Document:

exv10w4

 

Exhibit 10.4

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

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	 	 	 	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

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	 	 	 	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

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	 	 	 	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:

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	 	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

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	 	 	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 -exv10w5

 

Exhibit E

COMMERCIAL LEASE

(RESTATED)

	 	 	 	 	 
	Date:

	 	December 18, 2007	 	 
	Between:

	 	Widmer Brothers LLC
	 	(“Landlord”)
	 

	 	Portland, Oregon	 	 
	And:

	 	Widmer Brothers Brewing Company
	 	(“Tenant”)

     Whereas Landlord and Tenant have previously entered into three individual leases for certain
properties; and

     Whereas the parties desire to consolidate all leases into a single lease which will replace
and terminate all existing leases effective October 1, 2007;

     Now therefore Landlord leases to Tenant and Tenant leases from Landlord the following
described property (the “Premises”) on the terms and conditions stated below:

     Property #1 — Gravel parking lot legally described per Exhibit A, all in the County of
Multnomah, State of Oregon

     Property #2 — Madrona Building — legally described as all of Lot 3, except the northerly
45 feet and all of Lots 4 and 5, Block 52, ALBINA, Multnomah County, Oregon

     Property #3 — Parking lot legally described as the West one-half of Lots 1 & 2 and the
approximately northern 45 feet of Lot 3, Block 52, ALBINA, Multnomah County, Oregon

     All properties shall be collectively referred to as the “Property.” The maintenance and
repairs provisions hereof shall apply to each parcel as applicable based upon its present or future
condition.

Section 1. Occupancy

     1.1 Original Term. The term of this lease shall commence October 1, 2007 and and continue
through September 30, 2017, unless sooner terminated as hereinafter provided.

     1.2 Possession. Tenant’s right to possession and obligations under the lease shall commence
on October 1, 2007. This lease shall not cancel Tenant’s obligations under pre-existing leases.

     1.3 Renewal Option. If the lease is not in default when each option is exercised or when the
renewal term is to commence, Tenant shall have two consecutive options to renew this lease, each
for a five year term, as follows:

 

 

     (1) Each of the renewal terms shall commence on the day following expiration of the preceding
term.

     (2) The option may be exercised by written notice to Landlord given not less than 150 days
before the last day of the expiring term. Giving such notice shall be sufficient to make the lease
binding for the renewal term without further act of the parties. Landlord and Tenant shall then be
bound to take the steps required in connection with the determination of rent as specified below.

     (3) The terms and conditions of the lease for each renewal term shall be identical with the
original term except for rent and except that Tenant will no longer have any option to renew this
lease that has been exercised. Rent for a renewal term shall be the greater of (a) the rental
during the preceding original or renewal term or (b) a reasonable fair market rental for the
ensuing term based upon rental value of comparable properties in the vicinity of the property.

     (4) If the parties do not agree on the rent within 60 days after notice of election to renew,
the rent shall be determined by arbitration as provided in Section 18.

Section 2. Rent

     2.1 Base Rent. Rent shall be payable on the first day of each month in advance at such place
as may be designated by Landlord. The base monthly rent for all the properties as of October 1,
2007 is Three Thousand six hundred and seventy eight dollars ($3,678.00).

     2.2 Rent Adjustment.

     The base rent shall be adjusted annually beginning January 1, 2008 ( the “Adjustment Date”) in
accordance with the following procedure:

A. The index to be used for this adjustment shall be the Consumer Price
Index (US, all Urban Consumer, All Items, 1967 equaling a base of 100, as
published by the US Department of Labor, Bureau of Labor Statistics,
Washington, D.C.).

B. On each Adjustment Date, the Base Rent shall be increased (but never
decreased) by a percentage equal to the percentage increase in the Index,
published most recently prior to the Adjustment Date over the Index
published most recently prior to the last Adjustment Date.

C. If the CPI , at any time during term of this Lease, discontinued or no
longer published, then the most nearly comparable published measure of
inflation, as determined by the Landlord in its sole discretion, shall be
substituted for the purpose of this calculation

     2.3 Security Deposit. There is no security deposit.

 

 

     2.4 Additional Rent. All taxes, insurance costs, utility charges that Tenant is required to
pay by this lease, and any other sum that Tenant is required to pay to Landlord or third parties
shall be additional rent.

Section 3. Use of the Premises

     3.1 Permitted Use. The Premises shall be used for parking, storage and general business
operations consistent with the prior use and for no other purpose.

     3.2 Restrictions on Use. In connection with the use of the Premises, Tenant shall:

     (1) Conform to all applicable laws and regulations of any public authority affecting the
premises and the use, and correct at Tenant’s own expense any failure of compliance created through
Tenant’s fault or by reason of Tenant’s

     (2) Refrain from any activity that would make it impossible to insure the Premises against
casualty, would increase the insurance rate, or would prevent Landlord from taking advantage of any
ruling of the Oregon Insurance Rating Bureau, or its successor, allowing Landlord to obtain reduced
premium rates for long-tern fire insurance policies, unless Tenant pays the additional cost of the
insurance.

     (3) Refrain from any use that would be reasonably offensive to other tenants or owners or
users of neighboring premises or that would tend to create a nuisance or damage the reputation of
the premises.

     (4) Refrain from loading the electrical system or floors beyond the point considered safe by a
competent engineer or architect selected by Landlord.

     (5) Refrain from making any marks on or attaching any sign, insignia, antenna, aerial, or
other device to the exterior or interior walls, windows, or roof of the premises without the
written consent of Landlord.

     3.3 Hazardous Substances. Tenant shall not cause or permit any Hazardous Substance to be
spilled, leaked, disposed of, or otherwise released on or under the Premises. Tenant may use or
otherwise handle on the Premises only those Hazardous Substances typically used or sold in the
prudent and safe operation of the business specified in Section 4.1. Tenant may store such
Hazardous Substances on the Premises only in quantities necessary to satisfy Tenant’s reasonably
anticipated needs. Tenant shall comply with all Environmental Laws and exercise the highest degree
of care in the use, handling, and storage of Hazardous Substances and shall take all practicable
measures to minimize the quantity and toxicity of Hazardous Substances used, handled, or stored on
the Premises. On the expiration or termination of this Lease, Tenant shall remove all Hazardous
Substances from the Premises introduced on the premises by Tenant or as a result of Tenant’s
activities. The term Environmental Law shall mean any federal, state, or local statute,
regulation, or ordinance or any judicial or other governmental order pertaining to the protection
of health, safety, or the environment. The term Hazardous Substance shall mean any hazardous,
toxic, infectious, or radioactive substance, waste, and material as defined or listed by any
Environmental Law and shall include, without limitation, petroleum oil and its fractions.

 

 

Section 4. Repairs and Maintenance

     4.1 Landlord’s Obligations. Landlord shall be under no obligation to make or perform any
repairs, maintenance, replacements, alterations, or improvements on the Premises, this Lease being
a triple net lease with all expenses and costs of improvements related to the Property being
assumed by Tenant.

     4.2 Tenant’s Obligations. The following shall be the responsibility of Tenant:

     (1) Repair of interior exterior walls, ceilings, doors, windows, and related hardware, light
fixtures, switches, and wiring and plumbing.

     (2) Any repairs necessitated by the negligence of Tenant, its agents, employees, and invitees,
except as provided in Section 6.2 dealing with waiver of subrogation, but including repairs that
would otherwise be the responsibility of Landlord under Section 4.1.

     (3) Ordinary maintenance of the heating and air conditioning system and any repairs necessary
because of improper maintenance.

     (4) Any repairs or alterations required under Tenant’s obligation to comply with laws and
regulations as set forth in Section 3.2(1).

     (5) All
repairs, improvements, or replacement of the roof or parking
areas.

     (6) All other repairs to the premises that Landlord is not required to make under Section 4.1.

     (7) Tenant, at its expense, shall keep the Premises (including without limitation the roof and
exterior paint) in first-class repair, operating condition, working order, and appearance.

     4.3 Landlord’s Interference with Tenant. In case repairs are made per Paragraph 4.4 , in
performing any repairs, replacements, alterations, or other work performed on or around the
Premises, Landlord shall not cause unreasonable interference with use of the Premises by Tenant.
Tenant shall have no right to an abatement of rent nor any claim against Landlord for any
inconvenience or disturbance resulting from Landlord’s activities performed in conformance with the
requirement of this provision.

     4.4 Reimbursement for Repairs Assumed. If Tenant fails or refuses to make repairs that are
required by this Section 4, Landlord may make the repairs and charge the actual costs of repairs to
Tenant. Such expenditures by Landlord shall be reimbursed by Tenant on demand together with
interest at the rate of 12% per annum from the date of expenditure by Landlord. Except in an
emergency creating an immediate risk of personal injury or property damage, Landlord may perform
repairs that are the obligation of the other party and charge the other party for the resulting
expense unless at least 10 days before work is commenced, and the defaulting party is given notice
in writing outlining with reasonable particularity the repairs required, and such party fails
within that time to initiate such repairs in good faith.

     4.5 Inspection of Premises. Landlord shall have the right to inspect the Premises at any
reasonable time or times to determine the necessity of repair. Whether or not such inspection is
made, the duty of Landlord to make repairs shall not mature until a reasonable time after Landlord
has received from Tenant written notice of the repairs that are required.

 

 

Section 5. Alterations

     5.1 Alterations Prohibited. Tenant shall make no improvements or alterations on the Premises
of any kind without first obtaining Landlord’s written consent. All alterations shall be made in a
good and workmanlike manner, and in compliance with applicable laws and building codes. As used
herein, alterations includes the installation of computer and telecommunications wiring, cables,
and conduit.

     5.2 Alterations Required. The improvements and alterations delineated on the work sheet
attached to and made a part of this lease shall be performed by the party designated and within the
time stated in the work sheet.

     5.3 Ownership and Removal of Alterations. All improvements and alterations performed on the
Premises by either Landlord or Tenant shall be the property of Landlord when installed unless the
applicable Landlord’s consent or work sheet specifically provides otherwise. Improvements and
alterations installed by Tenant shall, at Landlord’s option, be removed by Tenant and the premises
restored unless the applicable Landlord’s consent or work sheet specifically provides otherwise.

Suggested Form of Work Sheet

WORK SHEET

     Attached to and made part of a lease dated                                         , 20___between,
                                        , Landlord, and                                         , Tenant.

     The following work is to be done on the Premises by the                                                              at the                                                            ’s expense:

     The
work shall be commenced [promptly/ as soon as possible] by
                                        , 20___[subject
only to delays caused by factors not within the party’s reasonable control].

     Tenant [shall / shall not] be required on termination of the lease to remove the alterations
and improvements effected by the above work and to restore the premises to the condition that
existed before the work was done.

Landlord:                     

Tenant:                     

Section 6. Insurance

     6.1 Insurance Required. Tenant shall keep the Premises insured at Tenant’s expense against
fire and other risks covered by a standard fire insurance policy with an endorsement for extended
coverage.

     6.2 Waiver of Subrogation. Neither party shall be liable to the other (or to the other’s
successors or assigns) for any loss or damage caused by fire or any of the risks enumerated in a
standard fire insurance policy with an extended coverage endorsement, and in the event of insured
loss, neither party’s insurance company shall have a subrogated claim against the other. This
waiver shall be valid only if the insurance policy

 

 

in question expressly permits waiver of subrogation or if the insurance company agrees in
writing that such a waiver will not affect coverage under the policies. Each party agrees to use
best efforts to obtain such an agreement from its insurer if the policy does not expressly permit a
waiver of subrogation.

Section 7. Taxes; Utilities

     7.1 Property Taxes. Tenant shall pay as due all taxes on its personal property located on the
Premises. Tenant shall pay as due all real property taxes [and special assessments levied against
the Premises. As used herein, real property taxes includes any fee or charge relating to the
ownership, use, or rental of the Premises, other than taxes on the net income of Landlord or
Tenant.

     7.2 Special Assessments. If an assessment for a public improvement is made against the
Premises, Landlord may elect to cause such assessment to be paid in installments, in which case all
of the installments payable with respect to the lease term shall be treated the same as general
real property taxes for purposes of Section 8.1.

     7.3 Contest of Taxes. Tenant shall be permitted to contest the amount of any tax or assessment
as long as such contest is conducted in a manner that does not cause any risk that Landlord’s
interest in the Premises will be foreclosed for nonpayment. Landlord shall cooperate in any
reasonable manner with such contest by Tenant.

     7.4 Proration of Taxes. Tenant’s share of real property taxes and assessments for the years in
which this lease commences or terminates shall be prorated based on the portion of the tax year
that this lease is in effect.

     7.5 New Charges or Fees. If a new charge or fee relating to the ownership or use of the
Premises or the receipt of rental therefrom or in lieu of property taxes is assessed or imposed,
then, to the extent permitted by law, Tenant shall pay such charge or fee. Tenant, however, shall
have no obligation to pay any income, profits, or franchise tax levied on the net income derived by
Landlord from this lease.

     7.6 Payment of Utilities Charges. Tenant shall pay when due all charges for services and
utilities incurred in connection with the use, occupancy, operation, and maintenance of the
Premises, including (but not limited to) charges for fuel, water, gas, electricity, sewage
disposal, power, refrigeration, air conditioning, telephone, and janitorial services. If any
utility services are provided by or through Landlord, charges to Tenant shall be comparable with
prevailing rates for comparable services. If the charges are not separately metered or stated,
Landlord shall apportion the charges on an equitable basis, and Tenant shall pay its apportioned
share on demand.

Section 8. Damage and Destruction

     8.1 Partial Damage. If the Premises are partly damaged and Section 8.2 does not apply, the
Premises shall be repaired by Landlord at Landlord’s expense. Repairs shall be accomplished with
all reasonable dispatch subject to interruptions and delays from labor disputes and matters beyond
the control of Landlord and shall be performed in accordance with the provisions of Section 4.3.

 

 

     8.2 Destruction. If the Premises are destroyed or damaged such that the cost of repair exceeds
25% of the value of the structure before the damage, either party may elect to terminate the lease
as of the date of the damage or destruction by notice given to the other in writing not more than
45 days following the date of damage. In such event all rights and obligations of the parties shall
cease as of the date of termination, and Tenant shall be entitled to the reimbursement of any
prepaid amounts paid by Tenant and attributable to the anticipated term. If neither party elects to
terminate, Landlord shall proceed to restore the Premises to substantially the same form as prior
to the damage or destruction. Work shall be commenced as soon as reasonably possible and thereafter
shall proceed without interruption except for work stoppages on account of labor disputes and
matters beyond Landlord’s reasonable control.

     8.3 Rent Abatement. Rent shall be not be abated during the repair of any damage to the extent
the premises are untenantable.

     8.4 Damage Late in Term. If damage or destruction to which Section 9.2 would apply occurs
within one year before the end of the then-current lease term, Tenant may elect to terminate the
lease by written notice to Landlord given within 30 days after the date of the damage. Such
termination shall have the same effect as termination by Landlord under Section 9.2.

Section 9. Eminent Domain

     9.1 Partial Taking. If a portion of the Premises is condemned and Section 9.2 does not apply,
the lease shall continue on the following terms:

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

     (2) Landlord shall proceed as soon as reasonably possible to make such repairs and alterations
to the Premises as are necessary to restore the remaining Premises to a condition as comparable as
reasonably practicable to that existing at the time of the condemnation.

     (3) After the date on which title vests in the condemning authority or an earlier date on
which alterations or repairs are commenced by Landlord to restore the balance of the Premises in
anticipation of taking, the rent shall be reduced in proportion to the reduction in value of the
Premises as an economic unit on account of the partial taking. If the parties are unable to agree
on the amount of the reduction of rent, the amount shall be determined by arbitration in the manner
provided in Section 17.

     (4) If a portion of Landlord’s property not included in the Premises is taken, and severance
damages are awarded on account of the Premises, or an award is made for detriment to the Premises
as a result of activity by a public body not involving a physical taking of any portion of the
Premises, this shall be regarded as a partial condemnation to which Sections 9.1(1) and 9.1(3)
apply, and the rent shall be reduced to the extent of reduction in rental value of the Premises as
though a portion had been physically taken.

     9.2 Total Taking. If a condemning authority takes all of the Premises or a portion sufficient
to render the remaining premises reasonably unsuitable for the use that Tenant was then making of
the premises, the lease shall terminate as of the date the title

 

 

vests in the condemning authorities. Such termination shall have the same effect as a
termination by Landlord under Section 8.2. Landlord shall be entitled to all of the proceeds of
condemnation, and Tenant shall have no claim against Landlord as a result of the condemnation.

     9.3 Sale in Lieu of Condemnation.. Sale of all or part of the premises to a purchaser with the
power of eminent domain in the face of a threat or probability of the exercise of the power shall
be treated for the purposes of this Section 10 as a taking by condemnation.

Section 10. Liability and Indemnity

     11.0 Liens

     (1) Tenant shall pay as due all claims for work done on and for services rendered or material
furnished to the Premises, and shall keep the Premises free from any liens. If Tenant fails to pay
any such claims or to discharge any lien, Landlord may do so and collect the cost as additional
rent. Any amount so added shall bear interest at the rate of 12% per annum from the date expended
by Landlord and shall be payable on demand. Such action by Landlord shall not constitute a waiver
of any right or remedy which Landlord may have on account of Tenant’s default.

     (2) Tenant may withhold payment of any claim in connection with a good-faith dispute over the
obligation to pay, as long as Landlord’s property interests are not jeopardized. If a lien is filed
as a result of nonpayment, Tenant shall, within 10 days after knowledge of the filing, secure the
discharge of the lien or deposit with Landlord cash or sufficient corporate surety bond or other
surety satisfactory to Landlord in an amount sufficient to discharge the lien plus any costs,
attorney fees, and other charges that could accrue as a result of a foreclosure sale under the
lien.

     10.2 Indemnification. Tenant shall indemnify and defend Landlord from, and reimburse Landlord
for, any cost, claim, loss, or liability suffered directly or from a third-party claim arising out
of or related to any activity of Tenant on the Premises or any condition of the Premises in the
possession or under the control of Tenant including any such cost, claim, loss, or liability that
may be caused or contributed to in whole or in part by Landlord’s own negligence or failure to
effect any repair or maintenance required by this lease /and including without limitation any cost,
claim, loss, or liability suffered directly or from a third-party claim for damage to the Premises
or any other persons or property arising out of or related to Tenant’s failure to comply with
Section 4.3. Landlord shall have no liability to Tenant for any injury, loss, or damage caused by
third parties, or by any condition of the Premises . Tenant’s indemnification shall include
indemnification from occupancy under prior leases, but shall not include indemnification from
conditions pre-existing original occupancy of the premises by Tenant.

     Landlord shall have no liability for the failure or interruption of utilities and in no event
for lost profits or consequential damages.

 

 

     10.3 Liability Insurance. Before going into possession of the Premises, Tenant shall procure
and thereafter during the term of the lease shall continue to carry the following insurance at
Tenant’s cost: comprehensive general liability insurance in a responsible company with limits of
not less than $1,000,000 for injury to one person, $2,000,000 for injury to two or more persons in
one occurrence, and $3,000,000 for damage to property, commercial general liability policy
(occurrence version) in a responsible company with coverage for bodily injury and property damage
liability, personal and advertising injury liability, and medical payment with a general aggregate
limit of not less than $1,000,000 and a per occurrence limit of not less than $2,000,000. Such
insurance shall cover all risks arising directly or indirectly out of Tenant’s activities on or any
condition of the premises whether or not related to an occurrence caused or contributed to by
Landlord’s negligence. Such insurance shall protect Tenant against the claims of Landlord on
account of the obligations assumed by Tenant under Section 11.2, and shall name Landlord as an
additional insured. Certificates evidencing such insurance and bearing endorsements 10 days’
written notice to Landlord before any change or cancellation shall be furnished to Landlord before
Tenant’s occupancy of the property. Tenant shall also provide an overall umbrella policy in the
amount of $5,000,000.

     Landlord shall be named as additional insured under such policies and
proof of insurance provided.

Section 11. Quiet Enjoyment; Mortgage Priority

     11.1 Landlord’s Warranty. Landlord warrants that it is the owner of the Premises and has the
right to lease them. Landlord will defend Tenant’s right to quiet enjoyment of the Premises from
the lawful claims of all persons during the lease term.

     11.2 Estoppel Certificate. Either party will, within 20 days after notice from the other,
execute and deliver to the other party a certificate stating whether or not this lease has been
modified and is in full force and effect and specifying any modifications or alleged breaches by
the other party. The certificate shall also state the amount of monthly base rent, the dates to
which rent has been paid in advance, and the amount of any security deposit or prepaid rent.
Failure to deliver the certificate within the specified time shall be conclusive on the party from
whom the certificate was requested that the lease is in full force and effect and has not been
modified except as represented in the notice requesting the certificate.

Section 12. Assignment and Subletting

     No part of the Premises may be assigned, mortgaged, or subleased, nor may a right of use of
any portion of the property be conferred on any third person by any other means, without the prior
written consent of Landlord. This provision shall apply to all transfers by operation of law. If
Tenant is a corporation or partnership, this provision shall apply to any transfer of a majority
voting interest in stock or partnership interest of Tenant. No consent in one instance shall
prevent the provision from applying to a

 

 

subsequent instance. Landlord shall not unreasonably delay consent and shall give consent
under circumstances where withholding it shall be unreasonable. In determining whether to consent
to assignment Landlord may consider the following factors: financial ability of assignee; business
experience of assignee; benefits or detriment to Widmer Brothers Brewing Company.

Section 13. Default

     The following shall be events of default:

     13.1 Default in Rent. Failure of Tenant to pay any rent or other charge within 10 days after
it is due. Landlord shall be required to give only two written notices within a twelve month
period; thereafter, no written notice is required.

     13.2 Default in Other Covenants. Failure of Tenant to comply with any term or condition or
fulfill any obligation of the lease (other than the payment of rent or other charges) within 20
days after written notice by Landlord specifying the nature of the default with reasonable
particularity. If the default is of such a nature that it cannot be completely remedied within the
20-day period, this provision shall be complied with if Tenant begins correction of the default
within the 20-day period and thereafter proceeds with reasonable diligence and in good faith to
effect the remedy as soon as practicable.

     13.3 Insolvency. Insolvency of Tenant; an assignment by Tenant for the benefit of creditors;
the filing by Tenant of a voluntary petition in bankruptcy; an adjudication that Tenant is bankrupt
or the appointment of a receiver of the properties of Tenant; the filing of any involuntary
petition of bankruptcy and failure of Tenant to secure a dismissal of the petition within 30 days
after filing; attachment of or the levying of execution on the leasehold interest and failure of
Tenant to secure discharge of the attachment or release of the levy of execution within 10 days
shall constitute a default. If Tenant consists of two or more individuals or business entities, the
events of default specified in this Section 14.3 shall apply to each individual unless within 10
days after an event of default occurs, the remaining individuals produce evidence satisfactory to
Landlord that they have unconditionally acquired the interest of the one causing the default the
lease has been assigned, the events of default so specified shall apply only with respect to the
one then exercising the rights of Tenant under the lease.

     13.4 Abandonment. Failure of Tenant for 10 days or more to occupy the Premises for one or more
of the purposes permitted under this lease, unless such failure is excused under other provisions
of this lease.

Section 14. Remedies on Default

     14.1 Termination. In the event of a default the lease may be terminated at the option of
Landlord by written notice to Tenant. Whether or not the lease is terminated by the election of
Landlord or otherwise, Landlord shall be entitled to recover damages from Tenant for the default,
and Landlord may reenter, take possession of the premises, and remove any persons or property by
legal action or by self-help with the use of reasonable force and without liability for damages and
without having accepted a surrender.

 

 

     14.2 Reletting. Following reentry or abandonment, Landlord may relet the Premises and in that
connection may make any suitable alterations or refurbish the Premises, or both, or change the
character or use of the Premises, but Landlord shall not be required to relet for any use or
purpose other than that specified in the lease or which Landlord may reasonably consider injurious
to the Premises, or to any tenant that Landlord may reasonably consider objectionable. Landlord may
relet all or part of the Premises, alone or in conjunction with other properties, for a term longer
or shorter than the term of this lease, on any reasonable terms and conditions, including the
granting of some rent-free occupancy or other rent concession.

     14.3 Damages. In the event of termination or retaking of possession following default,
Landlord shall be entitled to recover immediately, without waiting until the due date of any future
rent or until the date fixed for expiration of the lease term, the following amounts as damages:

     (1) The loss of rental from the date of default until a new tenant is, or with the exercise of
reasonable efforts could have been, secured and paying out.

     (2) The reasonable costs of reentry and reletting including without limitation the cost of any
cleanup, refurbishing, removal of Tenant’s property and fixtures, costs incurred under Section
14.5, or any other expense occasioned by Tenant’s default including but not limited to, any
remodeling or repair costs, attorney fees, court costs, broker commissions, and advertising costs.

     (3) Any excess of the value of the rent and all of Tenant’s other obligations under this lease
over the reasonable expected return from the premises for the period commencing on the earlier of
the date of trial or the date the premises are relet, and continuing through the end of the term.
The present value of future amounts will be computed using a discount rate equal to the prime loan
rate of major Oregon banks in effect on the date of trial.

     14.4 Right to Sue More than Once. Landlord may sue periodically to recover damages during the
period corresponding to the remainder of the lease term, and no action for damages shall bar a
later action for damages subsequently accruing.

     14.5 Landlord’s Right to Cure Defaults. If Tenant fails to perform any obligation under this
lease, Landlord shall have the option to do so after 30 days’ written notice to Tenant. All of
Landlord’s expenditures to correct the default shall be reimbursed by Tenant on demand with
interest at the rate of 12% annum from the date of expenditure by Landlord. Such action by Landlord
shall not waive any other remedies available to Landlord because of the default.

     14.6 Remedies Cumulative. The foregoing remedies shall be in addition to and shall not exclude
any other remedy available to Landlord under applicable law.

Section 15. Surrender at Expiration

     15.1 Condition of Premises. On expiration of the lease term or earlier termination on account
of default, Tenant shall deliver all keys to Landlord and surrender the Premises in original
condition and for all buildings they shall be broom clean. A1 other areas used as parking lots
shall be free of all debris and all fences shall be in good

 

 

order. Alterations constructed by Tenant with permission from Landlord shall not be removed or
restored to the original condition unless the terms of permission for the alteration so require.
Depreciation and wear from ordinary use for the purpose for which the Premises are leased shall be
excepted but repairs for which Tenant is responsible shall be completed to the latest practical
date before such surrender. Tenant’s obligations under this section shall be subordinate to the
provisions of Section 9 relating to destruction.

     15.2 Fixtures

     (1) All fixtures placed on the Premises during the term, other than Tenant’s trade fixtures,
shall, at Landlord’s option, become the property of Landlord. If Landlord so elects, Tenant shall
remove any or all fixtures that would otherwise remain the property of Landlord, and shall repair
any physical damage resulting from the removal. If Tenant fails to remove such fixtures, Landlord
may do so and charge the cost to Tenant with interest at the legal rate from the date of
expenditure.

     (2) Before expiration or other termination of the lease term, Tenant shall remove all
furnishings, furniture, and trade fixtures that remain its property. If Tenant fails to do so, this
failure shall be an abandonment of the property, and Landlord may retain the property and all
rights of Tenant with respect to it shall cease or, by notice in writing given to Tenant within
20 days after removal was required, Landlord may elect to hold Tenant to its obligation of removal.
If Landlord elects to require Tenant to remove, Landlord may effect a removal and place the
property in public storage for Tenant’s account. Tenant shall be liable to Landlord for the cost of
removal, transportation to storage, and storage, with interest at the legal rate on all such
expenses from the date of expenditure by Landlord.

     15.3 Holdover

     (1) If Tenant does not vacate the Premises at the time required, Landlord shall have the
option to treat Tenant as a tenant from month to month, subject to all of the provisions of this
lease except the provisions for term and renewal [and at a rental rate equal to 150% of the rent
last paid by Tenant during the original term], or to eject Tenant from the Premises and recover
damages caused by wrongful holdover. Failure of Tenant to remove fixtures, furniture, furnishings,
or trade fixtures that Tenant is required to remove under this lease shall constitute a failure to
vacate to which this section shall apply if the property not removed will substantially interfere
with occupancy of the Premises by another tenant or with occupancy by Landlord for any purpose
including preparation for a new tenant.

     (2) If a month-to-month tenancy results from a holdover by Tenant under this Section 16.3, the
tenancy shall be terminable at the end of any monthly rental period on written notice from Landlord
given not less than 10 days before the termination date which shall be specified in the notice.
Tenant waives any notice that would otherwise be provided by law with respect to a month-to-month
tenancy.

Section 16. Miscellaneous

     16.1 Nonwaiver. Waiver by either party of strict performance of any provision of this lease
shall not be a waiver of or prejudice the party’s right to require strict

 

 

performance of the same provision in the future or of any other provision. The acceptance of a
late payment of rent shall not waive the failure to perform an obligation under this Lease except
for the failure to pay the rent so accepted when due and shall not affect Landlord’s remedies for
failure to perform such other obligations.

     16.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising
out of this lease, the prevailing party shall be entitled to recover in addition to costs such sum
as the court may adjudge reasonable as attorney fees at trial, on petition for review, and on
appeal.

     16.3 Notices. Any notice required or permitted under this lease shall be given when actually
delivered or 48 hours after deposited in United States mail as certified mail addressed to the
address first given in this lease or to such other address as may be specified from time to time by
either of the parties in writing.

     16.4 Succession. Subject to the above-stated limitations on transfer of Tenant’s interest,
this lease shall be binding on and inure to the benefit of the parties and their respective
successors and assigns.

     16.5 Recordation. This lease shall not be recorded without the written consent of Landlord.

     16.6 Entry for Inspection. Landlord shall have the right to enter on the Premises at any time
to determine Tenant’s compliance with this lease, to make necessary repairs to the building or to
the Premises, or to show the Premises to any prospective tenant or purchaser, and in addition shall
have the right, at any time during the last two months of the term of this lease, to place and
maintain on the Premises notices for leasing or selling of the Premises.

     16.7 Interest on Rent and Other Charges. Any rent or other payment required of Tenant by this
lease shall, if not paid within 10 days after it is due, bear interest at the rate of 12% per annum
(but not in any event at a rate greater than the maximum rate of interest permitted by law) from
the due date until paid. In addition, if Tenant fails to make any rent or other payment required
by this lease to be paid to Landlord within five days after it is due, Landlord may elect to impose
a late charge of five cents per dollar of the overdue payment to reimburse Landlord for the costs
of collecting the overdue payment. Tenant shall pay the late charge on demand by Landlord. Landlord
may levy and collect a late charge in addition to all other remedies available for Tenant’s
default, and collection of a late charge shall not waive the breach caused by the late payment.

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

     16.9 Time of Essence. Time is of the essence of the performance of each of Tenant’s
obligations under this lease.

 

 

Section 17. Arbitration

     17.1 Disputes to Be Arbitrated. If any dispute arises between the parties [regarding a matter
that this lease says should be arbitrated, or regarding to any other question involving
apportionment or valuation], either party may request arbitration and appoint as an arbitrator an
independent real estate appraiser having knowledge of valuation of rental properties comparable to
the premises. The other party shall also choose an arbitrator with such qualifications, and the two
arbitrators shall choose a third. If the choice of the second or third arbitrator is not made
within 10 days of the choosing of the prior arbitrator, then either party may apply to the
presiding judge of the judicial district where the premises are located to appoint the required
arbitrator.

     17.2 Procedure for Arbitration. The arbitrator shall proceed according to the Oregon statutes
governing arbitration, and the award of the arbitrators shall have the effect therein provided. The
arbitration shall take place in the county where the leased premises are located. Costs of the
arbitration shall be shared equally by the parties, but each party shall pay its own attorney fees
incurred in connection with the arbitration.

 

 

Landlord: Widmer Brothers, LCC

BY: /s/ Rob Widmer 12/18/07

Member

Tenant: Widmer Brothers Brewing

Company

By: /s/ Rich Shawen 2/18/07

Title: VP—Finance

 

 

Order Number: 200601737

EXHIBIT “A”

A tract of land in the southwest quarter of Section 27, Township 1 North, Range 1 East of the
Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, said tract
being described by that deed to Reiko Seger recorded December 31, 1997 in Document. No. 97-201660,
Multnomah County Records and more fully described as follows:

Part of Lots 17 and 18, including part of vacated street in Block 54, ALBINA, in the City of
Portland, County of Multnomah and State of Oregon, described as follows:

Commencing at the Northwest corner of Block 53, ALBINA, as recorded in Book I, Page 4 on May 28,
1873; thence Westerly along the Westerly extension of the Northerly line of said Block 53, a
distance, of 75 feet to the point of beginning of the tract to be described; thence Southerly 50
feet, more or less, to a point on the Westerly extension of the South line of Lot 1, Block 53, said
point lying Westerly a distance of 73 feet from the Southwest corner of Lot 1; thence Southeasterly
along the arc of a 205 foot radius curve to the left a distance of 51 feet, more or less, to a
point on the Westerly extension of the South line of Lot 2, Block 53, said point lying Westerly a
distance of 64 feet, more or less, from the Southwest corner of said Lot 2; thence Easterly along
the Westerly extension of the South line of said Lot 2, Block 53, 34 feet, more or less, to a point
lying Westerly 30 feet from the Southwest corner of said Lot 2, Block 53; thence Northerly parallel
with and 30 feet Westerly from the West line of Block 53, a distance of 100 feet to a point on the
Westerly extension of the Northerly line of said Block 53, thence Westerly along said line 45 feet
to the point of beginning.

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