exv10w20








    Exhibit 10.20



 




    LEASE



 


			
	
    DATED: 		
    November 17, 2005
	 
	
    BETWEEN: 		
    SCHNITZER INVESTMENT CORP., an Oregon corporation, SCHNITZER
    TRUST PARTNERS, an Oregon general partnership, MARK
    PROPERTIES LIMITED PARTNERSHIP, an Oregon limited partnership,
    CARDER-NIMBUS LLC, an Oregon limited liability company, DAVE
    Z’S LLC, an Oregon limited liability company, J. SCOTT
    ANDREWS LLC, an Oregon limited liability company, MJMARK LLC, an
    Oregon limited liability company, DJP NIMBUS, LLC, an Oregon
    limited liability company, KENDIG-NIMBUS, LLC, an Oregon limited
    liability company, SCHRECK-NIMBUS, LLC, an Oregon limited
    liability company as tenants in common (collectively,
    “LANDLORD”)
	 
	
    AND: 		
    ACRYMED INCORPORATED, an Oregon
    corporation          (“TENANT”)



 



    Tenant wishes to lease from Landlord, and Landlord wishes to
    lease to Tenant the premises described below on the following
    terms and conditions. In consideration of the mutual promises of
    the parties set forth below, and other valuable consideration,
    the receipt and sufficiency of which are hereby acknowledged,
    Landlord and Tenant agree as follows:



 



    1. Premises.  The Premises are
    approximately 16,238 rentable square feet (the
    “Premises”) in Building E (the “Building”).
    The Premises are outlined on the attached Exhibit A. The
    Building is a part of Nimbus Oaks Industrial Park (the
    “Project”) and is located at 9560 SW Nimbus Avenue in
    Beaverton, Oregon. The Premises shall be delivered to Tenant in
    their “As Is” condition subject to Landlord’s
    performance of Landlord’s Work (as defined in
    Exhibit B) and Landlord’s repair or replacement
    at Landlord’s sole cost and expense, to the extent, but
    only to the extent, required to be in good operating condition
    of the following Building systems serving the Premises:
    (i) HVAC, (ii) plumbing, (iii) electrical,
    (iv) sprinkler, (v) fire and life safety, and
    (vi) overhead doors. Landlord shall also repair or replace
    any broken windows in the Premises.



 



    2. Term.



 



    2.1 Lease Term.  The Lease term
    shall be for seventy-seven (77) months (the
    “Term”) commencing on the earlier to occur of:
    (i) delivery of possession of the Premises to Tenant with
    Landlord’s Work substantially complete, or (ii) the
    date of Tenant’s opening for business in the Premises (the
    “Commencement Date”) planned to be [February 17,
    2006] (the “Scheduled Commencement Date”), and
    continuing until the last day of the month that is seventy-seven
    (77) months after the Commencement Date (the
    “Expiration Date”). If possession of the Premises is
    not delivered to Tenant with Landlord’s Work substantially
    complete by the date that is thirty (30) days after the
    Scheduled Commencement Date (the “Outside Date”),
    Tenant shall be entitled to one (1) day’s free rent
    for each day of delay in the delivery of the Premises beyond the
    Outside Date; provided, however, the Outside Date shall be
    delayed one day for each delay due to a Tenant Delay (as defined
    below) or a Force Majeure Event (as defined below). Similarly,
    the Commencement Date shall be accelerated one (1) day for
    each day of delay in substantially completing Landlord’s
    Work due to a Tenant Delay. As used herein, the terms
    “substantial completion,” “Substantial
    Completion,” “Substantially Complete,”
    “Substantially complete” and words of similar import
    (whether or not spelled with initial capitals) as used in this
    Lease 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). Landlord shall use commercially
    reasonable efforts to expeditiously complete all punchlist work
    in a timely manner. As used herein, a “Tenant Delay”
    is a delay as a result of: (i) Tenant’s failure to
    approve any item or perform any other obligation within three
    (3) business days after receipt of notice from Landlord;
    (ii) Tenant’s request for changes in materials,
    finishes or installations other than those readily available;
    (iii) Tenant’s request to deviate from the Working
    Drawings (as defined on Exhibit B); or
    (iv) Tenant’s interference with Landlord’s
    construction of Landlord’s Work. As used herein, a
    “Force Majeure Event” is (a) the inability to
    fulfill, or delay in fulfilling, any obligations under this
    Lease by reason of strike, lockout, other labor trouble, dispute
    or




    

    1








 






    disturbance; (b) governmental regulation, moratorium,
    action, preemption or priorities or other controls or the
    inability to obtain permits; (c) shortages of fuel,
    supplies or labor; (d) any failure or defect in the supply,
    quantity or character of electricity or water furnished to the
    Premises by reason of any requirement, act or omission of the
    public utility or others furnishing the Building with
    electricity or water; or (e) for any other reason, whether
    similar or dissimilar to the above, or for act of God beyond a
    party’s reasonable control.



 



    2.2 Early Access
    Rights.  Approximately four (4) weeks
    prior to the Commencement Date, Tenant shall have rent and
    expense free early access to the Premises for the sole purpose
    of installing Tenant’s equipment, cabling, fixtures and
    furnishing in the Premises. Landlord may terminate Tenant’s
    right to early access to the Premises at any time if Landlord
    determines that such early access to the Premises in any way
    interferes with Landlord’s performance of the construction
    and installation of Landlord’s Work.



 



    2.3 Option to Extend.  Landlord
    hereby grants Tenant the right to extend the term of the Lease
    for two (2) additional periods of three (3) years each
    (each such extended period is hereinafter referred to as an
    “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 the second Extended Term, 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 Term of this Lease for an Extended Term must
    be given to Landlord no less than nine (9) months prior to
    the date the Term of the Lease would otherwise expire. If Tenant
    is in default under this Lease that has not been cured during
    the applicable cure period, if any, Tenant shall have no right
    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
    exercises its Option to Extend the Term of this Lease as herein
    provided, Base Rent shall be adjusted as of the commencement
    date of such 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 such 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 rental value of
    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 (10) 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 appraisers shall meet promptly and attempt to
    set the Base Rent for the Extended Term. If the two 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
    appraisers are given to set Base Rent. If the two appraisers are
    unable to agree on the third appraiser within such ten
    (10) day period, either of the parties to this Lease, by
    giving five (5) days notice to the other party, may apply
    to the then presiding judge of the Washington County Circuit
    Court for the selection of a third appraiser meeting the
    qualifications stated in this Section. Each of the parties shall
    bear one-half (1/2) 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 three
    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




    

    2








 






    appointed appraiser and the neutral appraiser. The party
    appointed appraisers shall arrange for a simultaneous exchange
    of their proposed fair market Base Rent determinations. The role
    of the neutral appraiser shall be to select whichever of the two
    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 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.



 



    (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 Beaverton, 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.” However, nothing shall preclude Landlord
    and Tenant from agreeing to consider tenant improvements
    allowances, commissions to brokers or lease concessions outside
    of the appraisal process.



 



    (d)  The 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
    privilege granted herein shall not be assigned under any
    circumstances unless Landlord shall have consented to such
    assignment in writing, which consent may be withheld by Landlord
    in its sole discretion.



 



    2.4 Right to Expand.  If at any
    time during the Term of the Lease, the space in the Building
    contiguous with the Premises is available for lease or is about
    to become available for lease and so long as Tenant is not in
    default of this Lease and subject to the rights of other tenants
    of the Project under leases executed prior to the date 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 (which terms shall be determined by Landlord in
    its sole discretion). Tenant shall have five (5) business
    days to accept Landlord’s offer. Such right of first offer
    is a one (1) time only right. 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. The right of first offer contained herein shall not
    apply to any renewal or extension of an existing lease (even if
    such lease does not contain an automatic extension right) and
    shall be personal to AcryMed Corporation (or a successor
    corporation by merger or acquisition).



 



    3. Rent.  Rent shall be Base Rent
    plus Tenant’s share of Taxes and Operating Expenses and
    other charges (“Additional Rent”), as described in
    Sections 6 and 7. Rent for the sixth
    (6th)

    full month of the Lease term shall be paid on or before the
    execution date of this Lease. Tenant shall pay all Base Rent and
    Additional Rent in advance on the first day of each calendar
    month without notice, offset or deduction, unless otherwise
    expressly permitted under this Lease. Base Rent for any partial
    calendar month shall be prorated based on the number of days in
    such month. Base Rent shall be payable as provided below:



 


	 	 	 	 	 
	
 
	
 
	
    Rent per

    
	
 
	
 

	

    Months


	
 
	

    Square Foot


	
 
	

    Base Monthly Rent



	 

	

    1 - 5


	
 
	
    $0.92
	
 
	
    Abated

	

    6 - 17


	
 
	
    $0.92
	
 
	
    $14,938.96

	

    18 - 29


	
 
	
    $0.95
	
 
	
    $15426.10

	

    30 - 41


	
 
	
    $0.98
	
 
	
    $15913.24

	

    42 - 53


	
 
	
    $1.01
	
 
	
    $16390.64

	

    54 - 65


	
 
	
    $1.04
	
 
	
    $16887.52

	

    66 - 77


	
 
	
    $1.07
	
 
	
    $17,374.66










    

    3








 






    As reflected in Section 3, Tenant shall have no obligation
    to pay monthly Base Rent for the first five (5) full months
    of the Term, commencing with the Commencement Date (the
    “Free Rent Period”). If this Lease is terminated
    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 is solely for the benefit
    of AcryMed Corporation (or a successor corporation by merger or
    acquisition), and shall not be 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,
    which portion shall be determined by multiplying the total
    amount of rent which was abated under this Section 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. Notwithstanding the foregoing, during the Free Rent
    Period, Tenant shall pay Tenant’s proportionate share of
    Operating Expenses in monthly payments payable on the first day
    of each month commencing on the Commencement Date.



 



    4. Use of the Premises.



 



    4.1 Use.  Tenant shall use the
    Premises only for general office, manufacturing, laboratory and
    warehouse use, and for no other purpose. Landlord acknowledges
    that Tenant’s use of autoclaves, compressors, hoods and
    walk-in curing ovens are permitted uses. Except for
    Landlord’s Work to be performed by Landlord in accordance
    with Exhibit B, Tenant will accept the Premises AS IS, in
    the condition existing as of the Commencement Date, with no work
    to be performed by Landlord. Tenant shall not, without the prior
    written consent of Landlord, use any apparatus, machinery or
    device in or about the Premises which will cause any noise,
    vibration, fumes or electronic interference or which will
    overload the floors, structure, systems, or equipment of the
    Buildings. Tenant shall not at any time use or occupy, or suffer
    or permit anyone to use or occupy the Premises, or permit
    anything to be done in the Premises, in any manner which:
    (a) violates the Certificate of Occupancy for the Premises
    or for the Buildings; or (b) causes or is liable to cause
    injury to the Premises or the Buildings or any equipment,
    facilities or systems therein; or (c) constitutes a
    violation of any law, statute, ordinance, rule, regulation,
    order or other governmental requirement (collectively
    “Laws”) or the requirements of insurance bodies; or
    (d) impairs the character or appearance of the Buildings as
    first-class buildings; or (e) impairs the proper and
    economic maintenance, operation and repair of the Buildings
    and/or their
    equipment, facilities or systems; or (f) annoys or
    inconveniences other tenants or occupants of the Project; or
    (g) overloads the floor loads or electrical capacity of the
    Buildings. Tenant shall also comply with all Laws applicable to
    Tenant’s use and occupancy of the Premises. Tenant shall
    not allow any objectionable liquid, odor, or noise to be emitted
    from the Premises; store any gasoline or other highly
    combustible materials on the Premises which would violate any
    applicable fire code or regulation nor conduct any operation
    that will increase Landlord’s fire insurance rates for the
    Premises. Landlord shall have the right to reasonably approve
    the installation of any power-driven machinery by Tenant and may
    select a qualified electrician whose opinion will control
    regarding electrical circuits and a qualified engineer or
    architect whose opinion will control regarding floor loads.



 



    4.2 Signage.  Tenant may not place
    any sign which is visible from the exterior of the Building
    without first obtaining (a) Landlord’s written
    approval (which approval shall not be unreasonably withheld) of
    the size, color, design, wording, and location, and (b) all
    necessary governmental approvals. All signs installed by Tenant
    shall be paid for by Tenant and removed at Tenant’s expense
    upon termination of this Lease with the sign location restored
    to its state immediately prior to placement of the sign. If
    requested by Tenant, Tenant shall have the right, at
    Tenant’s sole cost and expense and subject to Tenant
    obtaining all applicable governmental approvals, to have
    building signage facing Nimbus Avenue
    and/or a
    sign panel on a monument sign for the Project in such location
    on such monument sign as Landlord determines appropriate.



 



    4.3 Alterations;
    Improvements.  Tenant shall make no
    alterations, additions, or improvements to the Premises or do
    anything to the Premises which is visible from the exterior of
    the Premises without Landlord’s prior written consent
    (which consent shall not be unreasonably withheld but which may
    be conditioned upon Tenant’s obligation to remove such
    alterations or not remove such alterations at the end of the
    Term of the Lease) and without a valid building permit issued by
    the appropriate governmental agency; provided, that Landlord may
    condition such consent in Landlord’s sole discretion to the
    extent any such alteration affects the structure of the Building
    or the




    

    4








 






    electrical, plumbing, mechanical or life safety systems. Upon
    termination of this Lease, any such general alterations,
    additions, or improvements (including without limitation all
    general electrical, lighting, plumbing, heating and
    air-conditioning equipment, doors, windows, partitions, drapery,
    carpeting, shelving, counters, and physically attached fixtures)
    shall at once become part of the realty and belong to Landlord
    unless the terms of the applicable consent provide otherwise, or
    unless Landlord requests that part or all of the additions,
    alterations, or improvements be removed. Tenant may remove all
    special improvements unique to Tenant’s business,
    including, but not limited to, special shelving, counters,
    benches, hoods, autoclaves, compressors and walk in ovens, even
    if bolted to the floor. In such case, Tenant shall at its sole
    cost and expense promptly remove the specified additions,
    alterations, or improvements and repair and restore the Premises
    to its original condition upon occupancy prior to termination of
    this Lease subject to normal wear and tear. Landlord shall have
    the right to first approve any contractors performing work in
    the Premises, which approval shall not be unreasonably withheld.
    Landlord shall reimburse Tenant such amount after receiving
    copies of paid invoices for such plans and documents. Landlord
    shall have the right to first approve all plans for improvements
    to the Premises, which approval shall not be unreasonably
    withheld or delayed. All work on the Premises shall be scheduled
    through Landlord and shall be performed in accordance with
    Landlord’s reasonable rules and regulations. Landlord shall
    have the right to oversee the contractor’s work, at no
    expense to Tenant, and to stop work if it is not being done
    properly.



 



    5. Security Deposits.  On the date
    this Lease is executed by Tenant, Tenant shall deliver to
    Landlord the sum of $16,813.93 (the “Security
    Deposit”), to secure the faithful performance by Tenant of
    each term, covenant, and condition of this Lease. If Tenant
    shall at any time fail to make any payment or fail to keep or
    perform any term, covenant, and condition on its part to be made
    or performed or kept under this Lease, Landlord may, but shall
    not be obligated to and without waiving or releasing Tenant from
    any obligation under this Lease, use, apply or retain the whole
    or any part of the Security Deposit (i) to the extent of
    any sum due to Landlord; or (ii) to make any required
    payment on Tenant’s behalf; or (iii) to compensate
    Landlord for any loss, damage, attorneys’ fees, or expense
    sustained by Landlord due to Tenant’s default. In such
    event, Tenant shall, within five (5) days of written demand
    by Landlord, remit to Landlord sufficient funds to restore the
    Security Deposit to its original sum; Tenant’s failure to
    do so shall be a material breach of this Lease. Landlord shall
    not be required to keep the Security Deposit separate from its
    general funds, and Tenant shall not be entitled to interest on
    such deposit. Should Tenant comply with all of the terms,
    covenants, and conditions of this Lease and at the end of the
    term of this Lease leave the Premises in the condition required
    by this Lease, then the Security Deposit, less any sums owing to
    Landlord, shall be returned to Tenant (or, at Landlord’s
    option, to the last assignee of Tenant’s interests
    hereunder) within thirty (30) days after the termination of
    this Lease and vacancy of the Premises by Tenant.



 



    6. Utility Charges; Maintenance.



 



    6.1 Utility Charges.  Tenant shall
    pay when due all charges for electricity, natural gas, water,
    garbage collection, janitorial service, sewer, and all other
    utilities and services of any kind furnished to the Premises
    during the Term. Landlord shall install a meter (or meters), at
    Tenant’s sole cost and expense, to separately meter such
    charges (other than water). Landlord shall have no liability
    resulting from any interruption of services caused by fire or
    other casualty, strike, riot, vandalism, the making of necessary
    repairs or improvements, or any other cause unless caused solely
    by Landlord’s gross negligence or intentional misconduct.
    Tenant shall control the temperature in the Premises to prevent
    freezing of any systems.



 



    6.2 Maintenance.  Landlord shall
    repair and maintain the roof, exterior walls, building structure
    and foundation of the Premises in good condition, all as
    Operating Expenses. Except for such obligations of Landlord,
    Tenant shall keep the Premises neatly maintained and in good
    order and repair; provided that Tenant shall reimburse Landlord
    within thirty (30) days after written request for the cost
    of any repairs performed under this Section 6.2 by Landlord
    due to any act or omission of Tenant or Tenant’s agents,
    employees or contractors. Tenant’s responsibility shall
    include maintenance and repair of the electrical system,
    plumbing, air-conditioning and heating systems, overhead and
    personnel doors, and the replacement of all broken or cracked
    glass with glass of the same quality after Landlord has repaired
    or replaced any such equipment (to the extent required under
    Section 1) at Landlord’s sole expense (and not
    subject to pass through to Tenant as Operating Expenses under
    Section 7). Tenant shall refrain from any discharge that
    will damage the sewers serving the Premises. Tenant shall
    perform its own janitorial services with respect to the
    Premises. All required replacements of major parts of the HVAC
    equipment installed




    

    5








 






    after the Commencement Date shall be Landlord’s
    responsibility and shall be treated as capital expenses under
    Section 7.5.



 



    6.3 Obstruction Clearance.  If the
    Premises have a separate entrance, Tenant shall keep the
    sidewalks abutting the Premises or the separate entrance free
    and clear of snow, ice, debris, and obstructions of every kind.



 



    7. Taxes, Assessments, and Operating Expenses.



 



    7.1 Additional Rent.  Commencing on
    the Commencement Date and continuing on the first day of each
    calendar month throughout the Term, Tenant shall pay each month
    a sum representing Tenant’s proportionate share of real
    property taxes (“Taxes”) and operating expenses
    (“Operating Expenses”) of the Project. Such amount
    shall annually be estimated by Landlord in good faith to reflect
    actual or anticipated costs. Landlord shall compute its actual
    costs for Taxes and Operating Expenses on an annual basis and
    give Tenant notice thereof. Any overpayment by Tenant shall be
    credited to Tenant, and any deficiency shall be paid by Tenant
    within thirty (30) days after receipt of Landlord’s
    statement.



 



    7.2 Proportionate
    Share.  Tenant’s proportionate share of
    Taxes and Operating Expenses shall mean that percentage which is
    the same as the percentage which the rentable area of the
    Premises bears to the total rentable area of all buildings in
    the Project. If in Landlord’s reasonable judgment either of
    these methods of allocation results in an inappropriate
    allocation to Tenant, Landlord shall select some other
    reasonable method of determining Tenant’s proportionate
    share.



 



    7.3 Taxes.  Taxes charged to Tenant
    hereunder shall include all general real property taxes assessed
    against the Project or payable during the Term, installment
    payments on Bancrofted special assessments, all other
    governmental assessments, and any rent tax, tax on
    Landlord’s interest under this Lease, or any tax in lieu of
    or in addition to the foregoing, whether or not any such tax is
    now in effect. Tenant shall not, however, be obligated to pay
    any tax based upon Landlord’s net income.



 



    7.4 Operating Expenses.  Operating
    Expenses shall include all costs, fees, and expenses incurred in
    connection with the management, repair, maintenance, insurance
    and operations of the Project. Notwithstanding anything to the
    contrary, the following items shall be excluded from the
    calculation of Operating Expenses: (a) any expenses which
    under generally accepted property management practices,
    consistently applied would not be considered a normal
    maintenance or operating expense; (b) all costs associated
    with the operation of the business of the entity which
    constitutes “Landlord” (as distinguished from the
    costs of Building operations) including, but not limited to,
    Landlord’s or Landlord’s managing agent’s general
    corporate overhead and general administrative expenses;
    (c) costs incurred by Landlord in connection with the
    correction of defects in design and construction of the Building
    or Project; (d) costs of a capital nature other than a
    capital expense under Section 7.5 of this Lease (which
    capital expenses shall be amortized as described in
    Section 7.5 of this Lease); (e) any costs of any
    services sold or provided to tenants or other occupants for
    which Landlord or managing agent is reimbursed by such tenants
    or other occupants as an additional charge or rental over and
    above the basic rent (and escalations thereof);
    (f) overhead or profits paid to subsidiaries or affiliates
    of Landlord, or to any party as a result of a non-competitive
    selection process, for management or other services to the
    Building, or for supplies or other materials, to the extent that
    the costs of such services, supplies, or materials materially
    exceed the costs that would have been paid had the services,
    supplies or materials been provided by parties unaffiliated with
    the Landlord on a competitive basis and are consistent with
    those incurred by similar buildings in the same metropolitan
    area in which the Building is located; (g) wages, salaries
    and other compensation paid to any executive employee of
    Landlord
    and/or
    Landlord’s managing agent above the grade of Building
    manager; (h) any cost or expense related to removal,
    cleaning, abatement or remediation of “Hazardous
    Substances” in or about the Building, including without
    limitation, hazardous substances in the ground water or soil;
    (i) advertising and promotional costs including tenant
    relation programs and events; (j) all costs incurred in
    owning, operating, maintaining and repairing any underground or
    above-ground parking garage
    and/or any
    other parking facilities associated with the Building and common
    areas, including but not limited to, any expenses for parking
    equipment, tickets, supplies, signs, claims insurance, cleaning,
    resurfacing, restriping, business taxes, management fees and
    costs, structural maintenance, utilities, insurance of any form,
    real estate taxes, and the wages, salaries, employee benefits
    and taxes for personnel working in connection with any such
    parking facilities if the parking garage/facility revenues
    exceed parking garage/facility expenses (if garage revenues do
    not exceed garage expenses, then such costs may be included in
    Operating




    

    6








 






    Expenses to the extent total garage expenses exceed total garage
    revenues); (k) Landlord’s gross receipts taxes,
    personal and corporate income taxes, inheritance and estate
    taxes, other franchise, gift and transfer taxes, and all other
    real estate taxes relating to a period or payable outside the
    term of the Lease; (l) any fines, costs, penalties or
    interest resulting from the negligence or willful misconduct of
    the Landlord or its agents, contractors, or employees;
    (m) any rental payments and related costs pursuant to any
    ground lease of land underlying all or any portion of the
    Building and Common Areas; (n) any costs, fees, dues,
    contributions or similar expenses for political, charitable,
    industry association or similar organizations; (o) any
    rental and any associated costs, either actual or not, for the
    Landlord’s
    and/or
    Landlord’s managing agent’s management
    and/or
    leasing office; (p) acquisition costs for sculptures,
    paintings, or other objects of art or the display of such items;
    (q) costs incurred in connection with the original design
    and construction of the Building or Project or any major changes
    to same, including but not limited to, additions or deletions of
    floors, renovations of the common areas (except as expressly
    permitted under Section 7.5), and the repair of damage to
    the Building or Project in connection with any type of casualty,
    event of damage or destruction or condemnation to the extent
    Landlord is reimbursed by insurance or condemnation proceeds;
    (r) costs incurred in connection with upgrading the
    Building to comply with disability or life insurance
    requirements, or life safety codes, ordinances, statutes, or
    other laws to the extent that the Building is in violation of
    such requirements, codes, ordinances, statutes or laws prior to
    the Commencement Date, including, without limitation, the
    Americans With Disabilities Act, including penalties or damages
    incurred as a result of non-compliance; (s) costs for
    reserves of any kind; or (t) costs incurred in connection
    with modifying, upgrading, replacing, repairing or maintaining
    the Building’s telecommunication system.



 



    7.5 Capital Expenses.  Except for
    costs incurred by Landlord prior to the date Landlord’s
    Work is substantially complete, Landlord shall be entitled to
    recover as an Operating Expense the reasonable annual
    amortization of any capital improvement (together with interest
    at the prime rate in existence at the time) made by Landlord,
    either because such capital improvement is required by a Law,
    because such capital improvements are necessary or prudent for
    the health or safety of occupants of the Project or because such
    capital improvement will, in Landlord’s reasonable
    judgment, reduce Operating Expenses for the then current tenants
    of the Project.



 



    7.6 Audit.  Tenant shall have the
    right to audit, at Tenant’s sole cost and expense and so
    long as Tenant is not in default of this Lease, Landlord’s
    records pertaining to the computation of Operating Expenses and
    Taxes under Section 7 of this Lease, so long as Tenant
    complies with the following provisions: (a) Tenant shall
    perform such inspection within one hundred twenty
    (120) days following the receipt of Landlord’s
    reconciliation statement pertaining to the operating year in
    question, (b) Tenant shall provide to Landlord a copy of
    the inspection report, (c) Tenant shall keep the report
    confidential and shall not share the contents, results, or the
    fact that Tenant is investigating the operating expenses or
    adjustments with any other person, except for its advisors on a
    need-to-know
    basis, (d) Tenant shall pay to Landlord within ten
    (10) days following its inspection any amount determined to
    be owing by Tenant, and (e) Tenant shall give written
    notice of its intention to audit no later than ninety
    (90) days following receipt of Landlord’s
    reconciliation statement pertaining to the operating year in
    question. If Tenant does not give Landlord written notice of any
    objection or request to audit within ninety (90) days
    following receipt of Landlord’s reconciliation statement
    pertaining to an operating year, then such statement shall be
    binding on Tenant. Tenant’s inspection may only be
    conducted by Tenant’s employees or by Tenant’s
    certified public accountant paid on an hourly basis (and not a
    contingent fee basis). Landlord agrees to pay Tenant any amount
    determined to be owing to Tenant as determined within thirty
    (30) days following Landlord’s receipt of the
    inspection report or within thirty (30) days following a
    report by an independent certified public accountant selected by
    Landlord and approved by Tenant, which approval shall not be
    unreasonably withheld, if Landlord does not agree with
    Tenant’s inspection report.



 



    8. Parking and Storage Areas.



 



    8.1 Parking.  Tenant shall not
    allow its employees, agents, and invitees collectively to park
    in excess of sixty-five (65) parking spaces in the Project
    at any time. If the Premises is expanded, the number of parking
    spaces allocated to Tenant shall be increased based upon a ratio
    of 4 parking spaces for each additional 1,000 rentable
    square feet of space.



 



    8.2 Storage.  Tenant shall not
    store any materials, supplies, equipment, or other items outside
    of the Premises except for trash in the approved garbage areas.
    Trash and garbage receptacles shall be kept covered at all times.




    

    7








 






    9. Tenant’s Indemnification; Liability
    Insurance.



 



    9.1 Tenant’s
    Indemnification.  Tenant shall not allow any
    liens to attach to the Premises as a result of its activities.
    Tenant shall indemnify, defend and hold harmless Landlord from
    any claim, liability, damage, loss or expense (including
    reasonable attorneys’ fees) arising out of any activity on
    or use of the Premises by Tenant, its agents, employees, or
    invitees or resulting from Tenant’s failure to comply with
    any term of this Lease.



 



    9.2 Liability Insurance.  Tenant
    shall carry commercial general liability insurance on an
    occurrence basis with combined single limits of not less than
    $3,000,000 and insuring Tenant’s contractual obligations
    under this Lease. Such insurance shall be provided by an
    insurance carrier reasonably acceptable to Landlord and shall be
    evidenced by a certificate delivered to Landlord stating that
    the coverage will not be canceled or materially altered without
    ten (10) days’ advance written notice to Landlord.
    Landlord shall be named as an additional insured on such policy.



 



    10. Property Damage; Subrogation Waiver.



 



    10.1 Property Damage.  If fire or
    other casualty causes damage to the Building or the Premises in
    an amount exceeding thirty percent (30%) of the full
    construction-replacement cost of the Building or Premises,
    respectively, Landlord may elect to terminate this Lease as of
    the date of the damage by notice in writing to Tenant within
    thirty (30) days after such date. Otherwise, Landlord shall
    promptly repair the damage and restore the Premises to their
    former condition as soon as practicable. Rent shall be reduced
    during the period and to the extent the Premises are not
    reasonably usable for the use permitted by this Lease because of
    such damage and required repairs. Tenant shall be responsible
    for restoring its personal property, trade fixtures, and
    equipment.



 



    10.2 Insurance of
    Property.  Landlord shall be responsible for
    insuring the Building, the cost of which shall be an Operating
    Expense, and Tenant shall be responsible for insuring its
    personal property, equipment, and trade fixtures located on the
    Premises.



 



    10.3 Subrogation Waiver.  Landlord
    and Tenant each hereby releases the other, and the other’s
    partners, officers, directors, agents and employees, from any
    and all liability and responsibility to the releasing party and
    to anyone claiming by or through it or under it, by way or
    subrogation or otherwise, for all claims, or demands whatsoever
    which arise out of damage or destruction of property occasioned
    by perils which can be insured by an All Risk Property Insurance
    Coverage Form. Landlord and Tenant grant this release on behalf
    of themselves and their respective insurance companies and each
    represents and warrants to the other that it is authorized by
    its respective insurance company to grant the waiver of
    subrogation contained in this Section 10.3. This release
    and waiver shall be binding upon the parties whether or not
    insurance coverage is in force at the time of the loss or
    destruction of property referred to in this Section 10.3.



 



    11. Condemnation.  If a condemning
    authority takes 30 percent or more of the rentable area of
    the Premises, then either party may elect to terminate this
    Lease effective on the date that title passes to the condemning
    authority by written notice given to the other party within
    30 days after notice of the taking is given to the party.
    Otherwise, Landlord shall proceed as soon as practicable to
    restore the remaining Premises to a condition comparable to that
    existing at the time of the taking. Rent shall be abated during
    the period of restoration to the extent the Premises are not
    reasonably usable by Tenant, and rent shall be reduced for the
    remainder of the term in an amount equal to the reduction in
    rental value of the Premises caused by the taking. All
    condemnation proceeds paid for taking the Premises shall belong
    to Landlord. Tenant shall have the right to make a separate
    claim for relocation costs pursuant to ORS 281.045.



 



    12. Assignment and Subletting.



 



    12.1 Assignment and
    Subletting.  This provision shall apply to all
    transfers by operation of law or through mergers and changes in
    controlling stock ownership of Tenant. Tenant shall not assign
    all or any part of its interest under this Lease nor sublet all
    or any part of the Premises without first obtaining
    Landlord’s consent in writing. Landlord’s consent to
    an assignment of this Lease or sublease of the Premises shall
    not be unreasonably withheld, conditioned or delayed. Landlord
    may condition its consent on reasonable conditions. Should
    Landlord withhold its consent to a proposed assignment or
    subletting or any other transfer of Tenant’s rights under
    this Lease (each a “Transfer”) for any of the
    following reasons, the withholding of consent shall be deemed
    reasonable: (a) conflict or incompatibility of the proposed
    use with uses appropriate in a flex/office project;
    (b) financial inadequacy of the proposed transferee




    

    8








 






    as reasonably determined by Landlord; (c) any proposed
    change in use which would diminish the professional nature of
    the Building or of the other businesses located in the Project;
    (d) the proposed use would adversely impact the use of the
    common facilities by other tenants of the Project;
    (e) Tenant is then in default of the Lease beyond any
    applicable cure period; and (f) any other reasonable
    criteria. No Transfer shall result in Tenant being released from
    any obligation under this Lease. As a condition to
    Landlord’s prior written consent, the transferee shall
    agree in writing to comply with and be bound by all of the
    terms, covenants, conditions, and other provisions of this Lease
    and Tenant shall deliver to Landlord promptly after execution an
    executed copy of all agreements of such compliance by each
    transferee. No assignment shall relieve Tenant of its obligation
    to pay Rent or perform the 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
    assigns this Lease or sublets the Premises for an amount in
    excess of the rent called for by this Lease, or receives other
    consideration for a subletting or assignment, such excess rent
    or other consideration (after first deducting reasonable leasing
    costs such as brokerage commissions, tenant improvement costs
    and legal fees) shall be paid to Landlord promptly as it is
    received by Tenant. Notwithstanding anything to the contrary in
    this Section 12.1 and so long as Tenant provides Landlord
    written notice of an applicable assignment or sublease within
    five (5) business days following the effective date of such
    applicable assignment or sublease, no prior written consent of
    Landlord shall be required for any assignment or sublease with a
    corporation into or with which Tenant is merged or consolidated
    or with an entity to which all or substantially all of
    Tenant’s assets are transferred, provided (x) such
    merger, consolidation or transfer of assets is for a valid
    business purpose and not principally for the purpose of
    transferring the leasehold estate created hereby, and
    (y) the assignee or successor entity has a net worth
    (determined in accordance with generally accepted accounting
    principles consistently applied) at least equal to or in excess
    of the net worth of Tenant immediately prior to such merger,
    consolidation or transfer and Landlord has been provided with
    reasonable proof thereof prior to such transaction.



 



    12.2 Successors and
    Assigns.  Subject to the above limitations on
    transfer of Tenant’s interest, this Lease shall bind and
    inure to the benefit of the parties, their respective
    successors, and assigns.



 



    13. Default.  The occurrence of any
    one or more of the following events of default shall constitute
    a breach of this Lease by Tenant (an “Event of
    Default”):



 



    13.1 Failure of Tenant to make any Base Rent or Additional
    Rent payment, or any other payment under this Lease when it is
    due; provided, that the first two (2) times in any twelve
    (12) consecutive month period that Tenant fails to pay an
    installment of Base Rent or Additional Rent when due, Tenant
    shall not be in default of this Lease so long as Tenant pays
    such past due Base Rent or Additional Rent within ten
    (10) days of the date notice is sent to Tenant that such
    Base Rent or Additional Rent is past due.



 



    13.2 Tenant makes any Transfer without Landlord’s
    prior written consent as required under Section 12.



 



    13.3 Tenant abandons the Premises during the Term, unless
    Tenant given Landlord prior written notice of its intent to
    vacate and Tenant continues to pay and perform all its
    obligations.



 



    13.4 Failure of Tenant to deliver the instruments described
    in Section 17.1 or Section 17.3 as and when required
    in such Sections, as applicable, or failure of Tenant to comply
    with any applicable Law when and as required by the applicable
    governmental authority.



 



    13.5 Failure of Tenant to comply with any other term or
    condition of this Lease or to fulfill any other obligation of
    this Lease within 15 days after written notice from
    Landlord specifying the nature of the failure with reasonable
    particularity; provided that if the nature of such cure is such
    that a longer cure period is necessary, Tenant shall only be in
    default if Tenant shall have failed to commence such cure within
    said 15 day period and thereafter to have diligently
    prosecuted such cure to completion.



 



    13.6 Dissolution, termination of existence, or business
    failure of Tenant; the commencement by Tenant of a voluntary
    case under the federal bankruptcy laws or under any other
    federal or state law relating to insolvency or debtor’s
    relief; the entry of a decree or order for relief against Tenant
    in an involuntary case under the federal bankruptcy laws or
    under any other applicable federal or state law relating to
    insolvency or debtor’s relief; the appointment of or the
    consent by Tenant to the appointment of a receiver, trustee or
    custodian of Tenant or of any of Tenant’s property; an
    assignment for the benefit of creditors by Tenant; Tenant’s
    failure generally to pay its debts as such debts become due; the
    making or suffering by Tenant of a fraudulent transfer under
    applicable




    

    9








 






    federal or state law; concealment by Tenant of any of its
    property in fraud of creditors; or the imposition of a lien
    through legal proceedings or distraint upon any of the property
    of Tenant which is not discharged or bonded.



 



    14. Remedies for Default.  In case
    of default as described in Section 13 above, Landlord shall
    have the right to the following remedies, which shall be
    cumulative and in addition to any other remedies provided under
    applicable law:



 



    14.1 Termination.  Terminate this
    Lease without relieving Tenant from its obligation to pay
    damages.



 



    14.2 Retaking.  Retake possession
    of the Premises by summary proceedings or otherwise, in which
    case Tenant’s liability to Landlord for damages shall
    survive the termination. Landlord may, after such retaking of
    possession, relet the Premises upon any reasonable terms. No
    such reletting shall be construed as an acceptance of a
    surrender of Tenant’s leasehold interest.



 



    14.3 Recovery of Costs.  Recover
    all damages caused by Tenant’s default which shall include,
    without limitation, loss of rentals, costs of reletting and all
    other costs incurred or benefits lost as a result of such
    default. 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 equal to the difference between the rent under this
    Lease and the reasonable rental value of the Premises for the
    remainder of the term, discounted to the time of judgment at the
    rate of six (6%) percent per annum.



 



    14.4 Recovery of Costs.  Make any
    payment or perform any obligation required of Tenant so as to
    cure Tenant’s default, in which case Landlord shall be
    entitled to recover all amounts so expended from Tenant, plus
    interest at the rate of ten percent (10%) per annum from the
    date of the expenditure.



 



    15. Surrender on Termination.



 



    15.1 Delivery of Premises.  On
    expiration or early termination of this Lease, Tenant shall
    deliver all keys to Landlord, have final utility readings made
    on the date of move out, and surrender the Premises clean and
    free of debris inside and out, with all mechanical, electrical,
    and plumbing systems in good operating condition, all signing
    removed and defacement corrected, and all repairs called for
    under this Lease completed. The Premises shall be delivered in
    the same condition as at the commencement of the term after
    substantial completion of Landlord’s Work, subject only to
    depreciation and wear from ordinary use. Tenant shall remove all
    of its furnishings and trade fixtures that remain its property
    and restore all damage resulting from such removal. Failure to
    remove said property shall be an abandonment of same, and
    Landlord may dispose of it in any manner without liability.



 



    15.2 Month-to-Month Tenancy.  If
    Tenant fails to vacate the Premises when required, Landlord may
    elect either to treat Tenant as a tenant from month to month,
    subject to all provisions of this Lease except the provision for
    term and at rent equal to 150 percent of the rent last
    payable under this Lease, or to eject Tenant from the Premises
    and recover damages caused by wrongful holdover.



 



    16. Landlord’s Liability.



 



    16.1 Nondisturbance.  Landlord
    warrants that so long as Tenant complies with all terms of this
    Lease it shall be entitled to peaceable and undisturbed
    possession of the Premises free from any eviction or disturbance
    by Landlord or persons claiming through Landlord.



 



    16.2 Claims Against Landlord.  In
    any action or claim against Landlord, Tenant shall look solely
    to the interest of Landlord in the Project, and no personal
    judgment may be obtained against any of the individuals or
    entities comprising Landlord arising out of this Lease. In no
    event shall Landlord be liable for consequential, punitive or
    special damages.



 



    16.3 Transfer of Interest in
    Building.  If Landlord transfers its interest
    in the Building, Landlord shall have no liability under this
    Lease arising out of facts occurring after such transfer, and
    Tenant shall look only to the transferee for any and all such
    claims.




    

    10








 






    17. Mortgage or Sale by Landlord; Estoppel
    Certificates.



 



    17.1 Subordination.  This Lease is
    and shall be prior to any mortgage or deed of trust
    (“Encumbrance”) recorded after the date of this Lease
    and affecting the Building and the land upon which the Building
    is located. However, if any lender holding an Encumbrance
    secured by the Building and the land underlying the Building
    requires that this Lease be subordinate to the Encumbrance, then
    Tenant agrees that this Lease shall be subordinate to the
    Encumbrance, then Tenant agrees that this Lease shall be
    subordinate to the Encumbrance if the holder thereof agrees in
    writing with Tenant that so long as Tenant performs its
    obligations under this Lease no foreclosure, deed given in lieu
    of the foreclosure, or sale pursuant to the terms of the
    Encumbrance, or other steps or procedures taken under the
    Encumbrance shall affect Tenant’s rights under this Lease.
    If the foregoing condition is met, Tenant shall execute the
    written agreement and any other documents required by the holder
    of the Encumbrance to accomplish the purposes of this Section
    within ten days after Landlord’s request therefor.



 



    17.2 Attornment.  If the Building
    is sold as a result of foreclosure of any Encumbrance thereon or
    otherwise transferred by Landlord or any successor, Tenant shall
    attorn to the purchaser or transferee, and the transferor shall
    have no further liability hereunder, except to the extent of
    claims arising out of facts occurring prior to the transfer,
    which claims may be asserted against transferor but not against
    transferee.



 



    17.3 Estoppel Certificates.  Either
    party shall within ten (10) days after notice from the
    other execute and deliver to the other party a certificate
    stating whether or not this Lease has been modified and is in
    full force and effect and specifying any modifications or
    alleged breaches by the other party. The certificate shall also
    state the amount of monthly base rent, the dates to which rent
    has been paid in advance, and the amount of any security deposit
    or prepaid rent. Failure to deliver the certificate within the
    specified time shall be conclusive upon the party of whom the
    certificate was requested that the Lease is in full force and
    effect and has not been modified except as may be represented by
    the party requesting the certificate.



 



    18. Environmental Protection.



 



    18.1 Environmental
    Law.  “Environmental Law” shall mean
    any federal, state or local Law to the protection of health,
    safety or the environment. The term “Hazardous
    Substance” shall mean any hazardous, toxic, infectious or
    radioactive substance, waste and material as defined or listed
    by any Environmental Law and shall include, without limitation,
    petroleum oil and its fractions.



 



    18.2 Hazardous Substances.  Tenant
    shall not cause or permit any Hazardous Substance to be spilled,
    leaked, disposed of or otherwise released on or under the
    Premises. Tenant may use and sell on the Premises only those
    Hazardous Substances typically used and sold in the prudent and
    safe operation of the business permitted by Section 4.1 of
    this Lease. Tenant may store such Hazardous Substances on the
    Premises, but only in quantities necessary to satisfy
    Tenant’s reasonably anticipated needs. Tenant shall comply
    with all Environmental Laws and exercise the highest degree of
    care in the use, handling and storage of Hazardous Substances
    and shall take all practicable measures to minimize the quantity
    and toxicity of Hazardous Substances used, handled or stored on
    the Premises.



 



    18.3 Notices to Landlord.  Tenant
    shall immediately notify Landlord upon becoming aware of the
    following: (a) any spill, leak, disposal or other release
    of a Hazardous Substance on, under or adjacent to the Premises;
    (b) any notice or communication from a governmental agency
    or any other person relating to any Hazardous Substance on,
    under or adjacent to the Premises; or (c) any violation of
    any Environmental Law with respect to the Premises or
    Tenant’s activities on or in connection with the Premises.



 



    18.4 Spills and Releases.  In the
    event of a spill, leak, disposal or other release of a Hazardous
    Substance on or under the Premises or other part of the Project
    caused by Tenant or any of its contractors, agents or employees
    or invitees, or the suspicion or threat of the same, Tenant
    shall (i) immediately undertake all emergency response
    necessary to contain, cleanup and remove the released Hazardous
    Substance, (ii) promptly undertake all investigatory,
    remedial, removal and other response action necessary or
    appropriate to ensure that any Hazardous Substances
    contamination is eliminated to Landlord’s reasonable
    satisfaction, and (iii) provide Landlord copies of all
    correspondence with any governmental agency regarding the
    release (or threatened or suspected release) or the response
    action, a detailed report documenting all such response action,
    and a certification that any contamination has been eliminated.
    All such response action shall be performed, all such reports
    shall be




    

    11








 






    prepared and all such certifications shall be made by an
    environmental consultant reasonably acceptable to Landlord.



 



    18.5 Condition Upon
    Termination.  Upon expiration of this Lease or
    sooner termination of this Lease for any reason, Tenant shall
    remove all Hazardous Substances and facilities used for the
    storage or handling of Hazardous Substances from the Premises
    and restore the affected areas by repairing any damage caused by
    the installation or removal of the facilities. Following such
    removal, Tenant shall certify in writing to Landlord that all
    such removal is complete.



 



    18.6 Indemnity.



 



    (a)  Tenant shall indemnify, defend and hold harmless
    Landlord, its employees and agents, any persons holding a
    security interest in the Premises, and the respective successors
    and assigns of each of them from and against any and all claims,
    demands, liabilities, damages, fines, losses, costs (including
    without limitation the cost of any investigation, remedial,
    removal or other response action required by Environmental Law)
    and expenses (including without limitation attorneys’ fees
    and expert fees in connection with any trial, appeal, petition
    for review or administrative proceeding) arising out of or in
    any way relating to the use, treatment, storage, generation,
    transport, release, leak, spill, disposal or other handling of
    Hazardous Substances on the Premises or other part of the
    Project by Tenant or any of its contractors, agents or employees
    or invitees. Tenant’s obligations under this Section shall
    survive the expiration or termination of this Lease for any
    reason. Landlord’s rights under this Section are in
    addition to and not in lieu of any other rights or remedies to
    which Landlord may be entitled under this agreement or otherwise.



 



    (b)  Landlord shall indemnify, defend, and hold harmless
    Tenant, its employees, agents, successors, and assigns, from and
    against any and all claims, demands, liabilities, damages,
    fines, losses, costs (including without limitation the cost of
    any investigation, remedial, removal or other response action
    required by Environmental Law), and any expenses (including
    without limitation attorneys’ fees and expert fees in
    connection with any trial, appeal, petition for review or
    administrative proceeding) arising out of or in any way relating
    to the use, treatment, storage, generation, transport, release,
    leak, spill, disposal or other handling of Hazardous Substances
    on the Premises by Landlord or any of its contractors, agents,
    employees, or tenants other than Tenant. Tenant’s rights
    under this Section are in addition to and not in lieu of any
    other rights or remedies to which Tenant may be entitled under
    this Agreement or otherwise.



 



    19.  General Provisions.



 



    19.1 Nonwaiver.  Waiver by either
    party of strict performance of any provision of this Lease shall
    not be a waiver of nor prejudice the party’s right
    otherwise to require performance of the same provision or any
    other provision.



 



    19.2 Attorneys’ Fees.   In the
    event a suit, action, arbitration, or other proceeding of any
    nature whatsoever, including without limitation any proceeding
    under the U.S. Bankruptcy Code, is instituted, or the
    services of an attorney are retained, to interpret or enforce
    any provision of this Lease or with respect to any dispute
    relating to this Lease, the prevailing or non-defaulting party
    shall be entitled to recover from the losing or defaulting party
    its attorneys’, paralegals’, accountants’, and
    other experts’ fees and all other fees, costs, and expenses
    actually incurred and reasonably necessary in connection
    therewith. In the event of suit, action, arbitration, or other
    proceeding, the amount thereof shall be determined by the judge
    or arbitrator, shall include fees and expenses incurred on any
    appeal or review, and shall be in addition to all other amounts
    provided by law.



 



    19.3  Time.  Time is of the essence
    of this Lease.



 



    19.4 Severability.  If any
    provision of this Lease is held to be invalid, unenforceable or
    illegal the remaining provisions shall not be affected and shall
    be enforced to the fullest extent permitted by law.



 



    19.5 Interest and Late
    Charges.  Subject to Section 13.1 to the
    extent applicable, rent not paid within ten (10) days of
    when due shall bear interest from the date due until paid at the
    rate of ten percent (10%) per annum. Landlord may at its option
    impose a late charge of $.05 for each $1.00 of rent for rent
    payments made more than ten (10) days late in addition to
    interest and other remedies available for default.



 



    19.6  Tenant Representations.  If
    Tenant is a corporation or other entity, each person executing
    this Lease on behalf of Tenant hereby covenants and warrants
    that Tenant is duly formed and validly existing under the laws
    of its




    

    12








 






    state of formation; Tenant has full right and authority to enter
    into this Lease and to perform all Tenant’s obligations
    hereunder; and each person (and both of the persons if more than
    one signs) signing this Lease on behalf of Tenant is duly and
    validly authorized to do so.



 



    19.7 Right of Entry.  Landlord
    shall have the right to enter upon the Premises at any time,
    following at least 24 hours’ advance notice (written
    or oral) except in case of emergency (in which event no notice
    is required), to determine Tenant’s compliance with this
    Lease, to make necessary repairs to the Building or the
    Premises, or to show the Premises to any prospective tenant or
    purchasers. During the last two months of the term, Landlord may
    place and maintain upon the Premises notices for leasing or sale
    of the Premises. Landlord shall use reasonable efforts to
    minimize any interference with Tenant’s business operations
    caused by its entry, except in case of emergency.



 



    19.8  Proration.  If this Lease
    commences or terminates at a time other than the beginning or
    end of one of the specified rental periods, then the rent
    (including Tenant’s share of real property taxes, if any)
    shall be prorated as of such date, and in the event of
    termination for reasons other than default all prepaid rent
    shall be refunded to Tenant or paid on its account.



 



    19.9 Notices.  Notices between the
    parties relating to this Lease shall be in writing, effective
    when delivered, or if mailed, effective on the second day
    following mailing, postage prepaid, to the address shown below
    for the party stated in this Lease or to such other address as
    either party may specify by notice to the other. Rent shall be
    payable to Landlord at the same address and in the same manner.



 


	 	 	 
	

    If to Landlord:


	
 
	
    Nimbus Oaks Industrial Park

	
 
	
 
	
    c/o Melvin
    Mark Brokerage Company

	
 
	
 
	
    111 SW Columbia Street, Suite 1380

	
 
	
 
	
    Portland, OR 97201

	
 
	
 
	
    Phone No.: (503) 223-4777

	
 
	
 
	
    Fax No.:  (503) 223-4606

	
 
	
 
	
 

	

    If to Tenant:


	
 
	
    AcryMed Incorporated

	
 
	
 
	
    9560 SW Nimbus Ave.

	
 
	
 
	
    Beaverton, OR 97008

	
 
	
 
	
    Phone No.: (503) 624-9830

	
 
	
 
	
    Fax No.:  (503) 639-0846









 



    19.10 Brokerage
    Commissions.  Tenant hereby warrants and
    represents to Landlord that there are no real estate commissions
    due any broker, agent or other party in connection with the
    negotiation or execution of this Lease acting for or on behalf
    of Tenant other than CRESA Partners and Tenant hereby agrees to
    indemnify, protect, defend and hold Landlord harmless from and
    against any and all costs, expenses, liabilities, causes of
    action, claims or suits in connection with compensation,
    commissions, fees or other sums claimed to be due and owing to
    anyone claiming through Tenant other than CRESA Partners.
    Landlord and Tenant acknowledge Melvin Mark Brokerage is the
    listing broker and that CRESA Partners is the agent for the
    Tenant and for this Lease and are entitled to a commission paid
    by Landlord in accordance with a separate management agreement.



 



    19.11 Entire Agreement.  All
    understandings and agreements between the parties are merged in
    this Lease and neither party is relying upon any statement or
    representation not embodied in this Lease. No agreement shall be
    effective to change or modify this Lease, unless such agreement
    is in writing, refers expressly to this Lease and is signed by
    the party against whom enforcement is sought.



 



    19.12 Survival.  All indemnity
    obligations shall survive the expiration or sooner termination
    of this Lease.




    

    13








 






    IN WITNESS WHEREOF, the parties hereto have executed this
    Agreement as of the date first above written.



 


	 	 	 
	
    LANDLORD:
	
 
	
    Schnitzer Co-Tenants









 



    SCHNITZER INVESTMENT CORP.,




    an Oregon corporation



 


			
	 	    By: 
	
    /s/  Kenneth
    M. Novack









    Kenneth M. Novack, President




    Date 11/22/05



 



    SCHNITZER TRUST PARTNERS,




    an Oregon general partnership



 


			
	 	    By: 
	
    /s/  Kenneth
    M. Novack









    Kenneth M. Novack, Managing Partner




    Date 11/22/05



 



    Mark Co-Tenants



 



    MARK PROPERTIES LIMITED PARTNERSHIP,




    an Oregon limited partnership



 


			
	 	    By: 
	
    /s/  Mark
    Management L.L.C.









    Mark Management L.L.C.,




    General Partner



 


			
	 	    By: 
	
    /s/  Melvin
    Mark









    Melvin Mark, Jr., Co-Member




    Date 11/21/05



 



    CARDER-NIMBUS LLC,




    an Oregon limited liability company



 


			
	 	    By: 
	
    /s/  Jonathan
    T. Carder









    JONATHAN T. CARDER, Sole Member




    

    14








 






    DAVE Z’S LLC,




    an Oregon limited liability company



 


			
	 	    By: 
	
    /s/  David
    W. Zier









    DAVID W. ZIER, Sole Member



 



    J. SCOTT ANDREWS LLC,




    an Oregon limited liability company



 



    /s/  J.
    Scott Andrews








    J. SCOTT ANDREWS, Sole Member



 



    MJMARK LLC,




    an Oregon limited liability company



 



    /s/  M.
    James Mark








    M. JAMES MARK, Sole Member



 



    DJP. NIMBUS, LLC,




    an Oregon limited liability company



 



    /s/  Daniel
    J. Petrusich








    DANIEL J. PETRUSICH, Sole Member



 



    KENDIG-NIMBUS LLC,




    an Oregon limited liability company



 



    /s/  Michael
    J. Kendig








    MICHAEL J. KENDIG, Sole Member



 



    

    15








 






    SCHRECK-NIMBUS, LLC,




    an Oregon limited liability company



 



    /s/  F.
    Patrick Schreck








    F. PATRICK SCHRECK, Sole Member



 



    TENANT:




    ACRYMED INCORPORATED,




    an Oregon corporation



 



    By: /s/  Jack
    D. McMaken








    Its: President, CEO




    Date 11-17-05



 



    Exhibit List:



 



    Exhibit A — Outline of Premises



 



    Exhibit B — Work Letter




    

    16








 






    



 



    April 5, 2006




    Jack McMaken




    President & CEO




    AcryMed Incorporated




    9560 SW Nimbus Avenue




    Beaverton, Oregon 97008



 



    Dear Mr. McMaken:



 



    Reference is made to that certain Lease dated November 17,
    2005 by and between between SCHNITZER INVESTMENT CORP., an
    Oregon corporation, SCHNITZER TRUST PARTNERS, an Oregon
    general partnership, MARK PROPERTIES LIMITED PARTNERSHIP, an
    Oregon limited partnership,
    CARDER-NIMBUS
    LLC, an Oregon limited liability company, DAVE Z’S LLC, an
    Oregon limited liability company, J. SCOTT ANDREWS LLC, an
    Oregon limited liability company, MJMark LLC, an Oregon limited
    liability company, DJP NIMBUS LLC, an Oregon limited liability
    company, KENDIG-NIMBUS LLC, an Oregon limited liability company,
    SCHRECK-NIMBUS LLC, an Oregon limited liability company as
    tenants in common (collectively, “LANDLORD”) and
    ACRYMED INCORPORATED, an Oregon corporation.



 



    This letter shall serve as notification of the commencement date
    to said Lease and shall modify only the following terms and
    conditions.



 


		
	    TERM:          	
    The Commencement Date is hereby February 17, 2006 and the
    Lease shall continue through and including July 31, 2012.




 



    All other terms and conditions of said Lease shall remain the
    same. Please sign all copies, retain one for your record and
    return remaining.



 



    Sincerely,



 



    MELVIN MARK BROKERAGE COMPANY



 



    




    Tim Parker

    Vice President



 



    Accepted and approved this 7 day of April 2006.



 



    TENANT:



 



    ACRYMED INCORPORATED, an Oregon corporation




    By:
    /s/  Jack
    D. McMaken








    Its: President, CEO



 



    111 southwest
    columbia, suite 1380 • portland, oregon
    97201 • telephone:
    (503) 223-9203
    fax:
    (503) 223-4606
    www.melvinmark.com
    



 



    CORE Worldwide Commercial Real
    Estate Services
     • 
    Portland • Seattle • San Francisco • Sacramento • Long
    Beach • Los Angeles • San Diego • Honolulu • Denver • 
    Phoenix • Dallas • Houston • 
    Chicago • New York • Boston

     • 
    Hartford • Baltimore •  Washington
    D.C. • Orlando • 
    Atlanta •  Toronto • London
    




    

    17








 







    COMMENCEMENT
    DATE MEMORANDUM

    attached to and made a part of Lease bearing the

    Lease Reference Date of November 17, 2005 between

    Landlord’s predecessor SCHNITZER INVESTMENT CORP., an
    Oregon corporation, SCHNITZER TRUST PARTNERS, an Oregon
    general partnership, MARK PROPERTIES LIMITED PARTNERSHIP, an
    Oregon limited partnership, CARDER-NIMBUS LLC, an Oregon limited
    liability company, DAVE Z’S LLC, an Oregon limited
    liability company, J. SCOTT ANDREWS LLC, an Oregon limited
    liability company, MJMARK LLC, an Oregon limited liability
    company, DJP NIMBUS, LLC, an Oregon limited liability company,
    KENDIG-NIMBUS, LLC, an Oregon limited liability company,
    SCHRECK-NIMBUS, LLC, an Oregon limited liability company as
    tenants in common (collectively, “Landlord”) and
    ACRYMED, INCORPORATED, an Oregon corporation, as Tenant
    COMMENCEMENT DATE MEMORANDUM



 



    THIS MEMORANDUM, made as of April 16, 2007 by and between
    IPERS NIMBUS OAKS — OREGON, INC.,
    (“Landlord”) and ACRYMED, INCORPORATED,
    (“Tenant”).



 




    Recitals:



 



    A.  Landlord and Tenant are parties to that certain Lease,
    dated for reference November 15, 2005, Commencement Letter
    dated April 5, 2006, as amended by the First Amendment
    dated February 8, 2007, (the “Lease”) for certain
    premises (the “Premises”) consisting of approximately
    20,334 square feet at the building commonly known as
    Building E at Nimbus Oaks Business Center.



 



    B.  Tenant is in possession of the Premises and the Term of
    the Lease has commenced.



 



    C.  Landlord and Tenant desire to enter into this Memorandum
    confirming the Commencement Date, the Termination Date and other
    matters under the Lease.



 



    NOW, THEREFORE, Landlord and Tenant agree as follows:



 



    1. The actual Commencement Date is April 16, 2007.



 



    2. The actual Termination Date is July 31, 2012.



 



    3. The schedule of the Annual Rent and the Monthly
    Installment of Rent set forth on the Reference Pages is deleted
    in its entirety, and the following is substituted therefor:



 


	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
 
	
    Rentable

    
	
 
	
 
	
 
	
 
	
 
	
    Increased
	
 
	
 
	
    Revised
	
 
	
 
	
 
	
 
	
 

	
    Period
	
 
	
 
	
    Square

    
	
 
	
 
	
    Monthly

    
	
 
	
 
	
    Monthly

    
	
 
	
 
	
    Total

    
	
 
	
 
	
 
	
    Annual
	
 

	

    From


	
 
	
    Through
	
 
	
 
	
    Footage
	
 
	
 
	
    Base Rent
	
 
	
 
	
    Base Rent
	
 
	
 
	
    Base Rent
	
 
	
 
	
 
	
    Base Rent
	
 

	

    4/16/2007


	
 
	
 
	
    7/15/2007
	
 
	
 
	
 
	
    20,334
	
 
	
 
	
    $
	
    14,938.96
	
 
	
 
	
    $
	
    —
	
 
	
 
	
    $
	
    14,938.96
	
 
	
 
	
 
	
    $
	
    179,267.52
	
 

	

    7/16/2007


	
 
	
 
	
    7/31/2007
	
 
	
 
	
 
	
    20,334
	
 
	
 
	
    $
	
    14,938.96
	
 
	
 
	
    $
	
    4,506.00
	
 
	
 
	
    $
	
    19,444.96
	
 
	
 
	
 
	
    $
	
    233,339.52
	
 

	

    8/1/2007


	
 
	
 
	
    4/30/2008
	
 
	
 
	
 
	
    20,334
	
 
	
 
	
    $
	
    15,426.10
	
 
	
 
	
    $
	
    4,506.00
	
 
	
 
	
    $
	
    19,932.10
	
 
	
 
	
 
	
    $
	
    239,185.20
	
 

	

    5/1/2008


	
 
	
 
	
    7/31/2008
	
 
	
 
	
 
	
    20,334
	
 
	
 
	
    $
	
    15,426.10
	
 
	
 
	
    $
	
    4,641.00
	
 
	
 
	
    $
	
    20,067.10
	
 
	
 
	
 
	
    $
	
    240,805.20
	
 

	

    8/1/2008


	
 
	
 
	
    4/30/2009
	
 
	
 
	
 
	
    20,334
	
 
	
 
	
    $
	
    15,913.24
	
 
	
 
	
    $
	
    4,641.00
	
 
	
 
	
    $
	
    20,554.24
	
 
	
 
	
 
	
    $
	
    246,650.88
	
 

	

    5/1/2009


	
 
	
 
	
    7/31/2009
	
 
	
 
	
 
	
    20,334
	
 
	
 
	
    $
	
    15,913.24
	
 
	
 
	
    $
	
    4,780.00
	
 
	
 
	
    $
	
    20,693.24
	
 
	
 
	
 
	
    $
	
    248,318.88
	
 

	

    8/1/2009


	
 
	
 
	
    4/30/2010
	
 
	
 
	
 
	
    20,334
	
 
	
 
	
    $
	
    16,390.64
	
 
	
 
	
    $
	
    4,780.00
	
 
	
 
	
    $
	
    21,170.64
	
 
	
 
	
 
	
    $
	
    254,047.68
	
 

	

    5/1/2010


	
 
	
 
	
    7/31/2010
	
 
	
 
	
 
	
    20,334
	
 
	
 
	
    $
	
    16,390.64
	
 
	
 
	
    $
	
    4,924.00
	
 
	
 
	
    $
	
    21,314.64
	
 
	
 
	
 
	
    $
	
    255,775.68
	
 

	

    8/1/2010


	
 
	
 
	
    4/30/2011
	
 
	
 
	
 
	
    20,334
	
 
	
 
	
    $
	
    16,887.52
	
 
	
 
	
    $
	
    4,924.00
	
 
	
 
	
    $
	
    21,811.52
	
 
	
 
	
 
	
    $
	
    261,738.24
	
 

	

    5/1/2011


	
 
	
 
	
    7/31/2011
	
 
	
 
	
 
	
    20,334
	
 
	
 
	
    $
	
    16,887.52
	
 
	
 
	
    $
	
    5,072.00
	
 
	
 
	
    $
	
    21,959.52
	
 
	
 
	
 
	
    $
	
    263,514.24
	
 

	

    8/1/2011


	
 
	
 
	
    4/30/2012
	
 
	
 
	
 
	
    20,334
	
 
	
 
	
    $
	
    17,374.66
	
 
	
 
	
    $
	
    5,072.00
	
 
	
 
	
    $
	
    22,446.66
	
 
	
 
	
 
	
    $
	
    269,359.92
	
 

	

    5/1/2012


	
 
	
 
	
    7/31/2012
	
 
	
 
	
 
	
    20,334
	
 
	
 
	
    $
	
    17,374.66
	
 
	
 
	
    $
	
    5,224.00
	
 
	
 
	
    $
	
    22,598.66
	
 
	
 
	
 
	
    $
	
    271,183.92
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
    Initials 
	
 
	
 
	
 
	
 
	
    Initials  
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 










    

    18








 






    4. Capitalized terms not defined herein shall have the same
    meaning as set forth in the Lease.



 



    IN WITNESS WHEREOF, the parties hereto have caused this
    Agreement to be executed as of the date and year first above
    written.



 


	 	 	 	 	 
	
 
	
 
	
 

	
    LANDLORD:
	
 
	
    TENANT:

	
 
	
 
	
 

	
    IPERS NIMBUS OAKS — OREGON, INC. a Delaware
    corporation

    By: RREEF Management Company, a Delaware
    corporation
	
 
	
    ACRYMED INCORPORATED, an Oregon corporation

	
 
	
 
	
 

	

    By: /s/  David
    Kotansky


    



	
 
	
    By: /s/  Jack
    D. McMaken


    


	
    Name: David Kotansky
	
 
	
    Name: Jack D. McMaken

	
    Title: Regional Director
	
 
	
    Title: President, CEO

	
    Dated: 5.10.07
	
 
	
    Dated: 5-8-07









 


 


	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
 
	
 

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
    Initials
	
 
	
 
	
    Initials 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 










    

    19