EXHIBIT 10.21


 


LEASE


 


	
   

  	
  Portland, Oregon

  
	
   

  	
   

  
	
  March 1, 1996

  	
   

  



 


Parties


 


The parties to
this lease are U.S. National Bank of Oregon, as Trustee, hereinafter referred
to as “Landlord,” and Shared Communications Services, Inc.
hereinafter referred to as “Tenant”.


 


Premises


 


The property
subject to this lease, hereinafter referred to as the “Premises”, is described
as follows:


 


The lease premises consist of approximately a
9,760 square foot 1 story commercial building, consisting of approximately
5,020 square feet warehouse space, and approximately 4,740 square feet of
office space, and is situated upon approximately 20,000 square feet of land and
is more commonly known as 810 S.E. Belmont Portland, Oregon.  The property can further be identified by
Multnomah County tax account no. R64450-5900. 
Also referred to attached legal description.


 


Term:  Rent, Deposit


 


The original term of this lease shall
commence on March 1, 1996 and continue through the expiration date of February 28,
2001, at a monthly base rental rate as follows:


 


Base Rent:  The base rent shall be $4,500.00 per month,
commencing March 1, 1996 and continue through February 28, 1999.  Effective March 1, 1999 the base rent
shall escalate in accordance with any increase in the CPI Index, not to exceed
5% annually, based upon the Consumer Price Index, Pacific Cities and U.S. City
Average, All Item Indexes, U.S. City Average, All Urban Consumers.  Said escalation shall cover the period March 1,
1996 through February 28, 1999, and each three year period during any
options granted under this lease.


 


Should said index no longer be published,
discontinued, or unavailable Landlord shall have the right to substitute a
reasonably comparable index in which to base said escalation.


 


Should the above index be published at a date
other than March 1, 1999 Landlord shall have the right to substitute
another reasonably comparable published month in which to base said escalation.


 


Not withstanding the above, in no event shall
the base rental rate be less than $4,500.00 per month during the original term
of the lease, or any option term that may be exercised herein.


 


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This lease is subject to the additional terms
and conditions as follows, to which the parties agree:


 


Section 1. Occupancy


 


1.1          Payment of Rent The monthly base rental rate
herein stated shall be due and payable by the 1st day of each and every month
through the above designated term.  Tenant
shall pay the specified base rent, and any other charges due under the lease
when due in lawful money of the United States at Landlord’s address stated in
this lease, or such other address as Landlord shall designate by notice to Tenant.
 Any rent which is not paid within 10
days of the date due shall bear a 5% late charge for each $1.00 and shall be
paid to Landlord within 5 days of notice or billing from Landlord as additional
rent.


 


1.2          Condition of
Premises Landlord
makes no warranty as to the condition of the Premises, or any improvements
thereon or the adequacy of the Premises for Tenant’s intended use, and Tenant
accepts the Premises “As Is”, except as defined in paragraph 1.2.1, based upon
Tenant’s own inspection and not upon any representation by Landlord, or
Landlord’s agent, except as may be stated in this lease.


 


1.2.1       Improvements/Repairs
by Landlord:  As weather permits, as determined by Landlord,
but no later than June 1, 1996, Landlord agrees to paint the exterior of
the building, based upon a mutually acceptable color by Landlord and Tenant,
repair the exterior dry rot, and re-stripe and seal coat the parking area.  Landlord will expend $25,000.00, plus a
reasonable amount thereafter, not to exceed 10% of the initial amount of
$25,000.00, on seismic improvements to the warehouse portion of the building in
an effort to bring the warehouse portion of the building into compliance with
current seismic code, or building department directives.


 


1.3          Security
Deposit To
secure Tenant’s compliance with all terms of this lease, Tenant shall paid
Landlord, at the commencement of said lease, the sum of $4,500.00 as a deposit.
 The deposit shall be a debt from
Landlord owing to Tenant, refundable within 30 days following the expiration of
the lease term, or any option term exercised under the lease, or other
termination not caused by Tenant’s default.  Landlord shall have the right to offset
against the deposit a) for any sums owing from Tenant to Landlord under the
lease which have not been paid when due, b) any damages caused by Tenant’s
default, c) the cost of curing any failure by Tenant to comply with any term or
provision of said lease, should the Landlord elect to do so, d) and the cost of
performing any repair or cleanup that is Tenant’s responsibility under this
lease.  Offset against the deposit shall
not be an exclusive remedy in any of the above cases, but may be invoked by
Landlord, at its option, in addition to any other remedy provided by law or
this lease for Tenant’s non-performance.  Landlord shall give notice to Tenant each time
an offset is claimed against the deposit unless this lease is terminated,
Tenant shall within 10 days following such notice deposit with Landlord a sum
equal to the amount of the offset so that the total deposit amount, net of
offset, shall remain constant throughout the lease term.  Landlord may deliver the funds deposited
herein by Tenant to the purchaser or assignee of Landlord’s interest in the
leased premises, in the event that such interest be sold or transferred, and
thereupon Landlord shall be discharged from any further liability with respect
to such deposit.  If tenant exercises
their option(s) under paragraph 15.1 of the lease the Landlord at Landlord’s
option may increase the


 


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amount of Tenant’s
security deposit to an amount equal to one months rent, which shall be equal to
the last months rent due and payable under the option period.


 


Section 2. Use of the Premises


 


2.1          Permitted Use  Tenant shall use
and permit the Premises to be used for the following purposes only:  To provide telecommunications services and
necessary activities associated with Tenants primary business.


 


Tenant shall operate the above business every
business day during the hours and in the manner customary for such businesses,
except during the time and to the extent such use is prevented by fire, flood,
labor disputes, government edict or any other cause beyond Tenant’s control.


 


2.2          Restrictions on
Use  In connection with its use of the Premises,
Tenant shall:


 


a)             Refrain
from conducting any activity or creating any condition on the Premises in
violation of any federal, state or municipal laws or orders, which shall
include any violation of any applicable environmental laws, regulations, or
ordinances;


 


b)            Refrain
from selling alcoholic beverages on the Premises unless expressly permitted by
this lease;


 


c)             Refrain
from any activity or the maintenance of any condition that would in any way
tend to create a nuisance, damage the reputation of the Premises, or be
reasonably offensive to Landlord, or other tenants of the building in which the
Premises may be located.


 


d)            Refrain
from any use of the Premises that would cause the fire insurance rate on the
Premises or the Building to be increased or that will prevent Landlord from
taking advantage of any future ruling of the Oregon Insurance Rating Bureau or
its successor that would permit reduced premium rates for long-term fire
insurance policies on the Premises.  If
Tenant shall fail to comply with this restriction upon reasonable notice from
Landlord, Tenant shall pay any resulting extra cost of fire insurance upon
receipt of billings from Landlord.


 


e)             Refrain
from any activity or installation that will, in the opinion of a qualified
engineer or architect selected by Landlord, overload the floors or create undue
stress upon any part of the Premises:


 


f)             Refrain
from the use of any electrical equipment that will, in the opinion of a
qualified electrician selected by Landlord, overload the electrical circuits
from which Tenant obtains current or interfere with the reasonable use of such
circuits by Landlord or other tenants of Landlord using the same circuits.  Any changes to the wiring necessary to prevent
Tenant’s use from overloading the circuits shall be paid for by Tenant.


 


Signs and
Attachments  Tenant
at Tenants expense shall be responsible for obtaining all necessary permits,
and installing Tenant’s signage.  Tenant
shall not, without Landlord’s prior written consent, which shall not be
unreasonably withheld, place any permanent sign, advertisement, notice, marquee,
awning, decoration, aerial or attachment in, on or to the roof, canopy,
windows, doors or exterior walls of the Premises or the Building.  Any such sign or attachment placed upon the
Premises by Tenant with or without Landlord’s consent shall be removed at
Tenant’s expense upon termination of this lease, and all damage caused by
installation or removal shall be repaired at Tenant’s expense.  However, Tenant shall be able to


 


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place any
temporary sign, advertisement, notice, marquee, awning, decoration, aerial or
attachment on the premises without further consent of the Landlord.


 


2.3          Removal of
Snow, Ice and Debris:
 Tenant shall keep the sidewalks abutting
the Premises and all pedestrian areas leading to and away from any entrances,
include the parking area and driveways free and clear of snow, ice, debris and
obstructions of every kind.  If the
Premises consist of an entire building, Tenant shall keep the roof and drains
leading from the roof free and clear of snow, ice, leaves, garbage, debris, or
other obstruction which might overload or endanger the roof or adjoining
Premises, sidewalks or streets.  In
performing such work, Tenant shall take all necessary precautions to avoid
damage to the roof, gutters, downspouts, and drains.


 


2.4          Alterations  Unless herein stated or agreed upon during the
term of the lease, Tenant shall not make any alterations, additions or
improvements to the Premises, without Landlord’s prior written consent, which
shall not be unreasonably withheld.  Any
such additions, alterations or improvements, except for unattached movable
trade fixtures, shall at once become part of the realty and belong to Landlord
and shall not be removed later by Tenant unless the terms of the applicable consent
provide otherwise.


 


Section 3. Maintenance and Repair


 


3.1          Tenant’s
Obligation to Maintain and Repair  Tenant shall at all
times maintain the entire Premises in a neat condition, free of trash and
debris and in good order and repair.  Except
for those conditions stated in paragraph 1.2.1 and 3.2, Tenant’s
responsibilities for maintenance and repair shall include the entire premises,
without limitation, the following:


 


a)             Performance
of all necessary maintenance and repair upon the electrical fixtures, interior
lighting, interior and exterior lighting fixtures, switches and wiring from the
service panel, all doors, windows and related hardware, window coverings, alarm
system, concealed and exposed plumbing, indoor ceilings, walls, floors and
floor coverings, heating and air conditioning units, and all exterior walls
improvements to include the parking lot, exterior shell, and fencing.


 


b)            With
respect to Tenant’s responsibility in performing all routine maintenance and
repairs on all heating and air conditioning units Tenant shall maintain a
servicing agreement which requires each and every heating and air conditioning
unit being used in connection with the premises to be serviced at least
semi-annually.


 


c)             Not
permitting or suffering any waste upon the Premises.


 


d)            No
rent abatement shall occur during periods when repairs or replacements are
being performed.


 


e)             Tenant
shall be required to comply with current ADA laws relating to the Premises and
Tenant’s business activities which shall include all future requirements
whether these requirements are associated with the interior space, access to
and from the site, access to and from the building, or require modification to
the existing structure.


 


f)             All
required repairs and ADA compliance shall be completed whether the condition
requiring such repair existed at the execution of this lease or occurs after
occupancy.


 


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3.2          Landlord’s
Obligations to Repair:
 Landlord shall maintain and keep in good
order and repair the roof and existing structural components to the
improvements, and shall be responsible for major component replacement,
including the HVAC if Tenant has complied with paragraph 3.1.  Landlord shall not be responsible for painting
any portion of the interior or exterior of the Premises, except as stated in
paragraph 1.2.


 


Except for repairs or replacements herein
required to be made by Tenant, in the event that any repair or replacement
requested to the Landlord has a reasonable estimated cost in excess of $3,500,
and the remaining lease term, or option period thereof is less than 6 months,
Landlord may elect not to make such repair or replacement.  Such election shall be by written notice of
Landlord’s option not to perform said work.  Within 30 days following the effective date of
such notice, Tenant may elect to terminate the lease or complete said repairs.


 


3.3          Conditions of
Landlord’s Liability:
 Landlord shall only be deemed to be in
default under the terms of this Lease in the event Landlord shall violate,
neglect, or fail to observe, keep or perform any covenant or agreement which is
not observed, kept or performed by Landlord within ten (10) days after the
receipt by Landlord of written notice by Tenant of such breach which notice
shall specifically set out the breach.  Landlord
shall not be considered in default so long as Landlord commences to cure the
breach in a diligent and prudent manner and is allowed such additional time as
reasonably necessary to correct the breach.


 


Section 4. Utilities, Taxes and
Assessments


 


4.1          Utilities  Tenant shall pay when due all charges for
light, heat, water, garbage collection, janitorial service, sewer disposal,
monthly alarm monitoring fee, phone, or other utilities of any kind furnished
to the Premises.  Tenant shall be
responsible to contact all utility companies furnishing utilities to said
premises and have said utilities placed in Tenant’s name upon the lease
commencement date or occupancy whichever occurs sooner.  If any utility services are provided by or
through Landlord, charges to Tenant shall be comparable with prevailing rates
for comparable services.  If Landlord
receives and pays bills for any utilities furnished to the Premises, Tenant
shall reimburse Landlord upon demand.


 


4.2          Payment of Real
Property Taxes:
 During the term of this lease, Tenant
shall pay as additional rent, when due, all real property taxes assessed
against the property directly to Multnomah County, unless directed otherwise by
Landlord.  Landlord hereby agrees that it
will promptly, upon receipt, furnish Tenant copies of all notices of assessment
of taxes.  Should said notices not be
received by Tenant, Tenant shall be responsible for obtaining said amounts due
directly from Multnomah County prior to the real property taxes becoming due
and/or delinquent.  Tenant shall pay,
when due, all those taxes assessed against its personal property located on the
premises.  In addition to the real
property taxes, Tenant shall pay taxes applicable to the demised land and all
improvements comprising the demised premises assessed by any additional
appropriate taxing authority.  Real
property taxes can be further identified by the Multnomah County Assessor under
tax account number R-64450-5900.  In
addition, on or before March 1, 1996, Tenant shall reimburse Landlord for
its pro-rated share of 1995-1996 taxes, 4/12 thereof in the amount $2,316.16.


 


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4.3          Insurance  Landlord shall maintain building fire and
extended coverage insurance to include earthquake coverage at full replacement
value of said building and all associated improvements, excluding Tenant’s
property and fixtures.  Upon receipt of
billing for the annual insurance premium from the Landlord, Tenant shall
reimburse Landlord, as additional rent, for the amount paid by Landlord.  Landlord shall prorate any insurance
reimbursements due under the lease which does not coincide with a full year
lease term in the same manner as taxes as stated in paragraph 4.2.


 


As to any repairs that are the responsibility
of the tenant, but are covered by Landlord’s insurance, and which are
necessitated by an occurrence which is defined as an insurable event under
Landlord’s coverage, Landlord shall use reasonable efforts to make such repairs
as authorized by Landlord’s insurance carrier.  Tenant’s obligation shall be abated to the
extent any such repairs are actually completed at the expense of the Landlord’s
insurer, less any deductible which shall be paid by Tenant.


 


4.4          Special
Assessments  If an assessment for a public improvement is
made against the leased premises landlord shall, if possible, elect to cause
such assessment to be paid in installments.  Tenants reimbursement to Landlord shall be
treated in the same manner as general real property taxes for purposes of 4.2
provided, however, proration of any assessment not payable in installments
shall be prorated over the useful life of the improvement to include a fair
market interest for which such assessment is made which shall in no event
exceed twenty (20) years.


 


Section 5. Damage to or Destruction of
the Premises


 


5.1          Partial Damage  Except as described in Section 3.1 if
either the Building or the Premises shall be partially damaged by fire,
windstorm, or other casualty and paragraph 5.2 does not apply, Landlord shall,
subject to paragraph 5.3, repair the damage and restore the Premises to a
condition comparable to that existing prior to the damage, but only to the
extent of applicable insurance coverage.


 


Repair shall be accomplished with all reasonable
dispatch, subject to interruptions and delays from labor disputes and other
causes beyond Landlord’s reasonable control.  Rent shall be abated during the period to the
extent the Premises are not reasonably usable for the use permitted by this
lease, except where the damage is the fault of Tenant or Tenant is otherwise
liable for the cost of repair.


 


5.2          Destruction  If either the Building or Premises is damaged
such that the cost of restoration is reasonably estimated by Landlord to equal
or exceed 30 percent of the value of the Premises (or the Building), exclusive
of foundations, just prior to the occurrence of the damage, or if the damage
occurs when the remaining term of this lease (excluding any optional renewal
periods) is 20 percent or less of the original term, then the parties shall
proceed as follows:


 


a)             Landlord
may elect to terminate this lease by written notice to Tenant given within 90
days following the date of damage;


 


b)            Absent
such an election, Landlord shall, subject to paragraph 5.3, proceed to restore
the Premises (or Building) to condition substantially comparable existing just
prior to


 


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the damage.  Work shall be commenced as soon as reasonably
possible following the period for Landlord’s election not to rebuild and
thereafter shall proceed in the manner stated in paragraph 5.1.  Rent may be abated in the manner and under the
conditions stated in paragraph 5.1.


 


5.3          Repair of
Tenant’s Property  Repair, replacement or restoration of
any fixtures and personal property owned by Tenant or any additions or
improvements to the Premises constructed or owned by Tenant shall be the
responsibility of Tenant regardless of the cause of the damage.  Tenant shall pay all costs of moving its property
when this is required in connection with repairs of the Premises for which
Landlord or Tenant is responsible.


 


5.4          Waivers of
Subrogation  The parties shall obtain from their respective
insurance carriers waivers of Subrogation against the other party.  Neither party shall be liable to the other for
any loss nor damage caused by fire nor any of the events enumerated in a
standard fire insurance policy with an extended coverage endorsement except to
the extent such loss is not actually paid for out of the proceeds of such
insurance.


 


Section 6. Eminent Domain


 


6.1          Partial Taking  If a portion of the Premises is condemned or
purchased in lieu of condemnation and paragraph 6.2 does not apply, this lease
shall continue on the following terms:


 


a)             Landlord
shall be entitled to all of the proceeds of condemnation and Tenant shall have
no claim against the Landlord as a result of the condemnation.


 


b)            Subject
to paragraph 5.2 relating to Tenant’s improvements and property, Landlord shall
proceed as soon as reasonably practical to make such repairs and alterations to
the Premises as are necessary to restore the remaining Premises to a condition
as comparable as reasonably practicable to that existing just prior to the
condemnation.  Landlord may, but shall
not be required to, perform alterations prior to the actual taking after the
portion to be taken has been finally determined.  Rents shall be abated to the extent the
Premises are untenantable during the period of alteration and repair.


 


c)             After
the date on which title vests in the condemning authority or an earlier date on
which alterations are commenced by Owner to restore the balance of the Premises
in anticipation of taking, the rent shall be reduced in proportion to the
reduction in reasonable rental value of the Premises for Tenant’s use caused by
the condemnation.


 


6.2          Total Taking  If a condemning authority condemns or purchases
in lieu of condemnation all of the Premises or a proportion sufficient to
render the remaining Premises unsuitable for the permitted use despite
restoration as provided in paragraph 6.1, the lease shall terminate as of the
date that title vests in the condemning authority or to the date that Tenant
surrenders possession of the Property, whichever is later, and the provisions
of Section 12 covering termination shall apply.  Tenant shall be entitled to no condemnation
proceeds attributable to the value of its leasehold interest or any
improvements placed by it upon the Premises.  Tenant shall be entitled to any award made to
it for the removal of its property so long as such award does not diminish the
amount to be received by Landlord.


 


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Section 7. Liability to Third Persons;
Landlord’s Liability to Tenant


 


7.1          Indemnification
of Landlord  Tenant shall indemnify and hold Landlord
harmless from any claim, demand liability, damage, cost, expense (including
attorney fees), or loss arising out of or related to any activity of Tenant,
its agents, or invitee’s on the Premises or any condition existing in the
Premises, including any such claim, loss or liability that may be caused or
contributed to in whole or in part by Landlord, unless caused by the Landlord’s
sole negligence.


 


A)           Environmental Indemnification:  Notwithstanding any other provision of the
lease, and without limiting the generality of Paragraph 7.1, Tenant shall
indemnify, defend, and hold Landlord harmless for any damages, penalties,
fines, costs, liabilities, or losses (including, without limitation, diminution
in value of the Premises, damages for the loss or restriction on the use of
rental or usable space or of any amenity of the Premises, damages arising from
any adverse impact on marketing of space, and sums paid in settlement of
claims, attorneys’ fees, consultant fees, and expert fees) which arise during
or after the lease term as a result of contamination by Hazardous Substances as
a result of Tenant’s use of the Premises or activity, or by Tenant’s agents or
contractors.  This indemnification of
Landlord by Tenant includes, without limitation, costs and expenses for
Attorney’s, Engineer’s, and other professionals, and their assistants, incurred
in connection with any investigation of site conditions or any cleanup,
remedial, removal, or restoration work required by a federal, state, or local
government agency or political subdivision because of Hazardous Substances
present in the soil or ground water on or under the Premises.  Without limiting the foregoing, if the
presence of any Hazardous Substances on the Premise caused or permitted by
Tenant or its agents or contractors results in any contamination of the
Premises, Tenant shall promptly take all actions at its sole expense as are
necessary to return the Premises to the condition existing prior to the release
of any such Hazardous Substances to the Premises, provided that Landlord’s
approval of such actions shall first be obtained, which approval shall not be
unreasonably withheld so long as such actions would not potentially have any
material adverse long-term or short-term effect on the Premises.  For the purposes of the agreement “hazardous
substances” shall mean any and all hazardous or toxic substances, materials or
wastes as defined or listed under the environmental laws.  For purposes of this agreement “Environmental
Laws” shall mean the Resource Conservation and Recovery Act, the Toxic
Substances Control Act, the Comprehensive Environmental Response, Compensation
and Liability Act, the Solid Waste Disposal Act, or any comparable federal or
state statutes or any regulation promulgate under any such federal or state
statutes relating to the protection of human health or the environment.  However tenant shall not be responsible for
any environmental condition that existed at, or prior to, tenant’s occupancy.


 


B)            Survival.  Tenant’s indemnification obligations under
this lease shall survive the expiration or earlier termination of the lease.


 


C)            Landlords Access  At its option, Landlord shall have access to
the Property as may be required to carry out any remeadiation testing, or
inspection of the Premises with respect to the detection, analysis,
remediation, or other activity with respect to the presence, or possible
presence of Hazardous Substances located at, or adjacent to the Premises.  Landlord shall use all reasonable measures to
minimize the disturbance of the Tenant with in connection with such entry.


 


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7.2          Acts of Other
Tenants  Landlord shall have no liability for acts of
other tenants who may be occupying the Building or adjacent Premises.


 


7.3          Liens  Tenant shall pay as due all claims for work
done on and for services rendered or materials furnished to the Premises at its
request and shall keep the Premises free from any liens.  If Tenant fails to pay any such claims or to
discharge any lien, Landlord may do so and collect all costs of such discharge,
including its reasonable attorneys’ fees.  Such action by Landlord shall not constitute a
waiver of any right or remedy which Landlord may have on account of Tenant’s
default.  Tenant may withhold payment of
any claim in connection with a good-faith dispute over the obligation to pay,
so long as Landlord’s property interests are not jeopardized.  If a lien is filed as a result of nonpayment,
Tenant shall, within 10 days after knowledge of the filing, secure the
discharge of the lien.


 


7.4          Liability
Insurance  At all times during the term of this lease and
renewals thereof, Tenant shall, at Tenant’s expense, obtain and keep in force
and effect during the terms of this Lease a policy of Combined Single Limit,
Bodily Injury, and Property Damage Insurance, insuring Landlord, by
endorsement, naming the Landlord as an additional insured and Tenant against
any liability arising out of the ownership, use, occupancy, or maintenance of
the Premises and all areas appurtenance thereto.  Such insurance shall be a combined single
limit policy in an amount not less than $1,000,000.00 per occurrence.  The limits of said insurance shall not,
however, limit the liability of Tenant thereunder.


 


All insurance herein required shall be in a
form acceptable to Landlord and obtained from an insurance carrier licensed to
do business in the state in which the property is located.  The insurance carrier at all times during the
term of the lease shall have a policyholders rating of not less than an A+/7 in
the most current edition of Best’s Insurance Reports.


 


Proof of said insurance shall be delivered
prior to, or at, the Commencement Date of this lease.


 


Such policy shall provide that the insurance
shall not be cancelable or modified without at least ten (10) days prior
written notice to Landlord and shall be deemed primary and non-contributing
with other insurance available to Landlord.


 


In the event Tenant fails to procure,
maintain, and/or pay for the insurance required by this lease said failure
shall be an immediate default of said lease.


 


Section 8. Landlord’s Warranty


 


Possession
and Enjoyment of Premises  Subject to paragraph 14.5, relating to
inspection of the Premises, and any provision under this lease, Landlord
warrants that, so long as the Tenant is not in default under this lease,
Landlord shall not do any act which will interfere with Tenant’s right to
possession and enjoyment of the Premises during the term of this lease.


 


Section 9. Assignment and Sublease


 


9.1          Assignment and
Subleasing  No part of the premises may be assigned,
mortgaged or subleased by Tenant, nor may a right to use any portion of the
premises be conferred on any third person by any other means without Landlord’s
prior written consent,


 


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which shall not be
unreasonably withheld.  If Tenant desires
to enter into a sublease or assignment, Tenant shall first give to Landlord
sixty (60) days prior written notice, to the proposed effective date of the
sublease or assignment.


 


9.2          The proposed
sublease request shall be accompanied by:


 


a)             The
name of proposed assignee/Sublessee.


 


b)            The
nature of the proposed transferee’s business to be conducted upon the premises.


 


c)             The
most recent financial statement of proposed transferee.


 


d)            A
check payable to Landlord in the amount of $500.00.


 


e)             Submit
an “Assignment of Lease” (except for rent as stated herein) of Sublease
Agreement in which the lease terms remain unchanged and no variations from the
existing lease be granted to the proposed Sublessee or assignee.  In addition, Landlord requires a non-release
of liability clause be contained in the Sublessee/assignment agreement.


 


9.3          Withholding
Consent:  The Landlord at Landlord’s sole discretion may
withhold Landlord’s consent to any assignment or sublease, or any of the Tenant’s
interest under this lease, under any of the following circumstances which shall
include but not be limited to:


 


a)             The
proposed assignee or Sublessee or its business is subject to compliance with
additional requirements of the law (including related regulations) commonly
known as the “American with Disabilities Act” beyond those requirements which
are applicable to the Tenant desiring to assign or sublease.  Should Tenant pay any additional costs
necessary to comply with these additional laws or requirements Landlord’s
consent shall not be withheld on this basis.


 


b)            The
proposed assignee or Sublessee does not possess equal business experience or
financial capability as the Tenant desiring to assign or sublease.


 


c)             The
proposed assignee or Sublessee or its business may create a change in use,
creates a non conforming use, does not comply with the current zoning, or
creates a greater environmental risk than the existing tenant.


 


d)            The
proposed assignee or Sublessee or its business distributes, stores, or disposes
any hazardous waste materials.


 


9.4          Failure by
Tenant to Comply:
 Landlord shall have no liability to
Tenant for refusing to consent to Tenants request for any assignment or
sublease or for Tenant’s failure to comply with any or all requirements set
forth in section 9 of this lease.


 


Section 10. Default


 


The following shall be events of default:


 


10.1        Nonpayment by
Tenant:  Tenant’s failure to pay rent or any other
charge under this lease within 10 days after it is due.


 


10.2        Noncompliance
by Tenant:  Tenant’s failure to comply with any term or
condition, except for insurance coverage which must be continuous or fulfill
any obligation of this lease (other than the payment of rent or other charges)
within 15 days after written notice by


 


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Landlord, specifying
the nature of the default.  If the
default cannot be completely cured within the 15-day period, this provision
shall be satisfied if Tenant commences correction of the default within the 15-day
period and thereafter proceeds with reasonable diligence and in good faith to
effect the remedy as soon as possible.


 


10.3        Insolvency of
Tenant  Tenant’s insolvency; an assignment by Tenant
for the benefit of creditors; the filing by Tenant of a voluntary petition in
bankruptcy, an adjudication that Tenant is bankrupt or the appointment of a
receiver of the properties of Tenant; the filing of an involuntary petition of
bankruptcy and Tenant’s failure to secure a dismissal of such petition within
30 days after filing; attachment or levying of execution upon the leasehold
interest and failure of Tenant to secure discharge of such attachment or
release of such levy within 10 days.  If
Tenant consists of two or more individuals or business entities, the events of
default specified in this paragraph shall apply to each individual unless
within 10 days after an event of default occurs, the remaining individuals
produce evidence satisfactory to Landlord that they have unconditionally
acquired the interest of the one causing the default.


 


Section 11. Remedies on Default


 


11.1        Re-entry  In the event of a default, Tenant’s right to
possession of the Premises shall immediately terminate.  Thereafter, Landlord may re-enter, take
possession of the Premises and remove any persons or property by legal action
or by self-help, with the use of reasonable force and without liability for
damages.  Landlord shall have a security
interest in Tenant’s property on the Premises at the time of re-entry to secure
all sums owed or to become owing Landlord under the lease.  Perfection of such security interest shall be
by taking possession of the property or otherwise as provided by law.


 


11.2        Reletting  Following re-entry by Landlord because of
Tenant’s default, Landlord may relet the Premises for a term longer or shorter
than the term of his lease and upon any reasonable term, including the granting
of rent concessions to the new tenant.  Landlord
may alter, refurbish or change the character or use of the Premises in
connection with such reletting.  No such
reletting by Landlord following Tenant’s default shall be construed as an
acceptance of a surrender of the Premises.  If rent received upon reletting exceeds the
rent received under this lease, Tenant shall have no claim to the excess.


 


11.3        Damages for
Default  Following re-entry, Landlord shall have the
right to recover from Tenant the following damages:


 


a)             All
unpaid rent or other charges for the period prior to re-entry, plus interest as
provided in paragraph 14.6;


 


b)            An
amount equal to the rental lost during any period in which the Premises are not
releted if Landlord continuously use reasonable efforts to relet the Premises
during such period.  If Landlord lists
the Premises with a real estate broker experienced in leasing commercial
properties in the area of the Premises, this shall constitute the taking of
reasonable efforts to relet the Premises;


 


c)             All
costs incurred in reletting or attempting to relet the Premises, including
without limitation, the cost of cleanup and repair in preparation for a new
tenant, the cost of 


 


11





















 


correcting any
default or restoring any unauthorized alterations and the amount of any real
estate commissions or advertising expenses;


 


d)            The
difference between the rent reserved under this lease and the amount actually
received by Landlord upon any reletting;


 


e)             Landlord
shall have the right to collect from Tenant any reasonable attorney’s fees
incurred in connection with any default by Tenant under the lease, and for
collection activity undertaken by Landlord, whether or not any litigation is
commenced.


 


11.4        Actions on
Default  Landlord may sue periodically to recover
damages as they accrue throughout the lease term and no action for accrued
damages shall be a bar to a later action for damages subsequently accruing.  To avoid a multiplicity of actions, Landlord
may obtain a decree of specific performance requiring Tenant to pay the damages
stated in paragraph 11.3 as they accrue.  Alternatively, Landlord may in any one action
elect 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 the judgment at the rate of three percent per annum.


 


11.5        Tenant’s
Possession Following Default  In the event that Tenant remains in possession
following default and Landlord does not elect to re-enter, Landlord may recover
all unpaid rent and other charges, and shall have the right to cure any
non-monetary default and recover the cost of such cure from Tenant, plus
interest at the maximum legal rate from the date of the expenditure.  In addition, Landlord shall be entitled to
recover attorney’s fees and costs reasonably incurred in connection with the
default, whether or not litigation is commenced.  Landlord may sue to recover such amounts as
they accrue, and no one action for accrued damages shall bar a later action for
damages subsequently accruing.


 


11.6        Remedies
Cumulative  The foregoing remedies shall not be exclusive
but shall be in addition to all other remedies and rights provided under
applicable law, and no election to pursue one remedy shall preclude the
Landlord from pursuing any and all other remedies available.


 


Section 12. Surrender on Termination


 


12.1        Surrender of
Premises  Upon expiration of the lease term or earlier
termination because of default, Tenant shall deliver all keys to Landlord and
surrender the Premises to Landlord in same condition as it was at the time of
the signing of this lease, broom clean, and free of any outstanding utility
charges, or other charges which are the responsibility of Tenant under the
lease.  Alterations constructed by Tenant
pursuant to Landlord’s permission shall not be removed or restored to the
original condition unless the terms of permission for the alterations so
require.  Depreciation, and wear from
ordinary use for the purposes for which the Premises were let need not be
restored, but all repair for which Tenant is responsible shall be completed
prior to such surrender.  Tenant’s
obligation under this paragraph shall not apply in case of termination of the
lease because of destruction of the Premises.


 


12.2        Fixtures  With the exception of Tenant’s movable trade
fixtures, all other fixtures placed upon the Premises during the term shall, at
Landlord’s option, become the property of


 


12





















 


Landlord.  Landlord may elect to require Tenant to remove
all such fixtures, which would otherwise remain the property of Landlord, and
to repair any damage resulting from the removal.  Should Tenant fail to effect such removals or
make such repairs, Landlord may do so and charge the cost to Tenant with
interest at the maximum legal rate from the date of the expenditure until paid
in full.


 


12.3        Removal of
Tenant’s Property  If tenant is not in default of its
payment obligations under this lease at the time of termination, Tenant shall
remove all furnishings, furniture, trade fixtures, and all items of personal
property that remain the property of Tenant.  Failure to do by the end of the lease term
shall be an abandonment of the property and Tenant shall have no further rights
therein except as provided below.  Landlord
may elect to proceed as follows with respect to such abandoned property:


 


a)             Retain
or dispose of the property as it sees fit;


 


b)            Following
20-days written notice to Tenant, remove the property and place it in public
storage for Tenant’s account, in which case Tenant shall be liable for the cost
of removal, transportation and storage, plus interest at the maximum legal rate
from the date of all expenditures.


 


12.4        Holdover  Should Tenant fail to vacate the Premises when
required, Landlord’s rights shall be as follows:


 


a)             Landlord
may elect to treat Tenant as a tenant from month to month subject to all the
provisions of this lease except the provisions for term;


 


b)            Upon
30 days written notice Landlord may establish a new monthly base rental rate;


 


c)             Landlord
shall not be require to make any repairs, and or major component replacement
during said holdover period, unless agreed to by Landlord;


 


d)            Landlord
may elect to take legal action to eject Tenant from the Premises and to collect
any damages caused by Tenant’s wrongful holding over.


 


12.5        Tenant’s failure to remove
property as required by paragraph 12.3 above shall constitute a failure to vacate
to which paragraph 12.4 shall apply.


 


Section 13. Arbitration


 


13.1        Disputes
Arbitrable  If any dispute arises between the parties to
this lease regarding the extent of rent abatement under paragraph 5.1, the
extent of damage under 5.2, the extent of rent reduction to be made under
paragraph 6.1(c), or whether paragraph 6.2 applies following a partial taking
of the Premises by condemnation, either party may request arbitration and
appoint as arbitrator one independent real estate broker or appraiser having
knowledge regarding valuation of rental properties comparable to the Premises.  If the dispute is not resolved within 10 days
after such notice, the responding party shall likewise choose an arbitrator
meeting the above qualifications.  The
two arbitrators shall within 5 days choose a third having the above
qualifications.  If the choice of the
second or third arbitrator is not made within 5 days after the end of the
period in which the choice is to be made, then either party may apply to the
presiding judge of the Judicial District in which the Premises are located who
shall


 


13





















 


appoint the required
arbitrator.  All reasonable effort shall
be made between Landlord and Tenant to use Arbitration Service of Portland.


 


13.2        Submission of
Dispute  At any time within 20 days after appointment
of the third arbitrator either party may submit the dispute for settlement by
the arbitrators.


 


13.3        Arbitration
Proceedings  The arbitrators to whom a dispute is submitted
shall conduct such investigations and hearings as they shall consider
necessary.  Each party shall be afforded
the opportunity to make a presentation of its position to the arbitrators.  The written decision of the majority shall be
submitted to both parties within 30 days after the referral unless the
arbitrators determine that further time is reasonably required to make a proper
investigation of the relevant facts.  In
addition, to other powers conferred by law or this agreement; a majority of the
arbitrators shall have the power to compel oral or documentary evidence from
either party or any other person or firm at the request of either party for
discovery purposes.  The arbitration
shall take place in the State of Oregon.


 


13.4        Decision  The decision of the Arbitrators shall be final
and binding, and no party shall have any right to appeal therefrom including
any decision as to whether or not the question was subject to arbitration.


 


13.5        Cost of
Arbitration  The cost of arbitration shall be allocated between
the parties by the arbitrators on the basis of the extent to which the position
of one or the other party is adopted in the arbitrators’ decision.


 


Section 14. General Provisions


 


14.1        Nonwaiver  Waiver by either party of strict performance
of any provision of this lease shall not be a waiver of or prejudice the
parties’ right otherwise to require strict performance of the same provision or
of any other provision.


 


14.2        Actions and
Suits  If suit or action is instituted in connection
with any controversy arising out of this lease, the prevailing party shall be
entitled to recover in addition to costs such sum as the court may adjudge
reasonable as attorneys’ fees at trial and on any appeal of such suit or
action.


 


14.3        Notices  Any notice required by the terms of this lease
to be given by one party hereto to the other or desired so to be given, shall
be sufficient if it is in writing contained in a sealed envelope, deposited in
the United States Mail with postage thereon fully prepaid, certified mail return
receipt requested, and addressed to the respective party at the address of such
party hereinafter set forth.  Any such
notice shall be deemed conclusively to be delivered to the addressee thereof 24
hours after the deposit thereof in said United States Mail.


 


14.4        Succession  Subject to the prescribed limitations on
transfer of Tenant’s interest, this lease shall be binding upon and inure to
the benefit of the parties, their respective successors and assigns.


 


14.5        Entry for
Inspection  Landlord shall have the right to enter upon
the Premises at any time to determine Tenant’s compliance with this lease, to
make necessary repairs to the


 


14





















 


Building or to the
Premises, or to show the Premises to any prospective tenant or purchaser, and
in addition have the right, at any time during the last two months of the term
of this lease, to place and maintain upon the Premises notices for leasing or
selling of the Premises.


 


14.6        Interest on
Rent and other Charges  Any payment other than the base
rent which payment is required of Tenant under this lease shall, if not paid
within 10 days after it is due, bear interest at 18% per annum from the date
due until paid.


 


14.7        Proration of
Rent  In the event of commencement or termination of
this lease at a time other than the beginning or end of one of the specified rental
periods, then the rent shall be prorated as of the date of commencement or
termination and in the event of termination for reasons other than default, all
prepaid rent shall be refunded to Tenant or paid on his account.


 


14.8        Landlord’s
Conveyance  Any conveyance of the Premises by Landlord during
the term of this lease shall be subject to his lease, and following any such
conveyance, Landlord shall be discharged from all obligations under this lease
except those already accrued.


 


14.9        Representation
by Attorney’s:  The parties agree and acknowledge that each
party has been represented by an attorney of its own choosing in the
preparation of this lease.  Consequently
the shall not be construed either in favor or against any party.


 


Section 15.


 


15.1        Option to Renew:  If all terms and conditions of this lease
have been met and Tenant has not previously been in default of any provision of
the Lease, or failed to perform any provision of the lease whether a default
has actually been imposed by Landlord, Tenant shall have the option to renew
the Lease for two additional five year periods, once at the conclusion of the
initial lease term, and once at the conclusion of the initial option term at
the fair market rental value as determined by and MAI appraiser, selected by
Landlord, and to be agreed upon by both parties.  Should the tenant not agree with the fair
market rental rate as established by the MAI appraiser, and as presented by Landlord,
Tenant at Tenant’s expense may order a second appraisal.  If the second appraisal is within 10% of the
first appraisal, or higher, the higher of the two fair market rental rates established
by the two appraisals will be used.  If
the appraisals are more than 10% apart on the fair market rental rate, a third
appraisal shall be ordered.  Landlord and
Tenant shall split the costs equally for obtaining third appraisal.  Upon receipt of the third appraisal the fair
market rental rate will be established by averaging the two highest fair market
rental values stated in two of the three appraisals.  The fair market rental rate valuation shall
not include a premium or excessive rental rate for any specialized improvements
made by the tenant, but shall include a fair market rental rate based upon
improvements, made either by a Landlord or Tenant, in general warehouse/office
distribution facilities.  For
clarification purposes the current rental rate was established based upon space
comparably found in office/warehouse distribution facilities at the time of lease
commencement.  It would be the intent of
the parties to establish the fair market value at, either option period, under
similar conditions as the initial rental period, utilizing rental rates based
upon typical office/warehouse space found in the market at the time of renewal,
and not to charge a premium or excess on the fair market rental rate should
Shared Communications bring the office space to a Class A or similar
standard.  Any option period hereby
agreed upon or granted shall contain a rental escalation commencing with


 


15





















 


the fourth year,
based upon a CPI escalation as stated above.  Said option to extend shall be delivered to Landlord
in writing but no later than 180 days prior to the expiration of the original
term.  If this lease is renewed, all
terms of this Lease shall remain in full force and effect except for the
revised base rental rate, and term, of this Lease.  In any event the base rental rate during said
option period shall not be less than the amount equal to the last month’s rent
due under the initial term of the lease.  If Landlord and Tenant cannot agree upon the
fair market rental rate prior to the commencement of the option term, and
Tenant still occupies the premises, the base rental rate at the commencement of
the option term shall not be less than the last monthly stated rent in the
original term, or option term, thereof whichever is greater.  If the parties cannot agree on the base rent
to be paid during the option period within six months form the expiration date
of the initial term of this lease, said lease shall thereby terminate and
tenant shall vacate the premises.


 


15.2        First Right of
Refusal:  If all terms and conditions of this lease have
been met and Tenant has not previously been in declared in default, or option
periods thereof, for more than any 30 day period, of any provision of the
Lease, or has failed to perform any provision of the lease where the Landlord
has actually been imposed a default thereof, and in which Landlord desires to
sell the leased premises, but is under no obligation to sell, shall first offer
the property for Purchase to Tenant under the terms and conditions solely acceptable
to Landlord.  The proposed offer price
shall be based upon an appraisal performed by an MAI appraiser, which said
appraisal shall conform, to all acceptable standards and practices and shall be
based upon the Market Value, and shall be on an unencumbered, “fee title” fee
simple basis.  The purchase price or
appraised value offered shall not include a premium or excessive value/price
for any specialized improvements made by the tenant but shall be based upon
similar improvements, tenant, or otherwise, found in comparable sales.  Tenant shall have 20 days from receipt of
Landlord’s written notice of Landlord’s intent to sell the lease property to
submit an offer under the terms and conditions submitted by Landlord.  Should tenant not respond to Landlord within 20
days of receiving Landlord’s written notice this paragraph shall become null
and void and Landlord shall have the right to proceed with the sale of the
building without any further obligation to tenant.


 


IN WITNESS
WHEREOF, the parties hereto have executed this
instrument in duplicate at the place and on the day and year first above
written, any corporate signature being by authority of the board of directors.


 


	
  LANDLORD

  	
   

  	
  Tenant

  
	
  U.S. National Bank of Oregon, as Trustee

  	
   

  	
  Shared Communications Services, Inc.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John Wagner

  	
   

  	
  By:

  	
   /s/ [illegible]

  
	
   

  	
  John Wagner

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   CEO

  
	
   

  	
  Vice President

  	
   

  	
   

  	
   

  
	
  Date:

  	
  3/11/96

  	
   

  	
  Date:

  	
  3-11-96

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address for Notices.

  	
  Address for Notices:

  
													



 


16





















 


	
  U. S. National Bank of Oregon

  	
  810 S.E. Belmont

  
	
  P. O. Box 3168

  	
  Portland, Oregon  97212

  
	
  Portland, Oregon 97208

  	
   

  



 


17





















 


ADDENDUM “A”


 


1996


 


LEGAL DESCRIPTION


 


Lots 1, 2, 3, and 4 Block 177, Park Addition
to East Portland, City of Portland, County of Multnomah, and State of Oregon.


 


18