Document:

exv10w4

AMENDMENT TO SENIOR MANAGEMENT AGREEMENT

BETWEEN

SIGNIFICANT EDUCATION, INC

AND

JOHN CROWLEY

     This Amendment to the Senior Management Agreement (the “Agreement”) between Significant
Education, Inc., D/B/A/ Grand Canyon University (“GCU”), on the one hand, and John Crowley ( the
“Employee”), on the other hand dated August 2005, is made and entered into this 28th day
of June 2006.

     WHEREAS, Employee and GCU entered into an agreement of Employment in August 2005;

     WHEREAS, as part of his Employment Employee is entitled to a bonus of $100,000 on June 30,
2006;

     WHEREAS, Employee did not receive an increase in his annual pay in January 2006 per the
terms of his Agreement and is owed $12,500 in back pay as of June 30, 2006;

     WHEREAS, Employee wishes to assign his interest in the bonus and his back pay to Youth In
Motion, Inc., and have GCU pay such sums to Youth in Motion in lieu of payments to himself;

     NOW, THEREFORE, in consideration of the mutual covenants, conditions and promises contained
herein, and other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties agree to amend the Agreement as follows:

     1. Steps Following Execution. As soon as practicable following the execution of this
Amendment by the Parties, but in all events on or before midnight on July 3, 2006, GCU shall pay
the sum of $112,500.00 in the form of a check made payable to Youth In Motion, Inc.

     2. Release & Waiver. Employee expressly agrees to waive any and all rights, claims,
or interests in and/or relating directly or indirectly to the payments due to him under the
Agreement. Further, Employee, his past, present and future successors, assigns, and agents, and
all persons acting by, through, under or in concert with him, do hereby irrevocably and
unconditionally release, waive and forever discharge GCU, as well as its past, present and future
parents, subsidiaries, affiliates, divisions, predecessors, successors, assigns, partners,
officers, directors, stockholders, employees, insurers, agents, representatives, and attorneys, and
all persons acting by, through, under or in concert with them, or any of them, from any and all
actions, causes of action, suits, claims, debts, obligations, demands, liabilities, rights,
damages, losses, costs, expenses (including, but not limited to, attorneys’ fees and costs actually
incurred) of any nature whatsoever, known or unknown, suspected or unsuspected, fixed or
contingent, legal or equitable, arising under state, federal or any other law (“Claim” or “Claims”)
which they now have, own or hold or claim to have, own or hold, or at any time heretofore had,
owned or held, or claimed to have had, owned or held, or may hereinafter have, own or hold, or
claim to have, own or hold against GCU, its past, present and future parents, subsidiaries,
affiliates, divisions, predecessors, successors, assigns, partners, officers, directors,
stockholders, employees, insurers, agents, representatives, and attorneys, and all persons acting
by, through, under or in concert with them, or any of them, arising out of, based upon, or relating
to any and all payments, including bonus payments and back pay, due and owing under his Agreement
as of June 30, 2006

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     3. Full and Independent Knowledge. Each of the Parties represents that it has been
represented by an attorney in connection with the preparation and review of this Amendment; that
he, she or it has specifically discussed, or had the opportunity to specifically discuss, with an
attorney the meaning and effect of Amendment; and that he, she or it has carefully read and
understands the scope and effect of each provision contained herein.

     4. Warranties. Each of the Parties represents and warrants that he, she or it has
full power and authority to enter into and perform this Amendment. Each of the Parties further
represents and warrants that he, she or it has not heretofore assigned, transferred, encumbered or
otherwise conveyed, or purported to assign, transfer, encumber or otherwise convey, in whole of in
part, to any person or entity, any Claims released hereunder.

     5. Successors. This Amendment shall be binding upon and inure to the benefit of the
executors, administrators, successors, heirs and assigns of each of the Parties hereto.

     6. Further Assurances. Each of the Parties, without further consideration, agrees to
execute and deliver such other documents and take such other action as may be reasonably necessary
to consummate more effectively the subject matter hereof.

     7.Miscellaneous.

          (a) This Amendment shall include its preamble and recitals.

          (b) This Amendment shall be construed in accordance with and governed by the laws of the
State of Arizona without regard to conflict of laws provisions.

          (c) The Parties agree that Amendment may be executed in counterparts and that a copy signed by
a Party will be fully enforceable against such Party.

          (d) This Amendment and the Agreement contain the entire agreement between the Parties hereto
with respect to the subject matter hereof. The Parties acknowledge that no other understandings,
statements, promises, or inducements contrary to the terms of these agreements, whether oral or
written, exist; that they do not rely and have not relied on any oral or written understandings,
statements, promises, or inducements other than those contained in these agreements; and that they
have voluntarily entered into this Amendment and the assignment of payments effectuated thereby.
In the event the Amendment contradicts any portion of the Agreement, the terms of this Amendment
shall control.

          (e) This Amendment has been jointly negotiated by the Parties. It shall be construed as a
whole, according to its fair meaning, and shall not be construed strictly for or against any of the
Parties hereto.

          (f) This Amendment may not be amended, altered, modified or waived, in whole or in part,
except in a writing executed by the Parties hereto.

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          (g) If any provision of this Amendment is held invalid or otherwise unenforceable, the
enforceability of the remaining provisions shall not be impaired thereby.

          (h) The failure of any Party to insist upon strict adherence to any term of this Amendment on
any occasion shall not be considered a waiver thereof or deprive that Party of the right thereafter
to insist upon strict adherence to that term or any other term of this Amendment.

          IN WITNESS WHEREOF, the Parties have each executed this Amendment as of the date first set
forth above.

	 	 	 	 	 	 	 	 	 	 	 
	Employee

	 	 	 	 
	 	Significant Education, Inc.
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ John Crowley

	 	6/30/06
	 	 	 	/s/ Brent Richardson
	 	6/30/06	 	 
	 	 	 	 	 	 	 
	John Crowley

	 	Date
	 	 	 	Brent Richardson
	 	Date	 	 

Page 3 of 3exv10w7

LEASE AGREEMENT

     THIS LEASE AGREEMENT (this “Lease”) is made as of June 28, 2004 (the “Effective
Date”), by and between SPIRIT FINANCE ACQUISITIONS, LLC, a Delaware limited liability company
(“Lessor”), whose address is 8910 East Raintree Drive, Suite 100, Scottsdale, Arizona
85260, and SIGNIFICANT EDUCATION, LLC, a Delaware limited liability company (“Lessee”),
whose address is 2525 East Arizona Biltmore Circle, #140, Phoenix, Arizona 85016.

     In consideration of the mutual covenants and agreements herein contained, Lessor and Lessee
hereby covenant and agree as follows:

     1. Certain Defined Terms. Capitalized terms not defined herein shall have the meanings set
forth in Exhibit A hereto.

     2. Lease of Property; Use. In consideration of the Rentals and other Monetary Obligations to
be paid by Lessee and of the other terms, covenants and conditions on Lessee’s part to be kept and
performed, Lessor hereby leases to Lessee, and Lessee hereby takes and hires, the Property, subject
to the Permitted Encumbrances, all Legal Requirements (including any existing violation thereof),
and the condition of the Property as of the Effective Date; provided, however, that the recital of
the Permitted Encumbrances herein shall not be construed as a revival of any Permitted Encumbrance
which may have expired or been terminated. During the Lease Term, the Property shall be used
solely for the operation of a Permitted Facility, and related purposes such as ingress, egress and
parking. Lessee shall at all times during the Lease Term occupy the Property and shall diligently
operate its business on the Property. Except as otherwise permitted herein, Lessee shall not, by
itself or through any assignment, sublease or other type of transfer, convert all or any portion of
the Property to an alternative use during the Lease Term without Lessor’s prior written consent.

     3. Lease Term; Extension. The initial term of this Lease (“Initial Term”) shall
commence as of the Effective Date and shall expire at midnight on June 30, 2024 (“Expiration
Date”), unless terminated sooner as provided in this Lease and as may be extended as provided
herein. The time period during which this Lease shall actually be in effect, including any
Extension Term, is referred to herein as the “Lease Term.” Unless this Lease has expired
or has been sooner terminated, or an Event of Default has occurred and is continuing at the time
any option is exercised, and provided that all other agreements necessary to the continued
operation of Lessee’s business at the Property are extended for a period of not less than the
applicable extension periods, Lessee shall have the right and option (each, an “Extension
Option”) to extend the Initial Term for the Property for four (4) additional successive periods
of five (5) years each (each, an “Extension Term”), pursuant to the terms and conditions of
this Lease then in effect. Lessee may only exercise the Extension Options by giving written notice
thereof to Lessor of its election to do so first, no later than one hundred twenty (120) days prior
to the Expiration Date and one hundred twenty (120) days prior to the immediately preceding
Extension Term, as the case may be. If written notice of the exercise of any Extension Option is
not received by Lessor by the applicable dates described above, then this Lease shall terminate on
the last day of the Initial Term or, if applicable, the last day of the Extension Term then in
effect. Upon the request of Lessor or Lessee, the parties hereto will, at the expense of Lessee,
execute and exchange an

 

 

instrument in recordable form setting forth the extension of the Lease Term in accordance with
this Section 3.

     4. Rental and Other Monetary Obligations.

     A. Base Monthly Rental. During the Initial Term, on or before the first day of each
calendar month, Lessee shall pay in advance the Base Monthly Rental; provided, however, if
the Effective Date is a date other than the first day of the month, Lessee shall pay to
Lessor (or any other party designated by Lessor) on the Effective Date the Base Monthly
Rental prorated by multiplying the Base Monthly Rental by a fraction, the numerator of which
is the number of days remaining in the month (including the Effective Date) for which
Rentals are being paid, and the denominator of which is the total number of days in such
month. During the Extension Terms, if any, Lessee shall pay the Rentals (including the Base
Monthly Rental) in the manner set forth in this Section 4. Unless otherwise specifically
stated to the contrary herein, Lessee shall perform all its obligations under this Lease at
its sole cost and expense and shall pay all Rental and any other Monetary Obligation due
hereunder when due and payable, without notice or demand.

     B. Scheduled Adjustments. On the first Adjustment Date and on each Adjustment Date
thereafter, the Base Annual Rental shall increase by an amount equal to the Rent Adjustment.
The “Rent Adjustment” shall be an amount equal to five percent (5%) of the Base
Annual Rental in effect immediately prior to the applicable Adjustment Date.

     C. Additional Adjustments. In addition to the scheduled adjustments of Base Annual
Rental under Section 4.B above, Base Annual Rental shall be adjusted in accordance with the
terms and provisions of Section 44 below.

     D. Additional Rental. Lessee shall pay and discharge, as additional rental
(“Additional Rental”), all sums of money required to be paid by Lessee under this
Lease which are not specifically referred to as Rental. Notwithstanding any provisions in
this Lease to the contrary, Additional Rental shall not include (1) compensation paid to any
officers, executives or employees of Lessor; (2) costs for which Lessor is reimbursed by
insurance, condemnation or otherwise; (3) interest on debt or amortization payments on any
mortgage or deed to secure debt and any charges for any costs and expenses incurred in
connection with any refinancing of any debt secured by any mortgage on the Property; (4)
except as otherwise provided in Section 43.C. below, all professional fees
(legal/accounting/consultants) and other Costs and expenses arising out of the sale of any
of the Property by Lessor or the financing or refinancing of any loan secured by all or any
portion of the Property; (5) Lessor’s general corporate overhead and general corporate
administrative expenses including any costs related to Lessor’s maintenance of an office;
(6) late charges and other penalties incurred as a result of Lessor’s failure, negligence,
inability or unwillingness to make payments to any person or party when due; and (7) any
depreciation. Lessee shall pay and discharge any Additional Rental when the same shall
become due, provided that amounts which are billed to Lessor or any third party, but not to
Lessee, shall be paid within thirty (30) days after Lessor’s demand for payment thereof or,
if later, when the same are due. In no event shall Lessee be required to pay to Lessor

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any item of Additional Rental that Lessee is obligated to pay and has paid to any third
party pursuant to any provision of this Lease.

     E. Payment of Rental and Other Monetary Obligations. All Rental and other Monetary
Obligations which Lessee is required to pay hereunder shall be the unconditional obligation
of Lessee and shall be payable in full when due without any setoff, abatement, deferment,
deduction or counterclaim whatsoever. Upon execution of this Lease, Lessee shall establish
arrangements whereby payments of the Base Monthly Rental, any Additional Rental, impound
payments (if any), sales tax on real property tax (if any), and any other Monetary
Obligations are transferred by Automated Clearing House Debit initiated by Lessor from an
account established by Lessee at a United States bank or other financial institution to such
account as Lessor may designate. Any delinquent payment shall, in addition to any other
remedy of Lessor, incur a late charge of five percent (5%) (which late charge is intended to
compensate Lessor for the cost of handling and processing such delinquent payment and should
not be considered interest) and bear interest at the Default Rate, such interest to be
computed from and including the date such payment was due through and including the date of
the payment; provided, however, in no event shall Lessee be obligated to pay a sum of late
charge and interest higher than the maximum legal rate then in effect.

     5. Representations and Warranties of Lessor. The representations and warranties of Lessor
contained in this Section are being made to induce Lessee to enter into this Lease and Lessee has
relied and will continue to rely upon such representations and warranties. Lessor represents and
warrants to Lessee as follows:

     A. Organization, Authority and Status of Lessor. Lessor has been duly organized and is
validly existing and in good standing under the laws of the State of Delaware. All
necessary corporate action has been taken to authorize the execution, delivery and
performance by Lessor of this Lease and of the other documents, instruments and agreements
provided for herein. The person who has executed this Lease on behalf of Lessor is duly
authorized to do so.

     B. Enforceability. This Lease constitutes the legal, valid and binding obligation of
Lessor, enforceable against Lessor in accordance with its terms.

     C. Litigation. There are no suits, actions, proceedings or investigations pending, or
to the best of its knowledge, threatened against or involving Lessor before any arbitrator
or Governmental Authority which might reasonably result in any material adverse change in
the contemplated business, condition, worth or operations of Lessor.

     D. Absence of Breaches or Defaults. Lessor is not in default under any document,
instrument or agreement to which Lessor is a party or by which Lessor or any of Lessor’s
property is subject or bound. The authorization, execution, delivery and performance of this
Lease and the documents, instruments and agreements provided for herein will not result in
any breach of or default under any document, instrument or agreement to which Lessor is a
party or by which Lessor or any of Lessor’s property is subject or bound.

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     6. Representations and Warranties of Lessee. The representations and warranties of Lessee
contained in this Section are being made to induce Lessor to enter into this Lease and Lessor has
relied, and will continue to rely, upon such representations and warranties. Lessee represents and
warrants to Lessor as follows:

     A. Organization, Authority and Status of Lessee. Lessee has been duly organized or
formed, is validly existing and in good standing under the laws of its State of Delaware and
is qualified as a foreign limited liability company to do business in any jurisdiction where
such qualification is required, including the State. All necessary limited liability
company action has been taken to authorize the execution, delivery and performance by Lessee
of this Lease and of the other documents, instruments and agreements provided for herein.
Lessee is not a “foreign limited liability company”, “foreign corporation”, “foreign
partnership”, “foreign trust” or “foreign estate”, as those terms are defined in the Code
and the regulations promulgated thereunder. Lessee’s United States tax identification
number is correctly set forth on the signature page of this Lease. The person who has
executed this Lease on behalf of Lessee is duly authorized to do so. The address of Lessee
stated in Section 24 is the principal place of business and principal executive office of
Lessee, and Lessee will provide Lessor with written notice of any change of location of its
principal place of business or principal executive office within ten (10) days thereof.

     B. Enforceability. This Lease constitutes the legal, valid and binding obligation of
Lessee, enforceable against Lessee in accordance with its terms.

     C. Litigation. Except as described in Schedule 6.C. attached hereto, there are no
suits, actions, proceedings or investigations pending, or to its current actual knowledge,
threatened against or involving Lessee or the Property before any arbitrator or Governmental
Authority which might reasonably result in any material adverse change in the contemplated
business, condition, worth or operations of Lessee or the Property.

     D. Absence of Breaches or Defaults. Except as described in Schedule 6.D. attached
hereto, to its current actual knowledge, Lessee is not in default under any document,
instrument or agreement to which Lessee is a party or by which Lessee, the Property or any
of Lessee’s property is subject or bound. The authorization, execution, delivery and
performance of this Lease and the documents, instruments and agreements provided for herein
will not result in any breach of or default under any document, instrument or agreement to
which Lessee is a party or by which Lessee, the Property or any of Lessee’s property is
subject or bound.

     E. Licenses and Permits. To its current actual knowledge, Lessee has obtained all
required licenses and permits, both governmental and private, to use and operate the
Property as a Permitted Facility.

     F. Financial Condition; Information Provided to Lessor. The financial statements, all
financial data and all other documents and information heretofore delivered to Lessor by or
with respect to Lessee, Guarantor and/or the Property in connection with this Lease and/or
relating to Lessee, Guarantor and/or the Property are true, correct and complete in all
material respects, there have been no amendments

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thereto since the date such items were prepared or delivered to Lessor, and no change
has occurred to any such financial statements, financial data, documents and other
information not disclosed in writing to Lessor, which would result in a Material Adverse
Effect.

     G. Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws.
Lessee, and to Lessee’s current actual knowledge, each of the Lessee Entities is not
currently identified on the OFAC List, and is not a Person with whom a citizen of the United
States is prohibited from engaging in transactions by any trade embargo, economic sanction,
or other prohibition of United States law, regulation, or executive order of the President
of the United States. The Lessee has implemented procedures, and will consistently apply
those procedures throughout the Lease Term, to ensure the foregoing representations and
warranties remain true and correct during the Lease Term.

     H. Solvency. There is no contemplated, pending or threatened Insolvency Event or
similar proceedings, whether voluntary or involuntary, affecting Lessee, or to Lessee’s
current actual knowledge, its shareholders or Affiliates. Lessee does not have unreasonably
small capital to conduct its business.

     I. Ownership. Neither Lessee nor any Affiliate of Lessee that actually or
constructively owns ten percent (10%) or more of the outstanding capital stock of Lessor
owns, directly or indirectly, (i) ten percent (10%) or more of the total combined voting
power of all classes of voting capital stock of Lessee, or (ii) ten percent (10%) or more of
the total value of all classes of capital stock of Lessee.

     7. Rentals To Be Net to Lessor. The Base Annual Rental payable hereunder shall be net to
Lessor, so that this Lease shall yield to Lessor the Rentals specified during the Lease Term, and
all Costs and obligations of every kind and nature whatsoever relating to the Property shall be
performed and paid by Lessee.

     8. Taxes and Assessments. Lessee shall pay, prior to the earlier of delinquency or the
accrual of interest on the unpaid balance, all taxes and assessments of every type or nature
assessed against or imposed upon the Property or Lessee during the Lease Term, including without
limitation, all taxes or assessments upon the Property or any part thereof and upon any personal
property, trade fixtures and improvements located on the Property, whether belonging to Lessor or
Lessee, or any tax or charge levied in lieu of such taxes and assessments; all taxes, charges,
license fees and or similar fees imposed by reason of the use of the Property by Lessee; and all
excise, transaction, privilege, license, sales, use and other taxes upon the Rental or other
Monetary Obligations hereunder, the leasehold estate of either party or the activities of either
party pursuant to this Lease.

     Within thirty (30) days after each tax and assessment payment is required by this Section to
be paid, Lessee shall, upon prior written request of Lessor, provide Lessor with evidence
reasonably satisfactory to Lessor that such payment was made in a timely fashion. Lessee may, at
its own expense, contest or cause to be contested (in the case of any item involving more than
$10,000.00, after prior written notice to Lessor), by appropriate legal proceedings conducted in
good faith and with due diligence, any above-described item or lien with respect thereto,
including,

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without limitation, the amount or validity or application, in whole or in part, of any such
item, provided that (A) neither the Property nor any interest therein would be in any danger of
being sold, forfeited or lost by reason of such proceedings, (B) no Event of Default has occurred,
and (C) Lessee shall promptly provide Lessor with copies of all notices received or delivered by
Lessee and filings made by Lessee in connection with such proceeding.

     9. Utilities. Lessee shall be responsible for and shall pay, or cause to be paid, all charges
or fees related to the connection and use of water, gas, electricity, telephone, garbage
collection, sewer use and other utility services supplied to the Property during the Lease Term.
Under no circumstances shall Lessor be responsible for the provision of utility services to the
Property or for any interruption thereof.

     10. Insurance. Throughout the Lease Term, Lessee shall maintain, with respect to the
Property, at its sole expense, the following types and amounts of insurance (which may be included
under a blanket insurance policy if all the other terms hereof are satisfied), in addition to such
other insurance as Lessor may reasonably require from time to time:

     A. Insurance against loss, damage or destruction by fire and other casualty, including
theft, vandalism and malicious mischief, flood (if the Property is in a location designated
by the Federal Emergency Management Administration as a Special Flood Hazard Area),
earthquake (if the Property is in an area subject to destructive earthquakes within recorded
history), boiler explosion (if there is any boiler upon the Property), plate glass breakage,
sprinkler damage (if the Property has a sprinkler system), all matters covered by a special
coverage endorsement commonly known as an “all-risk” endorsement and such other risks as
Lessor may reasonably require, insuring the Property for not less than 100% of its full
insurable replacement cost.

     B. Comprehensive general liability and property damage insurance, including a products
liability clause, covering Lessor and Lessee against bodily injury liability, property
damage liability and automobile bodily injury and property damage liability, including
without limitation any liability arising out of the ownership, maintenance, repair,
condition or operation of the Property or adjoining ways, streets, parking lots or
sidewalks. Such insurance policy or policies shall contain a broad form contractual
liability endorsement under which the insurer agrees to insure Lessee’s obligations under
Section 15 hereof to the extent insurable, and a “severability of interest” clause or
endorsement which precludes the insurer from denying the claim of Lessee or Lessor because
of the negligence or other acts of the other, shall be in amounts of not less than
$1,000,000.00 per injury and occurrence with respect to any insured liability, whether for
personal injury or property damage, or such higher limits as Lessor may reasonably require
from time to time, and shall be of form and substance satisfactory to Lessor.

     C. State Worker’s Compensation insurance in the statutorily mandated limits.

     D. Business income insurance or rental interruption insurance, as requested by Lessor,
equal to 100% of the Base Annual Rental for a period of not less than six months.

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All insurance policies shall:

     (i) Provide for a waiver of subrogation by the insurer as to claims against
Lessor, its employees and agents, and provide that the insurer shall not deny a
claim and that such insurance cannot be unreasonably cancelled, invalidated or
suspended on account of the conduct of Lessee, its officers, directors, employees or
agents, or anyone acting for Lessee or any subtenant or other occupant of the
Property;

     (ii) Provide that any “no other insurance” clause in the insurance policy shall
exclude any policies of insurance maintained by Lessor and that the insurance policy
shall not be brought into contribution with insurance maintained by Lessor;

     (iii) Contain a standard without contribution mortgage clause endorsement in
favor of any lender designated by Lessor;

     (iv) Provide that the policy of insurance shall not be terminated, cancelled or
substantially modified without at least thirty (30) days’ prior written notice to
Lessor and to any lender covered by any standard mortgage clause endorsement;

     (v) Provide that the insurer shall not have the option to restore the Property
if Lessor elects to terminate this Lease in accordance with the terms hereof; and

     (vi) Be issued by insurance companies licensed to do business in the State and
which are rated A:VI or better by Best’s Insurance Guide or are otherwise approved
by Lessor.

     It is expressly understood and agreed that the foregoing minimum limits of insurance coverage
shall not limit the liability of Lessee for its acts or omissions as provided in this Lease. All
insurance policies (with the exception of worker’s compensation insurance to the extent not
available under statutory law) shall designate Lessor, and its respective successors and assigns,
and any mortgagee of Lessor as additional insureds as their interests may appear and shall be
payable as set forth in Section 18 hereof. All such policies shall be written as primary policies,
with deductibles not to exceed $100,000.00. Lessee shall procure policies for all insurance for
periods of not less than one year and shall provide to Lessor and any servicer or lender of Lessor
certificates of insurance or, upon Lessor’s request, duplicate originals of insurance policies
evidencing that insurance satisfying the requirements of this Lease is in effect at all times.

     11. Tax and Insurance Impound. Upon the occurrence of an Event of Default, in addition to any
other remedies, Lessor may require Lessee to pay to Lessor sums which will provide an impound
account (which shall not be deemed a trust fund) for paying up to the next one year of taxes,
assessments and/or insurance premiums. Upon such requirement, Lessor will estimate the amounts
needed for such purposes and will notify Lessee to pay the same to Lessor in equal monthly
installments, as nearly as practicable, in addition to all other Monetary Obligations due under
this Lease. Should additional funds be required at any time, Lessee shall pay the same to Lessor
within five (5) business days of demand. Lessee shall advise Lessor of

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all taxes and insurance bills which are due and shall cooperate fully with Lessor in assuring
that the same are paid. Lessor may deposit all impounded funds in accounts insured by any federal
or state agency and may commingle such funds with other funds and accounts of Lessor. Interest or
other gains from such funds, if any, shall be the sole property of Lessor. In the event of any
default by Lessee, Lessor may apply all impounded funds against any sums due from Lessee to Lessor.
Lessor shall give to Lessee an annual accounting showing all credits and debits to and from such
impounded funds received from Lessee.

     12. Compliance With Laws, Restrictions, Covenants and Encumbrances.

     A. Compliance. Lessee’s use and occupation of the Property, and the condition thereof,
shall, at Lessee’s sole cost and expense, comply fully with all Legal Requirements and all
restrictions, covenants and encumbrances of record with respect to the Property, in either
event, the failure with which to comply could have a Material Adverse Effect. Without in
any way limiting the foregoing provisions, Lessee shall comply with all Legal Requirements
relating to money laundering, anti-terrorism, trade embargos and economic sanctions, now or
hereafter in effect. Upon the Lessor’s written request from time to time during the Lease
Term, Lessee shall certify in writing to Lessor that Lessee’s representations, warranties
and obligations under Section 6.G and this Section 12.A remain true and correct and have not
been breached. Lessee shall immediately notify Lessor in writing if it becomes aware that
any of such representations, warranties or covenants are no longer true or have been
breached or if Lessee has a reasonable basis to believe that they may no longer be true or
have been breached. In connection with such an event, Lessee shall comply with all Legal
Requirements and directives of Governmental Authorities and, at Lessor’s request, provide to
Lessor copies of all notices, reports and other communications exchanged with, or received
from, Governmental Authorities relating to such an event. Lessee shall also reimburse
Lessor for all Costs incurred by Lessor in evaluating the effect of such an event on the
Property and this Lease, in obtaining any necessary license from Governmental Authorities as
may be necessary for Lessor to enforce its rights under the Transaction Documents, and in
complying with all Legal Requirements applicable to Lessor as the result of the existence of
such an event and for any penalties or fines imposed upon Lessor as a result thereof.

     B. Acts Resulting in Increased Insurance Rates. Lessee will use its best efforts to
prevent any act or condition to exist on or about the Property which will materially
increase any insurance rate thereon, except when such acts are required in the normal course
of its business and Lessee shall pay for such increase.

     C. ADA. Without limiting the generality of the other provisions of this Section,
Lessee agrees that it shall be responsible for complying in all respects with the Americans
with Disabilities Act of 1990, as such act may be amended from time to time, and all
regulations promulgated thereunder (collectively, the “ADA”), as it affects the
Property. Lessee agrees that it will defend, indemnify and hold harmless the Indemnified
Parties from and against any and all Losses caused by, incurred or resulting from Lessee’s
failure to comply with its obligations under this Section.

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     D. Environmental.

     (i) Representations and Warranties. Lessee represents and warrants to Lessor,
which representations and warranties shall survive the execution and delivery of
this Lease, as follows:

     (1) To Lessee’s current actual knowledge, and except as set forth on
Exhibit C attached hereto, the Property and Lessee are not in
violation of or subject to, any pending or, to Lessee’s current actual
knowledge, threatened investigation or inquiry by any Governmental Authority
or to any remedial obligations under any Environmental Laws that could have
a Material Adverse Effect, nor has Lessee received any written or oral
notice or other communication from any Person (including but not limited to
a Governmental Authority) with respect to the Property relating to (I)
Hazardous Materials or Remediation thereof; (II) possible liability of any
Person pursuant to any Environmental Law; (III) other environmental
conditions; or (IV) any actual or potential administrative or judicial
proceedings in connection with any of the foregoing that could have a
Material Adverse Effect. The foregoing representations and warranties would
continue to be true and correct following disclosure to the applicable
Governmental Authorities of all relevant facts, conditions and
circumstances, if any, pertaining to the Property.

     (2) To Lessee’s current actual knowledge, except to the extent set
forth on Exhibit C attached hereto, (I) all uses and operations on
or of the Property, whether by Lessee or any other Person, have been in
compliance with all Environmental Laws and environmental permits issued
pursuant thereto; (II) there have been no Releases in, on, under or from the
Property, or from other property migrating toward the Property, except in
Permitted Amounts; (III) there are no Hazardous Materials in, on, or under
the Property, except in Permitted Amounts; (IV) the Property has been kept
free and clear of all liens and other encumbrances imposed pursuant to any
Environmental Law (the “Environmental Liens”); and (V) Lessee has
not allowed any other tenant or other user of the Property to do any act
that materially increased the dangers to human health or the environment,
posed an unreasonable risk of harm to any Person (whether on or off the
Property), impaired the value of the Property in any material respect, is
contrary to any requirement set forth in the insurance policies maintained
by Lessor, constituted a public or private nuisance, constituted waste, or
violated any covenant, condition, agreement or easement applicable to the
Property.

     (ii) Covenants.

     (1) Lessee covenants to Lessor during the Lease Term, subject to the
limitations of subsection (2) below, as follows:

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     (I) The Property and Lessee shall not be (a) in violation of any
Remediation required by any Governmental Authority or (b) subject to
any Remediation obligations under any Environmental Laws. Lessee
shall not be in violation of any investigation or inquiry by any
Governmental Authority.

     (II) All uses and operations on or of the Property, whether by
Lessee or any other Person, shall be in compliance with all
Environmental Laws and permits issued pursuant thereto.

     (III) There shall be no Releases in, on, under or from the
Property, except in Permitted Amounts.

     (IV) There shall be no Hazardous Materials in, on or under the
Property, except in Permitted Amounts.

     (V) Lessee shall keep the Property or cause the Property to be
kept free and clear of all Environmental Liens, whether due to any
act or omission of Lessee or any other Person.

     (VI) Lessee shall not do or allow any other tenant or other user
of the Property to do any act that (a) materially increases the
dangers to human health or the environment, (b) poses an unreasonable
risk of harm to any Person (whether on or off the Property), (c) has
a Material Adverse Effect, (d) is contrary to any material
requirement set forth in the insurance policies maintained by Lessee,
(e) constitutes a public or private nuisance or constitutes waste, or
(f) violates any covenant, condition, agreement or easement
applicable to the Property.

     (2) Notwithstanding any provision of this Lease to the contrary, an
Event of Default shall not be deemed to have occurred as a result of the
failure of Lessee to satisfy any one or more of the covenants set forth in
subsections (I) through (VI) above provided that Lessee shall be in
compliance with the requirements of any Governmental Authority with respect
to the Remediation of any Release at the Property.

     (iii) Notification Requirements. Lessee shall immediately notify Lessor in
writing upon Lessee obtaining actual knowledge of (1) any Releases or Threatened
Releases in, on, under or from the Property other than in Permitted Amounts, or
migrating towards the Property; (2) any non-compliance with any Environmental Laws
related in any way to the Property; (3) any actual or potential Environmental Lien;
(4) any required or proposed Remediation of environmental conditions relating to the
Property required by applicable Governmental Authorities; and (5) any written or
oral notice or other communication which Lessee becomes aware from any source
whatsoever (including but not limited to a Governmental Authority) relating in any
way to Hazardous Materials or Remediation thereof at or on the Property, other than
in

10

 

Permitted Amounts, possible liability of any Person relating to the Property
pursuant to any Environmental Law, other environmental conditions in connection with
the Property, or any actual or potential administrative or judicial proceedings in
connection with anything referred to in this Section. Lessee shall, upon Lessor’s
written request, deliver to Lessor a certificate stating that Lessee is and has been
in full compliance with all of the environmental representations, warranties and
covenants in this Lease.

     (iv) Remediation. Lessee shall, at its sole cost and expense, and without
limiting any other provision of this Lease, effectuate any Remediation required by
any Governmental Authority of any condition (including, but not limited to, a
Release) in, on, under or from the Property and take any other reasonable action
deemed necessary by any Governmental Authority for protection of human health or the
environment. Should Lessee fail to undertake such Remediation in accordance with
the preceding sentence, Lessor, after written notice to Lessee and Lessee’s failure
to immediately undertake such Remediation, shall be permitted to complete such
Remediation, and all reasonable Costs incurred in connection therewith shall be paid
by Lessee.

     (v) Indemnification. Lessee shall, at its sole cost and expense, protect,
defend, indemnify, release and hold harmless each of the Indemnified Parties from
and against any and all Losses, including, but not limited to, all Costs of
Remediation (whether or not performed voluntarily), arising out of or in any way
relating to any Environmental Laws, Hazardous Materials or other environmental
matters concerning the Property. It is expressly understood and agreed that
Lessee’s obligations under this Section shall survive the expiration or earlier
termination of this Lease for any reason.

     13. Condition of Property; Maintenance. Lessee hereby accepts the Property “AS IS” and “WHERE
IS” with no representation or warranty of Lessor as to the condition thereof. The Property shall
be kept in good, clean, sanitary and working condition, and Lessee shall at all times at its own
expense maintain, repair and replace, as necessary, the Property, including all portions of the
Property, whether or not the Property was in such condition on the Effective Date.

     14. Waste; Alterations and Improvements. Lessee shall not commit actual or constructive waste
upon the Property. During the Lease Term, Lessee shall not alter the exterior, structural,
plumbing or electrical elements of the Property in any manner without the consent of Lessor, which
consent shall not be unreasonably withheld or conditioned; provided, however, Lessee may undertake
nonstructural alterations to the Property, individually, costing less than $100,000.00 without
Lessor’s prior written consent. If Lessor’s consent is required hereunder and Lessor consents to
the making of any such alterations, the same shall be made by Lessee at Lessee’s sole expense by a
licensed contractor and according to plans and specifications approved by Lessor and subject to
such other conditions as Lessor shall require. Any work at any time commenced by Lessee on the
Property shall be prosecuted diligently to completion, shall be of good workmanship and materials
and shall comply fully with all the terms of this Lease. Upon completion of any alterations,
Lessee shall promptly provide Lessor with (A) evidence of full payment to all laborers and
materialmen contributing to the alterations, (B) an architect’s certificate certifying the
alterations to have been completed in conformity with

11

 

the plans and specifications, (C) a certificate of occupancy (if the alterations are of such a
nature as would require the issuance of a certificate of occupancy), and (D) any other documents or
information reasonably requested by Lessor. Lessee shall execute and file or record, as
appropriate, a “Notice of Non-Responsibility,” or any equivalent notice permitted under applicable
law in the State. Any addition to or alteration of the Property shall be deemed a part of the
Property and belong to Lessor, and Lessee shall execute and deliver to Lessor such instruments as
Lessor may require to evidence the ownership by Lessor of such addition or alteration.

     15. Indemnification. Lessee shall indemnify, protect, defend and hold harmless each of the
Indemnified Parties from and against any and all Losses (excluding Losses suffered by an
Indemnified Party arising out of such Indemnified Party’s negligence or intentional misconduct)
caused by, incurred or resulting from Lessee’s use and occupancy of the Property, whether relating
to its original design or construction, latent defects, alteration, maintenance, use by Lessee or
any Person thereon, supervision or otherwise, or from any breach of, default under, or failure to
perform, any term or provision of this Lease by Lessee, its officers, employees, agents or other
Persons. It is expressly understood and agreed that Lessee’s obligations under this Section shall
survive the expiration or earlier termination of this Lease for any reason. Lessor shall
indemnify, defend and hold harmless Lessee and its directors, officers, shareholders, partners,
members, employees agents, servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns, including, but not limited to, any successors
by merger, consolidation or acquisition of all or a substantial portion of the assets and business
of Lessee (“Lessee Indemnified Parties”) from and against any and all Losses (excluding Losses
suffered by such Lessee Indemnified Parties arising out of such Lessee’s Indemnified Parties’
negligence or intentionally misconduct) arising from any default by Lessor of this Lease.

     16. Quiet Enjoyment. So long as Lessee shall pay the Rental and other Monetary Obligations
herein provided and shall keep and perform all of the terms, covenants and conditions on its part
herein contained, Lessee shall have, subject and subordinate to Lessor’s rights herein, the right
to the peaceful and quiet occupancy of the Property.

     17. Inspection. Lessor and its authorized representatives shall have the right, at all
reasonable times and upon giving reasonable prior notice (except in the event of an emergency, in
which case no prior notice shall be required), to enter the Property or any part thereof and
inspect the same. Lessee hereby waives any claim for damages for any injury or inconvenience to or
interference with Lessee’s business, any loss of occupancy or quiet enjoyment of the Property and
any other loss occasioned by such entry, but, subject to Section 37, excluding damages arising as a
result of the negligence or intentional misconduct of Lessor.

     18. Condemnation and Casualty.

     A. Notification. Lessee shall promptly give Lessor and any mortgagee (if required by
the terms of any applicable mortgage or deed of trust and Lessee has received notice
thereof) written notice of (i) any Condemnation of the Property or any part thereof, (ii)
the commencement of any proceedings or negotiations which might result in a Condemnation of
the Property or any part thereof, and (iii) any Casualty to the Property or any part
thereof. Such notice shall provide a general description of the nature and

12

 

extent of such Condemnation, proceedings, negotiations or Casualty, and shall include
copies of any documents or notices received in connection therewith. Thereafter, Lessee
shall promptly send Lessor copies of all notices, correspondence and pleadings relating to
any such Condemnation, proceedings, negotiations or Casualty.

     B. Partial Condemnation or Casualty. Except as otherwise provided in Section 18.C, in
the event of a Condemnation which is not a Total Condemnation or a Temporary Condemnation
(“Partial Condemnation”), or a Casualty which is not a Total Casualty (a
“Partial Casualty”), all Net Awards shall be paid to Lessor. In the event of a
Partial Condemnation or a Partial Casualty, Lessor shall have the option to terminate this
Lease by notifying Lessee in writing within thirty (30) days after Lessee gives Lessor
notice of such Partial Condemnation or Partial Casualty or that title has vested in the
condemning authority, or to continue this Lease in effect, which election shall be evidenced
by either a notice from Lessor to Lessee, or Lessor’s failure to notify Lessee in writing
that Lessor has elected to terminate this Lease within such thirty (30) day period. Lessee
shall have a period of sixty (60) days after receipt of the Lessor’s notice to terminate
referenced above during which to elect, despite such Lessor notice of termination, to
continue this Lease on the terms herein provided. If Lessee does not elect to continue this
Lease or shall fail during such sixty (60) day period to notify Lessor of Lessee’s intent to
continue this Lease, then this Lease shall terminate as of the last day of the month during
which such sixty (60) day period expired. Lessee shall vacate and surrender the Property by
such termination date, in accordance with the provisions of this Lease, and all obligations
of either party hereunder shall cease as of the date of termination (provided, however,
Lessee’s obligations to the Indemnified Parties under any indemnification provisions of this
Lease and Lessee’s obligations to pay Rental and all other Monetary Obligations (whether
payable to Lessor or a third party) accruing under this Lease prior to the date of
termination shall survive such termination). In such event, Lessor may retain all Net
Awards related to the Partial Condemnation or Partial Casualty, and Lessee shall immediately
pay Lessor an amount equal to the insurance deductible applicable to any Partial Casualty.

     If Lessor elects not to terminate this Lease, or if Lessor elects to terminate this
Lease (as provided above) but Lessee elects to continue this Lease, then this Lease shall
continue in full force and effect on the following terms: all Rental and other Monetary
Obligations due under this Lease shall continue unabated, and Lessee shall promptly commence
and diligently prosecute restoration of the Property to the same condition, as nearly as
practicable, as prior to such Partial Condemnation or Partial Casualty as approved by
Lessor. As the restoration of the Property progresses, upon the written request of Lessee
(accompanied by evidence reasonably satisfactory to Lessor that such amount has been paid or
is due and payable and is properly part of such costs and that Lessee has complied with the
terms of Section 13 in connection with the restoration), Lessor shall promptly make
available in installments, subject to reasonable conditions for disbursement imposed by
Lessor, an amount up to but not exceeding the amount of any Net Award received by Lessor
with respect to such Partial Condemnation or Partial Casualty. Prior to the disbursement of
any portion of the Net Award with respect to a Partial Casualty, Lessee shall provide
evidence reasonably satisfactory to Lessor of the payment of restoration expenses by Lessee
up to the amount of the insurance deductible applicable to such Partial Casualty. Lessee
shall be entitled to keep any portion of the

13

 

Net Award which may be in excess of the cost of restoration, and Lessee shall bear all
additional Costs of such restoration in excess of the Net Award.

     C. Total Condemnation and Total Casualty. In the event of a Condemnation of all or
substantially all of the Property or a Partial Condemnation, in either event that results in
Lessee making a good faith determination that the restoration and continued use of the
remainder of the Property as a Permitted Facility would be uneconomic (collectively, a
“Total Condemnation”), or a Casualty of all or substantially all of the Property or
a Partial Casualty, in either event that results in Lessee making a good faith determination
that the restoration and continued use of the Property as a Permitted Facility would be
uneconomic (collectively, a “Total Casualty”), then, in such event:

     (i) Awards. Lessor shall be entitled to receive the entire Net Award in
connection therewith without deduction for any estate vested in Lessee by this
Lease, and Lessee hereby expressly assigns to Lessor all of its right, title and
interest in and to every such Net Award and agrees that Lessee shall not be entitled
to any Net Award or other payment for the value of Lessee’s leasehold interest in
this Lease. Lessee shall be entitled to claim and receive any award or payment from
the condemning authority expressly granted for the taking of the Lessee Personalty,
any insurance proceeds with respect to the Lessee Personalty, the interruption of
its business and moving expenses, but only if such claim or award does not adversely
affect or interfere with the prosecution of Lessor’s claim for the Total
Condemnation or Total Casualty or otherwise reduce the amount recoverable by Lessor
for the Total Condemnation.

     (ii) Option To Terminate. Lessee shall have the right to terminate this Lease
by notice (the “Termination Notice”) given to Lessor not later than thirty
(30) days after the Total Condemnation or Total Casualty, as applicable. The
Termination Notice must: (1) specify a date on which this Lease shall terminate,
which date shall be the last day of a calendar month occurring not earlier than one
hundred twenty (120) days and not later than one hundred fifty (150) days after the
delivery of such notice (the “Early Termination Date”); (2) contain a
certificate executed by a manager of Lessee which (I) describes the Total
Condemnation or Total Casualty, and (II) represents and warrants that either all of
the Property has been taken, damaged or destroyed, or that substantially all of the
Property has been taken, damaged or destroyed, and Lessee has determined in good
faith that the restoration and continued use of the remainder of the Property as a
Permitted Facility would be uneconomic; and (3) if the Early Termination Date shall
occur prior to the commencement of any Extension Options which may be exercised
pursuant to Section 3, contain an irrevocable rejectable written offer (the
“Rejectable Offer”) of Lessee to purchase Lessor’s interest in the Property
and in the Net Award for the Total Condemnation or Total Casualty, as applicable, on
the Early Termination Date for a purchase price (the “Loss Value”) equal to
the greater of the fair market value of the Property as of the Early Termination
Date, or Lessor’s Total Investment.

     (iii) Early Termination Date. If the Early Termination Date shall occur prior
to the commencement of any Extension Options which may be exercised

14

 

pursuant to Section 3, Lessor shall have sixty (60) days from the delivery of
the Termination Notice to deliver to Lessee written notice of its election to either
accept or reject any Rejectable Offer contained in the Termination Notice. Lessor’s
failure to deliver such notice within such time period shall be deemed to constitute
Lessor’s acceptance of the applicable Rejectable Offer.

     (iv) Lessor Acceptance of Rejectable Offer. If Lessor accepts or is deemed to
have accepted the Rejectable Offer, then on the Early Termination Date or such other
date as the parties may mutually agree in writing, Lessor shall sell and convey, and
Lessee shall purchase for the applicable Loss Value, Lessor’s interest in the
Property and the Net Award. Lessee’s obligations under this Lease shall not be
terminated until the applicable Loss Value and all Rental and other Monetary
Obligations due and payable under this Lease prior to the Early Termination Date, or
such other date as the parties may mutually agree in writing, are paid in full.
Upon such payment, (1) Lessor shall convey the Property to Lessee “as-is” by special
warranty deed, subject to all matters of record, except for consensual liens,
encumbrances or other interests granted by Lessor (other than those granted by
Lessor at the request of Lessee), and without representations other than those
required by applicable Law; and (2) all obligations of either party hereunder with
respect to the Property shall cease as of the Early Termination Date, provided,
however, Lessee’s obligations to the Indemnified Parties under any indemnification
provisions of this Lease and Lessee’s obligations to pay any Monetary Obligations
(whether payable to Lessor or a third party) accruing under this Lease prior to the
Early Termination Date shall survive the termination of this Lease.

     (v) Lessor Rejection of Rejectable Offer. If Lessor rejects the Rejectable
Offer or if the Early Termination Date shall occur after the commencement of any
Extension Options exercised pursuant to Section 3, then (1) the Net Award shall be
paid to and belong to Lessor; (2) on the Early Termination Date, Lessee shall pay to
Lessor all Rental and other Monetary Obligations then due and payable under this
Lease; and (3) all obligations of either party hereunder shall cease as of the Early
Termination Date; provided, however, Lessee’s obligations to the Indemnified Parties
under any indemnification provisions of this Lease and Lessee’s obligations to pay
any sums (whether payable to Lessor or a third party) accruing under this Lease
prior to the Early Termination Date shall survive the termination of this Lease.

     D. Payment of Costs. Lessee shall be solely responsible for the payment of all Costs
incurred in connection with the conveyance of the Property to Lessee pursuant to this
Section 18, including, without limitation, to the extent applicable, the cost of title
insurance, survey charges, stamp taxes, mortgage taxes, transfer fees, escrow and recording
fees, taxes imposed on Lessor as a result of such conveyance, taxes imposed in connection
with the transfer of the Property to Lessee or the termination of this Lease pursuant to the
provisions of this Section 18, Lessee’s attorneys’ fees, and the reasonable attorneys’ fees
and expenses of counsel to Lessor.

15

 

     E. Insurance. Any loss under any property damage insurance required to be maintained
by Lessee shall be adjusted by Lessor and Lessee. Any award relating to a Total
Condemnation or a Partial Condemnation shall be adjusted by Lessor or, at Lessor’s election,
Lessee. Notwithstanding the foregoing or any other provisions of this Section 18 to the
contrary, if at the time of any Condemnation or any Casualty or at any time thereafter an
Event of Default shall have occurred and be continuing, Lessor is hereby authorized and
empowered but shall not be obligated, in the name and on behalf of Lessee and otherwise, to
file and prosecute Lessee’s claim, if any, for a Net Award on account of such Condemnation
or such Casualty and to collect such Net Award and apply the same to the curing of such
Event of Default and any other then existing Event of Default under this Lease and/or to the
payment of any amounts owed by Lessee to Lessor under this Lease, in such order, priority
and proportions as Lessor in its discretion shall deem proper.

     F. Lessee Obligation in Event of Casualty. During all periods of time following a
Casualty, Lessee shall take reasonable steps to ensure that the Property is secure and does
not pose any risk of harm to any adjoining property and Persons (including owners or
occupants of such adjoining property).

     G. No Limitations. Notwithstanding the foregoing, nothing in this Section 18 shall be
construed as limiting or otherwise adversely affecting the representations, warranties,
covenants and characterizations set forth in Lease.

     19. Fair Market Value. With respect to the determination of fair market value for any purpose
under this Lease, if the parties are unable to agree upon the fair market value, Lessee shall, at
Lessee’s sole expense, nominate to Lessor a list of not less than three independent MAI appraisers
from national companies who have offices in at least five states and who are experienced with
appraising property similar to the Property and Lessor shall select one such appraiser. In
determining the fair market value of the Property, the appraiser shall utilize the cost, income and
sales comparison approaches to value. The highest amount which results from the calculation of
each of the cost approach, the income approach, and the sales comparison approach, all as
determined in accordance with the provisions of this Section, shall constitute the fair market
value of the Property.

     20. Default, Conditional Limitations, Remedies and Measure of Damages.

     A. Each of the following shall be an event of default by Lessee under this Lease (each,
an “Event of Default”):

     (i) if any representation or warranty of Lessee set forth in this Lease is
false in any material respect, or if Lessee renders any false statement or account;

     (ii) if any Rental or other Monetary Obligation due under this Lease is not
paid when due and such failure continues for a period of ten (10) days after receipt
of notice thereof by Lessee (provided that in no event shall Lessor be required to
give more than two such notices in any calendar year if such failure to pay is the
principal responsibility of Lessee);

16

 

     (iii) if Lessee fails to pay, prior to delinquency, any taxes, assessments or
other charges the failure of which to pay will result in the imposition of a lien
against the Property;

     (iv) if there is an Insolvency Event;

     (v) if Lessee vacates or abandons the Property;

     (vi) if Lessee fails to observe or perform any of the other covenants,
conditions or obligations of Lessee in this Lease; provided, however, if any such
failure does not involve the payment of any Monetary Obligation, is not willful or
intentional, does not place any rights or property of Lessor in immediate jeopardy,
and is within the reasonable power of Lessee to promptly cure, all as determined by
Lessor in its reasonable discretion, then such failure shall not constitute an Event
of Default hereunder, unless otherwise expressly provided herein, unless and until
Lessor shall have given Lessee notice thereof and a period of thirty (30) days shall
have elapsed, during which period Lessee may correct or cure such failure, upon
failure of which an Event of Default shall be deemed to have occurred hereunder
without further notice or demand of any kind being required. If such failure cannot
reasonably be cured within such thirty (30) day period, as determined by Lessor in
its reasonable discretion, and Lessee is diligently pursuing a cure of such failure,
then Lessee shall have a reasonable period to cure such failure beyond such thirty
(30) day period, which shall in no event exceed ninety (90) days after receiving
notice of such failure from Lessor. If Lessee shall fail to correct or cure such
failure within such ninety (90) day period an Event of Default shall be deemed to
have occurred hereunder without further notice or demand of any kind being required;

     (vii) if a final, nonappealable judgment is rendered by a court against Lessee
which has a Material Adverse Effect, or which does not have a Material Adverse
Effect but which is in the amount of $100,000.00 or more, and in either event is not
discharged or provision made for such discharge within ninety (90) days from the
date of entry thereof;

     (viii) if Lessee shall be liquidated or dissolved or shall begin proceedings
towards its liquidation or dissolution;

     (ix) if the estate or interest of Lessee in the Property shall be levied upon
or attached in any proceeding and such estate or interest is about to be sold or
transferred or such process shall not be vacated or discharged within ninety (90)
days after it is made; or

     (x) if there is an “Event of Default” or other breach or default by Lessee
under any of the other Transaction Documents or any Other Agreement, after the
passage of all applicable notice and cure or grace periods.

     B. Upon the occurrence of an Event of Default, with or without notice or demand, except
as otherwise expressly provided herein or such other notice as may be required by statute
and cannot be waived by Lessee, Lessor shall be entitled to exercise,

17

 

at its option, concurrently, successively, or in any combination, all remedies
available at law or in equity, including without limitation, any one or more of the
following:

     (i) To terminate this Lease, whereupon Lessee’s right to possession of the
Property shall cease and this Lease, except as to Lessee’s liability, shall be
terminated.

     (ii) To the extent not prohibited by applicable law, to reenter and take
possession of the Property (or any part thereof), any or all personal property or
fixtures of Lessee upon the Property and, to the extent permissible, all franchises,
licenses, area development agreements, permits and other rights or privileges of
Lessee pertaining to the use and operation of the Property, and to expel Lessee and
those claiming under or through Lessee, without being deemed guilty in any manner of
trespass or becoming liable for any loss or damage resulting therefrom, without
resort to legal or judicial process, procedure or action. No notice from Lessor
hereunder or under a forcible entry and detainer statute or similar law shall
constitute an election by Lessor to terminate this Lease unless such notice
specifically so states. If Lessee shall, after default, voluntarily give up
possession of the Property to Lessor, deliver to Lessor or its agents the keys to
the Property, or both, such actions shall be deemed to be in compliance with
Lessor’s rights and the acceptance thereof by Lessor or its agents shall not be
deemed to constitute a termination of the Lease. Lessor reserves the right
following any reentry and/or reletting to exercise its right to terminate this Lease
by giving Lessee written notice thereof, in which event this Lease will terminate.

     (iii) To bring an action against Lessee for any damages sustained by Lessor or
any equitable relief available to Lessor and to the extent not prohibited by
applicable law, to seize all personal property or fixtures upon the Property which
Lessee owns or in which it has an interest, in which Lessor shall have a landlord’s
lien and/or security interest, and to dispose thereof in accordance with the laws
prevailing at the time and place of such seizure or to remove all or any portion of
such property and cause the same to be stored in a public warehouse or elsewhere at
Lessee’s sole expense, without becoming liable for any loss or damage resulting
therefrom and without resorting to legal or judicial process, procedure or action.

     (iv) To relet the Property or any part thereof for such term or terms
(including a term which extends beyond the original Lease Term), at such rentals and
upon such other terms as Lessor, in its sole discretion, may determine, with all
proceeds received from such reletting being applied to the Rental and other Monetary
Obligations due from Lessee in such order as Lessor may, in it sole discretion,
determine, which other Monetary Obligations include, without limitation, all
repossession costs, brokerage commissions, attorneys’ fees and expenses,
alteration, remodeling and repair costs and expenses of preparing for such
reletting. Except to the extent required by applicable Law, Lessor shall have no
obligation to relet the Property or any part thereof and shall in no event be liable
for refusal or failure to relet the Property or any part thereof, or, in the event
of any such reletting, for refusal or failure to collect any rent due upon such

18

 

reletting, and no such refusal or failure shall operate to relieve Lessee of
any liability under this Lease or otherwise to affect any such liability. Lessor
reserves the right following any reentry and/or reletting to exercise its right to
terminate this Lease by giving Lessee written notice thereof, in which event this
Lease will terminate as specified in said notice.

     (v) To accelerate and recover from Lessee all Rental and other Monetary
Obligations due and owing and scheduled to become due and owing under this Lease
both before and after the date of such breach for the entire original scheduled
Lease Term.

     (vi) To recover from Lessee all Costs paid or incurred by Lessor as a result of
such breach, regardless of whether or not legal proceedings are actually commenced.

     (vii) To immediately or at any time thereafter, and with or without notice, at
Lessor’s sole option but without any obligation to do so, correct such breach or
default and charge Lessee all Costs incurred by Lessor therein. Any sum or sums so
paid by Lessor, together with interest at the Default Rate, shall be deemed to be
Additional Rental hereunder and shall be immediately due from Lessee to Lessor. Any
such acts by Lessor in correcting Lessee’s breaches or defaults hereunder shall not
be deemed to cure said breaches or defaults or constitute any waiver of Lessor’s
right to exercise any or all remedies set forth herein.

     (viii) To immediately or at any time thereafter, and with or without notice,
except as required herein, set off any money of Lessee held by Lessor under this
Lease or any other Transaction Document or any Other Agreement against any sum owing
by Lessee hereunder.

     All powers and remedies given by this Section to Lessor, subject to applicable Law,
shall be cumulative and not exclusive of one another or of any other right or remedy or of
any other powers and remedies available to Lessor under this Lease, by judicial proceedings
or otherwise, to enforce the performance or observance of the covenants and agreements of
Lessee contained in this Lease, and no delay or omission of Lessor to exercise any right or
power accruing upon the occurrence of any Event of Default shall impair any other or
subsequent Event of Default or impair any rights or remedies consequent thereto. Every
power and remedy given by this Section or by Law to Lessor may be exercised from time to
time, and as often as may be deemed expedient, by Lessor, subject at all times to Lessor’s
right in its sole judgment to discontinue any work commenced by Lessor or change any course
of action undertaken by Lessor.

     C. Notwithstanding any provision in this Lease to the contrary, upon the occurrence of
an Event of Default by Lessee, Lessor, in exercising its rights and remedies hereunder,
shall not be permitted to interfere with classes conducted upon the Property or to remove
students residing at the Property prior to end of the applicable school semester.

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     D. In the event Lessor breaches or fails to perform any term or provision of this
Lease, and if Lessor fails to cure the default within thirty (30) days after written notice
thereof by Lessee, then Lessee shall be entitled either to (a) cure the default by taking
whatever action necessary or (b) pursue any remedy available to Lessee at law or in equity.
Notwithstanding the foregoing, Lessee shall not have the preceding rights in the event
Lessor takes action to cure the default within the 30-day period but is unable, by reason of
the nature of the work involved, to cure the default within such period, provided Lessor
continues to work thereafter diligently and without unnecessary delays. Lessee shall have
the right to remedy any default of an emergency nature without notice (if the giving of
notice is not reasonably practical) in the event of an emergency.

     21. Mortgage, Subordination and Attornment. Lessor’s interest in this Lease and/or the
Property shall not be subordinate to any liens or encumbrances placed upon the Property by or
resulting from any act of Lessee, and nothing herein contained shall be construed to require such
subordination by Lessor. Lessee shall keep the Property free from any liens for work performed,
materials furnished or obligations incurred by Lessee. NOTICE IS HEREBY GIVEN THAT LESSEE IS NOT
AUTHORIZED TO PLACE OR ALLOW TO BE PLACED ANY LIEN, MORTGAGE, DEED OF TRUST, SECURITY INTEREST OR
ENCUMBRANCE OF ANY KIND UPON ALL OR ANY PART OF THE PROPERTY OR LESSEE’S LEASEHOLD INTEREST
THEREIN, AND ANY SUCH PURPORTED TRANSACTION SHALL BE VOID.

     This Lease at all times shall be subordinate to the lien of any and all ground leases,
mortgages and trust deeds now or hereafter placed upon the Property by Lessor, and Lessee covenants
and agrees to execute and deliver, upon demand, such further instruments subordinating this Lease
to the lien of any or all such ground leases, mortgages or trust deeds as shall be desired by
Lessor, or any present or proposed mortgagees under trust deeds, provided that any such mortgage,
other security instrument or ground lease (or a separate instrument in recordable form duly
executed by the holder of any such mortgage or other security instrument or the ground lessor and
delivered to Lessee) shall provide for the recognition of this Lease and all of Lessee’s rights
hereunder unless and until an Event of Default exists.

     If any mortgagee, receiver or other secured party elects to have this Lease and the interest
of Lessee hereunder be superior to any such ground lease, mortgage or trust deed and evidences such
election by notice given to Lessee, then this Lease and the interest of Lessee hereunder shall be
deemed superior to any such ground lease, mortgage or trust deed, whether this Lease was executed
before or after such ground lease, mortgage or trust deed and in that event such mortgagee,
receiver or other secured party shall have the same rights with respect to this Lease as if it had
been executed and delivered prior to the execution and delivery of such ground lease, mortgage or
trust deed and had been assigned to such mortgagee, receiver or other secured party.

     Although the foregoing provisions shall be self-operative and no future instrument of
subordination shall be required, upon request by Lessor, Lessee shall execute and deliver whatever
instruments may be required for such purposes, and in the event Lessee fails so to do within
fifteen (15) days after demand, Lessee does hereby make, constitute and irrevocably appoint Lessor
as its agent and attorney-in-fact and in its name, place and stead so to do, which appointment
shall be deemed coupled with an interest.

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     In the event any purchaser or assignee of any mortgagee at a foreclosure sale acquires title
to the Property, or in the event that any mortgagee or any assignee otherwise succeeds to the
rights of Lessor as landlord under this Lease, Lessee shall attorn to mortgagee or such purchaser
or assignee, as the case may be (a “Successor Lessor”), and recognize the Successor Lessor
as lessor under this Lease, and, if the Successor Lessor in its sole discretion elects to recognize
Lessee’s tenancy under this Lease, this Lease shall continue in full force and effect as a direct
lease between the Successor Lessor and Lessee, provided that the Successor Lessor shall only be
liable for any obligations of the Lessor under this Lease which accrue after the date that such
Successor Lessor acquires title. The foregoing provision shall be self-operative and effective
without the execution of any further instruments.

     Lessee shall give written notice to any lender or mortgagee of Lessor having a recorded lien
upon the Property or any part thereof of which Lessee has been notified of any breach or default by
Lessor of any of its obligations under this Lease and give such lender or mortgagee at least thirty
(30) days beyond any notice period to which Lessor might be entitled to cure such default before
Lessee may exercise any remedy with respect thereto. Upon request by Lessor, Lessee shall also
provide Lessee’s and/or Guarantor’s most recent audited financial statements to Lessor or any such
lender or mortgagee and certify the continuing accuracy of such financial statements in such manner
as Lessor or such lender or mortgagee may request.

     22. Estoppel Certificate. At any time, and from time to time, Lessee shall, promptly and in
no event later than ten (10) business days after a request from Lessor or any lender or mortgagee
of Lessor, execute, acknowledge and deliver to Lessor or such lender or mortgagee, as the case may
be, a certificate in the form supplied by Lessor, certifying: (A) that Lessee has accepted the
Property; (B) that this Lease is in full force and effect and has not been modified (or if
modified, setting forth all modifications), or, if this Lease is not in full force and effect, the
certificate shall so specify the reasons therefor; (C) the commencement and expiration dates of the
Lease Term; (D) the date to which the Rentals have been paid under this Lease and the amount
thereof then payable; (E) whether there are then any existing defaults by Lessor in the performance
of its obligations under this Lease, and, if there are any such defaults, specifying the nature and
extent thereof; (F) that no notice has been received by Lessee of any default under this Lease
which has not been cured, except as to defaults specified in the certificate; (G) the capacity of
the person executing such certificate, and that such person is duly authorized to execute the same
on behalf of Lessee; (H) that neither Lessor nor any lender or mortgagee has actual involvement in
the management or control of decision making related to the operational aspects or the day-to-day
operation of the Property, including any handling or disposal of Hazardous Materials; and (I) any
other information reasonably requested by Lessor or any lender or mortgagee, as the case may be.
If Lessee shall fail or refuse to sign a certificate in accordance with the provisions of this
Section within ten (10) days following a request by Lessor, Lessee irrevocably constitutes and
appoints Lessor as its attorney-in-fact to execute and deliver the certificate to any such third
party, it being stipulated that such power of attorney is coupled with an interest and is
irrevocable and binding.

     23. Assignment.

     A. As a material inducement to Lessor’s willingness to complete the transactions
contemplated by the Lease and the other Transaction Documents, Lessee hereby agrees that
Lessor may, from time to time and at any time and without the consent

21

 

of Lessee, engage in all or any combination of the following, or enter into agreements
in connection with any of the following or in accordance with requirements that may be
imposed by applicable securities, tax or other Laws: (i) the sale, assignment, grant,
conveyance, transfer, financing, re-financing, purchase or re-acquisition of all, less than
all or any portion of the Property, this Lease or any other Transaction Document, Lessor’s
right, title and interest in this Lease or any other Transaction Document, the servicing
rights with respect to any of the foregoing, or participations in any of the foregoing, or
(ii) a Securitization and related transactions. Without in any way limiting the foregoing,
the parties acknowledge and agree that Lessor, in its sole discretion, may assign this Lease
or any interest herein to another Person (including without limitation, a taxable REIT
subsidiary) in order to maintain Lessor’s status as a REIT. In the event of any such sale
or assignment other than a security assignment, Lessee shall attorn to such purchaser or
assignee (so long as Lessor and such purchaser or assignee notify Lessee in writing of such
transfer and such purchaser or assignee expressly assumes in writing the obligations of the
Lessor hereunder). At the request of Lessor, Lessee will execute such documents confirming
the sale, assignment or other transfer and such other agreements as Lessor may reasonably
request, provided that the same do not increase the liabilities and obligations of Lessee
hereunder. Lessee shall not bear any Costs in connection with any sale or transfer of the
Property. Lessor shall be relieved, from and after the date of such transfer or conveyance,
of liability for the performance of any obligation of Lessor contained herein, except for
obligations or liabilities accrued prior to such assignment or sale.

     B. Lessee acknowledges that Lessor has relied both on the business experience and
creditworthiness of Lessee and upon the particular purposes for which Lessee intends to use
the Property in entering into this Lease. Except as provided below, Lessee shall not
assign, transfer, convey, pledge or mortgage this Lease or any interest therein, whether by
operation of law or otherwise without the prior written consent of Lessor, which consent
will not be unreasonably withheld, considering such matters as the experience of any
assignee, the assumption by any assignee of all of Lessee’s obligations hereunder by
undertakings enforceable by Lessor, the transfer to or procurement of all necessary licenses
and franchises to an assignee in order to continue operating the Property for the purposes
herein provided. At the time of any assignment of this Lease which is approved by Lessor,
the assignee shall assume all of the obligations of Lessee under this Lease pursuant to
Lessor’s standard form of assumption agreement. Such assignment of the Property shall
relieve Lessee of its obligations respecting this Lease except for those obligations arising
prior to such assignment. Any assignment, transfer, conveyance, pledge or mortgage in
violation of this Section 23 shall be voidable at the sole option of Lessor. Any consent to
an assignment given by Lessor hereunder shall not be deemed a consent to any subsequent
assignment.

     Notwithstanding any provision contained herein, Lessee may assign this Lease to a
Lessee Affiliate approved by Lessor in writing (“Assignee”), which approval shall
not be unreasonably withheld, provided that (i) neither Assignee nor any Affiliate of
Assignee that actually or constructively owns ten percent (10%) or more of the outstanding
capital stock of Lessor shall own, directly or indirectly, (1) ten percent (10%) or more of
the total combined voting power of all classes of voting capital stock of Assignee, or (2)
ten percent (10%) or more of the total value of all classes of capital stock

22

 

of Assignee; and (ii) the conditions set forth in this paragraph are satisfied.
Lessee shall provide Lessor with notice of the proposed assignment permitted by the
preceding sentence. Notwithstanding the foregoing, any such assignment shall not be
effective until Lessor has approved the Assignee (which approval shall not be unreasonably
withheld), and Assignee has provided written certification to Lessor that (1) Assignee or
any Person who owns directly or indirectly any interest in Assignee, is not a Person whose
property or interests are subject to being blocked under any of the Terrorism Laws or is
otherwise in violation of the Terrorism Laws, and (2) Assignee has taken such measures as
are required by the Terrorism Laws to assure that any Person who owns directly or indirectly
any interest in Assignee is not a Person whose property or interests are subject to being
blocked under any of the Terrorism Laws or is otherwise in violation of the Terrorism Laws.

     C. Lessee shall not sublet any or all of the Property without the prior written consent
of Lessor, which may be withheld by Lessor in its sole discretion and any such purported
subletting shall be void. Notwithstanding the foregoing, Lessee may sublease up to
twenty-five percent (25%) of gross rentable area of the improvements located on the Property
without the consent of Lessor, provided that (i) Lessee provide Lessor with a copy of any
such sublease; (ii) the use of the Property under such sublease shall be consistent with the
Permitted Facility; and (iii) neither the sublessee nor any Affiliate of the sublessee that
actually or constructively owns ten percent (10%) or more of the outstanding capital stock
of Lessor shall own, directly or indirectly, (x) ten percent (10%) or more of the total
combined voting power of all classes of voting capital stock of the sublessee, or (y) ten
percent (10%) or more of the total value of all classes of capital stock of the sublessee.
Any such sublease by Lessee shall in no way release Lessee of its obligation hereunder.

     24. Notices. All notices, demands, designations, certificates, requests, offers, consents,
approvals, appointments and other instruments given pursuant to this Lease (collectively called
“Notices”) shall be in writing and given by any one of the following: (A) hand delivery,
(B) express overnight delivery service, (C) certified or registered mail, return receipt requested
or (D) electronic mail message, provided that a copy of such electronic mail message is also sent
via certified or registered mail, return receipt requested, within one Business Day of the
transmission of such electronic mail message, and shall be deemed to have been delivered upon (i)
receipt, if hand delivered, (ii) the next Business Day, if delivered by a reputable express
overnight delivery service, (iii) the third Business Day following the day of deposit of such
notice with the United States Postal Service, if sent by certified or registered mail, return
receipt requested, or (iv) transmission, if delivered by electronic mail pursuant to the
requirements of Section 24(D) above. Notices shall be provided to the parties and addresses (or
electronic mail addresses) specified below:

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	If to Lessee:

	 	Significant Education, LLC

3300 West Camelback Road

Phoenix, Arizona, 85017

Attention: Charles Preston

Telephone: (512) 320-4093

Telecopy:  (512) 476-4869

E-Mail: cpreston@220partners.com
	 
	 	 
	 

	 	And:
	 
	 	 
	 

	 	Dennis Little, CFO

(same address)

Telephone: (602) 589-2081

Telecopy:  (602) 589-2458

E-Mail: dlittle@gcu.edu
	 
	 	 
	 

	 	With a copy to:
	 
	 	 
	 

	 	Linda Rawles, General Counsel

(same address)

Telephone: (602) 589-2063

E-Mail: lrawles@gcu.edu
	 
	 	 
	With a copy to:

	 	DuBois, Bryant, Campbell & Schwartz, L.L.P.

700 Lavaca St., Suite 1300

Austin, Texas 78701

Attention: Bryan Lee

Telephone: (512) 457-8000

Telecopy: (512) 457-8008

E-mail: blee@dbcslaw.com

	 
	 	 
	If to Lessor:

	 	Spirit Finance Acquisitions, LLC

8910 East Raintree Drive, Suite 100

Scottsdale, Arizona 85260

Attention: Chief Financial Officer

Telephone: (480) 606-0820

Telecopy:  (480) 606-0826

E-Mail: clong@spiritfinance.com
	 
	 	 
	With a copy to:

	 	Kutak Rock LLP

1801 California Street, Suite 3100

Denver, Colorado 80202

Attention: Peggy A. Richter, Esq.

Telephone: (303) 297-2400

Telecopy:  (303) 292-7799

E-Mail: peggy.richter@kutakrock.com

24

 

or to such other address or such other person as either party may from time to time hereafter
specify to the other party in a notice delivered in the manner provided above.

     25. Holdover. If Lessee remains in possession of the Property after the expiration of the
term hereof, Lessee, at Lessor’s option and within Lessor’s sole discretion, may be deemed a tenant
on a month-to-month basis and shall continue to pay Rentals and other Monetary Obligations in the
amounts herein provided, except that the Base Monthly Rental shall be automatically increased to
one hundred fifty percent (150%) of the last Base Monthly Rent payable under this Lease, and Lessee
shall comply with all the terms of this Lease; provided that nothing herein nor the acceptance of
Rental by Lessor shall be deemed a consent to such holding over. Lessee shall defend, indemnify,
protect and hold the Indemnified Parties harmless from and against any and all Losses resulting
from Lessee’s failure to surrender possession upon the expiration of the Lease Term, including,
without limitation, any claims made by any succeeding lessee.

     26. Landlord’s Lien/Security Interest. Lessee agrees that Lessor shall have a landlord’s
lien, and additionally hereby separately grants to Lessor a first and prior security interest, in,
on and against all personal property, appliances, furniture and equipment of Lessee from time to
time situated on or used in connection with the Property (the “Personalty”), which lien and
security interest shall secure the payment of all Rental and other Monetary Obligations payable by
Lessee to Lessor under the terms hereof and all other obligations of Lessee to Lessor under this
Lease; provided, however, that such lien and security interest shall be subject and subordinate to
any lien or security interest held by any mortgagee with respect to such Personalty, and the term
Personalty shall not include inventory. Lessee agrees that Lessor may file such documents as
Lessor then deems appropriate or necessary to perfect and maintain said lien and security interest,
and expressly acknowledges and agrees that, in addition to any and all other rights and remedies of
Lessor whether hereunder or at law or in equity, in the event of any default of Lessee hereunder,
Lessor shall have any and all rights and remedies granted a secured party under the Uniform
Commercial Code then in effect in the states where the Property are located. Lessee covenants to
promptly notify Lessor of any changes in Lessee’s name and/or organizational structure which may
necessitate the execution and filing of additional financing statements; provided, however, the
foregoing shall not be construed as Lessor’s consent to such changes. Notwithstanding anything to
the contrary, Lessor subordinates its Landlord’s lien to any financing obtained by Lessee in
connection with the operation of Lessee’s business on the Property and agrees to promptly execute
such documents as may be requested from such third-party lender or vendor to evidence such
subordination.

     27. Removal of Personalty. At the expiration of the Lease Term, and if Lessee is not then in
breach hereof, Lessee may remove from the Property all personal property belonging to Lessee.
Lessee shall repair any damage caused by such removal and shall leave all of the Property broom
clean and in good and working condition and repair inside and out. Any property of Lessee left on
the Property on the tenth day following the expiration of the Lease Term shall automatically and
immediately become the property of Lessor.

     28. Financial Statements; Compliance Certificate. Within forty five (45) days after the end
of each fiscal quarter and within one hundred twenty (120) days after the end of each fiscal year
of Lessee, Lessee shall deliver to Lessor (A) complete financial statements of

25

 

Lessee and Guarantor including a balance sheet, profit and loss statement, statement of
changes in financial condition and all other related schedules for the fiscal period then ended;
and (B) income statements for the business at the Property. All such financial statements shall be
prepared in accordance with generally accepted accounting principles, consistently applied from
period to period, and shall be certified to be accurate and complete by an officer or director of
the Lessee and Guarantor, respectively. Lessee understands that Lessor will rely upon such
financial statements and Lessee represents that such reliance is reasonable. In the event that
Lessee’s property and business at the Property are ordinarily consolidated with other business for
financial statements purposes, such financial statements shall be prepared on a consolidated basis
showing separately the sales, profits and losses, assets and liabilities pertaining to the Property
with the basis for allocation of overhead of other charges being clearly set forth. The financial
statements delivered to Lessor need not be audited, but Lessee shall deliver to Lessor copies of
any audited financial statements of Lessee and Guarantor which may be prepared, as soon as they are
available. Within thirty (30) days after the end of each fiscal year of Lessee, and upon prior
written request by Lessor, Lessee shall deliver such compliance certificate to Lessor as Lessor may
reasonably require in order to establish that Lessee is in compliance with all of its obligations,
duties and covenants under this Lease.

     29. Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts, acts of God,
enemy or hostile governmental action, civil commotion, fire or other casualty beyond the control of
the party obligated to perform (each, a “Force Majeure Event”) shall excuse the performance
by such party for a period equal to any such prevention, delay or stoppage, expressly excluding,
however, the obligations imposed upon Lessee with respect to Rental and other Monetary Obligations
to be paid hereunder.

     30. No Merger. There shall be no merger of this Lease nor of the leasehold estate created by
this Lease with the fee estate in or ownership of the Property by reason of the fact that the same
person, corporation, firm or other entity may acquire or hold or own, directly or indirectly, (A)
this Lease or the leasehold estate created by this Lease or any interest in this Lease or in such
leasehold estate, and (B) the fee estate or ownership of the Property or any interest in such fee
estate or ownership. No such merger shall occur unless and until all persons, corporations, firms
and other entities having any interest in (i) this Lease or the leasehold estate created by this
Lease, and (ii) the fee estate in or ownership of the Property or any part thereof sought to be
merged shall join in a written instrument effecting such merger and shall duly record the same.

     31. Characterization.

     A. Lessor and Lessee acknowledge and warrant to each other that each has been
represented by independent counsel and has executed this Lease after being fully advised by
said counsel as to its effect and significance. 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. Whenever in this Lease any words of obligation or duty are used, such words or
expressions shall have the same force and effect as though made in the form of a covenant.

26

 

     B. The following expressions of intent, representations, warranties, covenants,
agreements, stipulations and waivers are a material inducement to Lessor entering into this
Lease:

     (i) It is the intent of the parties hereto, and the parties acknowledge and
agree that they have executed and delivered this Lease with the understanding that
(1) this Lease constitutes an unseverable and single lease of all, but not less than
all, of the Property, and, if at any time this Lease covers other real property in
addition to the Property, neither this Lease, nor Lessee’s obligations or rights
hereunder may be allocated or otherwise divided among such properties by Lessee; (2)
this Lease is a “true lease,” is not a financing lease, capital lease, mortgage,
equitable mortgage, deed of trust, trust agreement, security agreement or other
financing or trust arrangement, and the economic realities of this Lease are those
of a true lease; and (3) the business relationship created by this Lease and any
related documents is solely that of a long-term commercial lease between Lessor and
Lessee, the Lease has been entered into by both parties in reliance upon the
economic and legal bargains contained herein, and none of the agreements contained
herein is intended, nor shall the same be deemed or construed, to create a
partnership between Lessor and Lessee, to make them joint venturers, to make Lessee
an agent, legal representative, partner, subsidiary or employee of Lessor, nor to
make Lessor in any way responsible for the debts, obligations or losses of Lessee.

     (ii) Each of the parties hereto covenants and agrees to the following: (1) each
will treat this Lease (I) as an operating lease pursuant to Statement of Financial
Accounting Standards No. 13, as amended; and (II) as a true lease for state law
reporting purposes and for federal income tax purposes. For federal income tax
purposes, each party shall report this Lease as a true lease with Lessor as the
owner of the Property and Lessee as the lessee of the Property including: (a)
treating Lessor as the owner of the property eligible to claim depreciation
deductions under Section 167 or 168 of the Code with respect to the Property; (b)
Lessee reporting its Rental payments as rent expense under Section 162 of the Code;
and (c) Lessor reporting the Rental payments as rental income under Section 61 of
the Code; (2) each party will not, nor will it permit any Affiliate to, at any time,
take any action or fail to take any action with respect to the preparation or filing
of any statement or disclosure to Governmental Authority, including without
limitation, any income tax return (including an amended income tax return), to the
extent that such action or such failure to take action would be inconsistent with
the intention of the parties expressed in this Section 31.B; (3) with respect to the
Property, the Lease Term (including any Extension Term) is less than eighty percent
(80%) of the estimated remaining economic life of the Property; and (4) the Base
Annual Rental is the fair market value for the use of the Property and was agreed to
by Lessor and Lessee on that basis, and the execution and delivery of, and the
performance by Lessee of its obligations under, this Lease do not constitute a
transfer of all or any part of the Property.

27

 

     (iii) Lessee waives any claim or defense based upon the characterization of
this Lease as anything other than a true lease and as a master
lease of the Property. Lessee stipulates and agrees (1) not to challenge the
validity, enforceability or characterization of the lease of the Property as a true
lease and/or as a single, unseverable instrument pertaining to the lease of all, but
not less than all, of the Property, and (2) not to assert or take or omit to take
any action inconsistent with the agreements and understandings set forth in this
Section 31.B.

     (iv) The parties agree that, notwithstanding any provision contained in this
Lease, any party (and each employee, representative or other agent of any party) may
disclose to any and all persons, without limitation of any kind, (1) the tax
treatment and tax structure of this Lease and all materials of any kind (including
opinions or any tax analyses) that are provided to any party relating to such tax
treatment and tax structure, and (2) any matter required under the Securities Act of
1933, as amended (the “Securities Act”), or the Securities Exchange Act of
1934, as amended (the “Exchange Act”).

     32. Easements. In order to provide for orderly development or renovation of the Property, it
may be necessary, desirable or required that street, water, sewer, drainage, gas, power lines, and
other easements, dedications, and similar rights be granted or dedicated over or within portions of
the Property. Lessor shall, on request of Lessee, join Lessee in executing and delivering such
documents, from time to time, and throughout the term of this Lease, as may be appropriate,
necessary, or required by any governmental agencies, public utilities, and/or companies for the
purpose of granting such easements and dedications, providing such easements or dedications will
not have the effect of reducing the then fair market value of the Property, will not subject Lessor
to a material increase in liability or material financial obligations, are documented in form and
substance reasonably satisfactory to Lessor and are reasonably necessary for the orderly
development or renovation of the Property. In the event that Lessee deems it necessary or
appropriate to obtain use, zoning, subdivision, plan approval and/or permits for the Property, or
any part thereof, Lessor agrees, from time to time, on Lessee’s request and subject to the terms of
this paragraph, to execute such documents, petitions, applications and authorizations as maybe
appropriate or required for the purposes of obtaining any permits, zoning and rezoning, plan
approval or other approvals for the Property or any part thereof. In each of the foregoing
instances, the cost and expense thereof shall be borne solely by Lessee. Further, notwithstanding
anything to the contrary herein, the rights granted to Lessee hereunder are subject to Lessee not
exercising those rights in any manner or way that will materially reduce the fair market value of
the Property. Neither Lessor nor Lessee shall make any changes in the existing use, zoning,
subdivision, plan approval and/or permits for the Property, or any part thereof, without the prior
written consent of the other party, which consent shall not be unreasonably withheld, conditioned
or delayed

     33. Bankruptcy. As a material inducement to Lessor executing this Lease, Lessee acknowledges
and agrees that Lessor is relying upon (A) the financial condition and specific operating
experience of Lessee and Lessee’s obligation to use the Property as a Permitted Facility, (B)
Lessee’s timely performance of all of its obligations under this Lease notwithstanding the entry of
an order for relief under the Bankruptcy Code for Lessee, and (C) all defaults under this Lease
being cured promptly and this Lease being assumed within sixty

28

 

(60) days of any order for relief
entered under the Bankruptcy Code for Lessee, or this Lease being rejected within such 60 day
period and the Property surrendered to Lessor. Accordingly,
in consideration of the mutual covenants contained in this Lease and for other good and
valuable consideration, Lessee hereby agrees that: (i) all obligations that accrue under this Lease
(including the obligation to pay Rentals), from and after an Insolvency Event shall be timely
performed exactly as provided in this Lease and any failure to so perform shall be harmful and
prejudicial to Lessor; (ii) any and all Rentals that accrue from and after an Insolvency Event and
that are not paid as required by this Lease shall, in the amount of such Rentals, constitute
administrative expense claims allowable under the Bankruptcy Code with priority of payment at least
equal to that of any other actual and necessary expenses incurred after an Insolvency Event; (iii)
any extension of the time period within which the Lessee may assume or reject this Lease without an
obligation to cause all obligations under this Lease to be performed as and when required under
this Lease shall be harmful and prejudicial to Lessor; (iv) any time period designated as the
period within which the Lessee must cure all defaults and compensate Lessor for all pecuniary
losses which extends beyond the date of assumption of this Lease shall be harmful and prejudicial
to Lessor; (v) any assignment of this Lease must result in all terms and conditions of this Lease
being assumed by the assignee without alteration or amendment, and any assignment which results in
an amendment or alteration of the terms and conditions of this Lease without the express written
consent of Lessor shall be harmful and prejudicial to Lessor; (vi) any proposed assignment of this
Lease shall be harmful and prejudicial to Lessor if made to an assignee: (1) that does not possess
financial condition adequate to operate a Permitted Facility upon the Property or operating
performance and experience characteristics satisfactory to Lessor equal to or better than the
financial condition, operating performance and experience of Lessee as of the Effective Date, or
(2) that does not provide guarantors of the lease obligations with financial condition equal to or
better than the financial condition of the Guarantor as of the Effective Date; and (vii) the
rejection (or deemed rejection) of this Lease for any reason whatsoever shall constitute cause for
immediate relief from the automatic stay provisions of the Bankruptcy Code, and Lessee stipulates
that such automatic stay shall be lifted immediately and possession of the Property will be
delivered to Lessor immediately without the necessity of any further action by Lessor. No
provision of this Lease shall be deemed a waiver of Lessor’s rights or remedies under the
Bankruptcy Code or applicable Law to oppose any assumption and/or assignment of this Lease, to
require timely performance of Lessee’s obligations under this Lease, or to regain possession of the
Property as a result of the failure of Lessee to comply with the terms and conditions of this Lease
or the Bankruptcy Code. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Lessee to or on behalf of Lessor under this Lease, whether or not expressly denominated
as such, shall constitute “rent” for the purposes of the Bankruptcy Code. For purposes of this
Section addressing the rights and obligations of Lessor and Lessee upon an Insolvency Event, the
term “Lessee” shall include Lessee’s successor in bankruptcy, whether a trustee, Lessee as debtor
in possession or other responsible person.

     34. Attorneys’ Fees. In the event of any judicial or other adversarial proceeding concerning
this Lease, to the extent permitted by Law, Lessor shall be entitled to recover all of its
reasonable attorneys’ fees and other Costs in addition to any other relief to which it may be
entitled. In addition, Lessor shall, upon demand, be entitled to all attorneys’ fees and all other
Costs incurred in the preparation and service of any notice or demand hereunder, whether or not a
legal action is subsequently commenced.

29

 

     35. Memorandum of Lease. Concurrently with the execution of this Lease, Lessor and Lessee are
executing Lessor’s standard form memorandum of lease in recordable form, indicating the names and
addresses of Lessor and Lessee, a description of the Property, the Lease
Term and Lessee’s right of first refusal, but omitting Rentals and such other terms of this
Lease as Lessor may not desire to disclose to the public. Further, upon Lessor’s request, Lessee
agrees to execute and acknowledge a termination of lease and/or quit claim deed in recordable form
to be held by Lessor until the expiration or sooner termination of the Lease Term.

     36. No Brokerage. Lessor and Lessee represent and warrant to each other that they have had no
conversation or negotiations with any broker concerning the leasing of the Property. Each of
Lessor and Lessee agrees to protect, indemnify, save and keep harmless the other, against and from
all liabilities, claims, losses, Costs, damages and expenses, including attorneys’ fees, arising
out of, resulting from or in connection with their breach of the foregoing warranty and
representation.

     37. Waiver of Jury Trial and Punitive, Consequential, Special and Indirect Damages. Lessor
and Lessee hereby knowingly, voluntarily and intentionally waive the right either may have to a
trial by jury with respect to any and all issues presented in any action, proceeding, claim or
counterclaim brought by either of the parties hereto against the other or its successors with
respect to any matter arising out of or in connection with this Lease, the relationship of Lessor
and Lessee, Lessee’s use or occupancy of the Property, and/or any claim for injury or damage, or
any emergency or statutory remedy. This waiver by the parties hereto of any right either may have
to a trial by jury has been negotiated and is an essential aspect of their bargain. Furthermore,
Lessor and Lessee hereby knowingly, voluntarily and intentionally waive the right they may have to
seek punitive, consequential, special and indirect damages from the other party and any of the
affiliates, officers, directors, members, managers or employees of the other party or any of their
successors with respect to any and all issues presented in any action, proceeding, claim or
counterclaim brought by either of them against the other party or any of the affiliates, officers,
directors, members, managers or employees of the other party or any of their successors with
respect to any matter arising out of or in connection with this Lease or any document contemplated
herein or related hereto. The waiver by Lessor and Lessee of any right they may have to seek
punitive, consequential, special and indirect damages has been negotiated by the parties hereto and
is an essential aspect of their bargain.

     38. Guaranty. On or before the Effective Date, Lessee shall cause Guarantor to execute and
deliver to Lessor the Guaranty.

     39. Securitizations and Other Transactions. As a material inducement to Lessor’s willingness
to complete the transactions contemplated by this Lease and the other Transaction Documents, Lessee
hereby acknowledges and agrees that Lessor may, from time to time and at any time (A) act or permit
another Person to act as sponsor, settler, transferor or depositor of, or a holder of interests in,
one or more Persons or other arrangements formed pursuant to a trust agreement, indenture, pooling
agreement, participation agreement, sale and servicing agreement, limited liability company
agreement, partnership agreement, articles of incorporation or similar agreement or document; and
(B) permit one or more of such Persons or arrangements to offer and sell stock, certificates,
bonds, notes, other evidences of indebtedness or securities that are directly or indirectly
secured, collateralized or otherwise backed by or represent a direct or indirect interest in whole
or in part in any of the assets, rights or properties described in

30

 

Section 23.A of this Lease, in
one or more Persons or arrangements holding such assets, rights or properties, or any of them
(collectively, the “Securities”), whether any such Securities are privately or publicly
offered and sold, or rated or unrated (any combination of which actions and
transactions described in both clauses (A) and (B) in this paragraph, whether proposed or
completed, are referred to in this Lease as a “Securitization”). Lessee shall cooperate
fully with Lessor and any Affected Party with respect to all reasonable requests and due diligence
procedures and to use reasonable efforts to facilitate such Securitization, including without
limitation, providing for inclusion in any prospectus or other Securities offering material such
documents, financial and other data, and other information and materials which would customarily be
required with respect to Lessee by a purchaser, transferee, assignee, servicer, participant,
investor or rating agency involved with respect to such Securitization, and Lessee shall indemnify
and hold harmless Lessor for any and all liabilities, losses and expenses arising under the
Securities Act, or the Exchange Act, in connection with any material misstatement (or alleged
misstatement) contained in such information provided in writing (including, without limitation,
electronically) by Lessee or its officers, managers, members, employees, or agents, or any omission
(or alleged omission) of a material fact by Lessee or its officers, managers, members, employees,
or agents, the inclusion of which was necessary to make such written information not misleading,
unless such material misstatement or alleged misstatement or omission or alleged omission is caused
by Lessor or its directors, officers, managers, members, shareholders, employees, or agents.
Lessee shall deliver to Lessor, any Affected Party and to any Person designated by Lessor, such
statements and audit letters of reputable, independent certified public accountants pertaining to
the written information provided by Lessee pursuant to this Section as shall be requested by Lessor
or such Affected Party, as the case may be. Lessee also shall deliver to Lessor, any Affected
Party and to any Person designated by Lessor or any Affected Party, such opinions of counsel
(including without limitation, local counsel opinions), appraisals, environmental reports and
zoning letters, or updates of any of the foregoing, as are customarily delivered in connection with
Securitizations or as may be required by any rating agency in connection with any Securitization.

     40. Performance at Lessee’s Expense. Lessee acknowledges and confirms that Lessor may impose
certain administrative, processing or servicing fees in connection with (a) any extension, renewal,
modification, amendment and termination of this Lease, (b) any release of Property, (c) the
procurement of certain consents, waivers and approvals with respect to the Property, (d) the review
of any assignment or sublease or proposed assignment or sublease or the preparation or review of
any subordination, non-disturbance agreement, (e) the collection, maintenance and/or disbursement
of reserves created under this Lease or the other Transaction Documents, and (f) inspections
required to make certain determinations under this Lease or the other Transaction Documents.
Lessee further acknowledges and confirms that it shall be responsible for the payment of all costs
of reappraisal of the Property or any part thereof, whether required by law, regulation, Lessor or
any Governmental Authority. Lessee hereby acknowledges and agrees to pay, immediately upon demand,
all such fees (as the same may be increased or decreased from time to time), and any additional
fees of a similar type or nature which may reasonably be imposed by Lessor from time to time.

     41. Miscellaneous.

     A. Time Is of the Essence. Time is of the essence with respect to each and every
provision of this Lease.

31

 

     B. Waiver and Amendment. No provision of this Lease shall be deemed waived or amended
except by a written instrument unambiguously setting forth the
matter waived or amended and signed by the party against which enforcement of such
waiver or amendment is sought. Waiver of any matter shall not be deemed a waiver of the
same or any other matter on any future occasion. No acceptance by Lessor of an amount less
than the Rental and other Monetary Obligations stipulated to be due under this Lease shall
be deemed to be other than a payment on account of the earliest such Rental or other
Monetary Obligations then due or in arrears nor shall any endorsement or statement on any
check or letter accompanying any such payment be deemed a waiver of Lessor’s right to
collect any unpaid amounts or an accord and satisfaction.

     C. Successors Bound. Except as otherwise specifically provided herein, the terms,
covenants and conditions contained in this Lease shall bind and inure to the benefit of the
respective heirs, successors, executors, administrators and assigns of each of the parties
hereto.

     D. Captions. Captions are used throughout this Lease for convenience of reference only
and shall not be considered in any manner in the construction or interpretation hereof.

     E. Severability. The provisions of this Lease shall be deemed severable. If any part
of this Lease shall be held unenforceable by any court of competent jurisdiction, the
remainder shall remain in full force and effect, and such unenforceable provision shall be
reformed by such court so as to give maximum legal effect to the intention of the parties as
expressed therein.

     F. Other Documents. Each of the parties agrees to sign such other and further
documents as may be necessary or appropriate to carry out the intentions expressed in this
Lease.

     G. Entire Agreement. This Lease and any other instruments or agreements referred to
herein, constitute the entire agreement between the parties with respect to the subject
matter hereof, and there are no other representations, warranties or agreements except as
herein provided.

     H. Forum Selection; Jurisdiction; Venue; Choice of Law. For purposes of any action or
proceeding arising out of this Lease, the parties hereto expressly submit to the
jurisdiction of all federal and state courts located in the State of Arizona. Lessee
consents that it may be served with any process or paper by registered mail or by personal
service within or without the State of Arizona in accordance with applicable law.
Furthermore, Lessee waives and agrees not to assert in any such action, suit or proceeding
that it is not personally subject to the jurisdiction of such courts, that the action, suit
or proceeding is brought in an inconvenient forum or that venue of the action, suit or
proceeding is improper.

     I. Counterparts. This Lease may be executed in one or more counterparts, each of which
shall be deemed an original.

32

 

     42. Corporate Fixed Change Coverage Ratio. For purposes of this Agreement and the Guaranty,
the term “CFCCR” shall mean with respect to the twelve month period of time immediately preceding
the date of determination, the ratio calculated for such period of time,
each as determined in accordance with GAAP, of (i) the sum of Net Income, Depreciation and
Amortization, Interest Expense and Operating Lease Expense, to (ii) the sum of Operating Lease
Expense, scheduled principal payments of long term Debt, scheduled maturities of all Capital
Leases, dividends and Interest Expense (excluding non cash interest expense and amortization of non
cash financing expenses). For purposes of calculating the CFCCR, the following terms shall be
defined as set forth below:

     “Capital Lease” shall mean all leases of any property, whether real, personal or mixed, by
Lessee or any of the other Lessee Entities, as applicable, which leases would, in conformity with
GAAP, be required to be accounted for as a capital lease on the balance sheet of Lessee. The term
“Capital Lease” shall not include any operating lease.

     “Debt” shall mean with respect to Lessee and the other Lessee Entities, collectively, and for
the period of determination (i) indebtedness for borrowed money, (ii) subject to the limitation set
forth in sub item (iv) below, obligations evidenced by bonds, indentures, notes or similar
instruments, (iii) obligations under leases which should be, in accordance with GAAP, recorded as
Capital Leases, and (iv) obligations under direct or indirect guarantees in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to
in clauses (i) through (iv) above, except for guaranty obligations of Lessee and/or the other
Lessee Entities which, in conformity with GAAP, are not included on the balance sheet of Lessee
and/or the other Lessee Entities.

     “Depreciation and Amortization” shall mean the depreciation and amortization accruing during
any period of determination with respect to Lessee and the other Lessee Entities, collectively, as
determined in accordance with GAAP.

     “Interest Expense” shall mean for any period of determination, the sum of all interest accrued
or which should be accrued in respect of all Debt of Lessee and the other Lessee Entities,
collectively, as determined in accordance with GAAP.

     “Net Income” shall mean with respect to the period of determination, the net income or net
loss of Lessee and the other Lessee Entities, collectively. In determining the amount of Net
Income, (i) adjustments shall be made for nonrecurring gains and losses or non cash items allocable
to the period of determination, (ii) deductions shall be made for, among other things, Depreciation
and Amortization, Interest Expense, Operating Lease Expense, and (iii) no deductions shall be made
for income taxes or charges equivalent to income taxes allocable to the period of determination, as
determined in accordance with GAAP.

     “Operating Lease Expense” shall mean the sum of all payments and expenses incurred by Lessee
and the other Lessee Entities, collectively, under any operating leases during the period of
determination, as determined in accordance with GAAP.

     43. Right of First Refusal/Third Party Offer.

33

 

     A. Offer. Subject to the terms and conditions set forth in this Section 43 (including,
without limitation, the condition set forth in Section 43.C(i)(5) below), any time during
the Lease Term, if Lessor desires to sell the Property and receives a bona fide written
offer from a third party which offer is in all respects acceptable to Lessor, Lessor
shall deliver a complete copy of such bona fide third party offer to Lessee (“Third
Party Offer”). Upon Lessee’s receipt of such Third Party Offer from Lessor, and a written
statement of Lessor’s desire to sell the Property in accordance with such Third Party Offer,
Lessee shall have the right to deliver an offer to Lessor (each, a “Purchase Offer”) to
purchase Lessor’s interest in the Property for the amount of the bona fide third party offer
to purchase the Property (the “Subject Purchase Price”). If Lessee delivers a Purchase
Offer, then Lessee shall complete such purchase, subject to the satisfaction of each of the
terms and conditions set forth in Section 43.B below.

     B. Conditions Precedent.

     (i) The purchase of Lessor’s interest in the Property pursuant to Section 43.A
shall be subject to the fulfillment of all of the following terms and conditions:
(1) no Event of Default shall have occurred and be continuing under this Lease or
other Transaction Documents; (2) Lessee shall have paid to Lessor the Subject
Purchase Price, together with all Rental and other Monetary Obligations then due and
payable under this Lease as of the date of the closing of such purchase; (3) in
addition to payment of the Subject Purchase Price, Lessee shall have satisfied its
obligations under Section 43.C below; and (4) the date of the closing of such
purchase shall occur on the next scheduled Base Monthly Rental payment date
following Lessor’s receipt of the Purchase Offer.

     (ii) On the date of the closing of the purchase of the Property pursuant to
this Section (the “Purchase Closing Date”), subject to satisfaction of the foregoing
conditions: (1) this Lease shall be deemed terminated; provided, however, such
termination shall not limit Lessee’s obligations to Lessor under any indemnification
provisions of this Lease (including, without limitation, Sections 12.D(v) and 15 of
this Lease) and Lessee’s obligations to pay any Monetary Obligations (whether
payable to Lessor or a third party) accruing under this Lease prior to the Purchase
Closing Date shall survive the termination of this Lease; and (2) Lessor shall
convey the Property to Lessee or, at Lessee’s request, the third party offeree “as
is” by special warranty deed, subject to all matters of record (except for any
consensual liens granted by Lessor other than those granted by Lessor at the request
of Lessee), and without representation or warranty.

     C. Costs. Lessee shall be solely responsible for the payment of all Costs resulting
from any proposed purchase pursuant to this Section 43, regardless of whether the purchase
is consummated, including, without limitation, to the extent applicable, the cost of title
insurance and endorsements, including, survey charges, stamp taxes, mortgage taxes, transfer
taxes and fees, escrow and recording fees, taxes imposed on Lessor as a result of such
purchase, the attorneys’ fees of Lessee and the reasonable attorneys’ fees and expenses of
counsel to Lessor.

34

 

     D. Termination of Right. NOTWITHSTANDING ANYTHING TO THE CONTRARY, LESSEE’S RIGHTS
UNDER THIS SECTION 43 SHALL TERMINATE AND BE NULL AND VOID AND OF NO FURTHER FORCE AND
EFFECT IF (i) LESSEE FAILS TO EXERCISE THE RIGHT GRANTED PURSUANT TO THIS SECTION 43, AND
THE SALE TO THE THIRD PARTY PURCHASER IS
CONSUMMATED; (ii) THIS LEASE TERMINATES OR THE LEASE TERM EXPIRES; (iii) THE PROPERTY
IS SOLD OR TRANSFERRED PURSUANT TO THE EXERCISE OF A PRIVATE POWER OF SALE OR JUDICIAL
FORECLOSURE OR ACCEPTANCE OF A DEED IN LIEU THEREOF; OR (iv) LESSEE SHALL BE IN DEFAULT OF
ANY OF THE TERMS AND CONDITIONS OF THIS LEASE. IN ANY SUCH EVENT, LESSEE SHALL EXECUTE A
QUITCLAIM DEED AND SUCH OTHER DOCUMENTS AS LESSOR SHALL REASONABLY REQUEST EVIDENCING THE
TERMINATION OF ITS RIGHT UNDER THIS SECTION 43.

     E. Attornment. If Lessee does not deliver its Purchase Offer to purchase the Property
and the Property is transferred to a third party purchaser, Lessee will attorn to any third
party purchaser as Lessor so long as such third party purchaser and Lessor notify Lessee in
writing of such transfer. At the request of Lessor, Lessee will execute such documents
confirming the agreement referred to above and such other agreements as Lessor may
reasonably request, provided that such agreements do not increase the liabilities and
obligations of Lessee hereunder.

     F. Exclusions. The provisions of this Section 43 shall not apply to or prohibit (i)
any mortgages or other hypothecation of Lessor’s interest in the Property; (ii) any sale of
the Property pursuant to a private power of sale under or judicial foreclosure of any
mortgage or other security instrument or device to which Lessor’s interest in the Property
is now or hereafter subject; (iii) any transfer of Lessor’s interest in the Property to a
mortgagee or other holder of a security interest therein or their designees by deed in lieu
of foreclosure; (iv) any transfer of the Property to any governmental or quasi governmental
agency with power of Condemnation; (v) any transfer of the Property to any Affiliate of
Lessor; (vi) any transfers of interests in Lessor by any member, shareholder, partner or
other owner to any other member, shareholder, partner or other owner; (vii) any transfers to
any Person to whom Lessor sells all or substantially all of its assets; (viii) any transfers
to any Person in connection with the transactions described in Section 23 of this Lease; or
(ix) any transfer of the Property to any of the successors or assigns of any of the Persons
referred to in this Section 43.F.

     44. Tenant Improvements.

     A. Projects. Lessor shall pay to Lessee funds in an aggregate amount not to exceed
Five Million Two Hundred Fifty Thousand and 00/100 Dollars ($5,250,000.00) plus an amount
equal to (i) $1,000,000.00 minus (ii) the Contingent Purchase Price, if any, paid by
Lessor pursuant to the Purchase and Sale Agreement (collectively, the “Project
Funds”) for the construction, completion, rehabilitation, renovation or installation of
improvements to the Property related to the operation of the Permitted Facility that are
expressly approved in writing by Lessor, which approval shall not be unreasonably withheld,
conditioned or delayed (each, a “Project”). In the event that Lessor fails to
approve or reject any proposed Project within ten (10) business days of

35

 

receipt of all
information required by Lessor in its sole and absolute discretion in connection with such
proposed Project, Lessor shall be deemed to approve of such proposed Project. Prior to the
commencement of any proposed Project, Lessee shall submit to Lessor a written request for
approval together with any information reasonably requested by Lessor. Upon Lessor’s
written approval of any Project, which approval
shall be in the sole and absolute discretion of Lessor, Lessor shall disburse the
requested Project Funds in accordance with Lessor’s standard disbursement procedures, the
nature of which shall be commensurate with the nature of the Project. Lessor reserves the
right to utilize the services of a construction management firm in connection with any
approved Project. Lessor further reserves the right to require Lessee to enter into one or
more written agreements to govern the disbursement of any Project Funds. All reasonable
costs and expenses incurred by Lessor with respect to any Project, including, without
limitation, attorneys’ fees, construction management fees, inspection costs and title
insurance policy endorsement fees, shall be paid by Lessee and all such costs and expenses
may be withheld from the Project Funds in Lessor’s discretion. Lessor and Lessee
acknowledge and agree that the Project Funds will be available to Lessee only for Projects
approved by Lessor within two (2) years from the date hereof. Notwithstanding the
foregoing, Lessor and Lessee acknowledge and agree that the schedule attached hereto as
Exhibit D provides the general understanding of Lessor and Lessee regarding the
type of Projects to be approved, the required Project Funds for such Projects and the
distribution process related thereto. All Projects shall constitute part of the Property and
shall be owned Lessor.

     B. Rent Adjustments.

     (i) Immediately upon the disbursement of any Project Funds, Base Annual Rental
shall be adjusted by an amount equal to an amount based on the amortization of such
Project Funds over the remaining balance of the Initial Term of the Lease with an
interest factor in effect at the time of disbursement.

     (ii) Immediately upon Lessor’s payment of any portion of the Contingent
Purchase Price pursuant to the Purchase and Sale Agreement, Base Annual Rental shall
be increased by an amount equal to the product of: (A) the quotient of (1) the sum
of (i) the Fixed Purchase Price plus (ii) such portion of the Contingent Purchase
Price divided by (2) the Fixed Purchase Price; times (B) the Base Annual Rental.

     C. Hold Back. Lessor shall have the option to hold back $2,000,000 of the Project
Funds and shall have no obligation to release said funds unless and until Guarantor extends
the term of the Letter of Credit (as that term is described in the Guaranty) or replaces
such Letter of Credit with another letter of credit, acceptable to Lessor in its sole
discretion, as required under the terms of Section 18 of the Guaranty.

     45. Option to Purchase. Lessee shall have the option after the fourth (4th)
anniversary of the Effective Date to give Lessor notice (the “Option Notice”) of Lessee’s election
to purchase the Property for the greater of (i) its fair market value (which fair market value
shall be determined in accordance with Section 19 above) or (ii) Lessor’s Total Investment. The
closing for such purchase must occur within ninety days following Lessor’s

36

 

receipt of the Option
Notice if such appraisal has been received and, if not, a day for day extension will be allowed
until the appraisal is received.

     Upon exercise of this option, Lessor and Lessee shall open a new escrow account with a
recognized title insurance company selected by mutual agreement of the parties. Such escrow
shall be subject to the standard escrow instructions of the escrow agent, to the extent they
are not inconsistent herewith. At or before the close of escrow, Lessor shall deliver to the
escrow agent its limited warranty deed conveying to Lessee all of Lessor’s right, title and
interest in the Property free and clear of all liens and encumbrances except liens for taxes and
assessments and easements, covenants and restrictions of record which were attached to the Property
as of the date hereof, attached during the term of the Lease through Lessee’s action or inaction,
as the case may be, have been granted by Lessor in lieu of a taking by the power of eminent domain
or the like, or have been approved by Lessee. In the event Lessor is unable to convey title as
required, Lessee shall have the right to accept such title as Lessor can convey or elect not to
consummate its exercise of the option. Both Lessor and Lessee agree to execute a purchase
agreement, escrow instructions and such other instruments as may be necessary or appropriate to
consummate the sale of the Property in the manner herein provided. All Costs incurred in
connection with Lessee’s exercise of the option, including, but not limited to, escrow fees, title
insurance fees, recording costs or fees, reasonable attorneys’ fees (including those of the
Lessor), appraisal fees, stamp taxes and transfer fees shall be borne by Lessee. Lessee shall
continue to pay and perform all of its obligations under this Lease until the close of escrow. The
purchase price paid by Lessee in exercising this option shall be paid to Lessor or to such person
or entity as Lessor may direct at closing in immediately available funds. The closing date may be
extended for a reasonable period of time to permit Lessor to cure title defects or to permit either
party to cure any other defects or defaults provided each party is diligently seeking to cure such
defect or default and Lessee continues to perform its obligations hereunder. In the case of any
mortgage or other monetary lien arising by, through or under Lessor (but not arising by, through or
under Lessee), the escrow agent shall first apply the purchase price to the payment of such
mortgage or monetary lien, and the balance shall be paid over to Lessor at closing.

     Lessee shall not have the right to exercise this option or consummate the exercise thereof if
at the time of exercise or consummation, an Event of Default exists or is continuing.

     Lessee may not sell, assign, transfer, hypothecate or otherwise dispose of the option granted
herein or any interest therein, except in conjunction with a permitted assignment of Lessee’s
entire interest herein and then only to the assignee thereof. Any attempted assignment of this
option which is contrary to the terms of this Section shall be deemed to be an Event of Default
under this Lease and the option granted herein shall be void.

     Notwithstanding the foregoing, the purchase option described in this Section shall be null and
void in the event that Lessor determines, in its sole and absolute discretion, that the sale of the
Property would cause Lessor to recognize income or gain from a “prohibited transaction” as defined
under Section 857(b)(6) of the Internal Revenue Code of 1986, as amended.

37

 

     IN WITNESS WHEREOF, Lessor and Lessee have entered into this Lease as of the date first above
written.

	 	 	 	 	 
	 	LESSOR:

SPIRIT FINANCE ACQUISITIONS, LLC, 

a Delaware limited liability company

 	 
	 	By:  	/s/ Gregg A. Seibert
 	 
	 	 	Printed Name:  	Gregg A. Seibert 	 
	 	 	Title:  Senior Vice President 	 
	 
	 	LESSEE:

SIGNIFICANT EDUCATION, LLC, 

a Delaware limited liability company 

 	 
	 	By:  	/s/ Brent Richardson
 	 
	 	 	Printed Name:  	Brent Richardson 	 
	 	 	Title:  Chief Executive Officer	 
	 	 	Tax Identification
No.:  
	 
	 

[Signature Page To Lease Agreement]

 

 

	 	 	 	 	 
	STATE OF ARIZONA 

COUNTY OF MARICOPA

	 	)

)

)
	 	ss

     The foregoing instrument was acknowledged before me on June 25, 2004 by Gregg A. Seibert,
Senior Vice President of Spirit Finance Acquisitions, LLC, a Delaware limited liability company, on
behalf of the company.

	 	 	 	 	 
	 	 	 
	 	/s/ Sandra L. Cardon
 	 
	 	Notary Public 	 

My Commission Expires:

November 28, 2004

[SEAL]

[Signature Page to Lease Agreement]

 

 

	 	 	 	 	 
	STATE OF ARIZONA 

COUNTY OF MARICOPA

	 	)

)

)
	 	ss

     The foregoing instrument was acknowledged before me on June 26, 2004 by Brent Richardson,
Chief Executive Officer of Significant Education, LLC, a Delaware limited liability company on
behalf of the company.

	 	 	 	 	 
	 	 	 
	 	/s/ Deborah Kent
 	 
	 	Notary Public 	 

My Commission Expires:

October 6, 2005

[SEAL]

[Signature Page to Lease Agreement]

 

 

EXHIBIT A

DEFINED TERMS

     The following terms shall have the following meanings for all purposes of this Lease:

     “ADA” has the meaning set forth in Section 12.C.

     “Additional Rental” has the meaning set forth in Section 4.D.

     “Adjustment Date” means the first anniversary of the last day of the last calendar month of
the first year of the Initial Term, and every second annual anniversary thereafter during the Lease
Term (including any Extension Term).

     “Affected Party” means each direct or indirect participant or investor in a proposed or
completed Securitization, including, without limitation, any prospective owner, any rating agency
or any party to any agreement executed in connection with the Securitization.

     “Affiliate” means any Person which directly or indirectly controls, is under common control
with or is controlled by any other Person. For purposes of this definition, “controls”, “under
common control with”, and “controlled by” means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or otherwise.

     “Assignee” has the meaning set forth in Section 23.B.

     “Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. Sec. 101 et seq., as
amended.

     “Base Annual Rental” means $2,808,750.00.

     “Base Monthly Rental” means an amount equal to 1/12 of the applicable Base Annual Rental.

     “Business Day” means a day on which banks located in Scottsdale, Arizona are not required or
authorized to remain closed.

     “Casualty” means any loss of or damage to any property included within or related to the
Property or arising from an adjoining property caused by fire, flood or other casualty.

     “CFCCR” has the meaning set forth in Section 42.

     “Code” means the Internal Revenue Code of 1986, as the same may be amended from time to time.

     “Condemnation” means a Taking and/or a Requisition.

     “Contingent Purchase Price” has the meaning set forth in the Purchase and Sale Agreement.

A-1

 

     “Costs” means all reasonable costs and expenses incurred by a Person, including without
limitation, reasonable attorneys’ fees and expenses, court costs, expert witness fees, costs of
tests and analyses, travel and accommodation expenses, deposition and trial transcripts, copies and
other similar costs and fees, brokerage fees, escrow fees, title insurance premiums, appraisal
fees, stamp taxes, recording fees and transfer taxes or fees, as the circumstances require.

     “current actual knowledge”, as it relates to Lessee, means the current actual knowledge of an
officer of the Lessee.

     “Default Rate” means 12% per annum or the highest rate permitted by law, whichever is less.

     “Early Termination Date” has the meaning set forth in Section 18.C(ii)(1).

     “Effective Date” has the meaning set forth in the introductory paragraph of this Lease.

     “Environmental Laws” means all federal, state and local laws, ordinances, common law
requirements and regulations and standards, rules, policies and other governmental requirements,
administrative rulings and court judgments and decrees having the effect of law in effect now or in
the future and including all amendments, that relate to Hazardous Materials and/or the protection
of human health or the environment and apply to Lessee and/or the Property.

     “Environmental Liens” has the meaning set forth in Section 12.D(i)(2).

     “Event of Default” has the meaning set forth in Section 20.A.

     “Exchange Act” has the meaning set forth in Section 31.B(iv).

     “Expiration Date” has the meaning set forth in Section 3.

     “Extension Option” has the meaning set forth in Section 3.

     “Extension Term” has the meaning set forth in Section 3.

     “Fixed Purchase Price” means the gross purchase price paid for the Property by Lessor on the
“Closing Date” defined and described in the Purchase and Sale Agreement.

     “Force Majeure Event” has the meaning set forth in Section 29.

     “Governmental Authority” means any governmental authority, agency, department, commission,
bureau, board, instrumentality, court or quasi-governmental authority of the United States, any
state or any political subdivision thereof with authority to adopt, modify, amend, interpret, give
effect to or enforce any federal, state and local laws, statutes, ordinances, rules or regulations,
including common law, or to issue court orders.

     “Guarantor” means, collectively, Brent Richardson and Christopher Richardson, or any other
additional or replacement guarantor approved by Lessor in its sole and absolute discretion.

A-2

 

     “Guaranty” means that certain Unconditional Guaranty of Payment and Performance dated as of
the date hereof between Guarantor and Lessor.

     “Hazardous Materials” includes: (a) oil, petroleum products, flammable substances, explosives,
radioactive materials, hazardous wastes or substances, toxic wastes or substances or any other
materials, contaminants or pollutants which pose a hazard to the Property or to Persons on or about
the Property, cause the Property to be in violation of any local, state or federal law or
regulation, (including without limitation, any Environmental Law), or are defined as or included in
the definition of “hazardous substances”, “hazardous wastes”, “hazardous materials”, “toxic
substances”, “contaminants”, “pollutants”, or words of similar import under any applicable local,
state or federal law or under the regulations adopted, orders issued, or publications promulgated
pursuant thereto, including, but not limited to: (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. §9601, et seq.; (ii)
the Hazardous Materials Transportation Act, as amended, 49 U.S.C. §1801, et seq.;
(iii) the Resource Conservation and Recovery Act, as amended, 42 U.S.C. §6901, et
seq.; and (iv) regulations adopted and publications promulgated pursuant to the aforesaid
laws; (b) asbestos in any form which is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment which contain dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty (50) parts per million; (c) underground storage tanks; and (d) any
other chemical, material or substance, exposure to which is prohibited, limited or regulated by any
governmental authority or which may or could pose a hazard to the health and safety of the
occupants of the Property or the owners and/or occupants of any adjoining property.

     “Indemnified Parties” means Lessor, and its directors, officers, shareholders, partners,
members, employees, agents, servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns, including, but not limited to, any successors
by merger, consolidation or acquisition of all or a substantial portion of the assets and business
of Lessor.

     “Initial Term” has the meaning set forth in Section 3.

     “Insolvency Event” means (a) Lessee’s (i) failure to generally pay its debts as such debts
become due; (ii) admitting in writing its inability to pay its debts generally; or (iii) making a
general assignment for the benefit of creditors; (b) any proceeding being instituted by or against
Lessee (i) seeking to adjudicate it a bankrupt or insolvent; (ii) seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors; or (iii)
seeking the entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property, and in the case of any such
proceeding instituted against Lessee, either such proceeding shall remain undismissed for a period
of one hundred twenty (120) days or any of the actions sought in such proceeding shall occur; or
(c) Lessee taking any corporate action to authorize any of the actions set forth above in this
definition.

     “Law(s)” means any constitution, statute, rule of law, code, ordinance, order, judgment,
decree, injunction, rule, regulation, policy, requirement or administrative or judicial
determination, even if unforeseen or extraordinary, of every duly constituted Governmental
Authority, court or agency, now or hereafter enacted or in effect.

A-3

 

     “Lease Term” shall have the meaning described in Section 3.

     “Legal Requirements” means the requirements of all present and future Laws (including without
limitation, Environmental Laws and Laws relating to accessibility to, usability by, and
discrimination against, disabled individuals), all judicial and administrative interpretations
thereof, including any judicial order, consent, decree or judgment, and all covenants, restrictions
and conditions now or hereafter of record which may be applicable to Lessee or to the Property, or
to the use, manner of use, occupancy, possession, operation, maintenance, alteration, repair or
restoration of the Property, even if compliance therewith necessitates structural changes or
improvements or results in interference with the use or enjoyment of the Property.

     “Lessee Entities” means, collectively, Lessee and all Affiliates of Lessee.

     “Lessor Entities” means, collectively, Lessor and all Affiliates of Lessor.

     “Lessor’s Total Investment” means, with respect to any Property, the sum of (a) the gross
purchase price paid for the Property by Lessor (or Lessor’s predecessor-in-interest) (including,
without limitation, any mortgage debt incurred or assumed in connection therewith and any
Contingent Purchase Price paid by Lessor), plus (b) all amounts disbursed pursuant to Section 44,
plus (c) the closing costs and expenses incurred by Lessor (or Lessor’s predecessor-in-interest)
with respect to the purchase of the Property.

     “Loss Value” has the meaning set forth in Section 18.C(ii).

     “Losses” means any and all claims, suits, liabilities (including, without limitation, strict
liabilities), actions, proceedings, obligations, debts, damages, losses, Costs, diminutions in
value, fines, penalties, interest, charges, fees, judgments, awards, amounts paid in settlement and
damages of whatever kind or nature (including, without limitation, attorneys’ fees and other Costs
of defense).

     “Material Adverse Effect” means a material adverse effect on (i) the Property, including,
without limitation, the operation of the Property as a Permitted Facility and/or the value of the
Property, (ii) Lessee’s ability to perform its obligations under this Lease, or (iii) Lessor’s
interests in the Property, this Lease or the other Transaction Documents.

     “Monetary Obligations” means all Rental and all other sums payable or reimbursable by Lessee
under this Lease to Lessor, to any third party on behalf of Lessor, or to any Indemnified Party.

     “Net Award” means (a) the entire award payable with respect to the Property by reason of a
Condemnation whether pursuant to a judgment or by agreement or otherwise, or (b) the entire
proceeds of any insurance required under Section 10 payable with respect to the Property, as the
case may be, and in either case, less any Costs incurred by Lessor in collecting such award or
proceeds.

     “Notices” has the meaning set forth in Section 24.

A-4

 

     “OFAC List” means the list of specially designated nationals and blocked persons subject to
financial sanctions that is maintained by the U.S. Treasury Department, Office of Foreign Assets
Control and any other similar list maintained by the U.S. Treasury Department, Office of Foreign
Assets Control pursuant to any Legal Requirements, including, without limitation, trade embargo,
economic sanctions, or other prohibitions imposed by Executive Order of the President of the United
States. The OFAC List currently is accessible through the internet website
www.treas.gov/ofac/t11sdn.pdf.

     “Option Notice” has the meaning set forth in Section 45.

     “Other Agreements” means, collectively, all agreements and instruments now or hereafter
entered into between, among or by (1) any of the Lessee Entities, and, or for the benefit of, (2)
any of the Lessor Entities, including, without limitation, leases, promissory notes and guaranties,
but excluding this Lease and all other Transaction Documents.

     “Partial Casualty” has the meaning set forth in Section 18.B.

     “Partial Condemnation” has the meaning set forth in Section 18.B.

     “Permitted Amounts” shall mean, with respect to any given level of Hazardous Materials, that
level or quantity of Hazardous Materials in any form or combination of forms which does not
constitute a violation of any Environmental Laws and is customarily employed in, or associated
with, similar businesses located in the State.

     “Permitted Encumbrances” shall mean those covenants, restrictions, reservations, liens,
conditions, encroachments, easements and other matters of title that affect the Property as of the
date of Lessor’s acquisition thereof and those items which hereafter affect title as permitted
under this Lease.

     “Permitted Facility” means a college or university, which initially is the Grand Canyon
University, and all lawful activities related thereto, including without limitation, other schools
ancillary to a college or university, such as a high school or prep school, and ministry and
related facilities, consistent with the history and mission of Grand Canyon University.

     “Person” means any individual, partnership, corporation, limited liability company, trust,
unincorporated organization, Governmental Authority or any other form of entity.

     “Personalty” has the meaning set forth in Section 26.

     “Project” has the meaning set forth in Section 44.

     “Project Funds” has the meaning set forth in Section 44.

     “Property” means, that certain real property legally described on Exhibit B attached
hereto, all rights, privileges, and appurtenances associated therewith, all buildings, fixtures and
other improvements now or hereafter located on such real estate (whether or not affixed to such
real estate).

A-5

 

     “Purchase and Sale Agreement” means that certain Purchase and Sale Agreement of even date
herewith by and between Grand Canyon University Institute for the Advanced Studies, an Arizona
non-profit corporation, as seller, and Lessor, as purchaser (pursuant to that certain Assignment
and Assumption of Lease Agreement of even date herewith by and between Significant Education, LLC,
a Delaware limited liability company, as assignor, and Lessor, as assignee, pursuant to which
Significant Education, LLC assigned all of its right, title and interest in and to the Purchase and
Sale Agreement to Lessor).

     “REIT” means a real estate investment trust as defined under Section 856 of the Code.

     “Rejectable Purchase Closing Date” has the meaning set forth in Section 43.C(ii).

     “Rejectable Purchase Offer” has the meaning set forth in Section 43.A.

     “Rejectable Offer” has the meaning set forth in Section 18.C(ii)(3).

     “Release” means any presence, release, deposit, discharge, emission, leaking, spilling,
seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other
movement of Hazardous Materials.

     “Remediation” means any response, remedial, removal, or corrective action, any activity to
cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous Material, any
actions to prevent, cure or mitigate any Release, any action to comply with any Environmental Laws
or with any permits issued pursuant thereto, any inspection, investigation, study, monitoring,
assessment, audit, sampling and testing, laboratory or other analysis, or any evaluation relating
to any Hazardous Materials.

     “Rental” means, collectively, the Base Annual Rental and the Additional Rental.

     “Rent Adjustment” has the meaning in Section 4.BB.

     “Requisition” means any temporary requisition or confiscation of the use or occupancy of the
Property by any Governmental Authority, civil or military, whether pursuant to an agreement with
such Governmental Authority in settlement of or under threat of any such requisition or
confiscation, or otherwise.

     “Securities” has the meaning set forth in Section 39.

     “Securities Act” has the meaning set forth in Section 31.B(iv).

     “Securitization” has the meaning set forth in Section 39.A.

     “State” means the State of Arizona.

     “Subject Purchase Price” has the meaning set forth in Section 43.A.

     “Successor Lessor” has the meaning set forth in Section 21.

A-6

 

     “Taking” means (a) any taking or damaging of all or a portion of the Property (i) in or by
condemnation or other eminent domain proceedings pursuant to any Law, general or special, or (ii)
by reason of any agreement with any condemnor in settlement of or under threat of any such
condemnation or other eminent domain proceeding, or (iii) by any other means, or (b) any de facto
condemnation. The Taking shall be considered to have taken place as of the later of the date
actual physical possession is taken by the condemnor, or the date on which the right to
compensation and damages accrues under the law applicable to the Property.

     “Termination Notice” has the meaning set forth in Section 18.C(ii).

     “Terrorism Laws” means Executive Order 13224 issued by the President of the United States, the
Terrorism Sanctions Regulations (Title 31 Part 595 of the U.S. Code of Federal Regulations), the
Terrorism List Governments Sanctions Regulations (Title 31 Part 596 of the U.S. Code of Federal
Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title 31 Part 597 of the
U.S. Code of Federal Regulations), and the Cuban Assets Control Regulations (Title 31 Part 515 of
the U.S. Code of Federal Regulations), and all other present and future federal, state and local
laws, ordinances, regulations, policies, lists and any other requirements of any Governmental
Authority (including, without limitation, the United States Department of the Treasury Office of
Foreign Assets Control) addressing, relating to, or attempting to eliminate, terrorist acts and
acts of war, each as hereafter supplemented, amended or modified from time to time, and the present
and future rules, regulations and guidance documents promulgated under any of the foregoing, or
under similar laws, ordinances, regulations, policies or requirements of other states or
localities.

     “Third Party Offer” has the meaning set forth in Section 43.A.

     “Threatened Release” means a substantial likelihood of a Release which requires action to
prevent or mitigate damage to the soil, surface waters, groundwaters, land, stream sediments,
surface or subsurface strata, ambient air or any other environmental medium comprising or
surrounding any Property which may result from such Release.

     “Total Casualty” has the meaning set forth in Section 18.C.

     “Total Condemnation” has the meaning set forth in Section 18.C.

     “Transaction Documents” means this Lease, the Guaranty and all documents related thereto.

A-7

 

EXHIBIT B

LEGAL DESCRIPTION OF PROPERTY

     Attached hereto are the true and correct legal descriptions of the Property.

PARCEL NO. 1:

     THAT PART OF THE SOUTHWEST QUARTER OF SECTION 14, TOWNSHIP 2 NORTH, RANGE 2 EAST OF THE GILA
AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

     COMMENCING AT THE SOUTHWEST CORNER OF SAID SECTION 14;

     THENCE NORTH 89 DEGREES 57 MINUTES 00 SECONDS EAST ALONG THE SOUTH LINE OF SAID SOUTHWEST
QUARTER OF SECTION 14, A DISTANCE OF 689.83 FEET;

     THENCE LEAVING SAID SOUTH LINE, NORTH 00 DEGREES 03 MINUTES 00 SECONDS WEST, 40.00 FEET TO A
POINT ON THE NORTH 40 FOOT RIGHT-OF-WAY LINE OF CAMELBACK ROAD, SAID POINT ALSO BEING THE TRUE
POINT OF BEGINNING;

     THENCE LEAVING SAID NORTH 40 FOOT RIGHT-OF-WAY LINE, NORTH 00 DEGREES 18 MINUTES 11 SECONDS
WEST, 650.01 FEET ;

     THENCE SOUTH 89 DEGREES 57 MINUTES 00 SECONDS WEST, 650.01 FEET TO A POINT ON THE EAST 40 FOOT
RIGHT-OF-WAY LINE OF 35TH AVENUE;

     THENCE ALONG SAID EAST 40 FOOT RIGHT-OF-WAY LINE, NORTH 00 DEGREES 18 MINUTES 11 SECONDS WEST,
649.77 FEET;

     THENCE LEAVING SAID EAST 40 FOOT RIGHT-OF-WAY LINE, NORTH 89 DEGREES 41 MINUTES 49 SECONDS
EAST, 50.00 FEET;

     THENCE NORTH 00 DEGREES 18 MINUTES 11 SECONDS WEST, 50.00 FEET;

     THENCE SOUTH 89 DEGREES 41 MINUTES 49 SECONDS WEST, 50.00 FEET TO A POINT ON SAID EAST 40 FOOT
RIGHT-OF-WAY LINE;

     THENCE ALONG SAID EAST 40 FOOT RIGHT-OF-WAY LINE, NORTH 00 DEGREES 18 MINUTES 11 SECONDS WEST,
186.36 FEET;

     THENCE LEAVING SAID EAST 40 FOOT RIGHT-OF-WAY LINE, NORTH 89 DEGREES 53 MINUTES 58 SECONDS
EAST, 279.00 FEET;

B-1 

 

     THENCE NORTH 00 DEGREES 18 MINUTES 11 SECONDS WEST, 413.41 FEET; THENCE SOUTH 85 DEGREES 07
MINUTES 27 SECONDS EAST, 684.34 FEET; THENCE NORTH 89 DEGREES 54 MINUTES 29 SECONDS FACT, 1630.12
I-tt ; THENCE SOUTH 00 DEGREES 01 MINUTES 05 SECONDS EAST, 353.82 FEET; THENCE SOUTH 89 DEGREES 53
MINUTES 58 SECONDS WEST, 430.00 FEET;

     THENCE SOUTH 00 DEGREES 01 MINUTES 05 SECONDS EAST, 1538.01 FEET TO A POINT ON SAID NORTH 40
FOOT RIGHT-OF-WAY LINE OF CAMELBACK ROAD;

     THENCE ALONG SAID NORTH 40 FOOT RIGHT-OF-WAY LINE, SOUTH 89 DEGREES 57 MINUTES 00 SECONDS
WEST, 511.63 FEET;

     THENCE I LEAVING SAID NORTH 40 FOOT RIGHT-OF-WAY LINE, NORTH 86 DEGREES 14 MINUTES 11 SECONDS
WEST, 180.42 FEET TO A POINT ON THE NORTH 52 FOOT RIGHT-OF-WAY LINE OF CAMELBACK ROAD;

     THENCE ALONG SAID NORTH 52 FOOT RIGHT-OF-WAY LINE, SOUTH 89 DEGREES 57 MINUTES 00 SECONDS
WEST, 229.00 FEET;

     THENCE LEAVING SAID NORTH 52 FOOT RIGHT-OF-WAY LINE, SOUTH 44 DEGREES 51 MINUTES 44 SECONDS
WEST, 16.94 FEET TO A POINT ON SAID NORTH 40 FOOT RIGHT-OF-WAY LINE;

     THENCE ALONG SAID NORTH 40 FOOT RIGHT-OF-WAY LINE, SOUTH 89 DEGREES 57 MINUTES 00 SECONDS
WEST, 568.64 FEET TO THE TRUE POINT OF BEGINNING;

     EXCEPT THAT PORTION DESCRIBED AS FOLLOWS:

     COMMENCING AT THE WEST QUARTER CORNER OF SAID SECTION 14;

     THENCE SOUTH 00 DEGREES 18 MINUTES 11 SECONDS EAST, 650.11 FEET ALONG THE WEST LINE OF SAID
SECTION 14;

     THENCE DEPARTING SAID WEST LINE, NORTH 89 DEGREES 41 MINUTES 49 SECONDS EAST, 319.00 FEET TO
THE EAST LINE OF ME WEST 319.00 FEET OF SAID SECTION 14 AND THE POINT OF BEGINNING;

     THENCE DEPARTING SAID EAST LINE OF THE WEST 319.00 FEET OF SECTION 14, SOUTH 85 DEGREES 07
MINUTES 27 SECONDS EAST, 684.34 FEET;

     THENCE NORTH 89 DEGREES 54 MINUTES 29 SECONDS EAST, 1629.29 FEET TO THE NORTH-SOUTH
MID-SECTION LINE OF SAID SECTION 14;

B-2 

 

     THENCE SOUTH 00 DEGREES 01 MINUTES 59 SECONDS EAST, 353.82 FEET ALONG SAID NORTH-SOUTH
MID-SECTION LINE OF SECTION 14;

     THENCE SOUTH 89 DEGREES 53 MINUTES 58 SECONDS WEST, 2309.17 FEET TO SAID EAST LINE OF THE WEST
319.00 FEET OF SECTION 14;

     THENCE NORTH 0 DEGREES 18 MINUTES 11 SECONDS WEST, 413.43 FEET ALONG SAID FAST LINE OF THE
WEST 319.00 FEET OF SECTION 14 TO THE POINT OF BEGINNING;

     AND EXCEPT A TRACT OF LAND FOR A WELL SITE SITUATED IN THE NORTHWEST QUARTER OF THE SOUTHWEST
QUARTER OF SECTION 14, TOWNSHIP 2 NORTH, RANGE 2 EAST OF THE GILA AND SALT RIVER BASE AND MERIDIAN,
MARICOPA COUNTY, ARIZONA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

     BEGINNING AT A POINT 1389.80 FEET NORTH AND 40.00 FEET EAST OF THE SOUTHWEST CORNER OF SAID
SECTION 14;

     THENCE NORTH 18.00 FEET;

     THENCE EAST 50.00 FEET;

     THENCE SOUTH 18.00 FEET;

     THENCE WEST 50.00 FEET TO THE POINT OF BEGINNING.

PARCEL NO. 2:

     THE NORTH 506.50 FEET OF THE EAST 430 FEET OF THE NORTHEAST QUARTER OF THE SOUTHWEST QUARTER
OF SECTION 14, TOWNSHIP 2 NORTH, RANGE 2 EAST OF THE GILA AND SALT RIVER BASE AND MERIDIAN,
MARICOPA COUNTY, ARIZONA;

     EXCEPT THAT PORTION CONVEYED TO THE CITY OF PHOENIX BY QUIT CLAIM DEED RECORDED AUGUST 8, 1960
IN DOCKET 3376, PAGE 212: AND ALSO

     EXCEPT THAT PORTION CONVEYED TO THE CITY OF PHOENIX BY QUIT CLAIM DEED RECORDED JULY 2, 2002
IN INSTRUMENT NO. 20020677117.

PARCEL NO. 3:

     THAT PORTION OF THE NORTH HALF OF THE SOUTHWEST QUARTER OF SECTION 14, TOWNSHIP 2 NORTH, RANGE
2 EAST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA, BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:

B-3 

 

     COMMENCING AT THE WEST QUARTER CORNER OF SAID SECTION 14;

     THENCE SOUTH 00 DEGREES 18 MINUTES 11 SECONDS EAST, 650.11 FEET ALONG THE WEST LINE OF SAID
SECTION 14;

     THENCE DEPARTING SAID WEST LINE, NORTH 89 DEGREES 41 MINUTES 49 SECONDS EAST, 319.00 FEET TO
THE EAST LINE OF THE WEST 319.00 OF SAID SECTION 14 AND THE POINT OF BEGINNING;

     THENCE DEPARTING SAID EAST LINE OF THE WEST 319.00 FEET OF SECTION 14, SOUTH 85 DEGREES 07
MINUTES 27 SECONDS EAST, 684.34 FEET;

     THENCE NORTH 89 DEGREES 54 MINUTES 29 SECONDS EAST, 1629.29 FEET TO THE NORTH-SOUTH
MID-SECTION LINE OF SAID SECTION 14;

     “THENCE SOUTH 00 DEGREES 01 MINUTES 59 SECONDS EAST, 353.82 FEET ALONG SAID NORTH-SOUTH
MID-SECTION LINE OF SECTION 14;

     THENCE SOUTH 89 DEGREES 53 MINUTES 58 SECONDS WEST, 2309.17 FEET TO SAID EAST LINE OF THE WEST
319.00 FEET OF SECTION 14;

     THENCE NORTH 00 DEGREES 18 MINUTES 11 SECONDS WEST, 413A3 FEET ALONG SAID EAST LINE OF THE
WEST 319.00 FEET OF SECTION 14 TO THE POINT OF BEGINNING;

     EXCEPT THAT PORTION DESCRIBED AS FOLLOWS:

     COMMENCING AT THE WEST QUARTER CORNER OF SAID SECTION 14;

     THENCE SOUTH 00 DEGREES 18 MINUTES 11 SECONDS EAST ALONG THE WEST LINE OF SAID SOUTHWEST
QUARTER OF SECTION 14, A DISTANCE OF 650.11 FEET;

     THENCE LEAVING SAID WEST LINE, NORTH 89 DEGREES 41 MINUTES 49 SECONDS EAST, 319.00 FEET TO THE
EAST LINE OF THE WEST 319.00 FEET OF SAID SOUTHWEST QUARTER OF SECTION 14;

     THENCE LEAVING SAID EAST LINE, SOUTH 85 DEGREES 07 MINUTES 27 SECONDS, EAST 684.34 FEET;

     THENCE NORTH 89 DEGREES 54 MINUTES 29 SECONDS EAST, 93.28 FEET TO THE TRUE POINT OF BEGINNING;

     THENCE CONTINUING NORTH 89 DEGREES 54 MINUTES 29 SECONDS EAST, 601.41 FEET;

B-4 

 

     THENCE SOUTH 00 DEGREES 06 MINUTES 02 SECONDS EAST, 375.81 FEET; THENCE SOUTH 89 DEGREES 53
MINUTES 58 SECONDS WEST, 601.41 FEET;

     THENCE NORTH 00 DEGREES 06 MINUTES 02 SECONDS WEST, 375.70 FEET TO THE TRUE POINT OF
BEGINNING.

B-5 

 

EXHIBIT C

ENVIRONMENTAL DISCLOSURES

     1. Anything described in Environmental Site Assessments, Inc.’s Phase I Environmental Site
Assessment, dated June 17, 2004, Project Number 1297M.

     2. Any item listed on Compliance and/or Condition of Property that fits the terms of this Schedule,
including the information contained in the other schedules to this Asset Purchase Agreement.

C-1 

 

EXHIBIT D

PROJECTS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Use	 	Dollar
 Amount	 	Doc	 	Payee	 	Estimated Timing	 	Process	 	Notes
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Upgrade Apartments
	 	$1,500,000	 	LSE	 	Lessee	 	Q2 2005 to Q2 2006	 	1	 	Occupied until next year
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	General Facilities Improvements
	 	$1,000,000	 	LSE	 	Lessee	 	Q3 2004 to Q4 2004	 	1	 	Roadways, general
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Infrastructure Build Out
	 	$2,500,000	 	LSE	 	Lessee	 	Q3 2004 to Q3 2005	 	2	 	Ratably over one year
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Campus Call Center Build Out
	 	$250,000	 	LSE	 	Lessee	 	Q3 2004 to Q1 2006	 	3	 	70% in first six months, balance ratably
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL
	 	$5,250,000	 	 	 	 	 	 	 	 	 	 

Process Notes

	1	 	Paid based on standard construction drawdown process, as mutually agreed between Lessor and
Lessee.
	 
	2	 	Paid upon submission of bona fide invoice to Lessor relating to the purchase or hardware,
software, implementation and testing.
	 
	3	 	Such portion relating to hard construction, paid under process 1 above. For such portion
relating to hardware, software, implementation and testing paid under process 2 above.

D-1 

 

SCHEDULE 6.01.C

LITIGATION

Schedule 6.01.C

 

 

SCHEDULE 6.01.D

BREACHES AND DEFAULTS

None, except as may be alleged in the various claims for delinquent payments on numerous contracts
and accounts payable obligations disclosed in Schedule 6.C.

Schedule 6.01.D

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