exv10w3






Exhibit 10.3




WIDMER BROTHERS BREWING COMPANY RESTATED LEASE




Smithson & McKay Limited Liability Company, Lessor




and




Widmer Brothers Brewing Company, Lessee




Dated As Of January 1, 1994





 









 








RESTATED LEASE



This Restated Lease, dated as of January 1, 1994, is made between Smithson & McKay Limited
Liability Company, an Oregon limited liability company (“Lessor”), and Widmer Brothers Brewing
Company, an Oregon Corporation (“Lessee”).




P R E M I S E S





	A.	 	Lessor is the owner of the real property described as 929 N. Russell, City of Portland,
County of Multnomah, State of Oregon (“Premises”), as more fully described in Exhibit A
attached hereto and incorporated herein; and
	 
	B.	 	Lessor wishes to continue to lease to Lessee and Lessee wishes to continue to lease from
Lessor said real property (“Premises”):
	 
	C.	 	This Lease restates and supersedes all lease documents for the Premises executed prior to the
date of this document. Where there is a conflict between this Restated Lease and any
predecessor documents, this document shall prevail.




In consideration of the premises and the covenants expressed herein, and for other good and
valuable consideration, the parties agree as follows:





	1.	 	Lease of Premises. Lessor hereby leases and demises to Lessee, and Lessee hereby
leases and takes from Lessor, the Premises for the term and upon the agreements, covenants and
conditions set forth herein. The Premises consist of the underlying real estate and shell
condition upon which Lessee’s offices, restaurant, and part of its brewery are located.
Lessee has made substantial improvements to the shell condition of the Premises.
	 
	2.	 	Term.






	 	2.1	 	The term of this Lease commenced on May 1, 1989 (“Commencement Date”) and
terminates on December 31, 2034, unless sooner terminated pursuant to any provisions
hereof.
	 
	 	2.2	 	Option to Extend. Lessee may extend the term until the tenth (10th)
anniversary of the expiration date by written notice of its election to do so given to
Lessor at least one (1) year prior to the December 31, 2034 expiration date. Lessee
may extend for a second term of ten (10) years by giving written notice to Lessor at
least one (1) year prior to the expiration of the first extended term. The terms and
conditions of the Lease applicable at the expiration date will govern the extended
term; however, the monthly rent will be the fair market rent for the Premises on the
expiration date. If Lessor and Lessee are unable to agree upon the fair market rent
prior to the expiration date, the question will be submitted to arbitration according
to Paragraph 30. In that event, Lessee will continue to pay rent according to the
Lease until the arbitration decision is rendered. At that time, Lessor and Lessee will
make appropriate adjustments as of the expiration date. Lessee will not have any
rights under this Paragraph if: (a) an event of default




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	 	 	 	exists on the expiration date or on the date on which Lessee gives its notice; or
(b) Lessee exercises its rights less than one (1) year before the expiration date.






	3.	 	Rent.






	 	3.1	 	Lessee will pay Lessor the monthly rent in equal consecutive monthly
installments on or before the first day of each month during the term of this Lease.
The monthly rent will be paid in advance at the address specified for Lessor in the
basic lease information or such other place as Lessor designates, without prior demand
and without any abatement, deduction or setoff. If the commencement date occurs on a
day other than the first day of a calendar month, or if the expiration date occurs on a
day other than the last day of the calendar month, then the monthly rent for each
fractional month will be prorated on a daily basis. This is a triple net lease with
all expenses, maintenance, renovation, and replacement assumed by Lessee.
	 
	 	3.2	 	Monthly rent is as follows: Three Thousand Dollars ($3,000.00) per month
subject to a yearly consumer price index adjustment as described below.
	 
	 	 	 	CPI Adjustments: The Basic Annual Rent shall be subject to upward adjustments, based
on the Consumer Price Index, one year after the Commencement Date of this Lease and
at the end of each subsequent year, during the Lease Term in accordance with the
following procedure:






	 	(A)	 	The index to be used for this adjustment shall be the Consumer
Price Index for All Urban Consumers (CPI-U), All Items, U.S. City Average
(1982-1984 equals 100), published by the U.S. Department of Labor, Bureau of
Labor Statistics.
	 
	 	(B)	 	The Base Period Consumer Price index shall be subtracted from
the Adjustment Period Consumer Price Index; the difference shall be divided by
the Base Period Consumer Price Index. This quotient shall then be multiplied
by $3,000.00. The result shall be added to the monthly rent of $3,000.00.
This arithmetical sum shall then be the Adjusted Monthly Rent for such
immediately succeeding leasehold year which shall be paid monthly.
	 
	 	(C)	 	If the Consumer Price Index is, at any time during the term of
this Lease, discontinued or no longer published, then the most nearly
comparable published measure of inflation, as determined by Lessor in its sole
discretion, shall be substituted for the purpose of this calculation.






	4.	 	Taxes and Other Charges.






	 	4.1	 	Lessee agrees to pay and discharge, as additional rent for the Premises during
the entire term of this Lease, before delinquency, all taxes, assessments, water rents,
sewer rentals, utility rates and fees, levies or other charges of any kind which are or
may during the term of this Lease be levied, charged, assessed or imposed upon




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	 	 	 	or against the Premises or any buildings or improvements which are hereafter located
thereon, or against any legal or equitable interest of Lessor in the Premises, or
against any of Lessee’s personal property now or hereafter located thereon, or which
may be levied, charged, assessed or imposed upon or against the leasehold estate
created hereby. All taxes, assessments and other charges covered by this
Paragraph 4 shall be prorated between Lessor and Lessee as of the commencement and
expiration dates of the Lease Term. If at any time during the term of the Lease any
tax, assessment or other charge is levied for a benefit which shall have a useful
life longer than the remaining Lease Term, and if the law permits the payment of any
such tax, assessment or other charge, in installments (whether or not interest
accrues on the unpaid balance), such tax, assessment or other charge shall be paid
in installments, with Lessee paying such installment during the term of this Lease
and Lessor paying any installments thereafter.
	 
	 	4.2	 	Anything herein to the contrary notwithstanding, Lessee shall not be required
to pay pursuant to this Paragraph 4 any franchise, capital levy or transfer tax of
Lessor, or any income, profits, or excess profits tax, or any tax which may, at any
time during the term of this Lease, be required to be paid on any gift, or demise,
deed, mortgage, descent or other alienation of any part or all of the estate of Lessor
in and to the Premises or any buildings or improvements which are now or hereafter
located thereon.
	 
	 	4.3	 	Lessee shall furnish to Lessor, upon request, receipts or other appropriate
evidence establishing payment of any taxes, assessments or other charges required to be
paid hereunder by Lessee.
	 
	 	4.4	 	Lessee shall pay prior to delinquency all taxes assessed against and levied
upon trade fixtures, furnishings, equipment and all other personal property of Lessee
contained in the Premises. When possible, Lessee shall cause said trade fixtures,
furnishings, equipment and all other personal property to be assessed and billed
separately from the real property of Lessor.
	 
	 	 	 	If any of Lessee’s said personal property shall be assessed with Lessor’s real
property, Lessee shall pay the taxes attributable to Lessee prior to the delinquency
date for payment of such taxes, provided that Lessor shall at reasonable time prior
thereto provide Lessee with a written statement setting forth the taxes applicable
to Lessee’s property and an explanation of Lessor’s method of computation thereof.






	5.	 	Lessor’s Warranty of Title and Quiet Enjoyment. Lessor hereby covenants and warrants
to Lessee that Lessor has good and marketable fee simple title to the Premises, free and clear
of all claims, liens and encumbrances except those certain exceptions set forth in the Title
Report attached hereto and incorporated herein as Exhibit B. Upon Lessee paying the rent
reserved hereunder and observing and performing all of the covenants, conditions and
provisions on Lessee’s part to be observed and performed hereunder, Lessee shall peaceably
hold and quietly enjoy the Premises for the entire term hereof, without hindrance, molestation
or interruption by Lessor or any other party. Without limiting the




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	 	 	generality of the foregoing, Lessor shall pay prior to delinquency all sums due and owing
under any encumbrance on the fee interest in the Premises, and shall perform in a timely
fashion all covenants and obligations on Lessor’s part to be performed under any such
encumbrances. In the event Lessor fails to pay sums due or perform such covenants and
obligations under such encumbrances, Lessee shall be entitled, upon no less than ten (10)
days written notice to Lessor, to pay any such sums, perform any such covenants or
obligations or cure any defaults under such encumbrances and offset any sums paid or
expended in performance or curing with interest thereon at the rate of twelve percent (12%),
against the rental owing hereunder. Lessor hereby warrants and certifies that as of the
date hereof there are no defaults, or events which with the passage of time or the giving of
notice of both would become defaults, under any encumbrances on the fee interest in the
Premises.
	 
	6.	 	Use. Lessee shall have the right to use the Premises for any lawful purpose, in
accordance with all present and future zoning laws, rules and regulations of governmental
authorities having jurisdiction thereof, and subject to all covenants, easements and
rights-of-way of record, if any, which are presently in existence and irrespective of whether
the same are being contested by Lessee.
	 
	7.	 	Condition of Premises; Utilities.






	 	7.1	 	Lessee hereby accepts the Premises in an “as is” condition, existing as of the
date of the execution hereof, subject to all applicable zoning, municipal, county and
state ordinances and regulations covering and regulating the use of the Premises, and
accepts this Lease subject thereto and to all matters disclosed thereby. Lessee
acknowledges that neither Lessor nor Lessor’s agent has made any representation or
warranty as to the suitability of the Premises for the conduct of any type of business.
	 
	 	7.2	 	Lessee shall pay for all water, sewer, gas, heat, light, power, steam,
telephone, or other utilities and services supplied to the Premises, together with any
taxes thereon.






	8.	 	Repairs, Governmental Regulations and Waste.






	 	8.1	 	Lessee shall keep the Premises as improved and every part thereof, structural
or non-structural, in good order, condition and repair, whether or not such portion of
the Premises requiring repair, or the means of repairing the same, are reasonably or
readily accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Lessee’s use, any prior use, the elements or the age of such portion of the
Premises, including without limiting the generality of the foregoing, all plumbing,
heating, air conditioning, ventilating, electrical lighting facilities and equipment
from time to time within the Premises, fixtures, walls (interior and exterior), floors,
windows, doors, plate glass and sky lights located within the Premises, and all
landscaping, driveways, parking lots, fences and signs located on the Premises, and
sidewalks adjacent to the Premises. The foregoing provisions shall not, however, be
construed to limit the right of Lessee to make




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	 	 	 	alterations, additions or improvements to the Premises as provided in Paragraph 9
hereof.
	 
	 	8.2	 	Upon the termination of this Lease, except to the extent provided otherwise (in
Paragraphs 7, 9, 10, and 16 hereof), Lessee shall surrender the Premises to Lessor in
the same condition as when received, ordinary wear and tear excepted. Lessee shall
repair any damage to the Premises occasioned by the removal of Lessee’s trade fixtures,
furnishings and equipment; which repairs shall include the patching and filling of
holes and repair of structural damage. Lessee shall, at Lessee’s sole cost and expense
comply promptly with all applicable statutes, ordinances, rules, regulations and
restrictions of record, if any, and requirements in effect during the term of this
Lease regulating the use by Lessee of the Premises. Lessee agrees and acknowledges
that it has inspected the Premises and has made all necessary investigations and
inquiries with respect to compliance by Lessor with all applicable current municipal,
county and state statutes, ordinances, rules and regulations and assumes full
responsibility for compliance therewith.
	 
	 	8.3	 	If Lessee fails to perform Lessee’s obligations under this Paragraph 8, Lessor
may, at its option (but shall not be required to), enter upon the Premises after thirty
(30) days prior written notice to Lessee of the specific failures of Lessee under this
Paragraph 8, and provided that Lessee has not theretofore cured such failures or, in
the case of any such failure which cannot be cured within said 30-day period, commenced
to cure the same and thereafter is diligently prosecuting such curing), put the same in
good order, condition and repair, and the cost thereof, together with interest thereon
at the rate of twelve (12%) percent per annum, shall become due and payable as
additional rental to Lessor together with Lessee’s next rental installment.
	 
	 	8.4	 	Except for the obligations of Lessor under Paragraph 10 (Damage or Destruction)
and Paragraph 16 (Eminent Domain), it is intended by the parties hereto that Lessor
shall have no obligation in any manner whatsoever to repair and maintain the Premises,
nor any buildings or improvements located thereon, nor the equipment therein, whether
structural or nonstructural, all of which obligations are those of Lessee under this
paragraph. Lessee expressly waives the benefit of any statute now or hereafter in
effect which would otherwise afford Lessee the right to make repairs at Lessor’s
expense, or to terminate this Lease because of Lessor’s failure to keep the Premises in
good order, condition and repair.
	 
	 	8.5	 	Lessee shall have the right to contest by appropriate judicial or
administrative proceedings, without cost or expense to Lessor, the validity or
application of any law, ordinance, order, rule, regulation or requirement (hereinafter
called “law”) that Lessee repair, maintain, alter or replace the improvements on the
Premises in whole or in part or that would affect Lessee’s use of the Premises. In the
event that any such contest is finally determined in a manner adverse to Lessee, Lessee
shall either undertake such repairs, maintenance, alterations or replacements to or of
the Premises as is required by such law or modify its use of the Premises as is
required by such law.





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	9.	 	Improvements, Changes, Alterations, Demolition and Replacement by Lessee.






	 	9.1	 	At any time and from time to time during the term of this Lease, Lessee shall
have the right but not the obligation to make alterations, additions or improvements to
the Premises, provided that Lessee is not then in default under any Condition or
provision of this Lease and that the Premises following the work are at least equal in
value to the Premises as they were before such alterations, additions or improvements
were made,
	 
	 	9.2	 	Any work referred to in Subparagraph 9.1 above shall be undertaken in all cases
subject to the following additional conditions which Lessee covenants to observe and
perform:






	 	9.2.1	 	No such work shall be undertaken until Lessee shall have
procured and paid for, so far as the same may be required from time to time,
all municipal and other governmental permits and authorizations of the various
municipal departments and governmental subdivisions having jurisdiction, and
Lessor agrees to join in the application for such permits or authorizations and
in all other ways cooperate with Lessee in obtaining such permits and
authorizations whenever such action is necessary (provided that Lessee shall
reimburse Lessor for any expenses incurred by Lessor, in connection therewith).
	 
	 	9.2.2	 	All improvements, additions and alterations, when completed,
shall be of such a character that the value of the buildings and improvements
on the Premises immediately after any such improvement, addition or alteration
shall be equal to or greater than the value of any buildings and improvement,
addition or alteration.
	 
	 	9.2.3	 	Lessee shall protect the adjacent property against damage
resulting from the performance of any work and shall indemnify and hold Lessor
harmless against all liens or liability in any way arising out of the
performance of the work or the furnishing of labor, services, materials,
supplies, equipment or power in connection therewith.
	 
	 	9.2.4	 	No prior written notice of Lessee’s intent to begin work is
required, but Lessor shall have the right upon ten (10) days written notice to
require copies of all government permits, drawings, specifications and
inspection reports pertaining to any work undertaken by Lessee.
	 
	 	9.2.5	 	All work done in connection with any improvement, addition or
alteration shall be done promptly and in a good and workmanlike manner and in
compliance with all laws, ordinances, orders, rules, regulations and
requirements of all Federal, state and municipal governments and the
appropriate departments, commissions, boards and officers thereof. All such
work shall be at the sole expense of Lessee and, upon completion thereof, shall
be free and clear of all liens and encumbrances of any nature




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	 	 	 	whatsoever, including mechanics’ liens except for any Leasehold mortgage
obtained by Lessee for purposes of obtaining construction financing. The
work with respect to any improvement, addition or alteration shall be
prosecuted with reasonable dispatch, unavoidable delays (as hereinafter
defined) excepted.
	 
	 	9.2.6	 	In addition to the insurance coverage referred to in
Paragraph 13 below, workmen’s compensation insurance covering all persons
employed in connection with the work and with respect to whom death or injury
claims could be asserted against Lessor, Lessee or the Premises, shall be
maintained by Lessee, at Lessee’s sole cost and expense, at all times when and
work is in process in connection with any improvement, addition or: alteration.
All such insurance shall be obtained and kept in force as otherwise provided
in Paragraph 13 below.






	 	9.3	 	Lessor shall from time to time during the term of this Lease execute and
deliver all applications for permits, licenses or other authorizations relating to the
use and occupancy of the Premises required by any municipal, county, state or Federal
authorities, or required In connection with any repair or alteration of any buildings
or improvements now or hereafter located on the Premises. Lessor will from time to
time during the term of this Lease execute, acknowledge and deliver any and all
instruments required to grant rights-of-way and easements in favor of municipal and
other governmental authorities or public utility companies incident to the installation
of water lines, fire hydrants, sewers, electricity, telephone, gas, steam and other
facilities and utilities reasonably required for the use and occupancy of the Premises.
Lessee shall reimburse Lessor for any expenses reasonably so incurred.
	 
	 	9.4	 	All alterations, improvements, additions and installations, which may be made
to the Premises, shall be owned by Lessee during the term of this Lease and shall, upon
the termination of this Lease, become the property of Lessor without compensation to
Lessee and remain upon and be surrendered with the Premises. In such event, Lessor
shall take such alterations, improvements, additions and installations, free and clear
of all claims to or against the same by Lessee or any third person (except for any
claims created or consented to by Lessor or otherwise arising from actions taken by
Lessor), and Lessee shall defend and indemnify Lessor against all liability and loss
arising from such claims. The foregoing provisions shall not apply to any alterations,
improvements, additions or installations made by Lessee or any sublessee which can be
removed without substantial and unrepairable damage to the Premises, and which Lessee
or any sublessee elects to remove upon the termination of this Lease, provided that
Lessee or any sublessee promptly repairs, at its sole cost and expense, all damage to
the remaining improvements on the Premises caused by such removal, and provided
further, that the value of the improvements remaining on the Premises following such
removal are substantially equal to what the value of the improvements existing on the
Premises at the time of the execution of this Lease, would have been if the same had
remained on the Premises at the time of




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	 	 	 	termination of this Lease, assuming no alterations and additions thereto and only
normal wear and tear since the date of execution of this Lease.
	 
	 	9.5	 	On completion of any work of alteration, addition or improvement by Lessee, or
sublessee, Lessee shall maintain and make available to Lessor upon Lessor’s request “as
built” drawings accurately reflecting all such work.






	10.	 	Damage or Destruction.






	 	10.1	 	No loss or damage by fire or other cause required to be insured against by
Lessee hereunder, resulting in either partial or total destruction of any building or
improvement on the Premises, shall, except as otherwise provided herein, operate to
terminate this Lease, or to relieve or discharge Lessee from the performance and
observance of any of the agreements, covenants and conditions herein contained on the
part of Lessee to be performed and observed. Without limiting the generality of the
foregoing, Lessee shall not be relieved from its obligation to pay rent hereunder on
the event of such damage or destruction, unless Lessee shall elect to terminate this
Lease as provided below.
	 
	 	10.2	 	If any buildings or improvements located on the Premises, or any fixture,
equipment or machinery used or intended to be used in connection with the Premises, at
any time during the term of this Lease shall be damaged or destroyed by fire or other
cause and Lessee does not terminate this Lease pursuant to Subparagraph 10.3 below,
then Lessee may, at its option, elect to exercise the option to purchase the Premises
contained in Paragraph 28 hereof (irrespective of the year of the Lease Term in which
such damage or destruction occurs) or instead may elect to repair, reconstruct or
replace such buildings or improvements and such fixtures, equipment and machinery to a
condition substantially similar to their condition immediately prior to such
destruction, in which case such work shall be carried out with all reasonable
diligence. All such repair, reconstruction or replacement shall be at the sole cost
and expense of Lessee and, upon completion thereof, shall be (subject to the provisions
relative to financing by Lessee hereof) free and clear of all liens and encumbrances of
any nature whatsoever, including mechanics’ liens.
	 
	 	10.3	 	If (i) any buildings or improvements hereafter located on the Premises are
totally destroyed, or are partially destroyed or damaged and the cost to repair or
reconstruct the Premises exceeds twenty percent (20%) of the replacement value of the
Premises (“replacement value” as used herein shall mean the actual cost of replacing
the entire Premises), or (ii) the then existing laws do not permit the repair,
reconstruction or replacement of such buildings and improvements, or (iii) such total
or partial destruction occurs during the last five (5) years of the term of this Lease,
then, in any of such events, Lessee may, at its option, elect to repair, reconstruct or
replace such buildings or improvements, or elect to terminate this Lease by giving
Lessor notice thereof within ninety (90) days after such total or substantial
destruction, or elect to exercise the option to purchase the Premises contained in
Paragraph 28 hereof (irrespective of the year of the Lease Term in




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	 	 	 	which such damage or destruction occurs). If Lessee elects to terminate this Lease,
then, upon Lessor’s written request made upon Lessee within ninety (90) days after
Lessor’s receipt of Lessee’s notice of election to terminate, Lessee shall deliver
the Premises to Lessor after, at Lessee’s option, either (i) promptly demolishing
any remaining portion of the Building in its Shell Condition as well as all
improvements located on the Premises, leaving the Premises clear of all debris and
graded to the level of surrounding sidewalks and/or streets, whereupon this Lease
shall terminate; or (ii) promptly restoring the Premises to the condition thereof as
of January 1, 1994 but with the right to remove improvements and fixtures as
described in this Restated Lease, normal wear and tear excepted, whereupon this
Lease shall terminate. Should Lessor and Lessee for any reason disagree as to
whether any destruction of such buildings or improvements is sufficient to entitle
Lessee to terminate this Lease under this paragraph, the matter shall be determined
by arbitration in the manner provided in Paragraph 30 hereof.
	 
	 	10.4	 	In the event that Lessee elects or becomes obligated under this Paragraph 10 to
restore the Premises, Lessee at its cost shall cause to be prepared final plans and
specifications and working drawings complying with applicable laws as necessary for
restoration of the Premises. The plans and specifications and working drawings must be
approved by Lessor, provided that Lessor shall not unreasonably withhold its approval
thereof. Lessor shall have thirty (30) days after receipt of the plans and
specifications and working drawings to either approve or disapprove the plans and
specifications and working drawings and return them to Lessee. If Lessor disapproves
the plans and specifications and working drawings, Lessor shall notify Lessee of its
objections and Lessor’s proposed solution to each objection. In the event of any
disagreement between the parties as to whether Lessor’s disapproval is reasonable, the
matter will be settled in the same manner as provided in Paragraph 30 hereof. Lessee
acknowledges that the plans and specifications and working drawings shall be subject to
approval of the appropriate governmental bodies and that they will be prepared in such
a manner as to obtain that approval.
	 
	 	 	 	The work of restoration shall be accomplished subject to the conditions set forth
in Subparagraph 9.2 hereof, and otherwise shall be accomplished as follows:






	 	10.4.1	 	Lessee shall undertake and complete the restoration with due diligence,
subject to unavoidable delays as defined in Paragraph 31 hereof;
	 
	 	10.4.2	 	Lessee shall perform the work itself or retain a licensed contractor. Lessee
or such contractor shall be required to carry public liability and property
damage insurance, standard fire and extended coverage insurance, with vandalism
and malicious mischief endorsements, during the period of construction in
accordance with Paragraph 13. Such insurance shall contain a waiver of
subrogation clause in favor of Lessor and Lessee in accordance with the
provisions of Subparagraph 13.3;




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	 	10.4.3	 	Lessee shall notify Lessor of the date of commencement of the restoration not
later than ten (10) days before commencement of the restoration to enable
Lessor to post and record notices of nonresponsibility. Lessee may elect at
its option to obtain a performance and payment bond covering the contractor
performing the work of restoration; provided that if Lessee does elect to
obtain a bond, Lessor shall be named as an additional obligee and a copy of
such bond shall be delivered to Lessor;
	 
	 	10.4.4	 	On completion of the restoration Lessee shall immediately record a notice of
completion in the county in which the Premises are located;






	 	10.5	 	If this Lease is cancelled or terminated under any of the provisions of this
Paragraph 10 following any destruction all of the insurance proceeds paid on account of
such destruction, less any portion thereof used by Lessee in demolishing any remaining
improvements and clearing or restoring the Premises pursuant to Paragraph 10.3, under
any of the hazard insurance policies which Lessee is obligated to maintain and keep in
full force and effect during the term of this Lease under the provisions of
Paragraph 13, shall belong to Lessor, and Lessee shall have no right, title or interest
therein; provided, however, that if Lessee has exercised the option to purchase the
Premises contained in Paragraph 28 hereof or if Lessee has elected to restore the
Premises pursuant to Subparagraphs 10.3 or 10.4 hereof, then all such proceeds shall
belong to Lessee and Lessor shall have no right, title or interest therein.






	11.	 	Assignment and Subletting.






	 	11.1	 	Lessee shall not have the right to assign or otherwise transfer Lessee’s
interest in this Lease and the estate created by this Lease without Lessor’s prior
written consent, which consent will not be unreasonably withheld, provided that any
such assignment consented to by Lessor shall comply with the following conditions:






	 	11.1.1	 	Lessee shall give Lessor not less than fifteen (15) days’ prior written
notice of the proposed assignment;
	 
	 	11.1.2	 	The proposed assignee shall, in recordable form, expressly assume all the
covenants and conditions of this Lease;
	 
	 	11.1.3	 	Lessee shall deliver to Lessor within ten (10) days after the execution and
delivery of such assignment, a true and correct manually signed copy of the
assignment;
	 
	 	11.1.4	 	Any such assignment shall not in any way affect or limit the liability of
Lessee under the terms of this Lease, even if such assignment alters the
primary liability of Lessee to pay rent and to perform all other obligations to
be performed by Lessee hereunder; provided, however, that Lessee shall be
relieved of any obligation under this Lease to the extent that such obligation
arises out of any amendment or modification of this Lease between Lessor and
Lessee’s assignee or any subsequent assignee made




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	 	 	 	without the written consent of Lessee thereto. The acceptance of rent by
Lessor from any other person shall not be deemed to be a waiver by Lessor of
any provision hereof. In the event of default by any assignee of Lessee, or
any successor of Lessee in the performance of any of the terms hereof,
Lessor may proceed directly against Lessee without the necessity of
exhausting remedies against said successor Lessee.






	 	 	 	Notwithstanding the foregoing, Lessee shall have the right at any time to assign or
otherwise transfer its interest in this Lease and the estate created by this Lease
without Lessor’s prior consent to a partnership or corporate subsidiary controlled
by Lessee, an entity that controls Lessee, or to an entity that is controlled by an
entity which also controls Lessee. “Control” as used in this Paragraph 11 shall
mean ownership of fifty (50%) percent or more of the voting stock or rights.
	 
	 	11.2	 	Lessee shall have the right (without any prior approval or consent by Lessor
being required), in the regular and ordinary course of maintaining and operating the
buildings and improvements now or hereafter located on the Premises, to sublease any
offices, spaces or related facilities in the buildings and improvements on the Premises
for any use permitted by Paragraph 6 hereof; provided, however, that each such sublease
shall be subject to the terms, covenants and conditions of this Lease and the rights of
Lessor hereunder.






	12.	 	Mortgage of Leasehold.






	 	12.1	 	Subject to the provisions of this paragraph, Lessee shall have the right to
encumber the leasehold estate created by this Lease by one or more mortgages, deeds of
trust or other security instruments, including, without limitation, assignments of the
rents, issues and profits from the Premises, to secure repayment of any loans, and
associated obligations, made to Lessee for the purpose of interim and long-term
financing or refinancing of the construction of new buildings and improvements to the
Premises.
	 
	 	12.2	 	As used herein, “Leasehold Mortgage” shall mean any mortgage, deed of trust or
other security instrument, including, without limitation, an assignment of the rents,
issues and profits from the Premises, which constitutes a lien on the leasehold estate
created by this Lease and “Lender” shall mean an owner and holder of a Leasehold
Mortgage.
	 
	 	12.3	 	During the continuance of any Leasehold Mortgage and until such time as the
lien of any Leasehold Mortgage has been extinguished:






	 	12.3.1	 	Lessor shall not agree to any mutual termination nor accept any surrender of
this Lease, nor shall Lessor consent to any amendment or modification of this
Lease, without the prior written consent of any Lender.
	 
	 	12.3.2	 	Notwithstanding any default by Lessee in the performance or observance of any
agreement, covenant or condition of this Lease on the part of Lessee to be
performed or observed, Lessor shall have no right to




- 11 -









 






	 	 	 	terminate this Lease unless an event of default shall have occurred and be
continuing, Lessor shall have given any Lender written notice of such event
of default, and such Lender shall have failed to remedy such default or
acquire Lessee’s leasehold estate created hereby or commence foreclosure or
other appropriate proceedings in the nature thereof, all as set forth in and
within the time specified by this Paragraph 12.
	 
	 	12.3.3	 	Any Lender shall have the right, but not the obligation, at any time prior to
termination of this Lease and without payment of any penalty, to pay all of the
rents due hereunder, to effect any insurance, to pay any taxes and assessments,
to make any repairs and improvements, to do any other act or thing required of
Lessee hereunder, and to do any act or thing which may be necessary and proper
to be done in the performance and observance of the agreements, covenants and
conditions hereof to prevent termination of this Lease. All payments so made
and all things so done and performed by any Lender shall be as effective to
prevent a termination of this Lease as the payments would have been if made,
done and performed by Lessee instead of by such Lender.
	 
	 	12.3.4	 	Should any event of default under this Lease occur, any Lender shall have
sixty (60) days after receipt of notice from Lessor setting forth the nature of
such event of default, and, if the default is such that possession of the
Premises may be reasonably necessary to remedy the default, a reasonable time
after the expiration of such sixty (60) day period, within which to remedy such
default, provided that (A) the Lender shall have fully cured by default in the
payment of any monetary obligations of Lessee under this Lease within such
sixty (60) day period and shall continue to pay currently such monetary
obligations as and when the same are due and (B) the Lender shall have acquired
Lessee’s leasehold estate created hereby or commenced foreclosure or other
appropriate proceedings in the nature thereof within such period, or prior
thereto, and is diligently prosecuting any such proceedings. All right of
Lessor to terminate this Lease as the result of the occurrence of any such
event of default shall be subject to, and conditioned upon, Lessor having first
given any Lender written notice of such event of default and such Lender having
failed to remedy such default or acquire Lessee’s leasehold estate created
hereby or commence foreclosure or other appropriate proceedings in the nature
thereof as set forth in and within the time specified by this Paragraph.
	 
	 	12.3.5	 	Any event of default under this Lease which in the nature thereof cannot be
remedied by a Lender shall be deemed to be remedied if: (A) within sixty (60)
days after receiving written notice from Lessor setting forth the nature of
such event of default, or prior thereto, the Lender shall have acquired
Lessee’s leasehold estate created hereby or shall have commenced foreclosure or
other appropriate Proceedings in the nature thereof, (B) the Lender shall
diligently prosecute any such proceedings to completion, and (C) the” Lender
shall have fully cured any default in the




- 12 -









 






	 	 	 	payment of any monetary obligations of Lessee hereunder which do not require
possession of the Premises within such sixty (60) day period and shall
thereafter continue to faithfully perform all such monetary obligations
which do not require possession of the Premises, and (D) after gaining
possession of the Premises the Lender performs all other obligations of
Lessee hereunder as and when the same are due.
	 
	 	12.3.6	 	If a Lender is prohibited by any process or injunction issued by any court or
by reason of any action by any court having jurisdiction of any bankruptcy or
insolvency proceeding involving Lessee from commencing or prosecuting or
foreclosure or other appropriate proceedings in the nature thereof, the times
specified in Subparagraphs 12.3.4 and 12.3.5 above for commencing or
prosecuting such foreclosure or other proceedings shall be extended for the
period of such prohibition; provided that the Lender shall have fully cured any
default in the payment of any monetary obligations of Lessee under this Lease
and shall continue to pay currently such monetary obligations as and when the
same fall due.
	 
	 	12.3.7	 	Lessor shall mail or deliver to any Lender a duplicate copy of any and all
notices which Lessor may from time to time give to or serve upon Lessee
pursuant to the provisions of this Lease, and such copy shall be mailed or
delivered to such Lender simultaneously with the mailing or delivery of the
same to Lessee. No notice by Lessor to Lessee hereunder shall be deemed to
have been given unless and until a copy thereof shall have been mailed or
delivered to all Lenders as herein set forth.
	 
	 	12.3.8	 	Notwithstanding any restriction on the Lessee’s right to assign this Lease
under Subparagraph 11.1 above, foreclosure of a Leasehold Mortgage, or any sale
thereunder, whether by judicial proceedings or by virtue of any power contained
in the Leasehold Mortgage, or any conveyance of the leasehold estate created
hereby from Lessee to a Lender through, or in lieu of, foreclosure or other
appropriate proceedings in the nature thereof shall not require the consent or
approval of Lessor or constitute a breach of any provision of or a default
under this Lease, and upon such foreclosure, sale or conveyance Lessor shall
recognize the Lender, or any other foreclosure sale purchaser, as Lessee
hereunder. In the event the Lender becomes Lessee under this Lease or any new
lease obtained pursuant to Subparagraph 12.3.9 below, or in the event the
leasehold estate hereunder is purchased by any other party at a foreclosure
sale, the Lender, or such other foreclosure sale purchaser, shall be personally
liable for the obligations of Lessee under this Lease or such new lease only
for the period of time that the Lender or such other foreclosure sale purchaser
remains lessee thereunder, and the lender’s or such foreclosure sale
purchaser’s right thereafter to assign this Lease or such new lease shall not
be subject to any restriction. In the event the Lender subsequently assigns or
transfers its interest under this Lease after acquiring the same by foreclosure
or deed in lieu of foreclosure or subsequently assigns or




- 13 -









 






	 	 	 	transfers its interest under any new lease obtained pursuant to
Subparagraph 12.3.9, and in connection with any such assignment or transfer
the Lender takes back a mortgage or deed of trust encumbering such leasehold
interest to secure a portion of the purchase price given to the Lender for
such assignment of transfer, then such mortgage or deed or trust shall be
considered a Leasehold Mortgage as contemplated under this Paragraph and the
Lender shall be entitled to receive the benefit of and enforce the
provisions of this Paragraph and any other provisions of this Lease intended
for. the benefit of the holder of a Leasehold Mortgage.
	 
	 	12.3.9	 	Should Lessor terminate this Lease by reason of any default by Lease
hereunder, Lessor shall, upon written request by any Lender given within sixty
(60) days after such termination, immediately execute and deliver a new lease
of the Premises to such Lender, or its nominee, purchaser, assignee or
transferee, for the remainder of the term of this Lease with the same
agreements, covenants and conditions (except for any requirements which have
been fulfilled by Lease prior to termination) as are contained herein and with
priority equal to that hereof; provided, however, that the Lender shall
promptly cure any default of Lessee susceptible to cure by Lender, and provided
further that if more than one Lender requests such new lease, the Lender
holding the most senior Leasehold Mortgage shall prevail. Upon execution and
delivery of such new lease, Lessor, at the expense of the new lessee, shall
take such action as shall be necessary to cancel and discharge this Lease and
to remove Lessee named herein from the Premises.






	 	12.4	 	At all times herein stated Lessor’s fee title to the Premises shall not be
encumbered or affected in any manner directly or indirectly by Lessee’s encumbrancing
of the leasehold estate created by this Lease, and the rights of any Lender of Lessee
hereunder in and to the Premises, including without limitation, any right to receive
rents, issues and profits therefrom, shall at no time be greater than the rights of
Lessee hereunder.






	13.	 	Fire and Extended Coverage and Liability Insurance.






	 	13.1	 	Lessee agrees, at Lessee’s sole cost and expense, to keep all buildings and
improvements on the Premises insured at all times throughout the term of this Lease
(including any period or periods of time during which any building is in the course of
demolition, remodeling, or construction) against loss or damage by fire and such other
hazards as are embraced by the standard extended coverage endorsement “all risks”
approved for use in the State of Oregon in an amount not less than ninety percent (90%)
(excluding foundations) of the actual replacement cost of the buildings or
improvements, provided such insurance is ordinarily and customarily available.
	 
	 	13.2	 	Lessee agrees to and shall at its own cost and expense procure and maintain
during the entire term of the Lease comprehensive general liability insurance




- 14 -









 






	 	 	 	covering the Premises with combined single limits of not less than Five Million
Dollars ($5,000,000.00) for bodily injury and property damage liability.
	 
	 	13.3	 	Lessee hereby expressly waives on behalf of its insurers hereunder any right of
subrogation against Lessor, and Lessor likewise waives on behalf of its insurers any
right of subrogation against Lessee, which any such insurers may have against Lessor or
Lessee by reason of any claim, liability, loss, or expense arising under this Lease.
The foregoing mutual waivers of subrogation are conditioned upon such waivers being
available from the insurers of each party without the payment of additional insurance
premiums.
	 
	 	13.4	 	All insurance provided for in this paragraph shall be effected under valid and
enforceable policies issued by insurers of recognized responsibility authorized to do
business in the State of Oregon and shall name Lessor as an additional insured. A
certificate of each insurance policy shall be provided to Lessor upon commencement of
the term of this Lease, upon request, and upon the renewal of each policy. Insurance
required hereunder shall be in companies holding a General Policyholders’ rating of B
Plus or better as set forth in the most current issue of “Best Insurance Guide.”
	 
	 	13.5	 	All policies of fire and hazard insurance required hereunder shall also be
payable to any Lender as the interest of such lender may appear, pursuant to a standard
mortgage clause, and the Lender shall be entitled to participate in the settlement or
adjustment of any losses covered by such policies of insurance. Provided, however,
that the Lender’s rights hereunder shall in no event be greater than Lessee’s rights
hereunder. All such policies issued by the respective insurers shall contain an
agreement by the insurers that such policies shall not be canceled or modified to
reduce or eliminate coverage or insured risks without at least thirty (30) days’ prior
written notice to Lessor and Lender.
	 
	 	13.6	 	Nothing in this Lease shall prevent Lessee from taking out insurance of the
kind and in the amount provided for in this Paragraph under a blanket insurance policy
or policies which can cover other properties as well as the Premises.
	 
	 	13.7	 	All amounts that shall be received under any insurance policy specified in
Subparagraph 13.1 shall, if the Premises are to be repaired or reconstructed pursuant
to the provisions of Paragraph 10 hereof, be first applied to the payment of the cost
of repair, reconstruction or replacement of any buildings or improvements, or
furniture, fixtures, equipment and machinery, that is damaged or destroyed. Any amount
remaining from the proceeds of any such insurance funds, after the repairing,
reconstructing and replacing of any buildings or improvements, or furniture, fixtures,
equipment and machinery, as herein required, shall be immediately paid to and be the
sole property of Lessee.
	 
	 	 	 	If said insurance proceeds shall be insufficient in amount to cover the cost of
repairing, reconstructing or replacing any buildings or improvements, or furniture,
fixtures, equipment and machinery, as herein required, and if this Lease is not




- 15 -









 






	 	 	 	terminated pursuant to Paragraph 10 above, then Lessee shall promptly pay any
deficiency.






	14.	 	Construction and Other Liens. Lessee hereby covenants to keep the Premises free and
clear of any and all construction and other liens for work or labor done, services performed
or materials used in or about the Premises for or in connection with any operations of Lessee,
any alterations, improvements, repairs or additions which Lessee may make or permit or cause
to be made, or any work or construction by, for or permitted by Lessee on or about the
Premises.
	 
	15.	 	Right to Contest; Indemnity.






	 	15.1	 	Lessee shall have the right to contest the amount or validity of any lien of
the nature of any tax, assessment, charge or other item to be paid by Lessee under
Paragraph 4 hereof by giving Lessor written notice of Lessee’s intention to do so
within twenty (20) days after the recording of such lien or at least ten (10) days
prior to the delinquency of such tax, assessment, charge or other item, as the case may
be. In any such case Lessee shall not be in default hereunder, and Lessor shall not
satisfy and discharge such lien nor pay such tax, assessment, charge or other item, as
the case may be, until ten (10) days after the final determination of the amount of
validity thereof, within which time Lessee shall satisfy and discharge such lien or pay
such tax, assessment, charge or other item to the extent held valid and all penalties,
interest and costs in connection therewith; provided, however, that the satisfaction
and discharge or any such lien shall not, in any case be delayed until execution is had
upon any judgment rendered thereon, nor shall the payment of any such tax, assessment,
charge or other item, together with penalties, interest and costs, in any case be
delayed until sale is made or threatened to be made of the whole or any part of the
Premises on account thereof. In the event of any such contest, Lessee shall protect
and indemnify Lessor against all loss, cost, expense and damage resulting therefrom.
Lessor shall not be required to join in any proceeding to contest the amount or
validity of any such lien, tax, assessment, charge or other item, except that if any
law shall require that such proceeding be brought by or in the name of Lessor, Lessor
agrees to join in any such proceeding, or permit the same to be brought in its name;
and Lessee covenants to indemnify and hold harmless Lessor from any costs or expenses
in connection therewith. Provided the same shall be without cost or expense to Lessor,
Lessor agrees that it will cooperate with Lessee in any such proceeding. Lessee shall
be entitled to any refund or any tax, assessment, charge or other item, and any
penalties or interest thereon, which shall have been paid by Lessee, or paid by Lessor
and reimbursed by Lessee.
	 
	 	15.2	 	Lessor shall not be liable, responsible or in any wise accountable for any
loss, injury, death or carnage to persons or property from whatever cause, whether in
or on the Premises, or in any way connected with the premises or with the buildings and
improvements or personal property therein or thereon, including any liability for
injury or death to the person or damage to or loss of property of Lessee, its agents,
officers, servants, or employees. Lessee agrees to indemnify Lessor, its




- 16 -









 






	 	 	 	officers, employees, and agents, and hold them harmless from any and all liability,
loss, costs, or obligations on account of, or arising out of, any such loss, injury,
death or damage, however occurring. Lessee, its agent, officers, servants, and
employees shall assume all risks of injury or death of person or persons, or damage
to or loss of any and all property of Lessee and any and all property under the
control or custody of the Lessee while upon the Premises or damage to or loss of any
and all property stored on the Premises, and Lessee hereby agrees that Lessor shall
not be liable for injury to Lessee’s business, or any loss of income therefrom, or
for damage to the goods, wares, merchandise, or other property of Lessee, Lessee’s
employees, invitees, customers, or any other person in or about the Premises.






	16.	 	Eminent Domain.






	 	16.1	 	If, during the term of this Lease, the entire Premises shall be taken as a
result of the exercise of the right of eminent domain, or if less than the entire
Premises shall be taken, but it shall have been agreed, or determined by arbitration
pursuant to Paragraph 30, that the buildings and improvements on the Premises cannot at
a reasonable expense be repaired, restored, or replaced to an economically profitable
unit, this Lease may at the option of Lessee be terminated on the date of such taking,
and the rights of the Lessor and Lessee in and to the award or awards upon any such
taking shall be determined in accordance with Subparagraph 16.3 hereof. As used in
this Paragraph 16, the terms “taken” or “taking” shall mean an acquisition and/or
damaging, including severance damage, by eminent domain, or by inverse condemnation, or
by deed or transfer in lieu thereof, or for any public or quasi-public use under any
statute or law; and the taking shall be considered to take place as of the earlier of
(i) the date actual physical possession is taken by the condemnor; or (ii) the date on
which title vests in the condemnor.
	 
	 	16.2	 	If less than the entire Premises shall be taken and it shall have been agreed,
or determined by arbitration pursuant to Paragraph 30, that the buildings and
improvements can be repaired, restored, or replaced to an economically profitable unit,
this Lease shall not terminate but shall continue in full force and effect for the
remainder of the term, subject to the provisions hereof. The rights of the Lessor and
Lessee in and to the award or awards upon any such taking shall be determined in
accordance with Subparagraph 16.23 hereof. Lessee shall restore, repair, and replace
that portion of the Premises not so taken. For the balance of the term of this Lease,
the rent payable by Lessee shall be equitably reduced by agreement of Lessor and Lessee
in accordance with the reduced economic return to Lessee, if any, which will occur by
reason of such taking and if the parties are unable to agree on the amount, if any, by
which the rent should be reduced, such amount, if any, shall be determined by
arbitration pursuant to Paragraph 30
	 
	 	16.3	 	The rights of Lessor and Lessee in and to any award or awards upon any such
taking shall be determined as follows:





- 17 -









 






	 	16.3.1	 	Entire taking: In the event of any taking of the nature covered by
Subparagraph 16.1 above, all compensation and damages for the taking shall be
paid in accordance with the following priorities:
	 
	 	 	 	(A) Lessee shall receive the value of the leasehold estate under this Lease
plus the unamortized value of any improvements or alterations made by Lessee
upon the Premises; and
	 
	 	 	 	(B) Lessor shall receive the balance of such compensation or damages.
	 
	 	16.3.2	 	Partial taking: In the event of any taking of the nature covered by
Subparagraph 16.2 above, all compensation and damages therefor shall be applied
first to the restoration, repair and replacement of the Premises by Lessee
pursuant to this Paragraph 16, and the remainder thereof shall be divided
between Lessor and Lessee in the manner provided by Subparagraph 16.3.1 above.






	 	16.4	 	If the Premises or any portion thereof or any buildings or improvements thereon
should be taken for governmental occupancy for a limited period, this Lease shall not
terminate and Lessee shall continue to perform and observe all of its obligations
hereunder as though such taking had not occurred including covenants for payment of
rent and other charges, except only to the extent that it may be prevented from
performing such obligations by reason of such taking. In such event, Lessee shall be
entitled to receive the entire amount of any awards, compensation and damages made for
such taking, and Lessor hereby assigns such awards, compensation and damages to Lessee
to the extent that the governmental occupancy does not extend beyond the expiration of
the term hereof.
	 
	 	16.5	 	Lessor, Lessee and any Lender shall all have the right to participate in any
settlement of awards, compensation and damages and may contest any such awards,
compensation and damages and prosecute appeals therefrom. Any Lender shall be entitled
to notice form both Lessee and Lessor with regard to any condemnation action, threat
thereof, or settlement proceedings.
	 
	 	16.6	 	Notwithstanding the foregoing, in the event of any taking of the nature covered
by Subparagraph 16.1 or 16.2 above during the term hereof Lessee shall have the right
exercisable by written notice given not less than thirty (30) days prior to the time
when title to the Premises vests in the condemning authority to exercise the option to
purchase pursuant to Paragraph 28 below and, provided said purchase is pursued
diligently to completion, any and all awards; compensation and damages payable for or
on account of the Premises shall be payable to and by the sole property of Lessee.






	17.	 	Lessor’s Right of Inspection. Lessor may, at any reasonable time and from time to
time during the term hereof, enter upon the Premises for the purpose of inspecting the
buildings or improvements hereafter located thereon and for such other purposes as may be
necessary or proper for the reasonable protection of its interests, subject, however, to




- 18 -









 






	 	 	Lessee’s reasonable requirements regarding security on the Premises and the confidentiality
or the business affairs of Lessee and its subtenants and other occupants of the Premises.
	 
	18.	 	Lessee’s Defaults and Lessor’s Remedies. If (a) default shall be made by Lessee in
the payment when due of any rent or other moneys due hereunder and shall continue for a period
of ten (10) days after written notice thereof to Lessee; (b) default shall be made by Lessee
in the performance or observance of any of the other agreements, covenants or conditions of
this Lease on the part of Lessee to be performed and observed and such default shall continue
for a period of thirty (30) days after written notice thereof to Lessee, or, in the case of a
default which cannot be cured by the payment of money and cannot reasonably be cured within
thirty (30) days, Lessee shall fail to commence curing thereof within said 30-day period and
thereafter shall fail diligently to prosecute such cure to Completion; (c) Lessee shall admit
in writing its inability to pay its debts generally as they become due, file a petition in
bankruptcy, insolvency, reorganization, readjustment of debt, dissolution or liquidation under
any law or statute of the Federal government or any state government or any subdivision of
either now or hereafter in effect, make an assignment for the benefit of its creditors,
consent to or acquiesce in the appointment of a receiver of itself or of the whole or any
substantial part of the Premises; (d) a court of competent jurisdiction shall enter an order,
judgment or decree appointing a receiver of Lessee or of the whole or any substantial part of
the Premises, and such order, judgment or decree shall not be vacated, set aside or stayed
within ninety (90) days from the date of entry of such order, judgment or decree, or a stay
thereof be thereafter set aside; or (e) a court of competent jurisdiction shall enter an
order, judgment or decree approving a petition filed against Lessee under any bankruptcy,
insolvency, reorganization, readjustment of debt, dissolution or liquidation law or statute of
the Federal government or any state government or any subdivision of either now or hereafter
in effect, and such order judgment or decree shall not be vacated, set aside or stayed within
ninety (90) days from the date of entry of such order, judgment or decree, or a stay thereof
be thereafter set aside; then any such event shall constitute an event of default by Lessee.
Upon the occurrence of any such event of default by Lessee, Lessor shall have the following
rights and remedies, in addition to all other rights and remedies of Lesson provided hereunder
or by law:






	 	18.1	 	The right to terminate this Lease, in which event Lessee shall immediately
surrender possession of the Premises, assign to Lessor its interest in any
construction, architectural and other contracts relating to the Premises, and pay to
Lessor all rent and all other amounts payable by Lessee hereunder to the date of such
termination;
	 
	 	18.2	 	The right to recover the worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the amount of
such rental loss for the same period that Lessee proves could be reasonably avoided;
	 
	 	18.3	 	The right to collect, by suit or otherwise, each installment of rent or other
sums that become due hereunder, or to enforce, by suit or otherwise, performance or




- 19 -









 






	 	 	 	observance of any agreement, covenant or condition hereof on the part of Lessee to
be performed or observed; or
	 
	 	18.4	 	The right to cause a receiver to be appointed in any action against Lessee to
take possession of the Premises or to collect the rents or profits therefrom. Neither
appointment of such receiver nor any other action taken by Lessor shall constitute an
election on they part or Lessor to terminate this Lease unless written notice of
termination is given to Lessee.






	19.	 	Failure of Lessee to Perform Required Acts. Subject to Lessee’s right of contest
under this Restated Lease, if at any time during the term of this Lease, Lessee fails or
neglects to do any of the things herein required to be done by Lessee, Lessor shall have the
right, but not the obligation, to do the same, but at the cost of and for the account of
Lessee. Provided, however, Lessor shall in no case take such action sooner than thirty (30)
days after giving Lessee written notice of such failure, refusal, or neglect and allowing said
period within which Lessee may commence a bona fide effort to cure the same. The amount of
any money so expended by Lessor together with interest thereon at the rate of twelve percent
(12%) per annum shall be repaid to Lessor immediately upon demand therefor and unless so paid
shall be added to the next rental payment coming due hereunder.
	 
	20.	 	Nonwaiver. No waiver of any default under this Lease shall constitute or operate as
a waiver of any subsequent default hereunder, and no delay, failure or omission in exercising
or enforcing any right, privilege, or option under this Lease shall constitute a waiver,
abandonment or relinquishment thereof or prohibit or prevent any election under or enforcement
or exercise of any right, privilege or option hereunder. No waiver of any provision hereof by
Lessor or Lessee shall be deemed to have been made unless and until such waiver shall have
been reduced to writing and signed by Lessor or Lessee, as the case may be. The receipt by
Lessor of rent with knowledge of any default under this Lease shall not constitute or operate
as a waiver of such default.
	 
	21.	 	No Merger.






	 	21.1	 	There shall be no merger of the leasehold estate created by this Lease with the
fee estate in the Premises by reason of the fact that the same person may on or hold
(i) the leasehold estate created by this Lease or any interest in such leasehold estate
and (ii) the fee estate in the Premises or any interest in such fee estate; and no
merger shall occur unless and until Lessor, Lessee and any Lender shall join in a
written instrument effecting such merger and shall duly record the same.
	 
	 	21.2	 	No termination of this Lease shall cause a merger of the estates of Lessor and
Lessee, unless Lessor so elects, and any such termination shall, at the option of
Lessor, either work a termination of any sublease in effect or act as an assignment to
Lessor of Lessee’s interest in any such sublease.




- 20 -









 












	22.	 	No Partnership. Nothing herein contained shall make or constitute Lessor, in any way
or for any purpose, a partner of Lessee in the conduct of Lessee’s business, or otherwise, or
a joint venturer or a member of a joint enterprise with Lessee.
	 
	23.	 	Covenants Run with Land.






	 	23.1	 	The agreements, covenants and conditions contained herein are and shall be
deemed to be covenants running with the land and the reversion and shall be binding
upon and shall inure to the benefit of Lessor and Lessee and their respective
successors and assigns and all subsequent Lessors and Lessees respectively hereunder.
	 
	 	23.2	 	All references in this Lease to “Lessee” or “Lessor” shall be deemed to refer
to and include successors and assigns of Lessee or Lessor, respectively, without
specific mention of such successors or assigns.






	24.	 	Notices. Any notice or communication hereunder to Lessor, Lessee or any Lender shall
be in writing and be mailed by first-class, certified mail, postage prepaid. Notices or
communications shall be addressed as follows:
	 
	 	 	To Lessor:

5940 S.W. Terwilliger Blvd.

Portland, OR 97201-2880
	 
	 	 	or such other address or addresses as Lessor shall from time to time designate by notice in
writing to Lessee.
	 
	 	 	To Lessee:

Kurt Widmer

President

Widmer Brothers Brewing Company

929 N. Russell Avenue

Portland, Oregon 97227
	 
	 	 	or such other address or addresses as Lessee shall from time to time designate by notice in
writing to Lessor.
	 
	 	 	Notices or Communications to any Lender shall be addressed to such Lender at such address as
such Lender shall from time to time designate by notice in writing to Lessor. Any notice
mailed in the manner above set forth shall be deemed to have been received on the third day
after the date of mailing, unless returned to the sender by the post office.






	25.	 	Limitation of Lessor’s Liability. The term “Lessor,” as used in this Lease, so far
as covenants or obligations on the part of Lessor are concerned, shall be limited to mean and
include only the owner or owners at the time in question of the fee or any lesser estate in
the Premises, and in the event of any transfer of the title to such fee or lesser estate the
Lessor herein named (and in the case of any subsequent transfer, the then transferor) shall




- 21 -









 






	 	 	be automatically freed and relieved from and after the date of such transfer of all personal
liability for the performance of any covenants or obligations on the part of Lessor
contained in this Lease thereafter to be performed; provided, however, that any funds in the
hands of Lessor of the then transferor at the time of such transfer, in which Lessee has an
interest, shall be turned over to the transferee and any amount then due and payable to
Lessee by Lessor or the then transferor under any provision of this Lease shall be paid to
Lessee; and provided, further, that upon any such transfer, the transferee shall expressly
assume, subject to the limitations of this paragraph, all of the agreements, covenants and
conditions in this Lease to be performed on the part of Lessor, it being intended hereby
that the covenants and obligations contained in this Lease on the part of Lessor shall,
subject as aforesaid, be binding on each Lessor, its successors and assigns, only during its
period of ownership.
	 
	26.	 	Estoppel Certificates. Lessee or Lessor, as the case may be, shall execute,
acknowledge and deliver to the other and/or to any Lender, promptly upon request, its
certificate certifying (a) that this Lease is unmodified and in full force and effect (or, if
there have been modifications, that this Lease is in full force and effect, as modified, and
stating the modifications), (b) the dates, if any, to which all rental due hereunder has been
paid, (c) whether there are then existing any charges, offsets or defenses against the
enforcement by Lessor of any agreement, covenant or condition hereof on the part of Lessee to
be performed or observed (and, if so, specifying the same), and (d) whether there are then
existing any defaults by Lessee in the performance or observance by Lessee of any agreement,
covenant or condition hereof on the part of Lessee to be performed or observed and whether any
notice has been given to Lessee of any default which has not been cured (and, if so,
specifying the same). Any such certificate may be relied upon by a prospective purchaser,
mortgagee or trustee or beneficiary under a deed of trust of the Premises or any part thereof.
	 
	27.	 	Holding Over. This Lease shall terminate without further notice upon the expiration
of the term specified, and any holding over by Lessee after the expiration of said term shall
not constitute a renewal hereof or give Lessee any rights hereunder or in or to the Premises.
	 
	28.	 	Lessee’s Option to Purchase the Premises.






	 	28.1	 	Lessor hereby grants to Lessee an exclusive and irrevocable option (the
“Option”) to purchase the Premises, for the price and upon the terms and conditions
specified herein, at any time during the term hereof, except the last twelve (12)
months of the lease term or extension thereof. Lessee may exercise the Option by
giving Lessor six (6) months’ written notice of exercise of the Option. Upon exercise
of the Option and provided Lessee is not in default of any monetary obligation
hereunder or otherwise in material default hereunder, Lessor shall be obligated to sell
and convey to Lessee and Lessee shall be obligated to purchase from Lessor the Premises
for a purchase price as determined by the method in Exhibit C attached hereto and
incorporated herein, except the last twelve (12) months of the lease term or extension
thereof.




- 22 -









 






	 	28.2	 	The purchase and sale of the Premises shall be closed on or before 180 days
after the date of the notice of intent to exercise the Option (“Closing Date”)
regardless of whether the price is established. If the appraisal process is not
complete within said time, the purchase price shall bear interest at the rate of twelve
percent (12%) per annum from the Closing Date until paid. The Closing shall be through
an escrow opened by Lessee with a title insurance company (“Title Company”) qualified
to do business in the State of Oregon and located in the City of Portland and County of
Multnomah. Prior to the Closing Date, Lessor and Lessee shall deposit in escrow with
Title Company all documents and funds necessary to close the purchase and sale
hereunder, together with escrow instructions consistent herewith. Lessor shall convey
to Lessee, by statutory general warranty deed, fee simple title to the Premises (or
such portion thereof as shall not have been taken by eminent domain in the event of
such taking prior to the Closing Date), subject only to the lien of taxes, assessments
or other charges payable by Lessee under this Lease, such matters as are set forth in
Exhibit B hereto and such other matters as may be created, suffered to be created or
consented to by Lessee (including without limitation, any subleases of space then in
effect covering space in the building on the Premises), or by Lessor at Lessee’s
request (evidence of such title to be an ALTA owner’s policy of title insurance), and
shall assign to Lessee any eminent domain award with respect to the Premises or
proceeds of insurance resulting from damage or destruction to the Premises which have
not been previously paid to Lessor and to which Lessee is entitled under the provisions
of this Lease.
	 
	 	28.3	 	The cost of the premium for the title insurance policy issued to Lessee on the
Closing Date shall be paid by Lessee. Any transfer taxes payable with respect to the
conveyance shall be paid by Lessor. Escrow fees shall be paid one-half (1/2) by Lessor
and one-half (1/2) by Lessee. All other costs of closing escrow shall be borne in
accordance with the custom then prevailing in the County of Multnomah. Lessee shall
continue to pay rent and other charges as may be due hereunder to and including the
date of the closing of escrow.
	 
	 	28.4	 	The option to purchase contained in this Paragraph 28 is personal to Lessee and
may not be assigned separate and apart from the Lessee’s leasehold interest under this
Lease.






	29.	 	Lessee’s Right of First Refusal.






	 	29.1	 	If at any time during the term of this Lease: (i) Lessor receives an offer
from a third party to purchase its fee title to the Premises or any part thereof or
interest therein, and Lessor desires to accept it; or (ii) if Lessor makes an offer to
sell, transfer, or assign its fee title to the Premises or any part thereof or interest
therein, then Lessor shall deliver to Lessee immediate notice of such offer, setting
forth the name and address of the proposed purchaser or transferee, an amount of the
proposed purchase price, and all other terms and conditions of such offer, and Lessee
shall have the right of first refusal to purchase such fee title to the Premises or
such part thereof or interest therein which is the subject of the offer




- 23 -









 






	 	 	 	by giving written notice to the Lessor, within thirty (30) days after receiving
Lessor’s notice, except notice must be given no later than twelve (12) months before
expiration of the lease term or any extension thereof, of Lessee’s intention to
purchase said title at the same price and on the same terms of any such offer
(Lessee shall pay the fair market cash value of any noncash terms of such an offer,
and the purchase price to Lessee shall have deducted therefrom the amount of any
brokerage commissions included in such offer). In the event that Lessee fails to
notify Lessor within said thirty (30) day period of Lessee’s election to exercise
its right of first refusal, or in the event Lessee notifies Lessor within said
period that Lessee will not exercise its right of first refusal, Lessor may proceed
to sell, transfer or assign its fee title or part thereof or interest therein to the
third party within ninety (90) days after the expiration of such thirty (30) day
period, but only on the same terms and conditions as were offered to Lessee, and any
change in such terms and conditions shall be deemed to be a new offer and Lessee
shall in such event not consummate any sale, assignment or other transfer to any
third party but shall first submit the changed terms and conditions to Lessee for
determination by Lessee in the manner provided above as to whether it will elect to
exercise its right of first refusal on the changed terms and conditions. In the
event that Lessee has elected not to exercise its right of first refusal and the
sale or transfer of the Lessor’s interest in the Premises as described in the offer
is not completed for any reason within the aforesaid ninety (90) day period, the
Lessee shall have, upon the same conditions and notice, the continuing right of
first refusal to purchase Lessor’s interest in the Premises upon the terms of any
subsequent offer or offers, even though Lessee declined to exercise its right of
first refusal with respect to any prior transaction. In the event that Lessee
acquires Lessor’s interest in the Premises pursuant to the foregoing provisions,
Lessor shall convey title to Lessee by a grant deed or instrument of assignment, as
the case may be, in form for recording, the form of which shall be subject to
reasonable approval by Lessee’s counsel. If the Lessee exercises said right of
first refusal, all funds and documents shall be placed in escrow, and the
transaction shall be consummated through said escrow within ninety (90) days after
Lessee gives Lessor notice of the exercise of the right of first refusal. The
parties agree that there will be no right of first refusal during the last twelve
(12) months of any lease term.
	 
	 	29.2	 	Lessee shall continue to pay the rent and other charges, as required by the
terms and provisions of this Lease to and including the date the escrow closes for the
purchase of the real property.
	 
	 	29.3	 	Lessee agrees and acknowledges that if it elects to purchase the Premises
pursuant to its right of first refusal, as herein provided, neither Lessor nor anyone
acting for and on behalf of Lessor has made any representations, statements, or
warranties concerning the physical condition of the Premises to be conveyed pursuant to
the terms and conditions of this Paragraph 29.





- 24 -









 






	30.	 	Arbitration. Whenever, under any provision of this Lease, arbitration is required,
then:






	 	30.1	 	Lessor and Lessee shall each appoint one (1) arbitrator within thirty (30) days
after a written notice requesting arbitration shall have been given by one of them to
the other, and written notice of appointment shall be given to the other party.
	 
	 	30.2	 	Said two (2) arbitrators shall, within thirty (30) days after the appointment
of the last-appointed arbitrator, resolve the question or dispute before them in
writing and notify Lessor and Lessee of the results thereof.
	 
	 	30.3	 	If said two (2) arbitrators cannot agree within said period, they shall, within
a period of thirty (30) additional days, agree upon and appoint a third arbitrator.
	 
	 	30.4	 	Said three (3) arbitrators shall, within thirty (30) days after the appointment
of the third arbitrator, remove the question or dispute before them in writing and
notify Lessor and Lessee of the results thereof.
	 
	 	30.5	 	The decision of at least two (2) of said three (3) arbitrators, rendered in
writing, shall be conclusive and binding upon Lessor and Lessee.
	 
	 	30.6	 	If either Lessor or Lessee fails to appoint an arbitrator within the time
limited in Subparagraph 30.1 above, or if the two (2) arbitrators appointed by Lessor
and Lessee fail to agree upon and appoint a third arbitrator, such second or third
arbitrator (as the case maybe), shall be appointed by the presiding judge of the
Circuit Court in and for the County of Multnomah upon application by either party.
Except as provided hereunder, the arbitration shall proceed in accordance with the laws
then in effect of the State of Oregon relating to arbitration.
	 
	 	30.7	 	Each of the parties hereto shall pay for the services of its appointees,
attorneys and witnesses plus one-half (1/2) of the fee charged by the third arbitrator
(if any) and one-half (1/2) of all other proper costs relating to arbitration.
	 
	 	30.8	 	All arbitrators appointed pursuant to this Paragraph 30 shall be real estate
brokers of M.A.I. appraisers who are familiar with appraisal procedures and with
commercial property values in the City of Portland and County of Multnomah.






	31.	 	Unavoidable Delays Force Majeure. If either party shall be delayed or prevented from
the performance of any act required by this Lease by reason of acts of God, strikes, lockouts,
labor troubles, inability to secure materials, restrictive governmental laws or regulations,
or other cause, without fault and beyond the reasonable control of the party obligated
(financial inability excepted), performance of such act shall be excused for the period of the
delay; and the period for the performance of any such act shall be extended for a period
equivalent to the period of such delay; provided, however, that nothing in this paragraph
shall excuse Lessee from the obligation to pay when due all rental and other monetary charges
required of Lessee. The party delayed or prevented from the performance of any act as above
described shall notify the other of such delay or prevention within fifteen (15) days of the
inception thereof, and shall thereafter keep said party regularly informed of the status of
such delay or prevention.




- 25 -









 






	32.	 	Exchange. In the event Lessee exercises its options to purchase the Premises
pursuant to either the Option to Purchase or the Right of First Refusal at Paragraphs 28 or
29, Lessor may elect to effect an exchange of its interest in the Premises pursuant to
Section 1031 of the Internal Revenue Code. In such event, Seller shall not less than
twenty-one (21) days prior to the date on which escrow is to close for such purchase,
designate certain other property (the “Exchange Property”) that it will take in exchange for
the Premises. Upon Lessor’s designation of the Exchange Property, Lessee will cooperate with
Lessor in entering into an agreement (the “Exchange Agreement”) whereby Lessee shall acquire
the Exchange Property. The closing on the Exchange Agreement shall occur simultaneous with
the close of escrow under Paragraphs 28 and 29 hereof. Lessee shall not be required to pay
more cash to close the Exchange Property than the cash required to be paid by Lessee pursuant
to Paragraphs 28 and 29 hereof, Lessor agrees to accept the Exchange Property in exchange of
moneys paid by Lessee for the Exchange Property, and Lessee shall receive at the close of
escrow a credit against the moneys owed by Lessee pursuant to Paragraphs 28 and 29 hereof,
including without limitation the purchase price of the Exchange Property, all ancillary costs
and expenses and reasonable attorneys’ fees, in acquiring the Exchange Property.
Notwithstanding anything to the contrary contained herein, it is understood that Lessee’s
obligation under this Paragraph 32 shall be limited to executing such documents to facilitate
the purchase of the Exchange Property as may be provided to Lessee by Lessor. Any such
documents submitted to Lessee by Lessor shall be in form and substance satisfactory to Lessee.
	 
	 	 	Lessor agrees to indemnify and save Lessee harmless against any and all liabilities,
penalties, demands, claims, causes of action, suits, losses, damages, costs and expenses,
arising out of or relating to Lessee’s purchase or contracting to purchase the Exchange
Property.
	 
	33.	 	General Provisions.






	 	33.1	 	Each party hereby agrees to indemnify the other party from and against any real
estate brokerage commissions or other such obligations incurred by the indemnifying
party as a result of the negotiation or execution of this Lease.
	 
	 	33.2	 	In case any one or more of the provisions contained in this Lease shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this Lease, but
this Lease shall be construed as if such invalid, illegal or unenforceable provisions
had not been contained herein.
	 
	 	33.3	 	Time is of the essence of each and all of the agreements, covenants and
conditions of this Lease.
	 
	 	33.4	 	Whenever in this Lease the consent or approval of either Lessor or Lessee is
required or permitted, the party requested to give such consent or approval shall act
promptly and shall not unreasonably withhold its consent of approval.




- 26 -









 






	 	33.5	 	At the request of either party, Lessor and Lessee will execute, acknowledge and
record in the Deed Records of the County of Multnomah a Short Form Lease.
	 
	 	33.6	 	The captions used herein are for convenience only and are not a part of this
Lease and do not in any way limit or amplify the terms and provisions hereof.
	 
	 	33.7	 	In the event of any action or proceeding at law or in equity between Lessor and
Lessee to enforce any provision of this Lease or to protect or establish any right or
remedy of either party hereunder, the unsuccessful party to such litigation shall pay
to the prevailing party all costs and expenses, including reasonable attorneys’ fees
incurred therein by such prevailing party, and if such prevailing party shall recover
judgment in any such action or proceeding, such costs, expenses and attorneys’ fees
shall be included in and as a party of such judgment.
	 
	 	33.8	 	This Lease shall be interpreted in accordance with and governed by the laws of
the State of Oregon. The language in all parts of this lease shall be, in all cases,
construed according to its fair meaning and not strictly for or against Lessor or
Lessee.
	 
	 	33.9	 	This instrument constitutes the entire agreement between Lessor and Lessee with
respect to the subject matter hereof and supersedes all prior offers and negotiations,
oral and written. This Lease may not be amended or modified in any respect whatsoever
except by an instrument in writing signed by Lessor or Lessee.
	 
	 	33.10	 	No remedy or election hereunder shall be deemed exclusive but shall, wherever
possible, be cumulative with all other remedies at law or in equity.
	 
	 	33.11	 	This Lease may be executed in counterparts and when so executed by each of the
parties hereto all of such counterparts taken together shall constitute an entire
agreement.
	 
	 	33.12	 	Lessor and Lessee understand and agree that this Lease is what is commonly
known in the business as a ground lease which is also a “net, net, net Lease.” Lessee
recognizes and acknowledges, without limiting the generality of any other terms or
provisions of this Lease, that it is the intent of the parties hereto that any and all
rentals in this Lease provided to be paid by Lessee to Lessor, shall be net to Lessor,
and any and all expenses incurred in connection with the Premises, or in connection
with the operations therein or thereon, including any and all taxes, assessments,
general or special license fees, insurance premiums, general or special license fees,
insurance premium, public utility bills, and costs of repair, maintenance and operation
of the premises, including any and all buildings, structures, permanent fixtures and
other improvements comprised therein, together with the appurtenances thereto, shall be
paid by Lessee, in addition to the rentals herein provided for, as its sole and
exclusive proper costs and expenses.





- 27 -









 






	34.	 	Exhibits. The following Exhibits are attached hereto and made a part hereof:
	 
	 	 	EXHIBIT A  —  Property Description

EXHIBIT B  —  Title Report

EXHIBIT C  —  Purchase Price





IN WITNESS WHEREOF, the parties have executed this Lease on March 12, 1997 as of the date first
above written.




	 	 	 	 	 	 	 	 	 
	LESSOR:	 	 	 	LESSEE:
	 
	 	 	 	 	 	 	 	 
	SMITHSON & MCKAY LIMITED LIABILITY
COMPANY, an Oregon limited liability
company	 	 	 	WIDMER BROTHERS BREWING COMPANY,

an Oregon corporation
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Kurt Widmer
	 	 	 	By:
	 	/s/ Kurt Widmer
	 

	 	 
	 	 	 	 	 	 
	 

	 	Kurt Widmer, Member
	 	 	 	 	 	Kurt Widmer, President
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Rob Widmer	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Rob Widmer, Member	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Kristen Maier-Lenz	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Kristen Maier-Lenz, Member	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Atty in Fact	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Kurt Widmer	 	 	 	 	 	 







- 28 -











 





EXHIBIT A

Property Description




Attached hereto and incorporated herein





 









 






Order No. *




EXHIBIT “A”




PARCEL I:



Lots 4, 5, 6, 7 and 8, Block 1, SUBDIVISION IN PROEBSTEL’S ADDITION TO ALBINA, in the City
of Portland, TOGETHER WITH a strip of land lying between the South lines of said Lots 6, 7 and 8
and the North line of North Russell Street and Lots 9 and 10, Block 1, SUBDIVISION IN PROESTEL’S
ADDITION TO ALBINA, in the City of Portland, TOGETHER WITH a strip of land, if any, between the
South line of Lot 9 and the North line of North Russell Street, as now established in the City of
Portland, County of Multnomah and State of Oregon.




PARCEL II:



Lots 15 and 16, Block 1, SUBDIVISION IN PROEBSTELS ADDITION TO ALBINA, in the City of
Portland, County of Multnomah and State of Oregon.




 









 








EXHIBIT B

Title Report




Attached hereto and incorporated herein







 












 






	 	 	 

	

	 	 






First American Title Insurance Company of Oregon


an assumed business name of TITLE INSURANCE COMPANY OF OREGON



310 S.W. FOURTH AVENUE, PORTLAND, OR 97204-2376

(503) 222-3651 • FAX (503) 222-7274



Preliminary Title Report




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	December 20, 1988

	 	ALTA Owners Stand. Cov.
	 	$	120,000.00	 	 	Premium
	 	$	328.25	 	 	b/
	 

	 	ALTA Owners Ext. Cov.
	 	$	 	 	 	Premium
	 	$	 	 	 	 
	 

	 	ALTA Lenders Stand.
Cov.
	 	$	 	 	 	Premium
	 	$	 	 	 	 
	 

	 	ALTA Lenders Ext. Cov.
	 	$	 	 	 	Premium
	 	$	 	 	 	 
	 

	 	Indorsement
	 	 	 	 	 	Premium
	 	$	 	 	 	 
	 

	 	Other
	 	 	 	 	 	Cost
	 	$	 	 	 	 
	 

	 	Govt. Serv. Charge
	 	 	 	 	 	Cost
	 	$	15.00	 	 	 
	 	 	A consolidated statement of all charges and advances in connection with
this order will be provided at closing.





Order No. 590659

Escrow No. 88-1-1165





			
	Re:	 	Spectrum Properties/ 
Lindquist Development





First American Title Insurance Company of Oregon

310 S.W. Fourth Avenue

Portland, Oregon 97204-2376




Attention: Sandra Simmons

Telephone No.: 222-3651



We are prepared to issue Title Insurance Policy or Policies in the form and amount shown above,
insuring title to the following described land:



Lots 4, 5, 6, 7 and 8, Block 1, SUBDIVISION IN PROEBSTEL’S ADDITION TO ALBINA, in the City of
Portland, TOGETHER WITH a strip of land lying between the South lines of said Lots 6, 7 and 8 and
the North line of North Russell Street and Lots 9 and 10, Block 1, SUBDIVISION IN PROEBSTEL’S
ADDITION TO ALBINA, in the City of Portland, TOGETHER WITH a strip of land, if any, between the
South line of Lot 9 and the North line of North Russell Street, as now established in the City of
Portland, County of Multnomah and State of Oregon.



and as of December 7, 1988 at 8:00 a.m., title vested in:




SPECTRUM PROPERTIES, INC.;



Subject to the exceptions, exclusions and stipulations which are ordinarily part of such
Policy form and the following:



1. City Liens, if any, of the City of Portland.



Note: An inquiry has been directed to the City Clerk and a subsequent advice will follow
concerning the actual status of such liens.




2. Party Wall Agreement, including the terms and provisions
thereof,




	 	 	 	 	 

	Recorded

	 	:
	 	August 27, 1890 in Book 146, page 74
	Between

	 	:
	 	A. J. Smithson, et ux with W. R. McKay, et al
	For

	 	:
	 	Joint use and maintenance of a party wall over and
across the West 10 inches of the above described property and Lots 5 and 6 adjoining on the West





This
report is for the exclusive use of the parties herein shown and is
preliminary to the issuance of a title insurance policy


and shall become
void unless a policy is issued, and the full premium paid.












 






Page 2

Order No. 590659



3. Party Wall Agreement, including the terms and provisions thereof,




	 	 	 	 	 

	Recorded

	 	:
	 	October 29, 1901 in Book 283, page 325
	Between

	 	:
	 	H. D. Manley, et al and W. R. McKay, et al
	For

	 	:
	 	Joint use and maintenance of a party wall over  and
across the East 10 inches of Lot 8 and Lots 9 and 10
adjoining on the East





4. Conditions and Restrictions contained in Ordinance No. 147808, of the City of
Portland, a copy of which was




	 	 	 	 	 

	Recorded

	 	:
	 	June 1, 1979 in Book 1356, page 695





5. Conditions and Restrictions contained in Conditional Use No. CU 152-87 of the City of Portland,
a copy of which was




	 	 	 	 	 

	Recorded

	 	:
	 	March 2, 1988 in Book 2084, page 808





NOTE: SPECTRUM PROPERTIES, INC., is an Oregon corporation in good standing.



NOTE: LINDQUIST DEVELOPMENT CO., INC., is an Oregon corporation in good standing.



NOTE: Pursuant to the settlement of a class-action lawsuit, certain insureds or purchasers of
title insurance may be entitled to benefits; if you do not have a “Qualification Questionnaire”,
please ask for a copy.



NOTE: Taxes for the year 1988 – 89: paid in full.




	 	 	 	 	 	 	 	 	 

	Original Amount
	 	 	:	 	 	$	465.32	 
	Tax Amount
	 	 	:	 	 	$	465.32	 
	Code No.
	 	 	:	 	 	 	001	 
	Account No.
	 	 	:	 	 	 	67830 – 0070	 
	(Affects Lot 4)
	 	 	 	 	 	 	 	 





NOTE: Taxes for the year 1988 – 89: paid in full.




	 	 	 	 	 	 	 	 	 

	Original Amount
	 	 	:	 	 	$	1,892.32	 
	Tax Amount
	 	 	:	 	 	$	1,892.32	 
	Code No.
	 	 	:	 	 	 	001	 
	Account No.
	 	 	:	 	 	 	67830 – 0090	 
	(Affects Lots 5 & 6)
	 	 	 	 	 	 	 	 





NOTE: Taxes for the year 1988 – 89: paid in full.




	 	 	 	 	 	 	 	 	 

	Original Amount
	 	 	:	 	 	$	1,656.55	 
	Tax Amount
	 	 	:	 	 	$	1,656.55	 
	Code No.
	 	 	:	 	 	 	001	 
	Account No.
	 	 	:	 	 	 	67830 – 0130	 
	(Affects Lots 7 & 8)
	 	 	 	 	 	 	 	 





NOTE: Taxes for the year 1988 – 89: paid in full.




	 	 	 	 	 	 	 	 	 

	Original Amount
	 	 	:	 	 	$	564.59	 
	Tax Amount
	 	 	:	 	 	$	564.59	 
	Code No.
	 	 	:	 	 	 	001	 
	Account No.
	 	 	:	 	 	 	67830 – 0170	 
	(Affects the West
one-half
of Lots 9 & 10)
	 	 	 	 	 	 	 	 
















 






Page 3

Order No. 590659



NOTE: We find no judgments against LINDQUIST DEVELOPMENT CO., INC., an Oregon corporation.




	 	 	 	 	 
	 	FIRST AMERICAN TITLE INSURANCE COMPANY OF OREGON

 	 
	 	/s/ Theresa L. Graham
 	 
	 	THERESA L. GRAHAM 	 
	 	Title Officer 	 
	 


TLG: cp – a

















 






	 	 	 

	

	 	First American Title Insurance Company of Oregon

SCHEDULE OF EXCLUSIONS FROM COVERAGE






ALTA LOAN POLICY (6/1/87)



The following matters are expressly excluded from the coverage of this policy and the Company
will not pay loss or damage, costs, attorneys’ lees or expenses which arise by reason of:





	1.	 	(a)     Any law, ordinance or governmental regulation (Including but not limited to building and
zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i)
the occupancy, use, or enjoyment of the land; (ii) the character dimensions or location of any
Improvement now or hereafter elected on the land; (iii) a separation in ownership or a change in
the dimensions or area of the land or any parcel of which the land is
or was a part; or (iv)
environmental protection. or the effect of any violation of these laws, ordinances or governmental
regulations, except to the extent that a notice of the enforcement thereof or a notice of a detect,
lien or encumbrance resulting from a violation or alleged violation affecting the land has been
recorded in the public records at Date of Policy.







	 	(b)	 	Any governmental police power not excluded by (a) above,
except to the extent that a notice of
the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or
alleged violation affecting the land has been recorded in the public records at Date of Policy.






	2.	 	Rights of eminent domain unless notice of the exercise thereof has been recorded in the public
records at Date of Policy, but not excluding from coverage any taking which has occurred prior to
Date of Policy which would be binding on the rights of a purchaser for value without knowledge.
	 
	3.	 	Defects, liens, encumbrances, adverse claims or other matters:






	 	(a)	 	created, suffered, assumed or agreed to by the Insured claimant;
	 
	 	(b)	 	not known to the Company, not recorded in the public records at Date of Policy, but Known to
the insured claimant and not disclosed in writing to the Company by the insured claimant prior to
the date the insured claimant became an Insured under this policy:
	 
	 	(c)	 	resulting in no loss or damage to the insured claimant;
	 
	 	(d)	 	attaching or created subsequent to Date of Policy (except to the extent that this policy
insures the priority of the lien of the insured mortgage over any statutory lien for services,
labor or material or the extent insurance is afforded herein as to assessments for street
improvements under construction or completed at date of policy); or
	 
	 	(e)	 	resulting in loss or damage which would not have been sustained if the insured claimant had
paid value for the insured mortgage.






	4.	 	Unenforceability of the lien of the insured mortgage because
of the inability or failure of the
insured at Date of Policy, or the inability or failure of any
subsequent owner of the indebtedness
to comply with applicable doing business laws of the state in which
the land is situated.
	 
	5.	 	Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which
arises out of the transaction evidenced by the insured mortgage and is based upon usury or any
consumer credit protection or truth in lending law.
	 
	6.	 	Any statutory lien for services, labor or materials (or the claim of priority of any statutory
lien for services, labor or materials over the lien of the insured mortgage) arising from an
improvement or work related to the land which is contracted for and
commenced subsequent to Date of
Policy and is not financed in whole or in part by proceeds of the indebtedness secured by the
insured mortgage which at Date of Policy the insured has advanced or is obligated to advance.





ALTA OWNERS POLICY (6/1/87)



The following matters are expressly excluded from the coverage of this policy and the Company
will not pay loss or damage costs, attorneys’ lees or expenses which arise by reason of:





	1.	 	(a)     Any law, ordinance or governmental regulation (including but not limited to building and
zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the
occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any
improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in
the dimensions or area of the land or any parcel of which the land is
or was a part: or (iv)
environmental protection, or the effect of any violation of these laws, ordinances or governmental
regulations. except to the extent that a notice of the enforcement
thereof or a notice of a defect,
lien or encumbrance resulting from a violation or alleged violation affecting the land has been
recorded in the public records at Date of Policy.







	 	(b)	 	Any governmental police power not excluded by (a) above, except to the extent that a notice of
the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or
alleged violation affecting the land has been recorded in the public records at Date of Policy.






	2.	 	Rights of eminent domain unless notice of the exercise thereof has been recorded in the public
records at Date of Policy, but not excluding from coverage any taking which has occurred prior to
Date of Policy which would be binding on the rights of a purchaser for value without knowledge.
	 
	3.	 	Defects, liens, encumbrances, adverse claims or other matters:






	 	(a)	 	created, suffered, assumed or agreed to by the insured claimant;
	 
	 	(b)	 	not known to the Company, not recorded in the public records at Date of Policy, but known to
the insured claimant and not disclosed in writing to the Company by the insured claimant prior to
the date the insured claimant Became an insured under this policy;
	 
	 	(c)	 	resulting in no loss or damage to the insured claimant;
	 
	 	(d)	 	attaching or created subsequent to Date of Policy; or
	 
	 	(e)	 	resulting in loss or damage which would not have been sustained if the insured claimant had
paid value for the estate or interest insured by this policy.





SCHEDULE
OF STANDARD EXCEPTIONS



The ALTA
standard policy form will contain in Schedule B the following
standard exceptions to
coverage:





	1.	 	Taxes or assessments which are not shown as existing liens by the records of any taxing
authority that levies taxes or assessments on real property or by the public records; proceedings
by a public agency which may result in taxes or assessments, or notices of such proceedings,
whether or not shown by the records of such agency or by the public records.
	 
	2.	 	Any facts, rights Interests, or claims which are not shown by the public records but which could
be ascertained by an inspection of said land or by making inquiry of persons in possession thereof.
	 
	3.	 	Easements, encumbrances, or claims thereof, not shown by the public records; reservations or
exceptions in patents or in acts authorizing the issuance thereof; water rights, claims or title to
water.
	 
	4.	 	Any lien, or right to a lien, for services, labor, or material heretofore or hereafter
furnished, imposed by law and not shown by the public records.
	 
	5.	 	Discrepancies, conflicts in boundary lines, shortage In area, encroachments, or any other facts
which a correct survey would disclose.





NOTE: [ILLEGIBLE]







 









 












	THIS MAP IS FURNISH AS A CONVENIENCE IN LOCATING PROPERTY AND THE COMPANY ASSUMES NO LIABILITY
FOR ANY VARIATIONS AS MAY BE DISCLOSED BY ACTUAL SURVEY First American Title Insurance Company of
Oregon an assumed business name of TITLE INSURANCE COMPANY OF OREGON 310 S.W. FOURTH AVENUE,
PORTLAND. OR 97204 (503) 222-3651






 











 







[ILLEGIBLE]


OFFICE OF





AUDITOR OF THE CITY OF PORTLAND



Portland
Oregon, 97204



Book
1356, Page 695




[ILLEGIBLE]






COPY
CERTIFICATE



	 	 
	STATE OF OREGON,
   County of Multnomah

      CITY OF PORTLAND.
	
ü
ý ss

þ







    

    



George
Yerkovich,  Auditor of the city of Portland, do hereby certify that I have compared the following
copy of ORDINANCE NO. 147808, passed by the Council May 31, 1979, being “ An Ordinance designating
one nursery building, one library building, two commercial buildings and two residences located in
the City of Portland as historical landmarks and declaring an emergency”.



with the
original  thereof, and that the same is a full, true and
correct  copy of
such original.



ORDINANCE NO. 147808


and of the whole thereof as the same appears on file and of record in my office, and in my copy and
custody.




     IN
 WITNESS WHEREOF, I have hereunto set my hand and seal of the
City of Portland affixed this 1st — day of June, 1979.



	 	 	 	 	 	 	 

	

[ILLEGIBLE]	 	            
George Yerkovich



Auditor of the City of Portland	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ GEORGE YERKOVICH	 	 
	 

	 	 	 	 

	 	 






 









 






ORDINANCE NO. 147808




Book
1356, Page 696




An Ordinance designating one nursery building , one library building, two commercial buildings and
two residences located in the City of Portland as historical landmarks, and declaring an emergency.



The City of Portland ordains:



Section 1. The Council finds:





	 	1.	 	That the Portland Historical Landmarks Commission has recommended that the Albertina
KERR Nursery. N.E.; the Albina Branch Library. N.E.; the Smithson block. N.: the
McKAY Bros. Block. N.; the William E. Brainard Residence, S.E.: and the James B.
Stevens Residence. S.E.; all located in the City of Portland be designated as historical
landmarks, as set froth in their report dated April 11, 1979.
	 
	 	2.	 	That on May 1, 1979 the City Auditor notified the owners of said proposed landmarks and
owners of property abutting such proposed landmarks, that a hearing on said proposals would
be at 2:00 p.m., May 9, 1979 in the Council Chamber of City Hall, at which time and place
said hearing was held.
	 
	 	3.	 	That no reconstrances were made or filed against said proposals and the recommendation
of the Portland Historical Landmarks Commission should be adopted.




NOW, THEREFORE, the landmarks set forth herein below are designated as historical landmarks and
thus subject to the protection and regulations of Chapter 33,120. Planning and Zoning of the
Code of the City of Portland. Oregon and the City Auditor hereby is authorized and directed to send
a copy of this Ordinance to said owners of said landmarks and have a copy of this ordinance
recorded in the Deed Records for Multnomah County.





	 	a.	 	Albertina KERR Nursery; 424 N.E. 22nd Avenue on Tax Lot 2. Block 2.
[ILLEGIBLE] Addition to the City of Portland, in the City
of Portland. County of Multnomah. State of Oregon, presently owned by
Alexander H. Kerr Benevolent Association and
Albertina Multnomah Center for Children.
	 
	 	b.	 	Albina Branch Library 716 N.E. Knott Street.
Lots 5-7, Block 16. Albina
Addition to the City of Portland, in the City of [ILLEGIBLE] County of Multnomah, State of
Oregon, presently owned by the Library Association of Portland, hereby is designated a
historical landmark.
	 
	 	c.	 	Smithson Block. 943 N.
Russell  Street. Lots 4-6, Block 1 Proebstel’s Addition to the City of Portland, in the City of Portland, county of Multnomah, State of
Oregon, presently owned by Robert L. Gille, hereby is designated a historical landmark.






Page No. 1











 






			
	ORDINANCE No.
	 	[ILLEGIBLE]







	 	d.	 	McKay Bros. Block. 927 N. Russell Street,  Lots 7,8, Block 1. Proestel’s
Addition to the City of Portland, in the City of Portland, County of Multnomah, State of
Oregon, presently owned by Robert L. Gille, hereby is designated a historical landmark.
	 
	 	e.	 	William E. Brainard House, 5332 S. E. Morrison Street, Lot 1 and N. 20’ of Lot 2. Block 5,
 Mount Tabor Addition to the City of Portland, in the City of Portland, County of Multnomah,
State of Oregon, presently owned by Russell B. Morrison, hereby is designated a historical
landmark.
	 
	 	f.	 	James B. Stephens Residence, 1825 S.E. 12th Avenue, Lots 5 and 6.
Block 124, Stephens Addition to the City of Portland, in the City of Portland, County of
Multnomah. State of Oregon, presently owned by Leroy E. and Hilda E. Boland to: H. H. Arnold,
hereby is designated a historical landmark.





Section 2. The Council declares:





[ILLEGIBLE] as this Ordinance is necessary for the immediate preservation of the public
health, peace, and safety of the City of Portland and that there be no delay in carrying out the
desires of the Commission, an emergency hereby is declared to exist and this Ordinance shall be in
force and effect from and after its passage by the Council.



[ILLEGIBLE]



[ILLEGIBLE]



Page No. 2









 






[ILLEGIBLE]







OFFICE OF



AUDITOR OF THE CITY OF PORTLAND



[ILLEGIBLE]



[ILLEGIBLE]




COPY CERTIFICATE



	 	 
	STATE OF OREGON,
   County of Multnomah

      CITY OF PORTLAND.
	
ü
ý ss

þ





	 	 	 

	 
	 	






BARBARA CLARK Auditor of the City of Portland, do hereby certify that I have compared the following
copy of Conditional Use No. CU 152—87, approving, with conditions, Conditional Use permit for the
restoration of the Smithson and McKay Buildings at 943 and 927 M. Russell, for ground-floor
office, personal service, retail use and 16 residential lofts in the GI—1 zone, on property
legally described as Lots 4—10 and 15 Block 1, Proebstel’s Add to Albina.



with the original thereof, and that the same is a full, true and correct copy of such original.









CU 152-87.



and of the whole thereof as the same appears on file and of record in my office, and in my care and
custody, [ILLEGIBLE].




     IN WITNESS WHEREOF, I have hereunto set my hand and seal of the City of Portland affixed this
2nd day of March 1988.



	 	 	 	 	 	 

	 

	 	 	 	Barbara Clark	 
	 
	 	 	 	 	 
	 

	 	 	 	Auditor of the City of Portland	 
	 
	 	 	 	 	 
	 

	 	By
	 	/s/ Mary E. Newell	 Deputy












 











 





[ILLEGIBLE]




	 	 	 	 	 

	

	 	CITY OF

PORTLAND, OREGON

HEARINGS OFFICE

	 	Hearings Officer

George M. [ILLEGIBLE]

1120 S.W. 5th Ave. Room 1015

Portland, Oregon 97204-1960

(503) 796-7719






REPORT OF HEARINGS OFFICER DECISION




JANUARY 4, 1988



File No.: CU 152-87




Applicant: Manhattan Loft Company (Rece Bly, Partner), 111 S.W. 5th Avenue
Suite 3300, 97204.




Deedholders: Old National Financial Services, Inc. (c/o Dale Watkins, Spectrum Properties,
T-8), 111 S.W. 5th Avenue, 97204; Andrew Cook (c/o Richard S. Borst, Spears and
Lubersky), 800 Pacific Building. 500 S.W. Yamhill, 97204; Dr. Malcom MacGregor, 495 N.E. Beech,
Gresham, 97030; and Lloyd G. Duyck, P.O. Box M. Cornclius, 97113.




Land Use Review: Conditional Use (Type III Review) to allow residential, personal service,
and retail uses in a GI zone.




Location: 943 and 927 N. Russell.




Legal Description: Lots 4-10 and 15 and 16, Block 1, Proebstel’s Add. to Albina.




Quarter Section: 2729.




Zone: GI-IS.




Neighborhood: Lower Albina/Eliot.




Decision: To approve a Conditional Use permit for the restoration of the Smithson and McKay
Buildings; located at 943 and 927 N. Russell, for ground-floor office, personal service, retail use
and 16 residential [ILLEGIBLE] in the G1-1 zone, subject to the following conditions:





	A.	 	Street trees shall be provided according to the City Forester’s requirements.






	B.	 	Two covered bicycle parking spaces shall be provided.






	C.	 	A Building Permit or an Occupancy Permit must be obtained from the Bureau of
Buildings at the Permit Center on the first floor of The Portland Buildings, 1120 S.W.
5th Avenue, Portland, Oregon, 97204, 796-7310, before carrying out this
project, in order to assure that all conditions imposed here and all requirements of the
pertinent Building Codes are met.





Authority for Decision: Code of the City of Portland, Chapter [ILLEGIBLE]




 









 





[ILLEGIBLE]


015090




Certified Copy of CU 152-87

To Be Recorded

[ILLEGIBLE]





	 	 	 	 	 	 
	 

	 	
	 	/s/ M. Burns	 




 Deputy    


Return to City Aud/toc





 












 





	 	 	 	 	 	 	 

	

	 	OREGON TITLE
	 	[ILLEGIBLE] OFFICE
	 	HILLSBORO OFFICE
	 	Insurance Company
	 	1240, [ILLEGIBLE]
	 	451 South First, Suite 300
	 	

1515 S.W. Fifth Avenue
	 	Gresham, Oregon 97030
(503) 651-6282
	 	Hillsboro, Oregon 97123

(503) 648-0531
	 	Portland, Oregon 97201
	 	
	 	 
	 	(503) 220-0015
	 	122ND OFFICE
	 	SUNSET CORRIDOR
	 	 	 	1521 N.E. 122nd Avenue
	 	2700 N.W. 185th Ave. Suite 2014
	 	 	 	Portland, Oregon 97230
	 	Portland, Oregon 97229
	 	 	 	(503) 257-9353
	 	(503) 645-7224
	 	 	 	 	 	 
	 	 	 	HOLLYWOOD OFFICE
	 	LAKE OSWEGO OFFICE
	 

	 	 	 	4311 N.E. Tillamook
	 	4500 Kruse Way
	 

	 	 	 	Portland, Oregon 97213
	 	Lake Oswego, Oregon 97035
	 

	 	 	 	(503) 284-2142
	 	(503) 635-8851
	 
	 	 	 	 	 	 
	 

	 	 	 	BEAVERTON OFFICE
	 	SUNNYSIDE OFFICE
	 

	 	 	 	9340 S.W. Beav.-Hills. Hwy.
	 	9895 S.E. Sunnyside Rd. Suite M
	 

	 	 	 	Beaverton, Oregon 97005
	 	Clackamas, OR 97015
	 

	 	 	 	(503) 297-8084
	 	(503) 654-7770






PRELIMINARY TITLE REPORT






	 	 	 

	Oregon Title Insurance Company

	 	June 28, 1989
	1515 S.W. Fifth Avenue, Suite 105
	 	 
	Portland, Oregon 97201
	 	 






Attention: Cheryl King




Reference:




	 	 	 	 	 

	 

	 	ORDER NO.
	 	:       107245 M
	 

	 	OFFICE
	 	:       1515 Building
	 

	 	NAMES OF PARTIES
	 	:       COOK/DUYCK/SMITHSON-McKAY. LTD PARTNERSHIP






     This preliminary title report is based on the condition of the title as of the effective
date shown in Schedule A. Any changes in the land title or the transaction may affect the
preliminary title report.



     Any change in the amount of insurance or type of coverage requested may cause the
premium to change.



     This report is for the exclusive use of the parties to the contemplated transaction, and the
company does not have any liability to any third parties nor any liability until the full premium
is paid and a policy is issued. Until all necessary documents are placed of record, the company
reserves the right to amend or supplement this preliminary title report for any reason.



     Any questions concerning this preliminary title report can be directed to



CHERYL KING 220-0015




 









 








SCHEDULE A




Order No. 107245 M





	1.	 	The effective date of this preliminary title report is June 12, 1989 at 5:00 P.M.
	 
	2.	 	The policy and indorsements to be issued and the related charges are:





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	                    

	 	Purchaser’s
	 	:
	 	$	30,000.00	 	 	Premium :
	 	$	230.00	 
	                    

	 	City Liens
	 	:
	 	 	 	 	 	 	 	$	5.00	 







	3.	 	The land to be insured in the policy to be issued is described as follows:
	 
	 	 	Lots 15 and 16, Block 1, according to the duly filed plat of SUBDIVISION IN PROEBSTELS
ADDITION TO ALBINA, in the City of Portland, filed December 5, 1881 in Plat Book 2, Page 31,
Records of the County of Multnomah and State of Oregon.
	 
	4.	 	The title to the land to be insured is vested in:





MALCOLM D. MACGREGOR, LLOYD G. DUYCK,

and the Heir and Devisess of

ANDREW J. COOK DECEASED




 









 








SCHEDULE B



Order No. 107245 M



The policy will be issued subject to the following exceptions:



1. Taxes or assessments which are not shown as existing liens by the records of any taxing
authority that levies taxes or assessments on real property or by the public records; proceedings
by a public agency which may result in taxes or assessments, or notices of such proceedings,
whether or not shown by the records of such agency or by the public records.



2. Any facts, rights, interests, or claims which are not shown by the public records but which
could be ascertained by an inspection of said land or by making inquiry of persons in possession
thereof.



3. Easements, or claims of easement or encumbrances, not shown by the public records, reservations
or exceptions in patents or in acts authorizing the issuance thereof, water rights, claims or title
to water.



4. Any lien, or right to a lien, for taxes, workmen’s compensation, services, labor, equipment
rental or material heretofore or hereafter furnished, imposed by law and not shown by the public
records.



5. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other
facts which a correct survey would disclose.



6. Taxes for the fiscal year 1989-90, a lien due , but not yet payable.



7. City
Liens, if any, of the City of Portland.




Note: An inquiry has been directed to the
City Clerk and a subsequent advice will follow concerning the actual status of such liens.
The lien search charge is $5.00 per tax lot.



8. Eliot Neighborhood Development Project, including the terms and
provisions thereof, disclosed by instrument,




	 	 	 	 	 

	Recorded

	 	:
	 	October 31, 1972 Book: 890 Page: 1155





9. Trust deed, including the terms and provisions thereof, given to secure an indebtedness of $55,000.00




	 	 	 	 	 

	Dated

	 	:
	 	March 26, 1984
	Recorded

	 	:
	 	April 2, 1984 Book : 1737 Page : 1867
	Grantor

	 	:
	 	Andrew J. Cook, Malcolm D. MacGregor and Lloy G. Duyck
	Trustee

	 	:
	 	Ticor Title Insurance
	Beneficiary

	 	:
	 	Rainier National Bank, A Washington Corporation
	Loan No.

	 	:
	 	Not disclosed






(CONTINUED)




 









 








SCHEDULE B, CONTINUED




Order No. 107245 M

Page 2



10. Conditions and restrictions contained in Zone Code Variance No.
CU152-87, recorded March 2, 1988 in Book 2084, Page 808.



11. Due probate and administration of the Estate of Andrew J. Cook,
deceased, Probate No. 8906-91092, which proceedings are pending in
the Circuit Court for Multnomah County. Sasha S. Cook also known as Sophia Garrison Cook was
appointed as personal representative and has power to execute the forthcoming conveyance.
Attorney for estate, Helen Rives-Hendricks and John G. Doran, Attorney’s.



12. A copy of the Partnership Agreement for Smithson-McKay LTD
Partnership must be submitted to the company for review prior to the
recordation of the forthcoming documents.



13. We find no judgments, federal or state tax liens against Smithson-McKay LTD Partnership.



NOTE: Taxes for 1988-89, paid in full.




	 	 	 	 	 

	Original Amount

	 	:
	 	 $1,082.65
	Tax Amount

	 	:
	 	 $1,082.65
	Code No.

	 	:
	 	 001
	Account No.

	 	:
	 	 R-67830-0290
	Map No

	 	:
	 	 2729






	 	 	 	 	 	 	 

	 	 	OREGON TITLE INSURANCE COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	BY
	 	/s/ Larry D. Dunston
 

	 	 
	 	 	Larry D. Dunston	 	 





LD/ch pre 993




	 	 	 	 	 

	cc:	 	Spears Lubersky
	 

	 	Attn:
	 	Helen Rives Hendricks







 











 









	NORTH THIS SKETCH IS MADE SOLELY FOR THE PURPOSE OF ASSISTING IN LOCATING SAID PREMISES. AND THE
COMPANY ASSUMES NO LIABILITY FOR VARIATION. IF ANY. IN DIMENSIONS AND LOCATIONS ASCERTAINED
ASCERTIANED BY ACTUAL SURVEY., THIS PLOT PLAN IS COURTESY’. OF OREGON TITLE INSURANCE COMPANY






 









 








EXHIBIT C

Purchase Price




Attached hereto and incorporated herein









 









 








EXHIBIT C

Purchase Price





	 	 	Purchase Price shall be the greater of:





     1. Two Million Two Hundred Thousand
and no/100ths Dollars ($2,200,000.00); or



     2. The appraised value. The appraised value shall be determined as follows:




     (a)
The Lessee shall have the property appraised by a MIA or SRA real estate appraiser
having knowledge about commercial property in Multnomah County. The appraised value shall
be disclosed to Lessor. If the appraised value is accepted, then it shall become the
purchase price.




     (b) If the Lessee’s appraised value is not accepted, then Lessor shall appoint an
independent MIA or SRA real estate appraiser having knowledge about commercial property in
Multnomah County.




     (c) The purchase price shall be set by the decision of the appraisers and shall be the
average of the two amounts determined by the two appraiser unless the two amounts determined
by the appraisers differ by more than ten percent (10%).




     (d)
In the event there is a more than ten percent (10%) difference, a third appraiser
with similar qualifications shall be appointed by the two previously appointed appraiser to
make a third independent determination and the average figure the two closest figures will
be the decision of the appraisers and shall constitute the purchase price. If the choice of
the third appraiser is not made within ten (10) days of the determination that there is a
difference greater than ten percent (10%), then either party may apply to the Presiding
Court of the Circuit Court for Multnomah County to appoint the required appraiser(s). Each
party shall bear the expense of appointment of their own first appraiser and they shall
jointly share the expense of the third. The decision of the appraisers as set forth above
shall be binding, final and specifically enforceable.