OFFICE LEASE

 

1001 SE WATER AVENUE

 

BETWEEN

 

Eastside Distilling Inc,

a Nevada corporation Tenant

 

AND

 

Eastbank Commerce Center, LLC,

an Oregon limited liability company

 

Landlord

 

 

   

 

TABLE OF CONTENTS

 

1. PREMISES; DELIVERY 1   1.1 Lease of Premises 1   1.2 Delivery of Possession
and Commencement 1   1.3 Early Access 1   1.4 Option to Extend Term 2   1.5
Right of First Offer 3         2. RENT PAYMENT 3   2.1 Base Rent 3   2.2 Abated
Rent and Other Inducement Provisions 4         3. SECURITY DEPOSIT 4         4.
USE 4   4.1 Use 4   4.2 Equipment 5   4.3 Signs and Other installations 5   4.4
Parking 5         5. UTILITIES, SERVICES, SECURITY 6   5.1 Utilities and
Services 6   5.2 Data and Information Sharing for Environmental Management and
Extra Usage 6   5.3 Security Measures for the Premises 6   5.4 Fiber Optic 7    
    6. MAINTENANCE. REPAIR, ALTERATIONS 7   6.1 Maintenance and Repair 7   6.2 A
Iterations 8         7. INDEMNITY, INSURANCE 9   7.1 Indemnity 9   7.2 Insurance
9         8. DAMAGE, WAIYER OF SUBROGATION 10   8.1 Fire or Casualty 10   8.2
Waiver of Subrogation 10         9. EMINENTDOMAIN 10         10. ASSIGNMENT AND
SUBLETTING 11         11. DEFAULT, REMEDIES 11   I I.I Default 11   11.2
Remedies for Default 12   11.3 Landlord’s Right To Cure Default 12         12.
SURRENDER, HOLDOVER 12         13. RULES AND REGULATIONS 13         14. ACCESS
13   14.1 Access 13   14.2 Furniture and Bulky Articles 13 15. Notices 13

 

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16. SUBORDINATION AND ATTORNMENT, TRANSFER OF BUILDING, ESTOPPELS 14   16.1
Subordination and Attornment 14   16.2 Transfer of Building 14   16.3 Estoppels
14         17. ATTORNEY FEES 14         18. QUIET ENJOYMENT 14         19.
LIMITATION ON LIABILITY 15         20. ADDITIONAL RENT 15   20.1 Additional
Rent: Operating Expense Adjustment. 15   20.2 Disputes 16         21. HAZARDOUS
MATERIALS 16         22. MISCELLANEOUS 17   22.1 Complete Agreement; No Implied
Covenants 17   22.2 Governing Law 17   22.3 Partial Invalidity 7   22.4 Space
Leased AS IS 17   22.5 Captions; Construction 17   22.6 Nonwaiver 17   22.7
Consent 17   22.8 Force Majeure 17   22.9 Commissions 18   22.10 Successors 18  
22.11 Financial Reports 18   22.12 Waiver of Jury Trial. 18   22.13 Executive
Order 13224 8   22.14 Relocation 8   22.15 Confidentiality 18   22.16 Building
Name and Signage 19   22.17 Mold 19   22.18 Survival of Obligations 19   22.19
Amendments 19   22.20 Execution; Counterpart; Signature Transmitted 19   22.2I
Intentionally Deleted 19   22.22 Exhibit 19

 

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OFFICE LEASE

 

Basic Lease Terms.

 

A. EFFECTIVE DATE OF LEASE: September 21, 20 I 7       B. TENANT: Eastside
Distilling Inc,     a Nevada corporation         Addresses For Notices: Eastside
Distilling Inc.     Att’n General Manager     1001 SE Water Ave., Suite 390    
Portland, OR 97214     Facsimile: ___________________    
Email:______________________      

C.

LANDLORD:

Eastbank Commerce Center, LLC,     an Oregon limited liability company          
Addresses For Notices:     c/o Beam Development     75 SE Yamhill, Suite 201    
Portland, OR 97214     Attn: Jonathan Malsin     Email:
jonathan(((‘,beamdeveloprnent.co111           With copy to:     Brix Law LLP    
75 SE Yamhill, Suite 202     Portland, OR 97214     Attn: Brad Miller     Email:
bmi!lerii:Ubrix!aw,com           Address for payment of Rent:     c/o Beam
Development     75 SE Yamhill, Suite 201     Portland, OR 97214      

D.

PREMISES:

Approximately 3,050 rentable square feet with an address of 1001 SE Water
Avenue, Suite 390, Portland, Oregon 97214, as shown on the attached Exhibit “A.”
     

E.

 

BUILDING:

 

The building located at 1001 SE Water Avenue, Portland, OR 97214 commonly known
as the Eastbank Commerce Center.      

F.

 

BUILDING AREA:

 

Approximately 55,274 rentable square feet      

G.

 

TENANT’S PROPORTIONATE SHARE: 5.52%.

The percentage is obtained by dividing the rentable square feet of the Premises
by the total number of rentable square feet of the Building. Landlord may modify
Tenant’s Proportionate Share if the Building size is increased or decreased, as
the case may be.      

 

H.

 

TENANT’S PERMITTED USE OF PREMISES: 

General office use, and for no other purpose.       I. TERM OF LEASE:
Anticipated Commencement Date: October 15, 2017.     Expiration Date: Last day
of the month that is twenty-six (26) months after the Commencement Date (defined
below) of the Lease.      

J.

 

INITIAL MONTHLY BASE RENT:

$5,718.75.

 

K. BASE RENT:         Period (Months) Monthly Base Rent                    1-2
Abated                3 -12 $5,718.75                13-24 $5,890.31    
           25-26 $6,067.02        

 

L.

PREPAID RENT:

$5,718.75, applicable to month three (3) after the Commencement Date.       M.

SECURITY DEPOSIT: 

$6,067.02.       N.

PARKING: 

During the Term of the Lease, Tenant shall be permitted to use four (4) reserved
parking spaces. All parking arrangements with Tenant shall be addressed by
separate agreement and shall be subject to the provisions of Section 4.4.      
L.

BROKER(S):

Landlord was not represented by a real estate broker with respect to this Lease.

    Tim Budelman of Norris & Stevens, Inc. representing Tenant.

 

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OFFICE LEASE

 

For valuable consideration, Landlord and Tenant covenant and agree as follows:

 

1. PREMISES; DELIVERY     1.1 Lease of Premises.       Landlord leases to Tenant
the Premises described in the Basic Lease Terms and shown as Suite 390 on
Exhibit “A” (the “Premises”) subject to the terms and conditions of this Lease.
    1.2 Delivery of Possession and Commencement.       Should Landlord be unable
to deliver possession of the Premises on the Anticipated Commencement Date
stated in the Basic Lease Terms, Landlord shall have no liability to Tenant for
delay in delivering possession. The term of the Lease shall commence on the date
the Premises are delivered to Tenant in the condition required under this Lease,
which shall be deemed to have occurred when Landlord’s Work (defined below) has
been substantially completed (the “Commencement Date”). The Premises shall be
delivered to Tenant in “‘as is’’ condition and without any representation or
warranty subject only to the improvements to be performed by Landlord in
accordance with Exhibit “B” (“Landlord’s Work’’). The terms “substantial
completion,” “substantially complete.” and words of similar import (whether or
not spelled with initial capitals) as used herein shall mean the date of
substantial completion of Landlord’s Work such that Tenant may commence the
installation of any of Tenant’s equipment and occupy the Premises for the
conduct of its business (subject to the completion of any additional
construction to be performed by Tenant). Landlord’s Work shall be deemed
substantially complete notwithstanding the fact that minor details of
construction, mechanical adjustments or decorations which do not materially
interfere with Tenant’s use and enjoyment of the Premises remain to be performed
(items normally referred to as “punch list” items). The existence of any “punch
list” items shall not postpone the Commencement Date. Tenant’s occupancy of the
Premises shall constitute conclusive acceptance of the amount of square footage
stated herein, and of the condition of the Premises. The Expiration Date of this
Lease shall be the date stated in the Basic Lease Terms. Upon ascertaining the
date of the Commencement Date, Landlord shall deliver to Tenant a written
confirmation in the form attached hereto as Exhibit “E” (“Lease Confirmation”)
of the Commencement Date. The Lease Confirmation shall be binding upon Tenant
unless Tenant objects to the notice in writing delivered to Landlord within five
(5) days of Tenant’s receipt of said Lease Confirmation.       The rentable
areas of the Premises and the Building specified in Section I. I are
approximate. Tenant is satisfied with Landlord’s measurement of the rentable
areas of the Premises and of the Building.     1.3 Early Access.       Tenant
shall have the right to occupy the Premises approximately seven (7) days after
the mutual execution of this Lease. Such early access to the Premises by Tenant
shall be solely for the purpose of installing Tenant’s cabling, furniture,
fixtures, and equipment in the Premises and shall be subject to the following
conditions: (i) prior to Tenant’s entry into the Premises, Tenant provides
Landlord with proof that Tenant has the insurance that Tenant is required to
maintain under this Lease, (ii) prior to Tenant’s entry into the Premises,
Tenant provides Landlord with such evidence as reasonably required that Tenant
has received all required governmental approvals to enter the Premises, (iii)
prior to Tenant’s entry into the Premises, Tenant provides Landlord with
contractor’s licenses, insurance and bonds for all contractors entering the
Premises in connection with any work to be performed on by Tenant in the
Premises, and (iv) Landlord shall have the right to terminate or suspend
Tenant’s early access at any time that Landlord determines that such early
access interferes with the performance of the Landlord’s Work.

 

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1.4 Option to Extend Term.       Landlord hereby grants Tenant the right to
extend the Term of the Lease for one (I) additional period of three (3) years
(such extended period is hereinafter referred to as the “Extended Term”) on the
same terms and conditions contained in the Lease, except that (i) Base Rent for
an Extended Term shall be as set forth hereinbelow, (ii) no additional options
to extend shall apply following the expiration of applicable Extended Term
(other than as expressly set forth above), and (iii) Landlord shall have no
obligation to make any improvements to the Premises or contribute any amounts
therefor. Written notice of Tenant’s exercise of its option to extend (“Option
to Extend”) the Tem1 of this Lease for the Extended Term must be given to
Landlord no less than six (6) months prior to the date the Term of the Lease
would otherwise expire. If Tenant is in default under this Lease, Tenant shall
have no Option to Extend the Term of this Lease until such default is cured
within the cure period set forth in this Lease for such default, if any;
provided, that the period of time within which said Option to Extend may be
exercised shall not be extended or enlarged by reason of Tenant’s inability to
exercise said Option to Extend because of a default. In the event Tenant validly
exercises its Option to Extend the Term of this Lease as herein provided, Base
Rent shall be adjusted as of the commencement date of the Extended Term as
follows (but in no event shall it be less than the Base Rent for the month
immediately prior to the commencement of the Extended Term):

 

(a) Not later than six (6) months prior to the commencement of an Extended Term,
Landlord shall provide Tenant with Landlord’s determination of the fair market
Base Rent for such Extended Term, including periodic increases as dictated by
the current market (“Landlord’s Determination of Base Rent for Extended Term”).
Tenant shall provide notice to Landlord within ten (10) days after receipt of
such notice from Landlord as to whether Tenant accepts Landlord’s Determination
of Base Rent for Extended Term. In the event Tenant does not agree to Landlord’s
Determination of Base Rent for Extended Term, Landlord and Tenant shall attempt
to agree upon Base Rent for the Premises for the Extended Term, such rent to be
the fair market Base Rent installment of rent for the Premises for the Extended
Term, as defined in Subsection (c) below. If the parties are unable to agree
upon the Base Rent for the Extended Term by the date three (3) months prior to
the commencement of the Extended Term, then within ten (10) days thereafter each
party, at its own cost and by giving notice to the other party, shall appoint a
real estate appraiser with at least five (5) years full-time commercial real
estate appraisal experience in the area in which the Premises are located to
appraise and set Base Rent for the Extended Term. If a party does not appoint an
appraiser within ten ( I 0) days after the other party has given notice of the
name of its appraiser, the single appraiser appointed shall be the sole
appraiser and shall set Base Rent for the Extended Term. If each party shall
have so appointed an appraiser, the two (2) appraisers shall meet promptly and
attempt to set the Base Rent for the Extended Term. If the two (2) appraisers
are unable to agree within thirty (30) days after the second appraiser has been
appointed, they shall attempt to select a third appraiser meeting the
qualifications herein stated within ten (10) days after the last day the two (2)
appraisers are given to set Base Rent. If the two (2) appraisers are unable to
agree on the third appraiser within such ten ( I 0) day period, either of the
parties to this Lease, by giving five (5) days’ notice to the other party, may
apply to the Arbitration Service of Portland for the selection of a third
appraiser meeting the qualifications stated in this Section. Each of the parties
shall bear one-half ( l /2) of the cost of appointing the third appraiser and of
paying the third appraiser’s fee. The third appraiser, however selected, shall
be a person who has not previously acted in any capacity for either party.

 

(b) The fair market Base Rent shall be fixed by the appraisers in accordance
with the following procedures. Each party-appointed appraiser shall state, in
writing, such appraiser’s determination of the fair market Base Rent supported
by the reasons therefor and shall make counterpart copies for the other party
appointed appraiser and any neutral appraiser. The party-appointed appraisers
shall arrange for a simultaneous exchange of their proposed fair market Base
Rent determinations. The role of any neutral appraiser shall be to select
whichever of the two (2) proposed determinations of fair market Base Rent most
closely approximates the neutral appraiser’s own determination of fair market
Base Rent. The neutral appraiser shall have no right to propose a middle ground
or any modification of either of the two (2) proposed determinations of fair
market Base Rent. The determination of fair market Base Rent the neutral
appraiser chooses as that most closely approximating the neutral appraiser’s
determination of the fair market Base Rent shall constitute the decision of the
appraisers and shall be final and binding upon the parties. The appraisers shall
have no power to modify the provisions of this Lease.

 

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(c) For purposes of the appraisal, the term “fair market Base Rent” shall mean
the price that a ready and willing tenant would pay, as of the Extended Term
commencement date, as a base rent to a ready and willing landlord of premises
comparable to the Premises, in terms of size, quality and comparable term, in
their then improved state, in the Portland, Oregon market, if such premises were
exposed for lease on the open market for a reasonable period of time; including
any rent increases over the Extended Term. In no event shall there be deducted
from such fair market rental the value of any concessions, including without
limitation, tenant improvements, commission and/or “down time.”

 

(d) Any neutral appraiser’s decision shall be made not later than thirty (30)
days after the submission by the appraisers of their proposals with respect to
the fair market Base Rent. The parties have included these time limits in order
to expedite the proceeding, but they are not jurisdictional, and the neutral
appraiser may for good cause allow reasonable extensions or delays, which shall
not affect the validity of the award. Absent fraud, collusion or willful
misconduct by the neutral appraiser, the award shall be final, and judgment may
be entered in any court having jurisdiction thereof The Option to Extend the
Lease hereby granted is personal to the entity executing this Lease as tenant
and is not transferable; in the event of any assignment or subletting under this
Lease, the Option to Extend the Lease shall automatically terminate and shall
thereafter be null and void.

 

1.5 Right of First Offer.       Ifat any time during the initial Term of the
Lease space in Suites 360 or 370 of the Building as shown on Exhibit “D”
(collectively and individually, the “First Offer Space”) is available for lease
or is about to become available for lease (provided such space shall not be
deemed available for lease until it has already been leased to a third party
after the date of this Lease or if it is subject to any existing options of
existing tenants of the Building) and so long as Tenant is not in default of
this Lease, Landlord shall notify Tenant of the availability of such space and
the terms upon which Landlord is willing to lease such space to Tenant (the base
rent per sq. ft., and the general terms shall be consistent with the then
prevailing-market for premises comparable to the Premises, in terms of size,
quality and comparable term, in their then-improved state, in the Portland,
Oregon market, provided the base rent shall be no lower than that for the
initial Premises for the month in which the expansion of the Premises to include
the First Offer Space shall occur(the “Expansion Space Commencement Date”). If
Tenant timely accepts Landlord’s offer, if, as of the Expansion Space
Commencement Date, the Term of the Lease is set to expire less than twenty-four
(24) months later, the Term of the Lease with respect to the initial Premises
and the First Offer Space shall be extended such that the Term of the Lease
expires twenty-four (24) months following the Expansion Space Commencement Date.
Tenant shall have five (5) business days to accept Landlord’s offer. If Tenant
fails to accept Landlord’s offer within such five (5) business day period,
Landlord shall be free to lease such space any time during the term of this
Lease free and clear of any rights of Tenant; provided however, once such space
has been leased to a third party and thereafter becomes available for lease, the
provisions of this Right of First Offer shall then again apply. The right of
first offer contained herein shall not apply to any renewal or extension of the
term of the Lease and shall be personal to the entity executing this Lease as
tenant.     2. RENT PAYMENT     2.1 Base Rent.      

Tenant shall pay to Landlord the Base Rent for the Premises and any additional
rent provided herein, without deduction or offset. At the same time as execution
of the Lease, Tenant shall pay any prepaid rent stated in the Basic Lease Terms.
Rent is payable in advance on the first day of each month commencing on the
Commencement Date of this Lease. Tenant shall have a five (5) day grace period
from the first day of the month within which to pay the Base Rent and any
additional rent. Rent for any partial month during the Lease term shall be
prorated to reflect the number of days during the month that Tenant occupies the
Premises. Additional rent means amounts determined under Section 20 of this
Lease and any other sums payable by Tenant to Landlord under this Lease. Rent
not paid when due shall bear interest at the rate of nine percent (9%) per
annum, until paid. Landlord may at its option impose a late charge of the
greater of $.05 for each $ I of rent or $50 for rent payments made more than ten
(I 0) days late in lieu of interest for the first month of delinquency. Tenant
acknowledges that late payment by Tenant to Landlord of any rent or other sums
due under this Lease will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such costs being extremely difficult and
impracticable to ascertain, and that such late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by reason of any such
late payment and is not a penalty. Neither imposition nor collection nor failure
to impose or collect such late charge shall be considered a waiver of any other
remedies available for default. In addition to such late charge, an additional
charge of$75 shall be recoverable by Landlord for any returned checks.

 

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2.2 Abated Rent and Other Inducement Provisions.       As reflected above,
Tenant shall have no obligation to pay monthly Base Rent for the first two (2)
full months after the Commencement Date (the “Free Rent Period”) resulting in an
abatement of monthly Base Rent in the aggregate amount of$ I l,437.50. In the
event ofa default by Tenant under the terms of this Lease which results in early
termination pursuant to the provisions hereof during such Free Rent Period,
Tenant shall not be entitled to any such rent abatement after the date of
termination nor shall Tenant be entitled to assert any right to rent abatement
after such termination against any sums due Landlord. The rent abatement granted
under this Section and any other cash and allowance which is granted to Tenant
(collectively, “Inducement Provisions”) is solely for the benefit of the entity
executing this Lease as tenant and is not transferable to any assignee or
subtenant. In the event of a default by Tenant under the terms of this Lease
which results in early termination pursuant to the provisions hereof, then as a
part of the recovery to which Landlord shall be entitled shall be included a
portion of such rent which was abated under the provisions of this Section and
the cash and any allowance other all other Inducement Provisions, which portion
shall be determined by multiplying the total amount of rent, cash and allowance
which was abated or granted under this Lease by a fraction, the numerator of
which is the number of months remaining in the term of this Lease at the time of
such default and the denominator of which is the number of months during the
term of this Lease that Tenant is obligated to pay monthly Base Rent. For the
avoidance of doubt, during the Free Rent Period Tenant shall be obligated to pay
Tenant’s Proportionate Share of operating expenses and real property taxes.    
3. SECURITY DEPOSIT       Upon execution of the Lease, Tenant shall pay to
Landlord the amount stated in the Basic Lease Terms as a Security Deposit.
Landlord may apply the Security Deposit to pay the cost of performing any
obligation which Tenant fails to perform within the time required by this Lease,
but such application by Landlord shall not waive Landlord’s other remedies nor
be the exclusive remedy for Tenant’s default. If the Security Deposit is applied
by Landlord, Tenant shall on demand pay the sum necessary to replenish the
Security Deposit to its original amount. In no event will Tenant have the right
to apply any part of the Security Deposit to any rent or other sums due under
this Lease. If Tenant is not in default at the expiration or termination of this
Lease, Landlord shall return the entire Security Deposit to Tenant, within
thirty (30) days, except for the portion designated in the Basic Lease Terms, if
any, which Landlord shall retain as a non-refundable cleaning fee. If Tenant is
in default at the expiration or termination of this Lease, Landlord may retain
such portion of the Security Deposit as needed to cure the default and shall
promptly return the balance, if any, to Tenant. Landlord’s obligations with
respect to the Security Deposit are those of a debtor and not of a trustee, and
Landlord can commingle the Security Deposit with Landlord’s general funds.
Landlord shall not be required to pay Tenant interest on the Security Deposit.
Landlord shall be entitled to immediately endorse and cash Tenant’s Security
Deposit; however, such endorsement and cashing shall not constitute Landlord’s
acceptance of this Lease. In the event Landlord does not accept this Lease,
Landlord shall return said Security Deposit. If Landlord sells its interest in
the Premises during the term hereof and deposits with or credits to the
purchaser the unapplied portion of the Security Deposit, thereupon Landlord
shall be discharged from any further liability or responsibility with respect to
the Security Deposit.

 

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4. USE     4.1 Use.      

Tenant shall use the Premises for Tenant’s Permitted Use stated in the Basic
Lease Terms and for no other purpose. In connection with Tenant’s use of the
Premises (including, without limitation, any alteration of the Premises), Tenant
shall at its expense promptly comply with all applicable laws, ordinances,
rules, and regulations (“Laws”) and shall not annoy, obstruct, or interfere with
the rights of other tenants. Tenant shall not allow any objectionable fumes,
noise, light, vibration, radiation, or electromagnetic waves to be emitted from
the Premises. If any such sound or vibration is detectable outside of the
Premises, Tenant shall provide such insulation as is required to muffle such
sound or vibration and render it undetectable at Tenant’s cost. Tenant shall not
conduct any activities that will increase Landlord’s insurance rates. Tenant
shall pay before delinquency all taxes, assessments, license fees and public
charges levied, assessed or imposed upon its business operations and all trade
fixtures, leasehold improvements, merchandise and other personal property in or
about the Premises. Tenant shall not use the Premises for any uses that will
cause any increase in insurance rates in the Building. Notwithstanding anything
to the contrary in this Lease, in no event shall any portion of the Premises be
used for any marijuana-related business, cannabusiness, or any other business
related to controlled substances as defined in the Federal Controlled Substances
Act (including, but not limited to, the cultivation, manufacture, processing,
accounting, financial transactions, other ancillary services, storage or sale of
cannabis or cannabis-related products).

    4.2 Equipment.       Tenant shall install in the Premises only such
equipment as is customary for Tenant’s Permitted Use and shall not overload the
floors or electrical circuits of the Premises or Building or alter the plumbing
or wiring of the Premises or Building. Landlord must approve in advance the
location of and manner of installing any wiring or electrical, heat generating,
climate sensitive, or communication equipment or exceptionally heavy articles.
All telecommunications equipment, conduit, cables and wiring, additional
dedicated circuits, and any additional air conditioning required because of heat
generating equipment or special lighting installed by Tenant shall be installed
and operated at Tenant’s expense and, at Landlord’s written request shall be
removed by Tenant at Tenant’s sole cost. Tenant shall have no right to install
any equipment on or through the roofof the Building, or use or install or store
any equipment or other items outside of the interior boundary of the Premises.  
  4.3 Signs and Other Installations.       No signs, awnings, or other apparatus
shall be painted on or attached to the Building or anything placed on any glass
or woodwork of the Premises or positioned so as to be visible from outside the
Premises, including any window covering (l,’.¾, shades, blinds, curtains,
drapes, screens, or tinting materials) without Landlord’s written consent. All
signs installed by Tenant shall comply with Landlord’s standards for signs and
all applicable codes and all signs and sign hardware shall be removed upon
termination of this Lease with the sign location restored to its former state.
Any material violating this provision may be removed and disposed by Landlord
without compensation to Tenant, and Tenant shall reimburse Landlord for the cost
of the same upon request. Subject to Landlord’s final approval as to the
specific design, location, and size of such signage, Tenant may install, at
Tenant’s sole cost and expense, Tenant-branded signage on the door and window of
the entry to the Premises. Landlord shall, at Landlord’s sole cost and expense,
place Tenant’s name on the directory of the Building. Notwithstanding the above,
and subject to Landlord’s reasonable approval of the design, location, and size
of such signage, Landlord consents to Tenant placing a neon sign in its third
floor window for “Portland Potato” or “Portland Potato Vodka,” as permitted by
the city sign code and all other governmental regulations, provided such signage
shall not be placed within three (3) feet of the window line.     4.4 Parking.  
    All parking spaces shall be assigned to tenants and other parties pursuant
to a separate written agreement with Landlord. This Lease does not cover any
parking spaces or rights to use any parking spaces except as indicated in
Section N of the Basic Lease Terms. Except to the extent of the negligence or
willful misconduct of Landlord or Landlord’s agents, employees or contractors,
Landlord shall not be responsible for money, jewelry, automobiles or personal
property lost in or stolen from the parking areas regardless of whether such
loss or theft occurs when the parking areas are locked or otherwise secured.
Without limiting the terms of the preceding sentence, Landlord shall not be
liable for any loss, injury or damage to persons using the parking areas or
automobiles or other property therein, it being agreed that, to the fullest
extent permitted by law, the use of the parking spaces shall be at the sole risk
of Tenant and its employees. If Tenant and Landlord enter into a parking
agreement covering parking spaces in the Building, then any default by Tenant
under such agreement beyond any applicable cure period shall, at Landlord’s
option, constitute an event of default under this Lease. A copy of the separate
parking agreement is attached hereto as Exhibit “F.”

 

5

   

 

5. UTILITIES, SERVICES, SECURITY     5.1 Utilities and Services.       Landlord
will furnish water and electricity to the Building at all times and will furnish
heat and air conditioning, at building standard levels, during the normal
Building hours as established by Landlord. Tenant shall pay for all charges for
electricity, natural gas and water furnished to the Premises. If Tenant does not
pay any of these charges directly, Tenant shall pay Landlord for such charges
and the amount payable by Tenant will be based upon consumption as sub-metered
to the Premises by Landlord, or if not sub-metered, upon an equitable allocation
made by Landlord, which allocation will be binding absent manifest error. Tenant
shall be responsible for paying, as additional rent, the monthly charges
allocable to the Premises for the HYAC maintenance contracts entered into by
Landlord from time to time. Any additional rent provided for in this Lease shall
become due with the next monthly installment of Base Rent unless otherwise
provided. Janitorial service for the Building’s common areas will be provided in
accordance with the regular schedule of the Building, which schedule may change
from time to time. Tenant shall provide Tenant’s own janitorial service for the
Premises unless Landlord and Tenant otherwise agree in writing that Landlord
will provide such service to Tenant as part of operating expenses for the
Building. Tenant shall be responsible for, and promptly pay when due, any and
all charges for utility services used in the Premises and for all other services
required for Tenants use of the Premises (including without limitation, all data
and telephone services). Tenant shall comply with all government laws or
regulations regarding the use or reduction of use of utilities on the Premises.
Interruption of services or utilities shall not be deemed an eviction or
disturbance of Tenant’s use and possession of the Premises, render Landlord
liable to Tenant for damages, or relieve Tenant from performance of Tenant’s
obligations under this Lease. Landlord shall take all reasonable steps to
correct any interruptions in service caused by defects in utility systems within
Landlord’s reasonable control. Tenant shall provide its own surge protection for
power furnished to the Premises. Tenant shall cooperate with Landlord and the
utility service providers at all times as reasonably necessary, and shall allow
Landlord and utility service providers, reasonable access to the pipes, lines,
feeders, risers, wiring, and any other machinery within the Premises. Tenant
shall not contract or engage any other utility provider without prior written
approval of Landlord.     5.2 Data and Information Sharing for Environmental
Management and Extra Usage.       Tenant shall be required to furnish to
Landlord energy and water consumption data for all energy and water types used
on the Premises for which utility accounts or consumption meters are owned by
Tenant. Landlord and Tenant agree to provide all reasonable and accurate
information that may be required to pursue green building certification of the
Premises. If Tenant does not pay for utilities directly and Tenant uses
excessive amounts of utilities because of operation outside of ordinary business
hours of Monday through Friday from 7:00 am to 6:00 pm and Saturday 8:00 am to
Noon (“Ordinary Building Hours”), high demands from office machinery and
equipment, nonstandard lighting, or any other cause, Landlord may impose a
reasonable charge for supplying such extra utilities, which charge shall be
payable monthly by Tenant in conjunction with rent payments. Landlord reserves
the right to install separate meters for any such utility and to charge Tenant
for the cost of such installation.     5.3 Security Measures for the Premises.  
    Landlord may (but shall have no obligation) adopt security measures
regarding the Premises, and Tenant shall cooperate with all such security
measures. Landlord may, in Landlord’s sole and absolute discretion, modify the
type or amount of security measures provided at any time without notice.      
Tenant may not install alarm boxes, foil protection tape, or other security
equipment on the Premises without Landlord’s prior written consent. Tenant may,
at Tenant’s sole cost and expense, install a supplemental security system within
the Premises (such as a card-key system) with Landlord’s written consent not to
be unreasonably withheld; provided that such consent may be conditioned on,
among other things, that: (i) the plans and specifications for any such system
shall be subject to Landlord’s reasonable approval, (ii) any such system must be
compatible with any existing systems of the Building, (iii) Tenant’s obligation
to indemnify, defend and hold Landlord harmless shall also apply to Tenant’s use
and operation of any such system, (iv) the installation of such system shall
otherwise be subject to the terms and conditions of Section 6 below (and Exhibit
“B”, if installed as a part of the Tenant improvements), and (v) notwithstanding
anything to the contrary in this Lease, Tenant shall remove such system upon the
expiration or earlier termination of this Lease and repair all damage caused by
such removal. Tenant shall at all times provide Landlord with a contact person
who can disarm the security/surveillance system and who is familiar with the
functions of such system in the event of a malfunction, and Tenant shall provide
Landlord with the alarm codes or other necessary information required to disarm
such system in the event Landlord must enter the Premises in an emergency and
Landlord shall not have any liability for accidentally setting off Tenant’s
security system. The determination of the extent to which such supplemental
security equipment, systems and procedures are reasonably required shall be made
in the sole judgment, and shall be the responsibility of, the Tenant.

 

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5.4 Fiber Optic.       Tenant shall have the right to select an alternative
telecom provider for its data and telecom connectivity in the Building; provided
that (i) such telecom provider enters into a license agreement with the Landlord
which license agreement shall be subject to Landlord’s prior written approval,
(ii) Tenant assumes all costs and expenses related to the license agreement,
including, without limitation, the costs of installation of fiber and electrical
feeds, including chases and conduits in the risers in the Building
(collectively, the “Cabling”), and (iii) the telecom provider’s use will not
interfere with or adversely impact the Building or the use or occupancy of
office space leased by any tenant of the Building. Together with Tenant’s
request for a new telecom provider, Tenant shall submit to Landlord evidence
acceptable to Landlord in its sole discretion that the installation of the
Cabling by the telecom provider is in compliance with all applicable laws and
will not impede the operation of the Building or its systems in any material
respect and if so as to the latter, that Tenant will be responsible to correct
and remediate such impediment at it sole cost and expense as a condition
precedent to such approval by Landlord. Without limiting the generality of the
foregoing, Tenant shall not commence or allow the telecom provider to commence
any installation or operation of the Cabling until the proposed location of and
specifications for the Cabling have been approved in writing by Landlord.
Landlord shall have no obligation to design, install, construct, use, operate,
maintain, repair, replace or remove the Cabling or to have any other
responsibility or liability in connection therewith or the operations thereof.
The use of the Cabling and all areas outside the Premises shall be subject to
all terms and conditions of the Lease as if within the Premises, including,
without limitation, insurance and indemnification obligations in this Lease.
Landlord shall not be liable for any loss or damage suffered by Tenant or others
because of any interruption in or failure of utilities, including electrical
power, to the Cabling. Tenant acknowledges and agrees that it shall accept the
areas in which Tenant installs its Cabling and piping in their “As ls”
condition. Landlord makes no representation respecting the condition of these
areas or their suitability for operation and installation of the Cabling.     6.
MAINTENANCE, REPAIR, ALTERATIONS     6,1 Maintenance and Repair.     6.1.1
Landlord’s obligation with respect to maintenance and repair of the Building
shall be limited to: (A) the structural portions of the Building, (B) the
exterior walls of the Building, including glass and glazing (provided that the
cleaning of the interior faces of exterior glazing within the Premises shall be
Tenant’s responsibility), (C) the roof, (D) the mechanical, electrical, plumbing
and life safety systems leading to the Premises, and (E) the common areas.
Landlord shall have the right but not the obligation to undertake work of repair
that Tenant is required to perform hereunder and that Tenant fails or refuses to
perform in a timely and efficient manner. All costs incurred by Landlord in
performing any such repair for the account of Tenant shall be repaid by Tenant
to Landlord upon demand, together with a reasonable administrative fee.

 

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6.1.2  Tenant shall maintain and repair the Premises in good condition,
including, without limitation, maintaining and repairing all walls, floors, and
ceilings, all interior doors. partitions, and windows, and all Premises systems,
fixtures, and equipment that are not the maintenance responsibility of Landlord,
as well as damage to the Building caused by Tenant, its agents, employees,
contractors, or invitees.     6.1.3 Landlord shall have no liability for failure
to perform required maintenance and repair unless written notice is given by
Tenant and Landlord fails to commence efforts to remedy the problem within a
reasonable time and diligently pursue such remedy to completion. Landlord shall
have the right to erect scaffolding and other apparatus necessary for the
purpose of making repairs or alterations to the Building, and Landlord shall
have no liability for interference with Tenant’s use because of such work. Work
may be done during normal business hours. Tenant shall have no claim against
Landlord for any interruption of services or interference with Tenant’s
occupancy caused by Landlord’s maintenance and repair or any claim of
constructive or other eviction of Tenant.     6.1.4 Landlord’s cost of repair
and maintenance shall be considered “operating expenses” for the purposes of
Section 20, except that repair of damage caused by negligent or intentional acts
or breach of this Lease by Tenant, its contractors, agents or invitees shall be
at Tenant’s expense.     Landlord represents and warrants that the plumbing,
mechanical, electrical, safety, HVAC, and other serving the Premises shall be in
good working order on the Commencement Date.     6.2 Alterations.systems    
6.2.1 Tenant shall not make any alterations to the Premises that affect the
structure of the Building or any Building system (electrical, plumbing,
mechanical or life safety), or install any wall or floor covering without
Landlord’s prior written consent which may be withheld in Landlord’s sole
discretion. With respect to any other alteration requested by Tenant, Landlord’s
consent shall not be unreasonably withheld. Should Landlord consent in writing
to Tenant’s alteration of the Premises, Tenant shall contract with a contractor
approved by Landlord for the construction of such alterations (which contractor
shall comply with the insurance provisions set forth in this Lease), shall
secure all appropriate governmental approvals and permits, and shall complete
such alterations with due diligence in compliance with the plans and
specifications approved by Landlord and in a good and workmanlike manner. All
such construction shall be performed in a manner which will not interfere with
the quiet enjoyment of other tenants of the Building. Any such alterations,
wiring, cables, or conduit installed by Tenant shall at once become part of the
Premises and belong to Landlord except for removable machinery and unattached
movable trade fixtures. Landlord may at its option require that Tenant remove
any alterations, wiring, cables or conduit installed by or for Tenant and
restore the Premises to the original condition upon termination of this Lease.
If Tenant seeks Landlord’s consent to perform an alteration, then at the time
Landlord provides its approval of same, Landlord shall notify Tenant as to
whether Landlord will require Tenant to remove such alteration upon the
expiration or earlier termination of this Lease. If Tenant makes an alteration
without asking Landlord whether Landlord will require such alteration to be
removed at the expiration or sooner termination of this Lease, Landlord may at
its option, require that Tenant remove such alterations and repair any damage in
connection therewith. Landlord shall have the right to post notices of
nonresponsibility in connection with work being performed by Tenant in the
Premises. Work by Tenant shall comply with all laws then applicable to the
Premises. Tenant shall not allow any liens to attach to the Building or Tenant’s
interest in the Premises as a result of its activities or any alterations.
Landlord may perform alterations to or change the configuration of the Building
and common areas. At the conclusion of any alteration, (A) Tenant shall provide
Landlord with as-built drawings of such alterations, and (B) certify that the
“record-set” of as-built drawings are true and correct, which certification
shall survive the expiration or termination of this Lease.     6.2.2 Throughout
the term of the Lease and notwithstanding the provisions of Section 18 below,
Landlord shall have a continuing right (but shall not be obligated) to make
alterations and/or improvements to the common areas and any other portions of
the Building for any purposes that Landlord deems necessary, in its reasonable
business judgment, including, without limitation, alterations or improvements
that will affect the operation, design, use or aesthetic of the Building.
Landlord is authorized to prioritize sustainability requirements over minimizing
upfront costs of property improvements. Landlord shall make reasonable efforts
to complete all such alterations and improvements so as to minimize, to the
extent feasible, disturbance to Tenant. Without limiting the generality of the
foregoing, Landlord reserves the right to grant such easements, rights and
dedications as Landlord deems necessary or desirable and to cause the
recordation of parcel maps and covenants, conditions and restrictions affecting
the Premises and Building, as long as such easements, rights, dedications, maps
and covenants, conditions and restrictions do not materially and adversely
interfere with the use of the Premises by Tenant. At Landlord’s request, Tenant
shall join in the execution of any of the aforementioned documents.

 

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7. INDEMNITY, INSURANCE     7.1 Indemnity.       Tenant shall indemnify, defend,
and hold harmless Landlord and its managing agents and employees from any claim,
liability, damage, or loss occurring in, on, or about the Premises, or any cost
or expense in connection therewith (including attorney fees), arising out of (a)
any damage to any person or property occurring in, on, or about the Premises,
(b) use by Tenant or its agents, invitees or contractors of the Premises and/or
the Building, and/or (c) Tenant’s breach or violation of any term of this Lease.
This indemnity obligation shall survive the expiration or sooner termination of
this Lease. Notwithstanding the forgoing, Tenant shall have no obligation to
indemnify, defend or hold harmless Landlord for any claim, damage or loss caused
in whole or in part by the intentional or grossly negligent acts of Landlord,
its employees or agents or by other tenants in the building.     7.2 Insurance.
      Tenant shall carry liability insurance, on an occurrence basis, with
limits of not less than Two Million Dollars ($2,000,000) combined single limit
bodily injury and property damage which insurance shall have an endorsement
naming Landlord and Landlord’s managing agent and lender, if any, and any other
entity reasonably required by Landlord, as an additional insured, cover the
liability insured under Section 7 of this Lease and be in form and with
companies reasonably acceptable to Landlord. Such insurance shall provide that
it is primary insurance and not “excess over” or contributory with any other
valid, existing and applicable insurance in force for or on behalf of Landlord.
The policy shall not eliminate cross-liability and shall contain a severability
of interest clause. Tenant, at its cost, shall maintain on all of its personal
property, tenant improvements (whether constructed by Landlord or Tenant), in,
on, or about the Premises, a policy of” Broad Form” insurance, to the extent of
at least full replacement value without any deduction for depreciation. Tenant,
at its cost, shall maintain such other insurance as Landlord may reasonably
require from time to time. Not more frequently than once each year, if, in the
opinion of Landlord’s lender or of the insurance consultant, the amount of
public liability and property damage insurance coverage at that time is not
adequate, Tenant shall increase the insurance coverage as required by either
Landlord’s lender or Landlord’s insurance consultant. Prior to occupancy, Tenant
shall furnish a certificate evidencing such insurance which shall state that the
coverage shall not be canceled or materially changed without thirty (30) days’
advance notice to Landlord and Landlord’s managing agent, if any. Tenant shall
furnish to Landlord a renewal certificate at least thirty (30) days prior to
expiration of any policy.       Tenant shall also maintain workers’ compensation
insurance in accordance with the laws of the state in which the Premises are
located with employer’s liability insurance in an amount not less than
$1,000,000 and business income and extra expense insurance with limits not less
than one hundred percent ( I 00%) of all income and charges payable by Tenant
under this Lease for a period of twelve (12) months.       Should Tenant engage
the services of any contractor to perform work in the Premises, Tenant shall
ensure that such contractor carries commercial general liability, business
automobile liability, umbrella/excess liability (following forn1), worker’s
compensation and employers’ liability coverages in substantially the same
amounts as are required of Tenant under this Lease. Contractor shall include
Landlord, its trustees, officers, directors, members, agents and employees,
Landlord’s mortgagees and Landlord’s representatives as additional insureds on
the liability policies required hereunder. All policies required to be carried
by any contractor shall be issued by and binding upon an insurance company
licensed or authorized to do business in the state in which the Building is
located with a rating of at least “A-: X” or better as set forth in the most
current issue of Best’s Insurance Reports, unless otherwise approved by
Landlord. Certificates of insurance, acceptable to Landlord, evidencing the
existence and amount of each insurance policy required hereunder shall be
delivered to Landlord prior to the commencement of any work in the Premises.
Further, each policy will contain provisions giving Landlord and each of the
other additional insureds with at least thirty (30) days’ prior written notice
of any cancelation, non-renewal or material change in coverage. The above
requirements shall apply equally to any subcontractor engaged by contractor.

 

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8. DAMAGE, WAIVER OF SUBROGATION     8.1 Fire or Casualty.       “Major Damage”
means damage by fire or other casualty to the Building or the Premises which
causes the Premises or any substantial portion of the Building to be unusable,
or which will cost more than twenty-five percent (25%) of the pre-damage value
of the Building to repair, or which is not covered by insurance. In case of
Major Damage, Landlord may elect to terminate this Lease by notice in writing to
Tenant within thirty (30) days after such date. If this Lease is not terminated
following Major Damage, or if damage occurs which is not Major Damage, Landlord
shall promptly restore the Premises to the condition existing just prior to the
damage. Tenant shall promptly restore all damage to tenant improvements or
alterations installed or paid for by Tenant or pay the cost of such restoration
to Landlord if Landlord elects to do the restoration of such improvements.
Unless the casualty was caused by Tenant, rent shall be reduced from the date of
damage until the date restoration work being performed by Landlord is
substantially complete, with the reduction to be in proportion to the area of
the Premises not usable by Tenant. Notwithstanding the foregoing, in the event
of Major Damage, Landlord, within thirty (30) days of the date of such damage,
shall use commercially reasonable efforts to cause a general contractor selected
by Landlord to provide Landlord with a written estimate of the amount of time
required, using standard working methods, to substantially complete the repair
and restoration of the Premises and any common areas necessary to provide access
to the Premises (“Completion Estimate”). Landlord shall promptly forward a copy
of the Completion Estimate to Tenant. If the Completion Estimate indicates that
the Premises or any common areas necessary to provide access to the Premises
cannot be made tenantable within two hundred seventy (270) days from the date
the repair is started (when such repairs are made without the payment of
overtime or other premiums), then either party shall have the right to terminate
this Lease upon written notice to the other within ten (10) business days after
Landlord’s delivery of the Completion Estimate; provided, however, if the Lease
is not terminated under this Section and Landlord reasonably believes at any
time during the performance of the repairs that the repairs will not be
completed within thirty (30) days of the estimated completion date set forth the
Completion Estimate, Landlord shall notify Tenant, and either party may
terminate this Lease within ten (10) days of the date of Landlord’s notice.    
8,2 Waiver of Subrogation.       Tenant shall be responsible for insuring its
personal property and trade fixtures located on the Premises and any alterations
or tenant improvements it has made to the Premises. Neither Landlord, its
managing agent nor Tenant shall be liable to the other for any loss or damage
caused by any of the risks that are covered by property insurance or could be
covered by a customary broad form of property insurance policy, or for any
business interruption, and there shall be no subrogated claim by one party’s
insurance carrier against the other party arising out of any such loss. Subject
to the other provisions of this Lease, if damage is caused by a risk that is not
covered by property insurance or could be covered by a customary broad fonn of
property insurance policy and such damages is caused by the other party or its
agents, employees, contractors or invitees, nothing contained herein shall be
deemed to preclude a party from making a claim against the other with respect to
such damages.     9. EMINENT DOMAIN       If a condemning authority takes title
by eminent domain or by agreement in lieu thereof a portion sufficient to render
the Premises unsuitable for Tenant’s use, then either party may elect to
terminate this Lease effective on the date that possession is taken by the
condemning authority. If this Lease is not terminated, then rent shall be
reduced for the remainder of the term in an amount proportionate to the
reduction in area of the Premises caused by the taking. All condemnation
proceeds (except those specifically allocated to Tenant’s furniture, fixtures,
and equipment, if any) shall belong to Landlord, and Tenant shall have no claim
against Landlord for theses condemnation proceeds because of the taking. Nothing
herein is intended to prevent Tenant from separately seeking and retaining
condemnation proceeds from the condemning authority that are available for
tenants, including but not limited to relocation costs.

 

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10. ASSIGNMENT AND SUBLETTING       Tenant shall not assign or encumber its
interest under this Lease or sublet all or any portion of the Premises without
first obtaining Landlord’s consent in writing. This provision shall apply to all
transfers by operation of law, and to all mergers and changes in control of
Tenant, all of which shall be deemed assignments for the purposes of this
Section. Tenant’s request for Landlord’s consent to an assignment or sublease
shall be accompanied by a copy of the proposed agreements between Tenant and the
proposed assignee or subtenant. Tenant shall provide Landlord with (I) any
additional information or documents reasonably requested by Landlord, within ten
(I 0) days after receiving Tenant’s notice, and (2) an opportunity to meet and
interview the proposed assignee or subtenant, if requested. No assignment shall
relieve Tenant of its obligation to pay rent or perform other obligations
required by this Lease, and no consent to one assignment or subletting shall be
a consent to any further assignment or subletting. If Tenant proposes a
subletting for which Landlord’s consent is required, Landlord shall have the
option of terminating this Lease and dealing directly with the proposed
subtenant. Notwithstanding the foregoing, Landlord may at its sole discretion
withhold consent to the subletting of the Premises to an existing occupant of
the Building, to any prospective tenant with which the Landlord or Landlord’s
agents have negotiated within the previous six (6) months, where the prospective
tenant is a government entity or a labor union, or where any sublease will
require any changes to any building systems. Tenant shall not advertise at a
rate which is less than the Building’s listed rate. If Landlord does not
terminate this Lease, Landlord shall not unreasonably withhold its consent to
any assignment or subletting provided the proposed Tenant is compatible with
Landlord’s normal standards for the Building. If an assignment or subletting is
permitted, fifty percent (50%) of any net profit, or net value of any other
consideration received by Tenant as a result of such transaction shall be paid
to Landlord promptly following its receipt by Tenant. Tenant shall pay any costs
incurred by Landlord in connection with a request for assignment or subletting,
including reasonable attorney fees. not to exceed $750.     II. DEFAULT,
REMEDIES     I I.I Default.   Any of the following shall constitute an “Event of
Default” by Tenant under this Lease (time of performance being of the essence of
this Lease):     I I. I.I Tenant’s failure to pay rent or any other charge under
this Lease when due or within any grace period provided in th is Lease.    
11.1.2 Tenant’s failure to comply with any other term or condition within twenty
(20) days following written notice from Landlord specifying the noncompliance.
If such noncompliance cannot be cured within the twenty (20)-day period, this
provision shall be satisfied if Tenant commences correction within such period
and thereafter proceeds in good faith and with reasonable diligence to complete
correction as soon as possible but not later than ninety (90) days after the
date of Landlord’s notice.     I I. 1. 3 Failure of Tenant to execute the
documents described in Section 16.1 or 16.3 within the time required under such
Sections; failure of Tenant to provide or maintain the insurance required of
Tenant pursuant hereto; or failure of Tenant to comply with any Laws as required
pursuant hereto within twenty-four (24) hours after written demand by Landlord,
if non-compliance possess a substantial risk of damage to the Premises or
Building or bodily injury.     11.1.4 Tenant’s insolvency, business failure, or
assignment for the benefit of its creditors. Tenant’s commencement of
proceedings under any provision of any bankruptcy or insolvency law or failure
to obtain dismissal of any petition filed against it under such laws within the
time required to answer; or the appointment of a receiver for all or any portion
of Tenant’s properties or financial records.

 

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11.1.5 Assignment or subletting by Tenant in violation of Section I 0.     I 1.2
Remedies for Default       Upon occurrence of an Event of Default as described
in Section I I.I, Landlord shall have the right to the following remedies, which
are intended to be cumulative and in addition to any other remedies provided
under applicable law or under this Lease:     11.2.1 Landlord may at its option
terminate this Lease, without prejudice to its right to damages for Tenant’s
breach. With or without termination, Landlord may retake possession of the
Premises (using self-help or otherwise) and may use or relet the Premises
without accepting a surrender or waiving the right to damages. Following such
retaking of possession, efforts by Landlord to relet the Premises shall be
sufficient if Landlord follows its usual procedures for finding tenants for the
space at rates not less than the current rates for other comparable space in the
Building. If Landlord has other comparable vacant space in the Building,
prospective tenants may be placed in such other space without prejudice to
Landlord’s claim to damages or loss of rentals from Tenant.     11.2.2 Landlord
may recover all damages caused by Tenant’s default which shall include an amount
equal to rentals lost because of the default, amortized Lease commissions paid
for this Lease, and the amortized cost of any tenant improvements installed by
or paid for by Landlord. Landlord may sue periodically to recover damages as
they occur throughout the Lease term, and no action for accrued damages shall
bar a later action for damages subsequently accruing. Landlord may elect in any
one action to recover accrued damages plus damages attributable to the remaining
term of the Lease. Such damages shall be measured by the difference between the
rent under this Lease and the reasonable rental value of the Premises for the
remainder of the tem1, discounted to the time of judgment at the prevailing
interest rate on judgments.     I 1.3 Landlord’s Right To Cure Default.      
Landlord may, but shall not be obligated to, make any payment or perform any
obligation which Tenant has failed to perform under this Lease. All of
Landlord’s expenditures shall be reimbursed by Tenant upon demand with interest
from the date of expenditure at the rate of nine percent (9%) per annum.
Landlord’s right to correct Tenant’s failure to perform is for the sole
protection of Landlord and the existence of this right shall not release Tenant
from the obligation to perform all of the covenants herein required to be
performed by Tenant, or deprive Landlord of any other right which Landlord may
have by reason of default of this Lease by Tenant, whether or not Landlord
exercises its right under this Section.     12. SURRENDER, HOLDOVER       On
expiration or early termination of this Lease, Tenant shall deliver all keys to
Landlord and surrender the Premises vacuumed, swept, and free of debris and in
the same condition as at the commencement of the term subject only to reasonable
wear from ordinary use. Tenant shall remove all of its furnishings and trade
fixtures that remain its property and any alterations, cables, or conduits if
required by Section 6.2, and shall repair all damage resulting from such
removal. Failure to remove shall be an abandonment of the property, and,
following ten (10) days’ written notice, Landlord may remove or dispose of it in
any manner without liability, and recover the cost of removal and other damages
from Tenant. If Tenant fails to vacate the Premises when required, including
failure to remove all its personal property, Landlord may elect either: (i) to
treat Tenant as a tenant from month to month, subject to the provisions of this
Lease except that rent shall be one-and-one-quarter times the total rent being
charged when the Lease term expired, and any option or other rights regarding
extension of the term or expansion of the Premises shall no longer apply; and/or
(ii) to eject Tenant from the Premises (using self-help or otherwise) and
recover all damages (including, without limitation, consequential damages)
caused by wrongful holdover.

 

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13. RULES AND REGULATIONS       Tenant shall abide by and adhere to the
operating rules and regulations set forth in the attached Exhibit “C” and any
other rules and regulations as Landlord may from time to time reasonably
institute. Any default or breach of such rules and regulations shall be deemed a
default under this Lease and Landlord shall be entitled to exercise all rights
and remedies available to Landlord as set forth in this Lease. Landlord shall
not be liable to Tenant for the failure of any other tenant or any of its
assignees, subtenants or their respective agents, employees, representatives,
invitees or licensees to conform to such rules and regulations. Landlord shall
use commercially reasonable efforts to enforce all rules and regulations fairly.
    14. ACCESS     14.1 Access.       Tenant’s officers and employees or those
having business with Tenant may be required to identify themselves or show
passes in order to gain access to the Building. Landlord shall have no liability
for permitting or refusing to permit access by anyone. IN ALL EVENTS, LANDLORD
SHALL NOT BE LIABLE TO TENANT, AND TENANT HEREBY WAIVES ANY CLAIM AGAINST
LANDLORD, FOR (I) ANY UNAUTHORIZED OR CRIMINAL ENTRY OF THIRD PARTIES INTO THE
PRESMISES OR THE BUILDING, (II) ANY DAMAGE TO PERSONS, OR (Ill) ANY LOSS OF
PROPERTY IN OR ABOUT THE PREMISES OR THE BUILDING, BY OR FROM ANY UNATHORIZED OR
CRIMINAL ACTS OF THIRD PARTIES, REGARDLESS OF ANY ACTION, INACTION, FAILUIRE,
BREAKDOWN, MALFUNCTION AND/OR INSUFFICIENCY OF THE ACCESS       CONTROL PROVIDED
BY LANDLORD, IF ANY. Landlord may regulate access to any Building elevators and
may (but shall have no obligation) adopt security measures regarding the
Building as Landlord, in its sole and absolute discretion, deems appropriate. In
addition, Landlord may, in Landlord’s sole and absolute discretion, modify the
type or amount of security measures provided at any time without notice.
Landlord shall have the right to enter upon the Premises at any time by passkey
or otherwise to determine Tenant’s compliance with this Lease, to perform
necessary services, maintenance and repairs or alterations to the Building or
the Premises, to post notices of non-responsibility, or to show the Premises to
any prospective tenant or purchasers. Except in case of emergency, such entry
shall be at such times and in such manner as to minimize interference with the
reasonable business use of the Premises by Tenant. Tenant acknowledges that it
has neither received nor relied upon any representation or warranty made by or
on behalf of Landlord with respect to the safety or security of the Premises or
the Building or any part thereof or the extent or effectiveness of any security
measures or procedures now or hereafter provided by Landlord, and further
acknowledges that Tenant has made its own independent determination with respect
to all such matters.     14.2 Furniture and Bulky Articles.       Tenant shall
move furniture and bulky articles in and out of the Building or make independent
use of any elevators only at times approved by Landlord following at least 24
hours’ written notice to Landlord.     15. Notices.       A II notices between
the parties relating to this Lease must be in writing and sent to the parties at
the address set forth in the Basic Lease Terms, Any such notices must be sent
either by (a) overnight delivery using a nationally-recognized courier (e.g.,
Fed Ex, Airborne Express or UPS) and delivery charges prepaid, in which case
notice shall be deemed given one (I) business day after deposit with such
courier, (b) facsimile, email, PDF file or other generally-recognized electronic
means, in which case notice shall be deemed given upon transmission provided a
copy of such electronic transmission is sent within one (I) day after electronic
transmission by overnight delivery using a nationally-recognized courier and
delivery charges prepaid, Qr (c) personal delivery or mailed by U.S. certified
mail and postage or equivalent charges prepaid, in which case notice shall be
effective upon receipt provided that if any party refuses delivery, such notices
shall be deemed given when mailed or, if made by personal delivery, upon
delivery. Any notice sent by facsimile, email, PDF file or other electronic
transmission after 5:00 p.m. local time where the Premises are located shall be
deemed given the next business day. A party’s address may be changed by written
notice to the other party; provided, however, that no notice of a change of
address shall be effective until actual receipt of such notice. Notice to Tenant
may always be delivered to the Premises. Rent shall be payable to Landlord at
the address set forth in the Basic Lease Terms for rent payments, but shall be
considered paid only when received by Landlord.

 

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16. SUBORDINATION AND ATTORNMENT, TRANSFER OF BUILDING, ESTOPPELS     16.I
Subordination and Attornment.       This Lease shall be subject to and
subordinate to any mortgages, deeds of trust, ground lease, master lease, and
land sale contracts (hereafter collectively referred to as “encumbrances”) and
to any covenants, conditions and restrictions (“CC&Rs”), in each such case
applicable to encumbrances and CC&Rs now existing against the Building. At
Landlord’s option this Lease shall be subject and subordinate to any future
encumbrance, ground lease, master lease or CC&Rs hereafter placed against the
Building (including the underlying land) or any modifications of existing
encumbrances, and Tenant shall execute such documents as may reasonably be
requested by Landlord or the holder of the encumbrance to evidence this
subordination within ten (10) days of request therefor. If any encumbrance is
foreclosed, then if the purchaser at foreclosure sale gives to Tenant a written
agreement to recognize Tenant’s Lease, Tenant shall attorn to such purchaser and
this Lease shall continue.     16.2 Transfer of Building.       If the Building
is sold or otherwise transferred by Landlord or any successor, Tenant shall
attorn to the purchaser or transferee and recognize it as the landlord under
this Lease, and, provided the purchaser or transferee assumes all obligations
under this Lease thereafter accruing, the transferor shall have no further
liability hereunder for obligations accruing after the date of transfer.    
16.3 Estoppels.       Either party will within ten (I 0) days after notice fi-om
the other execute, acknowledge, and deliver to the other party a certificate
certifying whether or not this Lease has been modified and is in full force and
effect; whether there are any modifications or alleged breaches by the other
party; the dates to which rent has been paid in advance, and the amount of any
Security Deposit or prepaid rent; and any other facts that may reasonably be
requested. If requested by the holder of any encumbrance, or any underlying
lessor, Tenant will agree to give such holder or lessor notice of and an
opportunity to cure any default by Landlord under this Lease.     17. ATTORNEY
FEES       In any litigation arising out of this Lease, including any bankruptcy
proceeding, the prevailing party shall be entitled to recover attorney fees at
trial and on any appeal or petition for review. If Landlord incurs attorney fees
because of a default by Tenant, Tenant shall pay all such fees whether or not
litigation is filed. If Landlord employs a collection agency to recover
delinquent charges, Tenant agrees to pay all collection agency and other fees
charged to Landlord in addition to rent, late charges, interest, and other sums
payable under this Lease.     18. QUIET ENJOYMENT       Landlord warrants that
as long as Tenant complies with all terms of this Lease, it shall be entitled to
possession of the Premises free from any eviction or disturbance by Landlord or
parties claiming through Landlord. This covenant of quiet enjoyment shall in no
event entitle Tenant to any claims against Landlord arising out of any
construction noise that may fi-om time to time occur during the term of this
Lease, including, without limitation, construction noise for the performance of
tenant improvements.

 

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19. LIMITATION ON LIABILITY       Notwithstanding any provision in this Lease to
the contrary, neither Landlord nor its managing agent or employees shall have
any liability to Tenant for loss or damages to Tenant’s property fi-om any cause
(unless the result of Landlord’s gross negligence or willful misconduct), nor
arising out of the acts of other tenants of the Building or third parties, nor
any liability for consequential damages, nor liability for any reason which
exceeds the value of Landlord’s interest in the Building.     20. ADDITIONAL
RENT     20.I Additional Rent: Operating Expenses and Real Estate Taxes.      
Tenant shall pay as additional rent Tenant’s Proportionate Share of operating
expenses and real property taxes for the Building. Effective January I of each
year Landlord shall estimate the operating expenses and real property taxes.
Monthly rent for that year shall be increased by one-twelfth of Tenant’s
Proportionate Share of operating expenses and real property taxes, provided that
Landlord may revise its estimate during any year with reasonable cause and the
additional estimate shall be payable as equal additions to rent for the
remainder of the calendar year. Following the end of each calendar year,
Landlord shall compute Tenant’s actual Proportionate Share of operating expenses
and real property taxes and bill Tenant for any deficiency or credit Tenant with
any excess collected. Tenant shall pay any such deficiency within thirty (30)
days after Landlord’s billing, whether or not this Lease shall have expired or
terminated at the time of such billing.     20.1.1 As used herein “real property
taxes” as used herein shall mean all taxes and assessments of any public
authority against the Building and the land on which it is located, the cost of
contesting any tax and any form of fee or charge imposed on Landlord as a direct
consequence of owning or leasing the Premises, including but not limited to,
rent taxes, gross receipt taxes, leasing taxes, or any fee or charge wholly or
partially in lieu of or in substitution for ad valorerm real property taxes or
assessments, whether now existing or hereafter enacted. If a separate assessment
or identifiable tax increase arises because of improvements to the Premises,
then Tenant shall pay one hundred percent ( I 00%) of such increase.       As
used herein, ““operating expenses” shall mean all costs of operating,
maintaining, managing, replacing and repairing the Building as determined by
standard real estate accounting practice, including, but not limited to: all
water and sewer charges not separately metered and paid by tenants; the cost of
natural gas and electricity provided to the Building not separately metered and
paid by tenants; janitorial and cleaning supplies and services for the common
areas of the Building; administration costs, management fees not to exceeds five
percent of gross revenues for the Building; superintendent tees; security
services, if any; insurance premiums; licenses, permits for the operation and
maintenance of the Building and all of its component elements and mechanical
systems; ordinary and emergency repairs and maintenance, and the annual
amortized capital improvement cost (amortized over the useful life of the
improvement for any capital improvements to the Building. Without limiting the
generality of the foregoing, if Landlord makes an expenditure for a capital
improvement to the Building (or any portion thereof) by installing energy-,
water-, or labor-saving devices to reduce operating expenses or to comply with
any law, rule, regulation or other legal requirement or Green Agency Rating
pertaining to the Building, and if, under generally accepted accounting
principles, such expenditure is not a current expense, then the cost thereof
shall be amortized over a period equal to the useful life of such improvement,
determined in accordance with generally accepted accounting principles, and the
amortized costs allocated to each calendar year during the term, together with
an imputed interest amount calculated on the unamortized portion thereof using
an interest rate of eight percent (8%) per annum, shall be treated as an
operating expense (a “Permitted Capital Expenditure”). In the event the average
occupancy level of the Building for any calendar year was or is not one hundred
percent (100%) of full occupancy, then the estimated and actual operating
expenses for such year shall be proportionately adjusted by Landlord to reflect
those costs which have occurred had the Building been one hundred percent (100%)
occupied during such year. Operating Expenses do not include the cost of tenant
improvements. Operating expenses, excluding real estate taxes and insurance
premiums, shall not increase by more than five percent (5%) annually. In no
event shall Tenant be required to pay Controllable Expenses in excess of the
Controllable Expense Cap. As used herein “Controllable Expenses” are those
Operating Expenses for which Landlord has exclusive control over the amount of
increase over such Operating

 

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  Expenses, and in no event shall Controllable Expenses include insurance
premiums and deductibles, utility charges, Real Property Taxes, or Non-Recurring
Costs (as defined below). As used herein, the Controllable Expense Cap shall be
an amount equal to the amount of the Controllable Expenses for the Building
during the calendar year 2017, which cap amount shall be annually increased by
five percent (5%) on each January 1st thereafter. “Non-Recurring Costs” shall
mean Operating Expenses that are not customarily incurred and budgeted monthly
for by owners of comparable projects in the Portland, Oregon area, or are
materially in excess of such customary and budgeted monthly costs, such as costs
incurred due to unusual weather (i.e. snow and ice removal, wind damage,
excessive ground water), labor trouble, shortages in supplies, utility shortages
or black-outs and costs that may arise in connection with a force majeure event
or costs that do not occur annually.     20.2 Disputes.       If Tenant disputes
any computation of operating expenses in Section 20, it shall give notice to
Landlord not later than sixty (60) days after the notice from Landlord
describing the computation in question. If Tenant fails to give such a notice,
the computation by Landlord shall be binding and conclusive between the parties
for the period in question. lf Tenant gives a timely notice, the dispute shall
be resolved by an independent CPA selected by Landlord and approved by Tenant in
Tenant’s reasonable discretion, whose decision shall be conclusive between the
parties. Each party shall pay one-half of the fee of such CPA for making such
determination except that if the adjustment in favor of Tenant does not exceed
five percent (5%) of the escalation amounts for the year in question, Tenant
shall pay (i) the entire cost of any such third-party determination; and if the
decision of the CPA in favor of the Tenant exceeds seven percent (7%) of the
amount for the year in question, Landlord shall pay the entire cost of the CPA.
If the adjustment in favor of Tenant is between five percent (5%) and seven
percent (7%), each party shall pay one-half of the fee of the CPA, The CPA shall
not be paid on a contingency-fee basis. Landlord shall promptly credit any sums
found owing to Tenant, and if the Lease has expired or been terminated, Landlord
shall promptly refund such sums to Tenant. Nothing herein shall reduce Tenant’s
obligations to make all payments as required by this Lease. In no event shall
Landlord have any liability to Tenant based on its calculation of additional
rent or rent adjustments except and only the obligation to cause any correction
to be made pursuant to this Section 20.2. Tenant shall maintain as strictly
confidential the existence and resolution of any dispute regarding rent charges
hereunder.     21. HAZARDOUS MATERIALS       Neither Tenant nor Tenant’s agents
or employees shall cause or permit any Hazardous Material, as hereinafter
defined, to be brought upon, stored, used, generated, released into the
environment, or disposed of on, in, under, or about the Premises, except
reasonable quantities of cleaning supplies and office supplies necessary to or
required as part of Tenant’s business that are generated, used, kept, stored, or
disposed of in a manner that complies with all laws regulating any such
Hazardous Materials and with good business practices. Tenant covenants to remove
from the Premises (or the Building, if applicable), upon the expiration or
sooner termination of this Lease and at Tenant’s sole cost and expense, any and
all Hazardous Materials brought upon, stored, used, generated, or released into
the environment by Tenant, Tenant’s principals, agents, employees, contractors,
or invitees during the tem1 of this Lease. To the fullest extent permitted by
law, Tenant hereby agrees to indemnify, defend, protect, and hold harmless
Landlord, Landlord’s managing agent and their respective agents and employees,
and their respective successors and assigns, from any and all claims, judgments,
damages, penalties, fines, costs, liabilities, and losses that arise during or
after the term directly or indirectly from the use, storage, disposal, release,
or presence of Hazardous Materials on, in, or about the Premises which occurs
during the term of this Lease and caused by Tenant, Tenant’s principals, agents,
employees, contractors, or invitees. Tenant shall promptly notify Landlord of
any release of Hazardous Materials in, on, or about the Premises that Tenant or
Tenant’s agents or employees become aware of during the term of this Lease,
whether caused by Tenant, Tenant’s agents or employees, or any other persons or
entities. As used herein, the term “Hazardous Materials” shall mean any
hazardous or toxic substance, material, or waste which is or becomes regulated
by any local or state governmental authority or the United States Government.
The term “Hazardous Materials” shall include, without limitation, any material
or substance that is (i) defined as a “hazardous waste,” “extremely hazardous
waste,” “restricted hazardous waste,” “‘hazardous substance,” “‘hazardous
material,” or “waste” under any federal, state, or local law, (ii) petroleum,
and (iii) asbestos. The provisions of this Section 21, including, without
limitation, the indemnification provisions set forth herein, shall survive any
termination of this Lease. Landlord represents and warrants to Tenant that to
the best of Landlord’s knowledge that there are no Hazardous Materials in, on,
under, or about the Premises in violation of applicable Jaws.

 

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22. MISCELLANEOUS     22.1 Complete Agreement; No Implied Covenants.       This
Lease constitutes the entire agreement of the parties and supersedes all prior
written and oral agreements and representations and there are no implied
covenants or other agreements between the parties except as expressly set forth
in this Lease. Neither Landlord nor Tenant is relying on any representations
other than those expressly set forth herein.     22.2 Governing Law.       This
Lease shall be construed under the laws of the State of Oregon.     22.3 Partial
Invalidity.       If any provision of this Lease or the application thereof to
any person or circumstance shall to any extent be held invalid, then the
remainder of this Lease or the application of such provision to persons or
circumstances other than those as to which it is held invalid shall not be
affected thereby, and each provision of this Lease shall be valid and enforced
to the fullest extent permitted by law.     22.4 Space Leased AS IS.      
Except for the Landlord’s work described in Exhibit “B,” and subject to the
Landlord’s warranties and representation and its general duties of maintenance
and repair, the Premises are leased AS IS in the condition now existing with no
alterations or other work to be performed by Landlord.     22.5 Captions;
Construction       The titles to the Sections of this Lease are descriptive only
and are not intended to change or influence the meaning of any Section or to be
part of this Lease. All references to “days” in this Lease shall be construed to
mean calendar days unless otherwise expressly provided and all references to
“business days” shall be construed to mean days on which charter banks are open
for business where the Premises are located.     22.6 Nonwaiver.       Failure
by either party to promptly enforce any regulation, remedy, or right of any kind
under this Lease shall not constitute a waiver of the same and such right or
remedy may be asserted at any time after the party becomes entitled to the
benefit thereof notwithstanding delay in enforcement.     22.7 Consent.      
Except where otherwise provided in this Lease, either party may withhold its
consent for any reason or for no reason whenever that party’s consent is
required under this Lease.     22.8 Force Majeure.       If performance by
Landlord of any portion of this Lease is made impossible by any prevention,
delay, or stoppage caused by governmental approvals, war, acts of terrorism,
strikes, lockouts, labor disputes, acts of God, inability to obtain services,
labor, or materials or reasonable substitutes for those items, governmental
actions, civil commotions, fire or other casualty, or other causes beyond the
reasonable control of Landlord, performance by Landlord for a period equal to
the period of that prevention, delay, or stoppage is excused.

 

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22.9 Commissions.       Each party represents that it has not had dealings with
any real estate broker, finder, or other person with respect to this Lease in
any manner, except for the broker(s) identified in the Basic Lease Terms. Tenant
hereby agrees to indemnify, defend and hold Landlord harmless for, from and
against all claims for any brokerage commissions, finder’s fees or similar
payments by any person other than Tenant’s broker identified herein arising from
Tenant’s acts and all costs, expenses and liabilities incurred in connection
with such claims, including reasonable attorneys’ fees and costs. Landlord
hereby agrees to indemnify, defend and hold Tenant harmless for, from and
against all claims for any brokerage commissions, finder’s fees or similar
payments by any person arising from Landlord’s acts and all costs, expenses and
liabilities incurred in connection with such claims, including reasonable
attorneys’ fees and costs. Landlord shall pay a leasing commission in accordance
with a separate agreement between Landlord and Landlord’s broker and Tenant’s
broker.     22.10 Successors.       Subject to Section I 0, this Lease shall
bind and inure to the benefit of the parties, their respective heirs,
successors, and permitted assigns.     22.11 Financial Reports.       Within ten
(10) days after Landlord’s request, Tenant will furnish Tenant’s most recent
financial statements to Landlord prepared in accordance with generally accepted
accounting principles, certified by Tenant or an independent auditor to be true
and correct. Tenant will discuss its financial statements with Landlord and will
give Landlord access to Tenant’s books and records in order to enable Landlord
to verify the financial statements. Landlord will not disclose any aspect of
Tenant’s financial statements except (I) to Landlord’s lenders or prospective
purchasers of the Building who have executed a sales contract with Landlord, (2)
in litigation between Landlord and Tenant, or (3) if required by court order.
Notwithstanding the foregoing, so long as Tenant’s financial statements are
publicly available online, Tenant shall not be required to provide financial
statements directly to Landlord.     22.12 Waiver of Jury Trial.       To the
maximum extent permitted by law, Landlord and Tenant each waive right to trial
by jury in any litigation arising out of or with respect to this Lease.    
22.13 Executive Order 13224.       Tenant hereby certifies all persons or
entities holding any legal or beneficial interest whatsoever in Tenant are not
included in, owned by, controlled by, acting for or on behalf of, providing
assistance, support, sponsorship, or services of any kind to, or otherwise
associated with any of the persons or entities referred to or described in
Executive Order 13224 - Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism, as amended.    
22.14 Intentionally Deleted.     22.15 Confidentiality.       Landlord and
Tenant shall keep the content and all copies of this Lease, all related
documents and amendments, and all proposals, materials, information (including
but not limited to rental terms, rent abatement, construction allowance, and any
other concessions or terms of the business deal), and matters relating hereto
strictly confidential and shall not disclose, divulge, disseminate or distribute
any of the same, or permit the same to occur, except to the extent reasonably
required for proper business purposes by Landlord’s or Tenant’s employees,
attorneys, agents, insurers, auditors, lenders and permitted successors and
assigns (and Landlord shall obligate any such parties to whom disclosure is
permitted to honor the confidentiality provisions hereof) and except as may be
required by law, securities regulations, or court proceedings. This
confidentiality provision shall be binding upon the parties hereto and their
respective successor and assigns and shall survive the expiration of this Lease.
Tenant and its representatives shall be prohibited from issuing any press
release(s) or communicating with the media regarding the proposed or agreed to
transaction, in which Tenant has not received prior written authorization from
Landlord.

 

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22.16 Building Name and Signage.       Landlord shall have the right at any time
to install, affix and maintain any and all signs on the interior and exterior of
the Building as Landlord may, in its sole discretion, desire. Tenant shall not
use the name of the Building or use pictures or illustrations of the Building in
advertising or other publicity or for any purpose other than as the address of
the business to be conducted by Tenant in the Premises, without the prior
written consent of Landlord. Additionally, Landlord shall have the exclusive
right at all times during the Lease term to change, modify, add to or otherwise
alter the name, number or designation of the Building, and Landlord shall not be
liable for claims or damages of any kind which may be attributed thereto or
result therefrom.     22.17 Mold.       Landlord represents and warrants that to
the best of its knowledge the Premises is free from mold. Tenant shall not allow
or permit any conduct or omission at the Premises that will promote or allow the
production or growth of mold, spores, fungus. or any other similar organism, and
shall indemnify and hold Landlord harmless from any claim, demand. cost, and
expense (including attorney fees) arising from or caused by Tenant’s failure to
strictly comply with its obligations under this provision. Similarly, Landlord
will maintain and repair the Building as provided in Section 6.1.1 of the Lease
and in a manner that strives to prevent the production or growth of mold,
spores, fungus, or any other similar organism.     22. I 8 Survival of
Obligations.       The provisions of this Lease with respect to any indemnity
obligation or any obligation of either party to pay any sum in order to perform
any act required by this Lease after the expiration or other termination of this
Lease shall survive the expiration or other termination of this Lease.     22.19
Amendments.       Except as herein otherwise provided, no subsequent alteration,
amendment, change or addition to this Lease shall be binding upon Landlord or
Tenant unless reduced to writing and executed by both parties.     22.20
Execution; Counterpart; Signature Transmitted.       This Lease may be executed
simultaneously in one or more counterparts, each of which will be considered an
original, but all of which together will constitute one and the same instrument.
Signatures transmitted by facsimile, PDF file or other form of electronic
transmission and received by the other party shall be sufficient evidence of the
execution hereof by the applicable signatory and such signatures shall be
treated as originals. At the request of a party, the other party will confirm an
electronically transmitted signature page by delivering an original signature
page to the requesting party.     22.21 Intentionally Deleted.     22.22
Exhibit.       Exhibits “A” (Floor Plan Showing Premises), “B” (Landlord’s
Work), “C” (Rules and Regulations), “O” (First Offer Space), and “E” (Lease
Confirmation), “F’’ (Parking Use Agreement) are attached hereto and incorporated
as a part of this Lease. Exhibit F, Parking Agreement is attached hereto.

 

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IN WITNESS WHEREOF, the duly authorized representatives of the parties have
executed this Lease as of the effective date.

 

  Eastbank Commerce Center LLC         By:                    Its:          
Eastside Distilling  Inc         By:     Its:  

 

 

   

 

EXHIBIT A

Floor Plan Showing Premises

 

 

   

 

EXHIBIT “B”

Landlord’s Work

 

Except as expressly provided below, Tenant is leasing the Premises in its “as
is” condition and Landlord shall have no obligation to make any improvements to
the Premises or provide Tenant with any improvement allowance. Landlord shall,
at Landlord’s sole cost and expense and using such Building standard materials
and finishes as Landlord determines appropriate in its reasonable discretion,
and as “Landlord’s Work” perform the following:

 

  (1) Construct a demising wall between the columns on the east end of the
Premises by the kitchenette, as shown on Exhibit A; and         (2) Patch and
paint the walls of the Premises in Building-standard white.

 

 

 

   

 

EXHIBIT “C”

Rules & Regulations

 

Tenant covenants and agrees to comply with the following rules and regulations
as they may be modified or amended during the term:

 

1. Signs. Unless otherwise permitted in the Lease, no sign, advertisement,
display, notice or other lettering shall be exhibited, inscribed, painted or
affixed on any part of the outside of the Premises or inside, if visible from
the outside, or outside the building of which they form a part, and in no event
shall Tenant place any signs, displays or other advertising material on the
glass of the leaseline of the Premises. All signs, displays, advertisements, and
notices of Tenant shall be professional and maintained by Tenant in good and
attractive condition at Tenant’s expense and risk. Tenant shall not use
handbills for advertising at the Project. Any permanent signs must be approved
by Landlord.

 

2. Directory. The bulletin board or directory of the Building will be provided
exclusively for the display of the name and location of tenants, and Landlord
reserves the right to exclude any other names therefrom.

 

3. Access. The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by any of the tenants or used by them for any
purpose other than for ingress to and egress from their respective Premises. The
halls, passages, entrances, exits, elevators, stairways, balconies and roof are
not for the use of the general public and Landlord shall in all cases retain the
right to control thereof and prevent access thereto by all persons whose
presence in the judgment of Landlord shall be prejudicial to the safety,
character, reputation and interests of the Building or its tenants; provided,
however, that nothing herein contained shall be construed to prevent access by
persons with whom the Tenant normally deals in the ordinary course of Tenant’s
business unless such persons are engaged in illegal activities. No Tenant and no
employees or invitees of any Tenant shall go upon the roof of the Building

 

4. Locks. Tenant shall not alter any lock or install any new additional locks or
any bolts on any door of the Premises without the written consent of Landlord.

 

5. Restrooms. The toilet rooms, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were constructed and
no foreign substance of any kind whatsoever shall be thrown therein. The expense
of any breakage, stoppage or damage resulting from a violation of this rule
shall be borne by the Tenant who, or whose employees, sublessees, assignees,
agents, licensees, or invitees, shall have caused it.

 

6. No Defacing Premises. Tenant shall not overload the floor of the Premises,
shall not mark on or drive nails, screw or drill into the partitions, woodwork
or plaster (except as may be incidental to the hanging of wall decorations), and
shall not in any way deface the Premises or any part thereof.

 

7. Safes and Heavy Equipment. No furniture, freight or equipment of any kind
shall be brought into the Building and/or Common Area Facilities without the
consent of Landlord and all moving of the same into or out of the Building
and/or Common Area Facilities shall be done at such time and in such manner as
Landlord shall designate. Landlord shall have the right to prescribe the times
and manner of moving all furniture, freight and heavy equipment in and out of
the Building and/or Common Area Facilities, including, but not limited to,
requirements for the protection of floor coverings, walls and other surfaces
during such moves. Landlord will not be responsible for loss of or damage to any
such safe or property from any cause and all damage done to the Building and/or
Common Area Facilities by moving or maintaining any such safe or other property
shall be repaired at the expense of Tenant. There shall not be used in any
Premises, or in the public halls of the Building, either by any tenant or
others, any hand trucks except those equipped with rubber tires and side guards.
Elevators must be padded while moving freight via the elevators. All such heavy
equipment shall be subject to the requirements of Rule 26 below.

 

8. Janitorial Services. Tenant shall not cause any unnecessary labor by reason
of Tenant’s carelessness or indifference in the preservation of good order and
cleanliness. Janitorial service for Common Area Facilities shall include
ordinary dusting and cleaning by the janitor assigned to such work and shall not
include cleaning of carpets or rugs, except normal vacuuming, or moving of
furniture and other special services. The work of cleaning personnel shall not
be hindered by Tenant after 5.30 p.m. Tenant is responsible for cleaning his or
her own Premises. Tenant shall be responsible for transporting waste and rubbish
from the Premises to the Building trash room.

 

 

   

 

9. Nuisance. Tenant shall not use, keep or permit to be used or kept any noxious
gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Building by reason of noise, odors and/or vibrations, or
interfere in any way with other tenants or those having business in the
Building. No animals (other than those aiding the disabled such as “seeing eye”
dogs) or birds shall be brought in or kept in or about the Premises or the
Building and/or Common Area Facilities. No Tenant shall make or permit to be
made any disturbing noises or disturb or interfere with occupants of the
Building, or with those having business with such occupants by the use of any
musical instrument, radio, phonograph, unusual noise, or in any other way. No
Tenant shall throw anything out of doors or down the passageways.

 

10. Permitted Use. No Tenant shall occupy or permit any portion of its Premises
to be occupied for the manufacture or sale of liquor, narcotics, or tobacco in
any form, or as a medical office, or as a barber shop or manicure shop except
with prior written consent of Landlord. No Tenant shall advertise for laborers
giving an address at the Premises. The Premises shall not be used for lodging or
sleeping or for illegal purposes.

 

11. Hazardous Materials. Other than ordinary office supplies and materials used
and stored in accordance with applicable laws, ordinances, governmental rules
and regulations, Tenant shall not use or keep in the Premises or the Building
and/or Common Area Facilities any kerosene, gasoline or inflammable or
combustible fluid or material or any Hazardous Materials as defined in Section
1.2.4 of the Lease (including but not limited to asbestos or lead based paints)
or use any method of heating or air conditioning other than that supplied by
Landlord.

 

12. Telephones. Landlord will direct electricians as to where and how telephone
and telegraph wires are to be introduced. No boring or cutting for or stringing
of wires will be allowed without the consent of Landlord. The location of
telephones, call boxes and other office equipment affixed to the Premises shall
be subject to the approval of Landlord.

 

13. Keys. A reasonable number of keys (including electronic FOBs and cards) to
the locks on the entry doors to the Building and to the Premises shall be
furnished by Landlord to Tenant at Tenant’s cost, and Tenant shall not make any
duplicate keys. All keys to the Building, Premises, rooms and toilet rooms shall
be obtained from Landlord’s office, and Tenant shall not from any other source
duplicate or obtain keys or have keys made. The Tenant, upon termination of the
tenancy, shall deliver to Landlord the keys to the Building, Premises, rooms and
toilet rooms which shall have been furnished and shall pay Landlord the cost of
replacing any lost key or of changing the lock or locks opened by such lost key
if Landlord deems it necessary to make such change. If Landlord determines that
unusual burdens are created by Tenant’s access requirements or practices, Tenant
shall (a) bear the cost of such unusual burdens, as determined by Landlord, and
(b) if requested by Landlord, make adjustments so that such burdens are reduced
to normal levels.

 

14. Floor Covering. No Tenant shall lay linoleum, tile, carpet or other similar
floor coverings so that the same shall be affixed to the floor or the Premises
in any manner except as approved by Landlord. The expense of repairing any
damage resulting from a violation of this rule or removal of any floor covering
shall be borne by the Tenant by whom, or by whose contractors, agents,
sublessees, licensees, employees or invitees, the floor covering shall have been
laid.

 

15. Premises Closure. Tenant shall see that the doors of the Premises are closed
and securely locked before leaving the Building and that all water faucets,
water apparatus and electricity are entirely shut off before Tenant or Tenant’s
employees leave the Building. Tenant shall be responsible for any damage to the
Building and/or Common Area Facilities or other tenants caused by a failure to
comply with this rule.

 

16. Disorderly Conduct Landlord reserves the right to exclude or expel from the
Building and/or Common Area Facilities any person who, in the judgment of
Landlord, is intoxicated or under the influence of liquor or drugs, or who shall
in any manner do any act in violation of any of the rules and regulations of the
Building.

 

17. Tenant Requests. Any requests of Tenant will be considered only upon
application at the office of Landlord. Employees of Landlord shall not be
requested to perform any work or do anything outside of their regular duties
unless under special instructions from Landlord.

 

18. Vending Machines. No vending machine shall be installed, maintained or
operated upon the Premises without the written consent of Landlord, which
consent shall not be unreasonably withheld.

 

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19. Bicycles. Bicycles and other vehicles are not permitted inside the Building
or its elevators, except in areas designated by Landlord.

 

20. Building Name and Address. Landlord shall have the right, exercisable upon
thirty (30) days prior written notice to Tenant, to change the name and/or the
street address of the Building of which the Premises is a part.

 

21. Fire Regulations. Tenant agrees that it shall comply with all fire
regulations that may be issued from time to time by Landlord and Tenant also
shall provide Landlord with the names of a designated responsible employee to
represent Tenant in all matters pertaining to fire regulations.

 

22. Tenant Advertising. Without the written consent of Landlord, Tenant shall
not use the name of the Building and/or Common Area Facilities in connection
with or in promotion or advertising the business of Tenant except as Tenant’s
address.

 

23. Emergency Information. Tenant must provide Landlord with names and telephone
numbers to contact in case of emergency. Tenant must fill out a tenant emergency
information sheet and return it to Landlord’s office within three (3) days of
occupancy.

 

24. Installation of Burglar and Informational Services. If Tenant requires
telegraphic, telephonic, burglar alarm or similar services, it shall first
obtain, and comply with, Landlord’s instructions in their installation.

 

25. Deliveries. The Building freight elevator(s) shall be available for use by
all tenants in the Building, subject to such reasonable scheduling as Landlord,
in its discretion, shall deem appropriate. No equipment, materials, furniture,
packages, supplies, merchandise or other property will be received in the
Building or carried in the elevators except between such hours and in such
elevators as may be designated by Landlord. Tenant’s initial move in and
subsequent deliveries of bulky items, such as furniture. safes and similar items
shall, unless otherwise agreed in writing by Landlord, be made during the hours
of 6:00 p.m. to 6:00 a.m. or on Saturday or Sunday. Deliveries shall be limited
as set forth in the Lease. No deliveries shall be made which impede or interfere
with other tenants or the operation of the Building.

 

26. Floor Loads. Tenant shall not place a load upon any floor of the Premises
which exceeds the load per square foot which such floor was designed to carry
and which is allowed by law. Landlord shall have the right to prescribe the
weight, size and position of all equipment materials, furniture or other
property brought into the Building and/or Common Area Facilities. Heavy objects
shall, if considered necessary by Landlord, stand on such platforms as
determined by Landlord to be necessary to properly distribute the weight, which
platforms shall be provided at Tenant’s expense. Business machines and
mechanical equipment belonging to Tenant, which cause noise or vibration that
may be transmitted to the structure of the Building and/or Common Area
Facilities or to any space therein to such a degree as to be objectionable to
Landlord or to any tenants in the Building, shall be placed and maintained by
Tenant, at Tenant’s expense, on vibration eliminators or other devices
sufficient to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building and/or Common Area Facilities must be
acceptable to Landlord. Landlord will not be responsible for loss of, or damage
to, any such equipment or other property from any cause, and all damage done to
the Building and/or Common Areas by maintaining or moving such equipment or
other property shall be repaired at the

expense of Tenant

 

27. Energy Conservation, Tenant shall not waste electricity, water or air
conditioning and agrees to cooperate fully with Landlord to assure the most
effective operation of the Building’s heating and air-conditioning and to comply
with any governmental energy-saving rules, laws or regulations of which Tenant
has actual notice, and shall refrain from attempting to adjust controls. Tenant
shall keep corridor doors closed.

 

28. No Antennas. Tenant shall not install any radio or television antenna,
loudspeaker or other devices on the roof or exterior walls of the Building
and/or Common Area Facilities without obtaining Landlord’s prior approval as set
forth in the Lease. Tenant shall not interfere with radio or television
broadcasting or reception from or in the Building or elsewhere.

 

29. No Soliciting. Canvassing, soliciting and distribution of handbills or any
other written material, and peddling in the Building and/or Common Area
Facilities are prohibited, and Tenant shall cooperate to prevent such
activities.

 

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30. Prohibited Uses. The Premises shall not be used for any improper. immoral or
objectionable purpose. No cooking shall be done or permitted on the Premises
without Landlord’s consent, except that use by Tenant of Underwriters Laboratory
approved equipment for brewing coffee, tea, hot chocolate and similar beverages
or use of microwave ovens, dishwashers and refrigerators for employee use shall
be permitted, provided that such equipment and use is in accordance with all
applicable federal, state, county and city laws, codes, ordinances, rules and
regulations.

 

31. Enforcement of Rules. Landlord may waive any one or more of these Rules and
Regulations for the benefit of Tenant or any other tenant but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in favor
of Tenant, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Building.

 

32. Lease. These Rules and Regulations are in addition to, and are made a part
of, the terms, covenants, agreements and conditions of Tenant’s Lease of its
Premises in the Building. In the event the Rules and Regulations conflict with
any term of the Lease, the terms of the Lease shall control.

 

33. Additional Rules. Landlord reserves the tight to make such other Rules and
Regulations or amendments hereto as, in its reasonable judgment, may from Time
to time be needed for safety and security, for care and cleanliness of the
Building and/or Common Area Facilities and for the preservation of good order
therein. Tenant agrees to abide by all such Rules and Regulations hereinabove
stated and any additional rules and regulations which are adopted.

 

34. Observance of Rules. Tenant shall be responsible for the observance of all
of the foregoing rules byTenant’s employees, agents, licensees, sublessees,
assigns, and invitees.

 

35. Loading Dock and Service Corridor. The loading dock and service corridor are
not for the use of the general public and Landlord shall in all cases retain the
right to control thereof and prevent access thereto by all persons whose
presence in the judgment of Landlord shall be prejudicial to the safety,
character, reputation and interests of the Building or its tenants, or invitees;
provided that Tenant or its building-approved contractors shall be able to use
the loading dock in its normal course of loading and unloading activities, for
articles to be delivered to or received from the Tenant’s Premises. Children
under the age of I 8 are specifically prohibited from being in the loading dock
and service corridor area at any time, unless prior written permission is
received from Landlord.

 

36. Smoking. As more fully set forth in the Lease, Landlord has designated the
entire Building as a smoke free zone, including 20 feet from any Building entry
or opening. The Tenant shall not permit smoking in the Premises.

 

37. Animals. Except as allowed herein, no animals, except those assisting
handicapped persons, shall be brought into the Buildings or kept in or about the
Premises. Dogs are permitted in the Common Area Facilities and the Premises only
if on a leash, currently licensed and fully inoculated as required by law. In no
event shall any dog be left unattended to in the Common Areas or in the
Premises. No dog may engage in any threatening behavior, either to persons or
other dogs. All damage caused by any dog will be the responsibility of the
Tenant. No dog will be allowed to deposit any waste in or around the Building.
Landlord reserves the right to exclude any dog from the Building.

 

JS. Window Coverings. Landlord shall have the right to designate and approve
standard window coverings for the Premises and to establish rules to assure that
the Building presents a uniform exterior appearance. Tenant shall ensure, to the
extent reasonably practicable, that window coverings are closed on windows in
the Premises while they are exposed to the direct rays of the sun.

 

39. Outside Contractors. All contractors, contractor’s representatives and
installation technicians performing work in the Building shall be subject to
Landlord’s prior approval and shall be required to comply with Landlord’s
standard rules, regulations, policies and procedures, which may be revised from
time to time.

 

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