all fire, extended coverage or any and all material
damage insurance which may be carried endorsed with a subrogation clause substantially as follows:
“This insurance shall not be invalidated
should the insured waive in writing prior to a loss any or all right of recovery against any party
for loss occurring to the property described herein”; and each party hereto waives all claims for
recovery from the other party for any loss or damage (whether or not such loss or damage is caused
by negligence of the other party and notwithstanding any provision or provisions contained in this
Lease to the contrary) to any of its property insured under valid and collectible insurance
policies to the extent of any recovery collectible under such insurance.



30.

SALE BY LANDLORD




     Subject to Article 49 below, in the event of a sale or conveyance by Landlord of the
Premises, the same shall operate to release Landlord from any future liability under any of the
covenants or conditions, express or implied, herein contained in favor of Tenant, provided that the
purchasing or assignee Landlord shall assume the obligations of the selling or assigning Landlord
under this Lease, from and after the date of transfer, and in such event Tenant agrees to look
solely to the responsibility of the successor in interest of Landlord in and to this Lease. This
Lease shall not be affected by any such sale, and Tenant agrees to attorn to the purchaser or
assignee.



31.

RIGHTS OF LANDLORD TO PERFORM




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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.






     All covenants and agreements to be performed by Tenant under any of the terms of this Lease
shall be performed by Tenant at Tenant’s sole cost and expense and without any abatement of rent
except as expressly provided herein. If Tenant shall fail to pay any sum of money, other than
rent, required to be paid it hereunder, or shall fail to perform any other act on its part to be
performed hereunder except for those acts under Article 44, and such failure to pay shall
continue for ten (10) days after written notice thereof by Landlord, or the Tenant has not cured
the failure to perform within thirty (30) days or commenced that cure within the thirty (30) day
period and diligently prosecutes it to completion, if cure is not reasonably feasible within that
thirty (30) day period (except in cases of emergency, no notice to perform shall be required),
Landlord may, but shall not be obligated so to do, and without waiving or release Tenant from any
obligations of Tenant, make any such payment or perform any such other act on Tenant’s part to be
made or performed as in this Lease provided. All sums so paid by Landlord and all necessary
incidental costs together with interest thereon at the rate of eight percent (8%) per annum,
computed from the date of such payment by Landlord shall be payable to Landlord on demand and
Landlord shall have (in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of the non-payment thereof by Tenant as in the case of default by Tenant in
the payment of rent.



32.

ATTORNEYS’ FEES




     In the event of any litigation between Tenant and Landlord to enforce any provision of this
Lease, or any right of either party hereto, the unsuccessful party of such litigation shall pay to
the prevailing party all costs and expenses, including reasonable attorneys’ fees, incurred
therein. In addition, either party shall be entitled to all attorneys’ fees and all other costs
incurred in the preparation and service of any notice or demand hereunder upon the other party as a
result of the breach of this Lease by such other party, whether or not a legal action is
subsequently commenced, and if Tenant is obligated to reimburse Landlord for such fees and costs,
such fees and costs shall constitute Additional Rent under this Lease and shall be due and payable
with Tenant’s succeeding installment of Base Rent, or if none, within thirty (30) days after
receipt of written notice from Landlord. Moreover, if either party, without fault is made a party
to any litigation instituted by or against the other party, the other party shall indemnify such
party without fault against and save it harmless for, from and against all costs and expenses,
including reasonable attorneys’ fees incurred by it in connection therewith.



33.

ESTOPPEL CERTIFICATE




     Either party shall at any time and from time to time upon not less than ten (10) business
days’ prior written notice from the other execute, acknowledge and deliver to the requesting party
a statement in writing certifying that this Lease is unmodified and in full force and effect (or if
modified, stating the nature of the modification and certifying that this Lease, as so modified, is
in full force and effect) and the dates to which the rental and other charges are paid and
acknowledging that there are not, to such certifying party’s knowledge, any uncured defaults on the
part of the other party hereunder or specifying such defaults if any are claimed, as well as any
other reasonable information requested by the party. In the case of a statement made by Tenant, it
is expressly understood and agreed that any such statement may be relied upon by any prospective
purchaser or encumbrancer of all or any portion of the real property of which the Premises are a
part. Tenant’s failure to deliver such statement within such time shall be conclusive upon Tenant
that this Lease is in full force and effect, without modification except as may be represented by
Landlord, that there are no uncured defaults in Landlord’s performance and that not more than one
(1) month’s rental has been paid in advance.



34.

INTENTIONALLY OMITTED




35.

NOTICE




     Any notice or other communication from Landlord to Tenant or from Tenant to Landlord shall be
in writing and shall be served personally, by mail, by overnight delivery, by affixing a copy on
any door leading into the Premises or by facsimile transmission with confirmation of receipt. Any
notices or other communications from Landlord to Tenant may be given by Landlord’s attorney, the
Management Agent or another agent of Landlord. Any notices or communications from Tenant to
Landlord may be given by Tenant’s attorney. If served by mail, notice shall be deemed served on
the fifth (5th) day after mailing by registered or certified mail, return receipt
requested, postage prepaid, addressed to Tenant at the Premises or to Landlord at the place from
time to time established for the payment of rent and a copy thereof shall until further notice, be
served personally or by registered or certified mail to Landlord at the address shown for service
of notice at the address set forth for service of notice in the Lease Schedule or at such other
address as Landlord may from time to time designate by notice hereunder. Unless otherwise stated,
notice shall be effective upon delivery. In the event of a release or threatened release of
pollutants or contaminants to the environment resulting from Tenant’s activities at the site or in
the event any claim, demand, action or notice is made against Tenant regarding



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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





Tenant’s failure or
alleged failure to comply with any Laws, Tenant shall immediately notify Landlord by fax or
telephone with confirmation in writing and shall give to Landlord copies of any written claims,
demands or actions, or notices so made.



36.

INTENTIONALLY OMITTED




37.

RIGHTS RESERVED




     Landlord reserves the following rights, exercisable without notice and without liability to
Tenant for damage or injury to property, person or business and without effecting an eviction,
constructive or actual, or disturbance of Tenant’s use of possession or giving rise to any claim
for set-off or abatement of rent:



     (a) To change the street address of the Premises if required by governmental authority;



     (b) To install, affix and maintain any and all signs on the interior or exterior of the
Premises, subject to the Tenant’s rights under this Lease;



     (c) To designate and approve, prior to installation, all types of window shades, blinds,
drapes, awnings, window ventilators and other similar equipment, and to control all interior or
exterior lighting of the Premises;



     (d) Tenant shall have the right to operate or contract for the operation of food, beverage and
vending machines and services, microwave ovens, and refrigerators for the convenience of its
employees and invitees;



     (e) To retain at all times, and to use in appropriate instances, keys and/or keycards, to all
doors within and into the Premises. No locks or bolts shall be altered, changed or added without
the prior written consent of Landlord; provided, however, that Landlord, on behalf of itself and
its employees and agents, shall use commercially reasonable efforts to assure that they keep
confidential any information any of them learns about Tenant or its business, operations, clients,
products, services and other secret information, and none of them shall use that information in any
way other than in connection with their dealings on behalf of Landlord with Tenant;



     (f) To decorate or to make repairs, alterations, additions or improvements, whether structural
or otherwise, in and about the Premises, or any part thereof, and for such purpose to enter upon
the Premises with prior notice to and in coordination with reasonable restrictions of Tenant, and
during the continuance of said work to temporarily close doors, entryways, and to interrupt or
temporarily suspend building services and facilities, provided that Tenant is not prevented from
access to or use of the Premises; Landlord shall use commercially reasonable efforts to minimize
interference with Tenant’s business and enjoyment with the Premises and parking rights. Without
limiting the foregoing, Landlord shall use commercially reasonable efforts to cause any
construction or other work in the Medicis Development (other than (1) landscaping work, (2) routine
maintenance work, and (3) construction of the Pedestrian Bridge and/or Phase II Building [if
applicable]), to occur in a manner so as not to unreasonably interfere with Tenant’s business,
including as a result of loud noises, vibrations, fumes or other disturbances, all of which shall
be performed outside of Building Hours, except in the case of an emergency.



     (g) To prescribe the location and style of the suite number and identification sign or
lettering for the Premises occupied by Tenant;



     (h) To enter the Premises as set forth in Section 19;



     (i) Tenant agrees to cooperate in any reasonable safety program developed by Landlord;



     (j) To control and prevent access to common areas and other non-general public areas including
the roof, except as contemplated in this Lease;



     (k) To have and retain a paramount title to the Premises free and clear of any act of Tenant
but subject to the terms of this Lease; and



     (l) To approve the weight, size and location of safes and other heavy equipment and articles
in and about the Premises. Tenant shall use all reasonable efforts to attempt to cause no
delivery trucks or other vehicles servicing the Premises to park or stand in front of the main
entrance of the Premises from 10:00 A.M. to 9:00 P.M. each day. Tenant shall use reasonable
efforts to not interfere with access to the Premises or other premises while loading or unloading
trucks. Further, Tenant shall not leave unattended or store items outside the Premises in
connection with



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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





loading or unloading trucks. Landlord reserves the right to further reasonably
regulate the activities of Tenant in regard to deliveries to Premises, and Tenant shall abide by
such further regulations of Landlord. Movements of Tenant’s property into or out of the Premises
and within the Premises are entirely at the risk and responsibility of Tenant and Landlord reserves
the right to require permits before allowing any such property to be moved into or out of the
Premises.



38.

SATELLITE DISH




     After approval of Tenant’s specific plans by Landlord, which approval shall not be
unreasonably withheld or delayed, Tenant, at its sole cost and expense (provided that Landlord
shall not charge Tenant for roof-top use), shall have the right to erect, maintain and operate on
the roof of the Premises communications facilities, including radio transmitting and receiving
antennas, microwave dishes (not to exceed one (1) meter in diameter) and supporting structures
thereto (the “Tenant’s facilities”). Tenant’s installation, construction and ongoing maintenance
of Tenant’s facilities shall be performed in a workmanlike manner, Tenant shall use Landlord’s
roofing subcontractor to perform any roof penetrations, and any damage to the Premises caused by
Tenant and Tenant’s suppliers and/or subcontractors shall be reported to Landlord and shall be
repaired by Tenant at its sole cost and expense. Any Tenant’s facilities installed hereunder shall
meet all applicable Laws and shall not interfere with the reception of television, radio or other
electronic signals or the operation of any equipment used on the Riverwalk Project by any other
tenant or other occupants of the Riverwalk Project, or by owners or tenants of surrounding
properties and/or buildings. If Tenant’s operation of Tenant’s facilities interferes with the
operation of any other existing antenna or satellite dish at the Riverwalk Project, Tenant shall
immediately work with the affected party and Landlord to attempt to resolve the problem, if
feasible. Title to Tenant’s facilities shall be held by Tenant at all times. Tenant’s facilities
shall remain Tenant’s personal property and are not fixtures. Tenant has the right to remove all
Tenant’s facilities at its sole cost and expense on or before expiration of the Term, provided that
Tenant shall be responsible for repairing any damage to the Premises resulting from said removal to
the reasonable satisfaction of Landlord. Tenant’s liability insurance shall include coverage for
the installation, operation, maintenance, repair and removal of Tenant’s facilities and Tenant
shall pay any increases to Landlord’s insurance caused by the same. Landlord shall not be required
to make any improvements or alterations to the roof in order to accommodate the installation or
operation of Tenant’s facilities. Tenant’s facilities shall be used only by Tenant in connection
with the Permitted Use (that is, Tenant may not permit third parties, other than Tenant’s bona fide
assignees or sublessees that are in actual occupancy at the Premises to place a communication
equipment upon the Premises for use by or for the benefit of any such third party). Landlord shall
not permit others who are not bona fide tenants or occupants of the Premises to use roof top space
or to place equipment on the roof of the Premises without Tenant’s express prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed. Landlord shall use
commercially reasonable efforts to not permit any other communication equipment of those who become
tenants or occupants of portions of the Riverwalk Project controlled by Landlord and its affiliates
after the Date of this Lease to interfere with Tenant’s facilities, Tenant’s communications
equipment or the signals emitted or received by that equipment. Tenant shall reasonably support
Landlord’s efforts by providing to Landlord promptly following Landlord’s request therefor, written
detailed specifications of Tenant’s communications equipment and by providing any information
reasonably requested by Landlord or any tenant or occupant of the Riverwalk Project reasonably
related to the prevention of potential interference with Tenant’s communication equipment.



39.

REAL ESTATE BROKER




     Tenant and Landlord each represent that it has dealt directly with and only with the brokers
set forth in the Lease Schedule as brokers in connection with this Lease and agrees to indemnify
and hold the other harmless for, from and against all claims or demands of any other broker or
brokers for any commission alleged to be due such broker or brokers in connection with its
participating in the negotiation of this Lease based on the conduct of that party. Landlord
represents that it has entered into a commission agreement with the brokers listed on the Lease
Schedule.



40.

MISCELLANEOUS PROVISIONS




     A. Time is of the essence of this Lease and each and all of its provisions.



     B. Submission of this instrument for examination or signature by Tenant does not constitute a
reservation or offer or option for lease, and it is not effective as a lease or otherwise. Tenant
acknowledges and agrees with Landlord that, except as may be specifically set forth elsewhere in
this Lease, neither Landlord, nor any employee of Landlord, nor other party claiming to act on
Landlord’s behalf, has made any representations, warranties, estimations, or promises of any kind
or nature whatsoever relating to the physical condition of the Premises, or the land under the



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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





Premises, including by way of example only, the fitness of the Premises for Tenant’s intended use
or the actual dimensions of the Premises.



     C. The invalidity or unenforceability of any provision hereof shall not affect or impair any
other provision.



     D. This Lease shall be governed by and construed pursuant to applicable federal Laws, except
where otherwise expressly set forth in this Lease. If no federal Laws are available to interpret a
particular provision of this Lease, then the applicable Laws of the State of Arizona will be used
to interpret such provision, excluding Laws of the State of Arizona that would otherwise provide a
Service Provider with lien rights and any State of Arizona tax laws that would require Landlord to
pay taxes to the State of Arizona or any governmental entity, agency or political subdivision other
than the Community and the United States of America, and except where otherwise expressly set forth
in this Lease. The parties shall first attempt to resolve all non-monetary disputes among
themselves relating to this Lease, the business transactions contemplated by this Lease, the
Declaration or any other non-monetary controversy arising between them (collectively, “Claims”),
there being no obligation, express or implied, to attempt to resolve (or mediate, as provided
below) monetary disputes. If they are unable to resolve all Claims after fifteen (15) days, either
party may require that the Claims be submitted to mediation. If the parties are unable to agree
upon a mediator within ten (10) days, either party may request that the American Arbitration
Association (“AAA”) appoint a mediator, who shall conduct a mediation session within twenty (20)
days following his or her appointment, unless the parties agree otherwise. The mediation shall be
conducted pursuant to the procedures for mediation of commercial disputes of the AAA.



     If the parties cannot resolve the Claims through mediation, they shall submit the Claims to
binding arbitration under the Federal Arbitration Act, 9 U.S.C. §§ 1-14 (“Title 9”), pursuant to
the authority of 25 U.S.C. § 416(a)(c), as amended from time to time (“Section 416(a)(c)”), and in
accordance with this Section 40.D. Pursuant to Title 9 and Section 416(a)(c), any (i)
refusal to submit to arbitration, (ii) exercise of a right under Title 9, or (iii) enforcement of
an arbitration award or decision under this Section 40.D. is solely within the jurisdiction
of the District Court. An arbitration award under this Section 40.D. is final unless a
party files a motion to vacate or modify the award pursuant to 9 U.S.C. § 12 in the District Court
within 30 days of the date of the award. Judgment upon the award under this Section 40.D.
may be confirmed in District Court pursuant to Section 416(a)(c) and 9 U.S.C. § 9. The parties
acknowledge that this Lease, the future development, encumbrances and other obligations and
responsibilities arising from this Lease all involve interstate commerce and therefore (in addition
to Section 416(a)(c)) either party may avail itself to federal jurisdiction under Title 9. . The
arbitration and all related preliminary proceedings shall be conducted in accordance with rules as
may be agreed upon by the parties, or, failing agreement on those rules, in accordance with the
Rules for Commercial Arbitration of the AAA, as amended from time to time and as modified by this
Lease. The dispute shall be presented to a single arbitrator sitting in Maricopa County, Arizona.
The decision of the arbitrator shall be final and binding on the parties, except as provided by
law.



     E. Should the Master Lessor, the Community or the Secretary require a modification of this
Lease, which modification will not bring about any increased cost, expense or delay to Tenant or
in any other way substantially change the rights and obligations of Tenant hereunder, then and in
such event, Tenant agrees not to unreasonably withhold or delay its consent to such modification.



     F. If Tenant’s financial statements are not readily available to the public, Tenant agrees to
provide to Landlord, upon request, which request shall not be made more than two (2) times in any
calendar year, and within twenty
(20) days after receipt of such request, a current financial statement of Tenant certified by an
authorized representative of Tenant to be true and correct, and further agrees to provide any other
financial information reasonably requested by Landlord and Landlord agrees to hold all such
financial information in confidence, provided that Landlord may divulge the contents of any
financial statement or information to the Master Lessor, the Community, the Secretary, to
Landlord’s property manager, attorneys, accountants and affiliates, and in connection with any
financing arrangements, sales or assignments of Landlord’s interest in the Premises or in
connection with any administrative or judicial proceedings in which Landlord is involved where
Landlord may be required to divulge such information.



     G. All rights and remedies of Landlord under this Lease, or that may be provided by law, may
be exercised by Landlord in its own name individually, or in its name by its Management Agent, and
all legal proceedings for the enforcement of any such rights or remedies, including distraint for
rent, forcible detainer, and any other legal or equitable proceedings, may be commenced and
prosecuted to final judgment and execution by Landlord in its own name individually or in its name
by its agent. Tenant expressly stipulates that any rights or remedies available to Landlord either
by the provision of this Lease or otherwise may be enforced by Landlord in its own name
individually or in its name by agent or principal. Landlord shall be liable for all acts of its
authorized employees and agents acting within the scope of their authority and their ordinary
course of business.



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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.



     H. All of the obligations and rights of either party under this Lease arising during or
attributable to the period prior to the expiration or earlier termination of this Lease shall
survive such expiration or termination of this Lease.



     I. The marginal headings and titles to the paragraphs of this Lease are not a part of this
Lease and shall have no effect upon the construction or interpretation of any part hereof.



     J. Intentionally Deleted.



     K. Any and all Exhibits or Appendices attached hereto are expressly made a part of
this Lease.



     L. Upon termination of this Lease or upon Tenant’s abandonment of the leasehold, Tenant shall,
at its sole expense, remove any equipment which may cause contamination of the Riverwalk Project,
and shall clean up any existing contamination in compliance with all applicable Laws.



     M. This is a commercial lease and has been entered into by both parties in reliance upon the
economic and legal bargains contained herein, and both parties agree and represent each to the
other that they have had the opportunity to obtain counsel of their own choice to represent them in
the negotiation and execution of this Lease, whether or not either or both have elected to avail
themselves of such opportunity. This Lease shall be interpreted and construed in a fair and
impartial manner without regard to such factors as the party which prepared the instrument, the
relative bargaining powers of the parties or the domicile of any party.



     N. Landlord and Tenant hereby waive any right to a trial by jury in any action or proceeding
based upon, or related to, the subject matter of this Lease. This waiver is knowingly,
intentionally, and voluntarily made by each of parties hereto and each party acknowledges to the
other that neither the other party nor any person acting on its respective behalf has made any
representations to induce this waiver of trial by jury or in any way to modify or nullify its
effect. The parties acknowledge that they have read and understand the meaning and ramifications
of this waiver provision and have elected same of their own free will.



     O. Landlord hereby covenants that so long as Tenant is not in default under the terms and
provisions of this Lease, Tenant shall be entitled to quiet enjoyment of the Premises. The
provisions of this paragraph shall not extend to any disturbance, act or condition brought about by
the Community, the Master Lessor, the Secretary or by any other person; provided, however, that
Landlord shall use commercially reasonable and diligent efforts upon Tenant’s reasonable request to
attempt to stop any interference from other tenants, occupants or invitees. Without limiting the
foregoing, Landlord shall use commercially reasonable efforts to attempt to cause any construction
or other work in the Medicis Development (other than (i) landscaping work, (ii) routine maintenance
work, and (iii) construction of the Pedestrian Bridge and/or Phase II Building [if applicable]), to
occur in a manner so as not to unreasonably interfere with Tenant’s business, including as a result
of loud noises, vibrations, fumes or other disturbances, all of which if necessary, shall be
performed outside of Building Hours except in the case of emergency.



     P. This Lease does not grant any rights to light or air over or about the real property of
Landlord. Except to the extent specifically otherwise herein provided, Landlord specifically
excepts and reserves to itself the use of any roofs, the exterior portions of the Premises, all
rights to and the land and improvements below the improved floor level of the Premises, to the
improvements and air rights above the Premises and to the improvements and air rights located
outside the demising walls of the Premises and to such areas within the Premises required for
installation of utility lines and other
installations required to serve any occupants of the Premises and to maintain and repair same, and
no rights with respect thereto are conferred upon Tenant, unless otherwise specifically provided
herein.



     Q. This Lease and any Appendices and riders attached hereto and forming a part hereof, set
forth all of the covenants, promises, agreements, conditions and understandings between Landlord
and Tenant concerning the Premises and there are no covenants, promises, agreements,
representations, warranties, conditions or understandings either oral or written between them other
than as contained in this Lease. Except as otherwise provided in this Lease, no subsequent
alteration, amendment, change or addition to this Lease shall be binding unless it is in writing
and signed by both Landlord and Tenant. Without limitation as to the generality of the foregoing,
Tenant hereby acknowledges and agrees that Landlord’s leasing agents and field personnel are only
authorized to show the Premises and negotiate terms and conditions for leases subject to Landlord’s
final approval, and are not authorized to make any agreements, representations, understandings or
obligations, binding upon Landlord, respecting the condition of the Premises or Riverwalk Project,
suitability of the same for Tenant’s business, the current or future amount of Taxes or Operating
Costs or any component thereof, the amount of rent or other terms applicable under other leases at
the Riverwalk Project, whether Landlord is furnishing the same utilities or services to other
tenants at all, on the same level or on the same basis, or any other matter, and no such
agreements, representations, understandings or obligations not expressly contained herein or in
such contemporaneous agreement shall be of any force or effect. TENANT HAS RELIED ON TENANT’S
INSPECTIONS AND DUE DILIGENCE IN ENTERING THIS LEASE, AND NOT ON ANY



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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED NOT EXPRESSLY CONTAINED HEREIN.



     R. Neither this Lease nor any memorandum hereof shall be recorded by Tenant. Landlord or
Tenant may require that Landlord and Tenant shall execute and record a short form memorandum of
this Lease in form and substance reasonably satisfactory to Landlord and Tenant.



     S. [If Landlord becomes obligated to pay Tenant any judgment arising out of any failure by
Landlord to perform or observe any of the terms, covenants, conditions or provisions to be
performed or observed by Landlord under this Lease, Tenant shall be limited in the satisfaction of
such judgment solely to Landlord’s interest in the Premises or any proceeds arising from the sale
thereof and no other property or assets of Landlord or the individual members, managers, partners,
directors, officers or shareholders of Landlord or its constituent partners shall be subject to
levy, execution or other enforcement procedure whatsoever for the satisfaction of any such money
judgment.]



     T. Landlord and Tenant acknowledge and agree that the obligations of Landlord under this Lease
are further expressly conditioned upon Landlord obtaining the consent and approval of the Master
Lessor, the Community (and, to the extent required under current applicable Laws or the Master
Lease, the Secretary) to the terms, covenants and provisions of this Lease, which approvals must be
obtained within thirty (30) days of the date hereof. If the Master Lessor, the Community or the
Secretary disapproves or objects to this Lease within thirty (30) days after the execution of this
Lease by Landlord and submission of this Lease to the Master Lessor, the Community and, if
applicable, the Secretary for approval, this Lease shall automatically terminate, any amounts
previously delivered by Tenant to Landlord shall be returned to Tenant and the parties shall have
no further obligation to each other arising out of or in connection with this Lease, except as
expressly provided herein. Landlord shall promptly notify Tenant after the expiration of such
thirty (30) day period of the approval, deemed approval, or disapproval of this Lease by the Master
Lessor, the Community and/or the Secretary.



     U. Nothing contained in this Lease shall be deemed to constitute a waiver of applicable Laws
providing tax immunity to trust or restricted Indian property or any interest therein or income
therefrom.



     V. As to Landlord, the Master Lessor, the Secretary, and the Community, Tenant hereby waives
any provisions of state and local Laws pertaining to improvements affixed to the land by any person
acting in good faith and erroneously believing, because of a mistake either of law or fact, that he
has the right to do so, and also providing for removal of such improvements.



     W. Nothing contained in this Lease shall operate to delay or prevent a termination of Federal
trust responsibilities with respect to the Premises by the issuance of a fee patent or otherwise
during the Term; provided, however, no such termination shall serve to abrogate this Lease. The
termination of those trust responsibilities or the issuance of a fee patent shall not affect the
validity of Tenant’s rights under this Lease.



     X. While the Premises are held in trust by the United States or subject to a restriction
against alienation imposed by the United States, all of Tenant’s obligations under this Lease and
the obligations of Tenant’s insurers, sureties and guarantors are to the United States as well as
to Landlord.



     Y. No member of or delegate to Congress or Resident Commissioner shall be admitted to any
share or part of this Lease or to any benefit that may arise herefrom, but this provision shall not
be construed to extend to this Lease if made with a corporation or company for its general benefit.



     Z. Tenant and all persons in possession or holding under Tenant shall conform to and shall not
violate the terms of any Declaration or other matters of record. This Lease is and shall remain
subordinate to any Declaration or similar instruments and any amendments or modifications thereto;
provided, however, if the Declaration or such similar instrument is not of record as of the date of
this Lease, then this Lease shall automatically become subordinate to the Declaration or such
similar instrument upon recordation thereof. Although the provisions of this paragraph are
intended to be self operative, Tenant shall execute and deliver to Landlord within ten (10) days
after Landlord’s written request, an agreement in recordable form (substantially in the form
attached as Appendix “E”) subordinating this Lease to the Declaration or such similar
instrument. Landlord represents and warrants that such matters of record shall not have a material
and adverse effect on the ability of Tenant to conduct business in the Premises for the permitted
use of the Premises and Tenant’s leasehold estate in the Premises shall not be subject to any
amendments to such matters of record entered into after the execution of this Lease to the extent
that any provision contained in any such amendment has a material and adverse effect on the ability
of Tenant to conduct business in the Premises for the Permitted Use of the Premises or materially
increases the costs or expenses of Tenant under this Lease, or materially and substantially
modifies the rights and obligations of Tenant under this Lease.



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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.



     AA. Tenant acknowledges that Landlord is not, as of the Date of this Lease, the ground lessee
under the Master Lease. Landlord is in the process of acquiring the ground lessee’s interest to
the Medicis Development pursuant to a Substitute Lease, as such term is defined in the Master
Lease, and pursuant to the procedure set forth in Articles 8, 15 and 47 of the Master
Lease. Landlord shall diligently pursue the acquisition of the ground lessee’s interest to the
Medicis Development under a Substitute Lease using its good faith and commercially reasonable
efforts. If, despite such diligent, good faith and commercially reasonable efforts, Landlord is
unable to obtain the ground lessee’s interest to the Medicis Development pursuant to a Substitute
Lease, Landlord shall assign its interest in this Lease to Apex Park at Pima, L.L.C. (“Apex”), the
current ground lessee under the Master Lease, which shall thereupon assume the obligations of
Landlord hereunder. Landlord shall indemnify and hold Tenant harmless against all Losses arising
from or related to the failure of Landlord to assign its interest in this Lease to Apex in the
event Landlord is unable to procure such Substitute Lease.



     BB. Each of Landlord and Tenant, each as to itself, hereby represents its compliance with all
applicable anti-money laundering laws, including, without limitation, the USA Patriot Act, and the
laws administered by the United States Treasury Department’s Office of Foreign Assets Control,
including, without limitation, Executive Order
13224 (“Executive Order”). Each of Landlord and Tenant further represents (i) that it is not, and
it is not owned or controlled directly or indirectly by any person or entity, on the SDN List
published by the United States Treasury Department’s Office of Foreign Assets Control and (ii) that
it is not a person otherwise identified by government or legal authority as a person with whom a
U.S. Person is prohibited from transacting business. As of the date hereof, a list of such
designations and the text of the Executive Order are published under the following internet website
address: www.ustreas.gov/offices/enforcement/ofac.



41.

REPRESENTATIONS AND WARRANTIES




     A. Tenant represents and warrants that this Lease has been duly authorized, executed and
delivered by and on behalf of Tenant and constitutes the valid and binding agreement of Tenant in
accordance with the terms hereof.



     B. Landlord represents and warrants as follows:



          (i) This Lease has been duly authorized, executed and delivered by and on behalf of Landlord
and constitutes the valid and binding agreement of Landlord in accordance with its terms;




          (ii) Landlord has, or upon the transfers contemplated by Section 40.AA above it will
have, the right to develop and construct the Premises and the Phase I Improvements and to perform
the Landlord’s obligations set forth or contemplated by this Lease;




          (iii) Landlord has or has firm commitments for sufficient financial resources to enable it to
perform its obligations hereunder, and the financial information previously submitted from Landlord
to Tenant, if any, is true and accurate in all material respects as of the date of such financial
information; and




          (iv) The Master Lease delivered to Tenant prior to the Date of this Lease is in full force and
effect and has not been modified.




42.

HAZARDOUS SUBSTANCES




     A. Tenant’s use of the Premises shall be in compliance with all Laws, including the laws
governing Hazardous Substances (as defined herein). Tenant shall not cause or permit any Hazardous
Substances to be used, stored, generated, or disposed of on or in the Premises by Tenant, Tenant’s
agents, employees, contractors, or invitees, except in accordance with all Laws. Tenant shall give
or post notices required by all applicable Laws pertaining to the Hazardous Substances. Tenant
shall not dispose of any Hazardous Substances on the Premises. Landlord, and any other party
reasonably designated by Landlord (including, without limitation, any environmental consultant),
has the right, but not the obligation, after reasonable prior notice to Tenant (which may be
telephonic if Tenant is then in default under the terms of this Lease, to enter upon the Premises
at all reasonable times to assess the environmental condition of the Premises, including, without
limitation, to conduct any environmental assessment, audit and/or laboratory practice and procedure
audit (if Tenant constructs and uses the Lab) (the scope of which shall be determined in Landlord’s
sole discretion) and to take samples of air quality, building materials and conduct other invasive
testing. Such assessment or audit shall be conducted in a manner so as to minimize interference
with the conduct of business at the Premises. Tenant agrees to reasonably cooperate in connection
therewith, including without limitation, providing all requested information and making
knowledgeable officers, employees or property managers available for interview. If any such
undertaking discloses that a violation of, or liability under, any Law exists, or if the inspection
is performed while Tenant is in default under this Lease, Tenant shall pay all costs and expenses
incurred in connection with such undertaking; otherwise, the



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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





costs and expenses of such undertaking
shall be paid by Landlord. The term “Hazardous Substances” shall mean any chemical, compound,
material, corrosive material, substance or other matter that: (i) is a flammable explosive,
asbestos (which is either in friable condition or such other condition deemed hazardous pursuant to
any applicable Laws), polychlorinated biphenyls, petroleum, radioactive material, corrosive
material, nuclear medicine material, drug, vaccine, bacteria, virus, hazardous waste, medical
waste, toxic substance, petroleum product, or related injurious or potentially injurious material,
whether injurious or potentially injurious by itself or in combination with other materials; (ii)
is controlled or regulated by any Law relating to the protection of health, safety or the
environment; (iii) gives rise to any reporting, notice or publication requirements under any Laws;
or (iv) gives rise to any liability, responsibility or duty on the part of Tenant or Landlord under
any Laws relating to protection of health, safety and the environment. Tenant shall indemnify,
defend and hold Landlord, the Master Lessor, the Community and the Secretary harmless for, from and
against any and all claims, damages, fines, judgments, penalties, costs, liabilities, or losses
(including, without limitation, any and all sums paid for good faith settlement of claims,
attorneys’ fees, consultant and expert fees) arising during or after the Term (or any applicable
renewal term) to the extent arising as a result of handling of Hazardous Substances by Tenant not
in compliance with this Lease. This indemnification includes, without limitation, any and all
costs incurred because of any investigation of the site or any cleanup, removal or restoration
mandated by a federal, state, Community or local agency or political subdivision. Without
limitation of the foregoing, if Tenant causes or permits the presence of any Hazardous Substances
in the Premises and such action results in contamination, Tenant shall promptly notify Landlord of
such contamination, and, at its sole expense, take any and all necessary actions to return the
Premises to the condition existing prior to the contamination by any such Hazardous Substances on
the Premises. Tenant shall first obtain Landlord’s approval for any such remedial action, which
shall not be unreasonably withheld or delayed. Tenant shall also notify Landlord, in writing,
within two (2) days after any of the following: (a) Tenant’s receipt of any order of a
governmental, Community or other tribal agency requiring any remedial work; or (b) Tenant’s receipt
of any warning, notice of inspection, notice of violation or alleged violation, or Tenant’s receipt
of notice or knowledge of any proceeding, investigation of enforcement action, pursuant to any Laws
respecting Hazardous Substances. All costs incurred by Landlord pursuant to Landlord’s approval or
notifications to Landlord pursuant to the immediately preceding two (2) sentences of this
Section 42.A. shall be within the scope of the indemnification of Landlord in this
Section 42.A.



     B. Landlord shall not cause or knowingly permit any Hazardous Substances (except ordinary
supplies, cleaning chemicals or products) to be used, stored, generated or disposed of on or in the
Riverwalk Project by Landlord, its agents, employees, contractors, invitees or other tenants on the
Riverwalk Project without the prior written notification to Tenant. Landlord, at Landlord’s sole
cost and expense, shall be responsible for the removal, abatement and/or remediation of any
Hazardous Substances now or hereafter located in, on or under the Riverwalk Project which were
introduced by its agents or employees. If Hazardous Substances are stored, generated or disposed
of on or in the Riverwalk Project or if the Riverwalk Project becomes contaminated unlawfully as a
result of any actions of Landlord, its agents or employees, Landlord shall defend Tenant with
counsel designated by Landlord for any and all claims or liabilities arising during or after the
Term (and any applicable renewal term) as a result of such contamination at Landlord’s cost.
Landlord represents and warrants to the best of Landlord’s knowledge, without any duty of inquiry
or investigation, and subject to the contents of any environmental reports delivered to Tenant by
or on behalf of Landlord or otherwise obtained by Tenant, that (i) any handling, transportation,
storage, treatment or use of Hazardous Substances that has occurred or will occur on the Riverwalk
Project prior to the Commencement Date, has been or will be in compliance with all applicable Laws;
(ii) no
leak, spill, release, discharge, emission or disposal of Hazardous Substances has occurred on the
Premises or at the Riverwalk Project prior to the Commencement Date; (iii) the soil, ground water
and soil vapor on or under the Premises and Riverwalk Project are free of toxic or hazardous
substances and will be as of the actual Commencement Date; and (iv) as of the actual Commencement
Date the Riverwalk Project does not contain any asbestos, PCBs, radon or underground storage tanks.
Landlord shall defend, indemnify and save Tenant harmless from any claims, fines, penalties,
liabilities, losses, damages, costs and expenses (including reasonable attorney fees, expert
witness fees and other cost to defend) which arise from Landlord’s breach of its representations,
agreements and warranties contained in this Article 42, but not the actions of third
parties not within Landlord’s control. Notwithstanding anything contained in this Article
42 to the contrary, Tenant shall not be liable under this Lease for the use, presence,
disposal, storage, generation, release or threatened release of Hazardous Materials upon, about,
beneath, migrating to or from the Premises by Landlord.



43.

SUCCESSORS AND ASSIGNS




     Subject to the restrictions on assignment and subletting set forth in this Lease, the
covenants and conditions herein contained shall apply to and bind the respective heirs, successors,
executors, administrators, and assigns of the parties hereto. The terms “Landlord” and “Tenant”
shall include the successors and assigns of either such party, whether immediate or remote.



44.

EMPLOYMENT OPPORTUNITY




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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.






     A. Qualified members of the Community or members of any other federally recognized Indian
tribe shall receive preference, as between substantially equally qualified candidates, in hiring
and in all other aspects of employment with Tenant in connection with the operation of the Premises
in accordance with terms of this Lease. Tenant shall provide the office of the Director of the
Human Resources Department of the Community (the “Director”) with notice or copies of postings, in
such form as is agreed to by the Tenant and the Director (collectively “Notice”) for all job
openings for jobs at or on the Premises and the required qualifications for such job openings.
Tenant shall not employ any person at or on the Premises who is not a member of the Community or
member of any other federally recognized Indian tribe without giving the Director of the Human
Resources Department of the Community three (3) days’ Notice so that a qualified member of the
Community or a member of any other federally recognized Indian tribe may be referred for
employment; provided, however, that the foregoing is not intended to and shall not prohibit Tenant
from promoting existing employees. Tenant shall report the following employment information for
jobs at or on the Premises during the prior six months to the office of the Director of the Human
Resources Department of the Community on January l and July l of each year designating members and
non-members of the Community in separate categories.



          (a) The number in each job group utilized by Tenant;




          (b) All lay-offs and re-calls;




          (c) All promotions/demotions, job reclassifications, and
terminations; and




          (d) The number receiving merit increases and the number denied merit
increases.




     B. The Community shall notify Tenant, in writing, of business enterprises owned by members of
the Community which are qualified to provide services of any kind with respect to the construction
and operation of the Premises. It shall thereafter be the policy of Tenant in connection with the
improvements to be developed on the Premises that prior to contracting with any business enterprise
which is not owned by a member or members of the Community for services with respect to the
construction and operation of the Premises, Tenant shall give to the Community Manager the same
notice of contracting opportunity and required qualifications as is given by Tenant in the ordinary
course of business.



     C. Tenant may vary from the provisions of this Article 44 in the event of an emergency
situation or when it is not reasonable or practical to give the notice referred to above.



     D. In the event it is determined by the Director of the Human Resources Department that Tenant
has committed a violation of a provision of this Article 44, a fine, in an amount not to
exceed Two Hundred Fifty and No/l00 Dollars ($250.00) per occurrence, may be imposed upon Tenant,
which fine shall be paid to the Community to support job training.



     E. It is the purpose and intent of the provisions of this Article 44 that if there are
two (2) or more persons substantially equally qualified for a job opening at or on the Premises,
and one of such persons is a Community member or
member of any other federally recognized Indian tribe, the qualified person who is a member of the
Community or member of any other federally recognized Indian tribe shall be selected. If no
substantially equally qualified member of the Community or member of any other federally recognized
Indian tribe applies for the job opening at or on the Premises, a person who is not a member of the
Community or a member of the federally recognized tribe may be selected for employment. It is not
the intent and purpose of this Article 44 to establish quotas. Further, Tenant shall not
be required to discharge existing employees or fail to promote existing employees in order to
create job openings, it being the purpose and intent that the provisions of this Article 44
apply with respect to job openings and newly created positions at or on the Premises. The
restrictions of this Article 44 shall apply to Tenant for so long as those restrictions are
required by applicable federal or Community Laws.



     F. Tenant shall indemnify, defend and hold Landlord harmless for, from and against any and all
claims, demands, losses, judgments, fines, liabilities, costs, expenses and attorneys’ fees
incurred, sustained and/or asserted against Landlord as a result of any breach by Tenant of the
provisions of this Article 44.



45.

OPTION TO EXTEND




     A. Landlord hereby grants Tenant two (2) consecutive option(s) (individually, an “Option to
Extend Term”) to extend the initial Lease Term (“Initial Term”) for the entire Premises only in
accordance with the terms of this Article 45. An Option to Extend Term shall extend the
Term of this Lease for an additional five (5) years (individually, an “Extended Term”) commencing
upon the expiration of the Initial Term or the first Extended



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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





Term, as applicable. If Tenant
exercises an Option to Extend Term, then all of the terms contained in this Lease shall continue in
full force and effect during the applicable Extended Term, except with respect to the following:



          (1) Annual Base Rent for the applicable Extended Term shall be adjusted on the first day of
the applicable Extended Term to an amount equal to ninety-five percent (95%) of the then Fair
Market Rental Value of the Premises, including escalations and typical step increases, but in no
event less than Annual Base Rent payable immediately preceding the applicable Extended Term. The
term “Fair Market Rental Value of the Premises” shall be, subject to the further terms of this
Article 45, Landlord’s good faith calculation of the then prevailing fair market rental
rate for the Premises as of the commencement of the applicable Extended Term, taking into
consideration all elements affecting the lease transaction, including standard tenant improvement
allowances for Class “A” office buildings (inclusive of parking decks) in the Scottsdale/Loop 101
office market area.




          (2) Tenant shall have no further right to extend the Term of this Lease whether pursuant to
the provisions of this Article 45 or otherwise.




     B. The applicable Option to Extend Term shall be exercised, if at all, only by written notice
(“Notice to Extend Term”) delivered by Tenant to Landlord at least twelve (12) months, but not more
than eighteen (18) months, prior to the expiration of the Initial Term or the first Extended Term,
as applicable. If Tenant does not deliver the Notice to Extend Term within the time period set
forth herein, the Option to Extend Term shall lapse and Tenant shall have no right to extend the
applicable Lease Term. Within thirty (30) days after Landlord’s receipt of the Notice to Extend
Term, Landlord and Tenant shall promptly attempt to agree in good faith as to the Fair Market
Rental Value of the Premises for the applicable Extended Term, including any step increases. If
Landlord and Tenant are unable to agree on the Fair Market Rental Value of the Premises for the
applicable Extended Term, within forty-five (45) days from the date of the Notice to Extend Term,
the parties shall each select a Broker (as defined in Section 4.B.(iii)) and the Brokers
shall promptly select a third Broker to review and consider each party’s position concerning the
Fair Market Rental Value of the Premises. Within twenty (20) days after the selection of the third
Broker, such Broker shall render his or her decision concerning the Fair Market Rental Value of the
Premises. Such Broker shall select either Landlord’s or Tenant’s position concerning the Fair
Market Rental Value of the Premises in its entirety without averaging or otherwise adjusting such
value in any manner. The third Broker’s decision concerning the Fair Market Rental Value of the
Premises shall be binding upon the parties, shall not be subject to any right of appeal and shall
constitute the basis for the determination of the Annual Base Rent payable by Tenant during the
applicable Extended Term pursuant to Section 45.(A)(1) above. Each party shall be
responsible for the fees and costs of its Broker. The non-prevailing party shall be responsible
for the fees and costs of the third Broker.



     C. If, within thirty (30) days following the determination of the Fair Market Value of the
Premises for the applicable Extended Term, either party shall request that both parties enter into
an amendment documenting the applicable Extended Term and Annual Base Rent during the applicable
Extended Term, then Landlord shall prepare an amendment to this Lease setting forth the Extended
Term and Annual Base Rent for the applicable Extended Term pursuant to this Article 45
(“Extended Term Amendment”). The Extended Term Amendment shall be submitted to
Tenant for execution and Tenant shall have twenty (20) days following receipt thereof from Landlord
in which to execute and deliver the Extended Term Amendment to Landlord, and Landlord shall have
twenty (20) days after receipt of the same in which to execute the Extended Term Amendment and to
deliver one fully executed copy to Tenant. The failure of either or both Landlord or Tenant to
execute the Extended Term Amendment shall not have the effect of nullifying Tenant’s Notice of
Acceptance, and this Lease shall nevertheless be extended for the applicable Extended Term as
herein provided.



     D. The Option to Extend Term shall be exercisable by Tenant on the express conditions that at
the time of the exercise of the Option to Extend Term and at all times prior to, and upon the date
of, the commencement of the applicable Extended Term, Tenant shall not be in default under any of
the provisions of this Lease, unless such restriction is expressly waived in writing by Landlord
(which election shall be in Landlord’s sole discretion).



46.

RIGHT OF FIRST OFFER REGARDING SALE OF LANDLORD’S INTEREST




     A. Except with respect to a sale or transfer to an affiliate of Landlord (which shall be
permitted at any time), Landlord shall have no right to sell its leasehold interest in the Medicis
Development and the Buildings located thereon (“Landlord’s Interest”) during the construction of
the Premises until Landlord has received a Certificate of Occupancy for the Premises, provided that
after receipt of the Certificate of Occupancy for the Premises, Landlord thereafter shall have the
right to sell Landlord’s Interest.



     B. Provided that the originally named Landlord is the “Landlord” under this Lease, prior to
entering into a contract for the sale of Landlord’s Interest with any party other than an affiliate
of Landlord, Landlord shall



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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.





first offer to sell to Tenant Landlord’s Interest, subject to, and upon
all of the terms, covenants and conditions, set forth in this Article 46 (the “Landlord’s
Interest Right of First Offer”). Landlord and Tenant acknowledge and agree that the Landlord’s
Interest Right of First Offer shall not apply to (i) any recapitalization of Landlord or Landlord’s
Interest that does not include a sale of Landlord’s Interest, even if an unaffiliated third party
obtains less than a majority interest in the Premises through such recapitalization, or (ii) a sale
of Landlord’s Interest as part of a “portfolio sale” of other assets of Landlord and/or its parent
or affiliated company unless Tenant bids on the entire portfolio and not just Landlord’s Interest.
Landlord’s Interest shall be offered to Tenant at the Fair Market Value of Landlord’s Interest.
The term “Fair Market Value of Landlord’s Interest” shall be Landlord’s good faith determination of
the then prevailing fair market value of Landlord’s Interest at the time of the proposed sale. Any
sale of Landlord’s Interest shall be subject to the terms of the Master Lease.



     C. The terms of the Landlord’s Interest Right of First Offer for Landlord’s Interest shall be
provided by Landlord to Tenant in writing (“Landlord’s Interest Notice of First Offer”). Tenant
shall notify Landlord in writing of its acceptance of the Landlord’s Interest Notice of First Offer
(“Landlord’s Interest First Offer Acceptance Notice”) or rejection of the Landlord’s Interest
Notice of First Offer and, consequently, of its right to purchase Landlord’s Interest (“Landlord’s
Interest First Offer Rejection Notice”) within fifteen (15) business days after receiving the
Landlord’s Interest Notice of First Offer. If Tenant does not for any reason deliver the
Landlord’s Interest First Offer Acceptance Notice or the Landlord’s Interest First Offer Rejection
Notice to Landlord within the time frame herein contained, the same shall constitute Tenant’s
Landlord’s Interest First Offer Rejection Notice which shall be deemed delivered on the fifteenth
(15th) business day. The Landlord’s Interest First Offer Acceptance Notice or the
Landlord’s Interest First Offer Rejection Notice, as the case may be, shall be irrevocable. If
Tenant delivers (or is deemed to have delivered) a Landlord’s Interest First Offer Rejection
Notice, Landlord shall have a period of twelve (12) months after the delivery (or deemed delivery)
of such Landlord’s Interest First Offer Rejection Notice within which to close the sale of
Landlord’s Interest on substantially the same terms and conditions set forth in the Landlord’s
Interest Right of First Offer before Landlord shall again be obligated to provide to Tenant a
Landlord’s Interest Notice of First Offer (that is, after the expiration of such twelve (12) month
period, in the event such sale has not closed, or if a sale is proposed on materially different
terms, Tenant’s rights hereunder shall be reinstated in full force and effect).



     D. If Tenant delivers the Landlord’s Interest First Offer Acceptance Notice as specified
above, then Landlord shall prepare a purchase contract for the purchase and sale of Landlord’s
Interest (the “Purchase Contract”) setting forth the terms by which Tenant shall purchase
Landlord’s Interest. After the Purchase Contract shall be submitted to Tenant, the parties shall
have thirty (30) days (the “Outside Date”) to attempt to complete the negotiation in good faith of
an acceptable form of Purchase Contract. If the parties do not execute and deliver to escrow the
mutually agreeable form of Purchase Contract prior to the Outside Date, then the Landlord’s
Interest Right of First Offer to purchase Landlord’s Interest shall be void and of no further force
or effect.



     E. The Landlord’s Interest Right of First Offer granted herein is personal to the
originally-named Tenant or to a single assignee of at least sixty-six percent (66%) of the
Premises. If the originally-named Tenant or its affiliates or their
respective successors or permitted assigns are no longer the “Tenant” under this Lease at the
time the originally-named Landlord would otherwise be required to provide the Landlord’s Interest
Notice of First Offer to Tenant, then Landlord shall not be required to provide such Landlord’s
Interest Notice of First Offer and the Landlord’s Interest Right of First Offer under this
Article 46 shall be null and void and of no further force or effect.


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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.






     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease the day and year first above
written.



	 	 	 	 	 	 	 	 	 	 	 
	 	 	Landlord:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Apex 7720 North Dobson,
L.L.C., an Arizona limited liability company
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Apex Park at Pima, L.L.C., an Arizona limited liability company

Its: Member
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Alter Park at Pima, L.L.C.,


a Delaware limited liability company
	 	 	 	 	 	 	Its: Manager
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	18-CHAI CORP., an Illinois corporation 


Its: Manager
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	/s/ RONALD F. SIEGEL
	 	 	 	 	 	 	 	 	 	Ronald F. Siegel
	 

	 	 	 	 	 	 	 	 	Its: Vice President
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Dated:
   July 26                       , 2006
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Tenant:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Medicis Pharmaceutical Corporation, a Delaware corporation
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/
MARK A. PRYGOCKI, SR.
	 

	 	Name:	 	Mark A. Prygocki, Sr.
	 

	 	Its:	 	Executive
Vice President and Treasurer
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Dated:
         July
19                 , 2006







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