3/22/2018 11:22 pm 18cv11173 - oregon local news, breaking ...€¦ · plaintiff oregon resources...

– COMPLAINT CHENOWETH LAW GROUP, PC 510 SW Fifth Avenue, Fifth Floor

Portland, OR 97204 Telephone: (503) 221-7958 Facsimile: (503) 221-2182

[email protected]

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IN THE CIRCUIT COURT OF THE STATE OF OREGON

FOR THE COUNTY OF MULTNOMAH

OREGON RESOURCES MARKETING, LLC, an Oregon limited liability company, Plaintiff vs. LOVEJOY SQUARE LLC, an Oregon limited liability company,

Defendant.

Case No.: COMPLAINT

(Declaratory Judgment, ORS § 28.010 et seq.) Fee Authority: ORS 21.135(1), (2)(a), (2)(f) Relief Requested: Declaratory Relief JURY TRIAL REQUESTED CLAIMS NOT SUBJECT TO MANDATORY ARBITRATION

Plaintiff alleges as follows:

1.

Plaintiff Oregon Resources Marketing, LLC, dba Oregon’s Finest (“Oregon’s Finest”), is

an Oregon limited liability company whose principal place of business is in Oregon. Oregon’s

Finest regularly conducts business in Multnomah County.

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3/22/2018 11:22 PM18CV11173



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2.

Defendant Lovejoy Square LLC (“Defendant”) is an Oregon limited liability company

whose principal place of business is in Washington. Defendant regularly conducts business in

Multnomah County.

3.

On or about November 20, 2013, Oregon’s Finest entered into a commercial lease (the

“Lease”) whereby Oregon’s Finest agreed to lease the premises at 1327 NW Kearny Street

(“Premises”). A true and correct copy of the Lease is attached as Exhibit A.

4.

On or about February 28, 2017, Oregon’s Finest exercised its option to renew the Lease

under the same terms, and on or about November 30, 2017, Oregon’s Finest and Defendant entered

into an agreement to extend the Lease for a period of three years.

5.

After the parties renewed the Lease, the parties began negotiating the rate of rent because

it was not determined under the renewed Lease. The parties have continued to negotiate the rent,

and as of the date of the filing of this action, the parties have not agreed upon the rate of rent.

6.

On or about August 11, 2017, Defendant delivered a letter to Oregon’s Finest that alleged

Defendant had received complaints from undisclosed parties that there was an odor emanating

from the Premises. Defendant further alleged that if Oregon’s Finest did not take all actions

necessary to render all offensive odors undetectable within 30 days, Oregon’s Finest would be in

default of the Lease.

7.

At or around the time Oregon’s Finest received the August 11 letter, an HVAC technician

advised Oregon’s Finest to unplug the filter-equipped exhaust system that was designed to reduce



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the emanation of odors because the building’s HVAC system was inadequate to maintain the

operability of the exhaust system. Neither Defendant nor any other party informed Oregon’s Finest

of any odor complaints after Oregon’s Finest unplugged the exhaust system.

8.

On or about August 18, 2017, Oregon’s Finest responded to Defendant’s August 11 letter

and stated that the HVAC system was too small to maintain the operability of the exhaust fan.

Oregon’s Finest also stated that, pursuant to an agreement between Oregon’s Finest and

Defendant’s property manager, Defendant had agreed to upgrade the HVAC system. Further, until

Defendant performed those upgrades, Oregon’s Finest was not responsible for any alleged odors

emanating from the Premises.

9.

On or about September 15, 2017, Oregon’s Finest agreed to hire a professional who would

assess the tonnage of the air space in the Premises and would provide a recommendation as to how

the HVAC system should be upgraded. Once Defendant received that recommendation, Defendant

agreed to make the required upgrades to the HVAC system. Defendant did not communicate to

Oregon’s Finest that it was required to obtain the tonnage assessment by a particular date or time.

10.

During the time following that agreement, the parties were still negotiating the rent for the

Premises under the renewed Lease. Oregon’s Finest complied with the parties’ agreement and

hired a professional to assess the tonnage and provide a recommendation.

11.

Without having sent a notice of default pursuant to the Lease, Defendant sent a letter on

February 5, 2018, stating that Oregon’s Finest had ten days to provide the tonnage report and

accept Defendant’s outlined rental rates.

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12.

On or about February 15, 2018, Oregon’s Finest, through its counsel, contacted

Defendant’s counsel to explain that Oregon’s Finest was compiling the requested information.

13.

On or about February 19, 2018, Oregon’s Finest, through its counsel, informed Defendant’s

counsel that Oregon’s Finest was in the process of obtaining the tonnage assessment and that the

assessment would be delivered to Defendant as soon as Oregon’s Finest received it.

14.

On March 19, 2018, Oregon’s Finest received a notice of termination from Defendant,

dated March 16, 2018. The notice stated that Oregon’s Finest was in default because it had not

produced the tonnage assessment within the time periods prescribed in the Lease.

15.

On March 20, 2018, Oregon’s Finest received the tonnage assessment and promptly

delivered it to Defendant the same day.

16.

Section 17.7 of the Lease awards attorney fees to the prevailing party in an action to

interpret or enforce the Lease.

CLAIM FOR RELIEF

(Declaratory Judgment, ORS 28.010–160)

17.

Oregon’s Finest re-alleges and incorporates the foregoing paragraphs as if fully set forth

herein.

18.

A real and substantial controversy exists as to whether and to what extent Defendant may

retake possession of the Premises. Oregon’s Finest maintains that it is not in default because it



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mitigated the alleged emanation of odor from the Premises by unplugging the exhaust system as

recommended by an HVAC technician, and no subsequent odor complaints were communicated

to Oregon’s Finest.

19.

A real and substantial controversy also exists as to the amount of rent Oregon’s Finest is

obligated to pay under the Lease. Oregon’s Finest maintains that the rent is the fair market value

existing at the time it exercised its option to renew the Lease.

20.

Oregon’s Finest is entitled to judgment pursuant to Oregon’s Uniform Declaratory

Judgment Act, ORS 28.010–160, declaring that Oregon’s Finest is not in default of the Lease and

is in rightful possession of the Premises, and that the rent should be set at the fair market value

existing at the time Oregon’s Finest exercised its option to renew the Lease.

21.

Oregon’s Finest is entitled to its attorney fees incurred in bringing this action.

PRAYER

WHEREFORE, Plaintiff Oregon Resources Marketing, LLC, dba Oregon’s Finest, prays

for a judgment against Defendant Lovejoy Square LLC as follows:

1. On the CLAIM FOR RELIEF, for DECLARATORY JUDGMENT, for a

judgment:

a) declaring that Oregon’s Finest is not in default of the Lease and is in rightful

possession of the Premises;

b) declaring the rent for the Premises to be set at the fair market value existing

at the time Oregon’s Finest exercised its option to renew the Lease;

c) awarding costs and disbursements pursuant to ORCP 68;

d) awarding attorney fees to Oregon’s Finest; and



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e) granting such other relief as this Court may deem just and equitable.

DATED: March 22, 2018

CHENOWETH LAW GROUP, PC /s/ Bradley Crittenden

Sandra S. Gustitus, OSB No. 143298 Bradley T. Crittenden, OSB No. 173274 510 SW Fifth Ave., Fifth Floor Portland, OR 97204 Phone: (503) 221-7958 Fax: (503) 221-2182 Email: [email protected] [email protected] Attorneys for Plaintiff

COMMERCIAL LE~ASE-MULTI-TENANT

Between

Metro West Holdings IV. LLC

"Landlord"

And

Oregon Resource Marketing. LLC

"Tenant"

Dated:

November, _20_ 2013

Exhibit A - Page 1 of 23

TABLE OF CONTENTS

Page

SECTION 1 BASIC LEASE PROVISIONS 1

SECTION 2 PREMISES 3

SECTION 3 TERM 4

SECTION 4 RENT 4

SECTION 5 PROVISIONS AS TO USE 6

SECTION 6 UTILITIES 7

SECTION 7 INSURANCE: INDEMNITY 7

SECTION 8 REPAIRS. MAINTENANCE AND ALTERATIONS 9

SECTION 9 RECONSTRUCTION AND RESTORATION 10

SECTION 10 ASSIGNMENT AND SUBLETTING 11

SECTION 11 CONDEMNATION 12

SECTION 12 SIGNS 12

SECTION 13 OTHER OBLIGATIONS OF PARTIES 12

SECTION 14 DEFAULTS:REMEDIES 14

SECTION 15 SECURITY DEPOSIT 16

SECTION 16 LANDLORD'S AND TENANT’S WORK SECTION 17

SECTION 17 MISCELLANEOUS 17

LIST OF EXHIBITS 22

563972V3Exhibit A - Page 2 of 23

COMMERCIAL LEASE

In consideration of the mutual promises of the parties set forth in thisCommercial Lease (the "Lease"), the parties agree as follows:

SECTION 1 BASIC LEASE PROVISIONS

This Section sets forth certain definitions and a summary of the basicprovisions contained in the Lease. In the event of any conflict between any provisioncontained in this Section 1 and a provision contained in the balance of the Lease, thelatter shall control.

1.1 Name of Landlord ("Landlord"): Metro West Holdings IV, LLC

1.2 Address for Noticesto Landlord: Mark R. Madden / Managing Member

1355 NW 13th Avenue. Portland. OR 97209

1.3 Address for RentPayments: 1355 NW 13thAve

Portland. Oregon 97209

Phone No.: 503-221-2900

Facsimile No.: 503-223-2567

1.4 Name of Tenant("Tenant") andAddress ofPremises: Oregon Resource Marketing, LLC

Dba: Oregon’s Finest1327 NW Kearny Street

Portland OR 97209

1.5 Address for Notices Oregon’s Finestto Tenant: 1327 NW Kearnv Street

Portland OR 97209

Phone No.:Facsimile No.:Email:

With a Copy to:

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1.6 Trade Name UnderWhich TenantWill Operateat Premises: Oregon’s Finest

1.7 Business To BeConducted By Tenantat Premises:

1.8 Approximate FloorArea of Premises:

1.9 Lease Term (the"Term"):

Retail store licensed bv the State of Oregon

Medical Marijuana Program dispensing medicalmarijuana and other related products, or any

other marijuana business as allowed bv futurechanges in State. Countv and City law. Tenant

will hold Landlord harmless against anv and allactions from anv and all government agencies

whether federal, state, or local resulting from theTenant’s use of the premises.

2.390 rentable souare feet

Three (31 Year and Seventy Five (75) days

1.10 Lease Dates:

1.10.1 Estimated Deliveryof Possession Date:

1.10.2 Estimated LeaseCommencement Date:

1.10.3 Estimated BaseRent CommencementDate:

1.10.4 EstimatedOperatingExpense PaymentCommencement Date:

1.10.5 Estimated ExpirationDate:

1.11 Base Rent:

Period

Months 1-36

1.12 Rent Abatement

1.3 Tenant's Initial Share ofOperating Expenses,Insurance, and Taxes:

December 1. 2013

December 1. 2013

February 15. 2014

February 15. 2014

February 28. 2017

Rent per RSF Monthly BaseRent

$21.00/NNN $4,182.50 + CAM’s

Seventy Five (75) days

12%

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1.14 Tenant's Initial EstimatedMonthly Payments ofOperating Expenses,Insurance and Taxes: $1.453.91 @ $7.30

1.15 Broker: Firm: NAI Norris Beaas and Simpson

Individual: Jeremiah “J. J.” Unger

1.16 Tenant's Broker: Firm: NAI Norris. Beaas and Simpson

Individual: Jeremiah “J. J.” Unger

1.17 Guarantor's nameand address: Oregon Resource Marketing. LLC

SECTION 2 PREMISES

Landlord hereby leases to Tenant and Tenant hereby leases fromLandlord certain space consisting of approximately 2.390 rentable square feet(“Premises"), on the first floor.

The commercial building known as 1327 NW Kearny. Portland. OR(“Building”) consists of approximately 2.390 rentable square feet, of which approximately2.390 rentable square feet are on the first floor and approximately N/A rentablesquare feet on the second floor.

Tenant shall maintain in good condition, monitor and keep secure all publicaccess points to its Premises. Tenant’s lease of the Premises shall include appurtenant,non-exclusive rights to use in common with all others all common areas within the Projectas Landlord may designate from time to time. Landlord reserves the right to alter orrelocate any common area and expand or contract the Project.

SECTION 3 TERM

The term of this Lease is set forth in Section 1.9 (the "Term"). The Termshall commence on the "Commencement Date" which shall be December 1. 2013 . If thefirst day of the Term is a day other than the first day of a calendar month, then the Termshall be deemed extended by the number of days between the Commencement Date andthe first day of the first calendar month thereafter so that the Term of the Lease shallexpire at midnight at the end of a calendar month ("Expiration Date”) February 28. 2017.Tenant shall have option to renew for two 2 periods of three (3) years at “fair market” butat not less than 115% of the amount of the base rent of the last month of the previouslease term, with_3% percent escalation per year thereafter through the renewal term.Tenant shall deliver (6) months prior to lease expiration, written notice to landlord oftenants intent to exercise renewal extension.SECTION 4 RENT

4.1 Base Rent

Throughout the Term, Tenant shall pay to Landlord, as minimum rent, theamounts set forth in Section 1.11 in accordance with the schedule set forth in Section

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1.11 ("Base Rent"). Tenant shall pay Base Rent & CAM”S in advance on the first day ofeach calendar month of the Term at the address for rent payments set forth in Section1.3, or at such other place as Landlord shall designate from time to time except thatTenant shall pay the first month's Base Rent & CAM’S payment on the date Tenantexecutes this Lease.

4.2 Rent Abatement: N/A

4.3 Security Deposit of: $11,272,82 equal to first & last months rent & CAM’s.Due at lease execution.

4.3.1 Operating Expenses

In addition to Base Rent, Tenant shall pay as additional rent its share of alloperating expenses for Metro West Holdings IV, LLC. As used herein "OperatingExpenses" shall mean all costs and expenses of operation, maintenance, management,and repair of Metro West Holdings IV, LLC as determined by standard real estateaccounting practice, including but not limited to: wages, salaries and benefits ofemployees engaged in the operation, maintenance, and repair of the Metro WestHoldings IV, LLC;_all accounting, legal and professional fees incurred in connection withthe operation of Metro West Holdings IV, LLC; costs of repairs, replacements andgeneral maintenance; cost of services supplied to tenants at Metro West Holdings IV,LLC; cost or rental value of the Metro West Holdings IV, LLC; management fees; andreasonable and prudent reserves or depletion allowances kept in accordance with goodaccounting practices. Operating Expenses shall not include income or franchise taxes ofLandlord. NNN’s in the first year are estimated at $7.30 psf or approximately $1,453.91 amonth. Controllable expenses to be capped at a 3% per year increase.

4.3.2 Taxes and Assessments

In addition to Base Rent, Tenant shall pay as additional rent its share of allproperty taxes and assessments of any public authority against the Metro West HoldingsIV, LLC_or the ownership, management or operation thereof, any rent tax, localimprovement district, gross receipts tax, tax on Landlord's interest under this Lease, orany tax in lieu of or in addition to the foregoing, whether or not such tax is now in effect(excluding any tax based upon Landlord's net income), and the cost of contesting anysuch tax or assessment (collectively, "Taxes").

4.3.3 Insurance

In addition to Base Rent, Tenant shall pay as additional rent its share of allinsurance relating Metro West Holdings IV, LLC carried by Landlord and its propertymanager, if any, including, but not limited to, casualty, rental interruption, and liabilityinsurance and all deductibles (collectively, "Insurance").

4.3.4 Tenant's Share

Tenant’s share of the Metro West Holdings IV, LLC Operating Expenses,Insurance, and Taxes shall be equal to 12% (“Tenant’s Share”). In the event thatLandlord expands or permits expansion of the Metro West Holdings IV, LLC, Tenant’sShare shall be adjusted, as of the date such expansion is substantially complete, toreflect the accurate percentage interest of the rentable square footage of the Premises tothe increased square footage of Metro West Holdings IV, LLC. However, tenant may becharged additional, city water, sewer, storm water as disproportionate use as determinedby landlord.

Tenant’s obligation to pay Tenant’s Share shall be deemed to be anobligation to pay rent to Landlord, and any failure to pay Tenant’s Share shall giveLandlord the right to exercise the same remedies as if Tenant had failed to pay BaseRent.

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4.3.5 Payment

Upon commencement of the Lease and at the beginning of each calendaryear during the term of the Lease, Landlord may estimate Tenant's share of OperatingExpenses, Insurance, and Taxes for the ensuing calendar year or portion thereof.Landlord may revise the estimate during the course of any year. Tenant will pay Tenant'sestimated share of Operating Expenses, Insurance, and Taxes on the first day of eachcalendar month during the Term. If Landlord bills on an estimated basis, Landlord shallby the last day of March (or as soon thereafter as practical) after the end of any calendaryear give notice to Tenant if Tenant's estimated share differed from Tenant's actualshare. If Tenant's estimated payments differed from Tenant's actual share, anappropriate adjustment shall be made within thirty days after the giving of such notice.Any objections by Tenant to the annual statement shall be made in writing given toLandlord within thirty days after the statement is submitted to Tenant. If no objections aremade within such time period, the annual statement shall be conclusive and binding onTenant. If Tenant desires to review any of Landlord's records pertaining to OperatingExpenses, Insurance, or Taxes, Tenant may do so after reasonable prior notice given toLandlord, but no more often than once during any calendar year. Such review shall takeplace at Landlord's offices where such records are kept, and shall be conducted by acertified public accountant chosen by Tenant subject to Landlord's prior written approval,which shall not be unreasonably withheld. Tenant shall pay all costs of such reviewincluding without limitation reimbursement for time incurred by Landlord’s representativesand photocopy charges. If Landlord bills on an actual basis Tenant shall pay Tenant'sactual share of Operating Expenses, Insurance, and Taxes on the first day of the firstcalendar month after the date of any such bill.

4.4 Late Charges

Tenant acknowledges that late payment of any rent or other paymentrequired by this Lease from Tenant to Landlord will result in costs to Landlord, the extentof which is extremely difficult and economically impractical to ascertain. Tenant thereforeagrees that if Tenant fails to make any rent or other payment required by this Lease to bepaid to Landlord within Ten days of the date it is due, Landlord may elect to impose a latecharge of five percent (5%) of the overdue payment, to reimburse Landlord for the cost ofcollecting the overdue payment. Landlord may levy and collect a late charge in additionto all other remedies available for Tenant's default, and collection of a late charge shallnot be in lieu of nor shall it waive the breach caused by the late payment.

4.5 Net Lease Provision. Place of Payment

All payments required to be paid by Tenant under this Lease other thanBase Rent will constitute Additional Rent. This is intended to be a net lease, meaningthat Tenant shall pay all expenses of every type relating to the Premises during the Termand all rent (including Base Rent and Additional Rent) shall be received by Landlord whenand as due without set off, offset, abatement, or deduction of any kind. Tenant shallmake all payments of additional rent at the address for rent payments set forth in Section1.3, or at such other place as Landlord shall designate from time to time.

SECTION 5 PROVISIONS AS TO USE

5.1 Permitted Use

Tenant shall use the Premises only for the purpose set forth in Section 1.7and for no other purpose without the written consent of Landlord, whichshall not be unreasonably withheld. Subject to Oregon State Law’s effectinguse. Tenant shall not interfere with other building tenant use and operatebusiness in with in tenants premise only.

5.2 Further Covenants as to Use

5.2.1 Tenant shall comply at its expense with all applicable state or

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municipal Laws (defined in Section 13.8), including without limitation those regarding themaintenance, operation, condition, and use of the Premises when and as required by theapplicable public authority. Tenant shall not use the Premises in conflict with any state ormunicipal Laws nor shall Tenant permit anything to be done in or about the Premiseswhich will conflict with any state or municipal Laws. However, Landlord expresslyapproves the use of the Premises for dispensing of medical marijuana, as to whichTenant shall comply fully with all applicable Oregon statutes and regulations and localordinances and regulations, including any changes or amendments which may occur overtime.

5.2.2 Tenant shall not conduct or permit any activities on the Premiseswhich will likely increase the fire insurance rate upon Metro West Holdings IV, LLC orcause a cancellation of any of Landlord's insurance policies; or create a nuisance ordamage the reputation of the Metro West Holdings IV, LLC or be reasonably offensive toLandlord or other tenants. Tenant shall not permit any noise, odor, or offensive light to beemitted from the Premises. Tenant shall not allow the disposal of any medical waste atthe Premises or in Metro West Holdings IV. LLC trash receptacles by Tenant or Tenant'semployees, agents, or independent contractors.

5.2.3 Tenant shall keep the Premises clean and orderly and will cause itsemployees on the Premises to be well groomed and dressed in accordance with a first-class, professional operation of Tenant's business. Tenant shall supervise its employeesand cause Tenant's agents, independent contractors, employees, customers, suppliersand invitees to conduct their activities in such a manner as to comply with therequirements of this Lease.

5.2.4 All parts of Metro West Holdings IV. LLC including without limitationcommon areas within Metro West Holdings IV, LLC shall be used in strict compliancewith the lease document and with respect of other Tenants. Tenant shall not use any areaoutside of the Premises for any purpose other than those designated in writing given byLandlord to Tenant in advance. Tenant shall use, and cause its employees, suppliers,agents, and independent contractors to use loading areas in accordance with the Leaseagreement and in respect of other tenants in the Building. Tenant and Tenant's agents,employees, and independent contractors are prohibited from going on the roof orpenetrating the roof.

5.3 Storage; Trash; Recycling

Tenant shall not store anything outside except in such areas approved inwriting in advance by Landlord. Tenant shall use only trash and garbage receptaclesapproved by Landlord. Tenant shall be responsible for disposing of trash and other matterin a manner acceptable to Landlord, at Tenant's expense. Tenant shall comply with allrecycling programs required by applicable Laws or by Landlord from time to time. Tenantshall not use trash for animal discharge or cleaning debris.

SECTION 6 UTILITIES

Tenant shall pay for all charges for utilities and services supplied to thePremises, including (without limitation) hookup and service charges for electricity, gas,telephone, cable, water, and sewer. If consumption is not separately metered to thePremises, Tenant shall pay Landlord for all utilities consumed on the Premises at a ratereasonably determined by Landlord which is not in excess of the cost to Landlord, withinten days after billing by Landlord. If Tenant disputes such method of billing, or if Landlorddetermines that Tenant’s consumption of utilities exceed its pro rata share of the totalutility bill, then Tenant shall install and pay for separate meters to measure separate utilityconsumption. If Tenant is billed directly by the utility provider, Tenant shall pay for theapplicable utilities within the time permitted for payment by the utility company. Landlordshall not be liable for any failure or interruption of utilities or services to the Premises. Dueto Tenants abundant use of water/sewer special monthly assessment may be issued byLandlord and Tenant shall pay with rental invoice with out delay.

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SECTION 7 INSURANCE: INDEMNITY

7.1 Public Liability Insurance

Tenant shall continuously maintain at its expense comprehensive publicgeneral liability insurance in respect of the Premises (and extending out to the edge ofany sidewalk or other pedestrian area surrounding the Premises) and the conduct oroperation of the business in the Premises with Landlord and its managing agent, if any,and any mortgagee of the Metro West Holdings IV. LLC whose name and address havebeen previously furnished to Tenant as additional insured with Two Million Dollars($2,000,000) minimum combined single limit coverage or its equivalent. All suchinsurance shall insure the performance by Tenant of the indemnity agreement set forth inSection 7.5 of this Lease and for the injury to, illness of, or death of persons and damageto property.

7.2 Tenant's Casualty Insurance

Tenant shall continuously maintain at its expense (a) fire and extendedcoverage insurance on all furnishings, leasehold improvements, fixtures, inventory andequipment located on the Premises, for the full replacement value, and (b) insurance onall plate glass on the Premises for its replacement cost. The proceeds of such insurance,so long as this Lease remains in effect, shall be used to repair or replace the leaseholdimprovements, fixtures, inventory, equipment, and plate glass so insured.

7.3 Insurance Policies

All insurance policies to be carried by Tenant shall include only reasonableand prudent deductible amounts. All insurance policies shall name Landlord (OvertonPearl 2), Landlord’s managing agent (WDC Properties), and Landlord's mortgagee asadditional insured’s and shall be provided by companies and with loss-payable clausessatisfactory to Landlord, with ratings no less than A+ by A.M. Best. Copies of all policiesor certificates evidencing such insurance in form acceptable to Landlord shall bedelivered to Landlord by Tenant prior to Tenant's occupancy of the Premises. All policiesand certificates shall bear endorsements requiring thirty days' written notice to Landlordprior to any change or cancellation.

7.4 Landlord’s Insurance

Landlord shall keep in full force and effect all insurance required to bemaintained by Landlord’s mortgagee, fire and extended coverage insurance covering theBuilding, including the Premises (except Tenant’s inventory, trade fixtures, furnishings,equipment and personal property including signs, wall coverings, carpeting, drapes,tables and chairs) against loss or damage by fire and such other risks as are from time totime covered under “ extended coverage” endorsements, and special extended coverageendorsements commonly known as “ all risks” endorsements, in an amount equal to thefull replacement cost, if available, but not less than required by Landlord’s mortgagee ortrust deed holder from time to time, and at Landlord’s option such insurance coverageshall include (a) rental interruption insurance and (b) such other and/or additionalcoverage as Landlord deems reasonably appropriate.

7.5 Waiver of Subrogation

Neither party nor its officers, directors, employees, agents, or invitees shallbe liable to the other party for any loss or damage caused by water damage or any of therisks covered by an all risk policy of property insurance or under workers compensationinsurance, and there shall be no subrogated claim by one party's insurance carrieragainst the other party arising out of any such loss.

7.6 Indemnity of Landlord

(a) Tenant shall indemnify, defend, and hold harmless Landlord

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and Landlord's officers, directors, partners, employees, agents, and independentcontractors from any and all claims damages, liability, cost or expense for: (a) anydamage to any property or injury (including without limitation “ slip and fall” , illness, ordeath of any person) occurring in or on the Premises, during those periods of time whennot used exclusively by Landlord or occurring elsewhere in the Building when suchdamage, injury, illness or death shall be caused in whole or in part by the act or failure toact of Tenant, its agents, servants, employees, invitees or licensees, by any breach of thisLease by Tenant, or by any use of the Premises during the Term, and (b) any violation oflaw by Tenant, its officers, directors, partners, employees, agents, and independentcontractors, and (c) any act or omission whatsoever of Tenant or any sub-tenant and theirrespective shippers, concessionaires, invitees, licensees, agents, employees orindependent contractors. Tenant hereby waives all claims against Landlord for damageto any property or injury, illness or death of any person in, upon, or about the Premisesand/or Building arising at any time and from any cause whatsoever.

(b) Tenant covenants and agrees that Landlord shall not beliable to Tenant, or to any person or entity claiming any right through Tenant, as aconsequence of the following, unless caused by the gross negligence of Landlord: (a)any accident, injury, death, loss or damage whatsoever to any person or to the propertyof any person, including the person and property of Tenant and its employees, agents,officers, guests and all persons in the Building and common areas at its or theirinvitation or with their consent, or as shall occur on the Premises and the sidewalksadjoining same and any loading platform area allocated to the use of Tenant during theTerm of this lease; (b) any fires, explosion, falling plaster, steam, gas, electricity, wateror rain which may leak from any part of the Building or common areas or accumulatethereon or therein, or from the pipes, appliances or plumbing works therein or from theroof, street or subsurface or from any other place resulting from dampness or any othercause whatsoever; (c) any latent defect in the Premises or Building not known toLandlord even though the same could have become known to Landlord through theexercise of reasonable diligence; and (d) any loss or damage that may be occasionedby or through the acts or omissions of persons occupying adjoining premises or anypart of the Building adjacent to or connected with the Premises or located in theBuilding or any loss or damage resulting to Tenant or his property from burst, stoppedor leaking water, gas, or sewer pipes, or for any damage or loss of property within thePremises from any cause whatsoever.

Tenant acknowledges that Landlord shall have no liability for anydamage to or destruction of any items located in the Premises or Building, and Tenanthereby indemnifies and holds Landlord harmless from and against any liability,damage, cost or expense, including reasonable attorneys’ fees, which Landlord maysuffer or incur as a consequence of any such damage or destruction unless caused byLandlord's gross negligence or intentional wrongful act.

SECTION 8 REPAIRS. MAINTENANCE AND ALTERATIONS

8.1 Condition of Premises

Tenant accepts the Premises “ AS IS”

8.2 Maintenance of Premises

8.2.1 Landlord shall maintain and repair the Building roof, gutters,downspouts, foundation, and structure and the costs thereof shall be included inOperating Expenses; provided, however, that if the need for any such maintenance orrepair is directly related to Tenant's use of the Premises, Tenant shall pay for suchmaintenance or repair. Notwithstanding the preceding sentence, Landlord shall beresponsible for the replacement cost (to the extent such replacement is caused byordinary wear and tear), if any, of the roof and outer walls of the Building in which thePremises is located.

8.2.2 Tenant shall, at Tenant's own expense, keep the Premises in good

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condition and repair, including without limitation, the maintenance, replacement and repairof any storefront, doors, window casement, glazing, heating, ventilating, and airconditioning systems and equipment ("HVAC"), plumbing, and electrical wiring, usingcontractors first approved in writing by Landlord. All such maintenance shall conform tothe requirements under any applicable warranties. Tenant, at Tenant's own expense,shall be responsible for providing janitorial services and regular pest exterminationservices to the Premises using contractors first approved in writing by Landlord. Tenantshall remove all ice, snow and debris from the sidewalk or other pedestrian areassurrounding its Premises promptly after any accumulation thereof. At Landlord's option,Landlord may arrange for pest extermination, HVAC maintenance, or ice, snow or debrisremoval or any of the foregoing repairs and maintenance and Tenant shall reimburseLandlord for the cost thereof within ten days after billing therefore.

8.3 Condition of Premises upon Termination

Tenant shall, upon the termination of this Lease, surrender the Premises toLandlord broom clean, in good condition and repair, except for ordinary wear and tearand for damage covered by Landlord's fire and extended coverage insurance. All or anyof the alterations or improvements to the Premises as chosen by Landlord (excludingtrade fixtures installed and paid for by Tenant) shall, at Landlord's option, either (a)become part of the Premises and belong to Landlord and shall be surrendered with thePremises without disturbance upon the termination of the Lease, or (b) be removed byTenant prior to the termination of this Lease, in which event Tenant shall restore the areato the condition it was in immediately prior to the date Tenant took possession of thePremises.

8.4 Alterations

Tenant shall not make or permit to be made any alterations orimprovements to the Premises without the prior written consent of Landlord, which shallnot be unreasonably withheld. In the event Landlord consents to Tenant making anyalterations or improvements, the same shall be made at Tenant's sole expense, using acontractor first approved in writing by Landlord, and the same shall be made inaccordance with plans and specifications first approved in writing by Landlord. Landlordmay require a cash deposit or other reasonable security to assure Landlord that the costof such alterations or improvements shall be paid promptly when and as due to avoid anyliens. Also, Tenant shall pay Landlord an administrative charge for costs of anysupervision of the work and the review of plans and specifications. Tenant shall alsoreimburse Landlord for the cost of any supervisor, engineer, or other person who reviewsthe plans and specifications and/or any work performed by Tenant or its contractor at thePremises, promptly within ten days after billing therefore. Landlord may impose suchother conditions as Landlord may reasonably deem fit, including without limitationcompliance by Tenant with the provisions of Section 17.5, Work Agreement, hereto.

Notwithstanding the foregoing, Tenant may make non-structuralalternations to the Premises of not more than $5,000 per request without Landlord’s priorwritten consent so long as (a) Tenant gives Landlord prior written notice of suchalteration, together with a copy of redlined plans and specifications for planned changes,(b) Tenant uses licensed bonded contractors for the work, and (c) Tenant complies withall requirements of law , including without limitation Ordinances of the City of Portland,Oregon and the UBC Code.

8.5 Trade Fixtures

Upon the termination of this Lease, Tenant shall remove all trade fixtures,movable furniture, and equipment located on the Premises which belong to Tenant, andrepair at its expense any damage caused to the Premises by such removal. If Tenantfails to remove such property, this shall be an abandonment of the property and Landlordmay either (a) retain the property and all rights of Tenant with respect to it shall cease, (b)require Tenant to remove the property, or (c) effect a removal and place the property instorage for Tenant's account. Tenant shall be liable to Landlord for the cost orreasonable value of removal, restoration, transportation to storage and storage, with

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interest on all such as expenses as provided in Section 14.3 below.

8.6 Entry and Inspection

Landlord and its agents and employees may enter the Premises at any timein the event of an emergency or, in any other event, after 24 hours prior oral notice todetermine Tenant's compliance with this Lease, to make necessary repairs, or to showthe Premises to prospective tenants or purchasers. Tenant shall at all times provideLandlord with a key to all doors at the Premises.

SECTION 9 RECONSTRUCTION AND RESTORATION

9.1 Minor Damage

If, during the Term, the Premises are damaged by fire or other perilscovered by Landlord's insurance and such damage is not "substantial" as defined below,and if Landlord receives insurance proceeds therefore, Landlord shall promptly repairsuch damage at Landlord's expense and Tenant shall repair such damage to its propertyat its expense or using proceeds from the insurance described in Section 7.2, and thisLease shall continue in full force and effect.

9.2 Substantial Damage

If, during the Term, fifty percent (50%) or more of the Premises or fiftypercent (50%) or more of the Building are destroyed or damaged by fire or other perils(such percentage being defined as an amount exceeding fifty percent (50%) of its fullconstruction-replacement cost), then Landlord may elect to terminate this Lease by givingTenant written notice of such termination within 60 days after the date of such damage.Further, if fifty percent (50%) of the Premises is destroyed and the same cannot berestored to a similar condition preceding the destruction within one hundred fifty (150)days of the casualty, then Landlord and Tenant shall have a mutual election to terminatethis Lease by giving written notice of such termination to the other within sixty (60) daysafter the date of such damage. Otherwise, Landlord shall proceed to restore thePremises to a condition comparable to that existing prior to the damage. Tenant shallcooperate with Landlord during the period of repair and vacate all or any part of thePremises to the extent necessary for the performance of the required work. Landlordneed not incur expenses for restoration in excess of the net insurance proceeds availableto Landlord for such purpose after payment of all reasonable costs, expenses andattorneys' fees incurred by Landlord in connection therewith.

9.3 Abatement of Rent

Base Rent shall be abated during the period and to the extent the Premisesis not reasonably usable for Tenant's use. If the damage does not cause any materialinterference with Tenant's use, there shall be no rent abatement.

9.4 Repair of Leasehold Improvements and Tenant's Property

Repair, replacement, or restoration of any fixtures, inventory, leaseholdimprovements, equipment, and personal property shall be the responsibility of Tenantexcept for those leasehold improvements insured under landlord’s insurance on thestructure, which will be paid for by landlord from the insurance proceeds received.

SECTION 10 ASSIGNMENT AND SUBLETTING

Tenant shall not (voluntarily or by operation of law) assign, mortgage,pledge, hypothecate or encumber the Premises or Tenant's leasehold estate or subletany portion of the Premises, or otherwise transfer any interest in the Premises withoutLandlord's prior written consent in each instance, which consent shall not beunreasonably withheld or delayed. In no event shall Landlord be obligated to accept atransfer to a transferee with which Landlord has discussed the lease of space in the

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Metro West Holdings IV, LLC within the two years prior to the requested transfer.Landlord may condition its consent to a proposed transfer on reasonable conditionsincluding, without limitation. Should Landlord withhold its consent to a proposed transferfor any of the following reasons, the withholding shall be deemed to be reasonable: (a)conflict, incompatibility or duplication of the proposed use with other uses in Metro WestHoldings IV, LLC; (b) financial inadequacy or managerial inexperience of the proposedtransferee; (c) any proposed change in use which would diminish the reputation orprofitability of the other businesses located in the Metro West Holdings IV, LLC; (d) theproposed use would adversely impact the use of the common facilities by other tenants ofMetro West Holdings IV, LLC; (e) Tenant is then in default of the Lease or has been indefault on two or more occasions during the 12 month period preceding the date Tenantrequests the transfer; and (g) any other reasonable criteria. If Tenant is a corporation orother entity, the transfer of a 45 percent or greater interest in cumulative total in any two-year period in the stock or other form of ownership of Tenant shall be deemed anassignment within the meaning of this Section. If Tenant is a partnership, any change inthe partners shall be deemed an assignment of this Lease. If Tenant requests consent toa proposed transfer, Tenant shall pay a review fee of $250.00 at the time of the request tocover Landlord's expenses in reviewing the request for consent to transfer and Tenantshall pay all attorney’s fees and other reasonable costs incurred by Landlord inconnection with the requested transfer. Such costs shall be capped at Five HundredDollars ($500). In no event shall Tenant ever be released from its obligations under thisLease in connection with any transfer of its interest in the Lease or the Premises.

SECTION 11 CONDEMNATION

11.1 Entire or Substantial Taking

If more than 25 percent of the Premises shall be taken under the power ofeminent domain, this Lease shall terminate on Landlord's notice as of the date thecondemning authority takes possession.

11.2 Partial Taking

In the event of any taking under the power of eminent domain which doesnot result in a termination of this Lease pursuant to Section 11.1, the Base Rent payablehereunder shall be reduced, effective on the date the condemning authority takespossession, in the same proportion as the reduction in rentable floor area of thePremises. Landlord shall promptly, at its sole expense and subject to receipt of an awardsufficient to cover such restoration, restore the portion of the Premises not taken to asnear its former condition as is reasonably possible, and this Lease shall continue in fullforce and effect.

11.3 Awards

Any award for taking of all or any part of the Premises under the power ofeminent domain shall be the property of the Landlord, whether such award shall be madeas compensation for diminution in value of the leasehold or for taking of the fee. Tenanthereby assigns to Landlord all interest in any such award. Nothing in this Lease shallpreclude Tenant from making a separate claim for its lost trade fixtures or movingexpenses so long as any such claim or award resulting from such claim does not reduceLandlord's award.

11.4 Sale Under Threat of Condemnation

A sale by Landlord to any authority with power of eminent domain, eitherunder threat of condemnation or while condemnation proceedings are pending, shall bedeemed a taking under the power of eminent domain under this Section 11. Landlordneed not incur expenses for restoration in excess of the amount of condemnationproceeds received by Landlord after payment of all reasonable costs, expenses andattorneys' fees paid or incurred by Landlord in connection with the condemnation.

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SECTION 12 SIGNS

Tenant shall not construct or install any signs visible from the exterior of thePremises without the prior written consent of Landlord which consent shall not beunreasonably withheld. Tenant shall comply with Landlord's signage criteria for MetroWest Holdings IV, LLC. Any sign on the Premises will be designed and constructed incompliance with all applicable Laws. In no event shall handwritten signs be acceptable.Tenant shall be responsible for all costs of signage including design, construction,permits, and installation. See Exhibit D, Signage Design.

SECTION 13 OTHER OBLIGATIONS OF PARTIES

13.1 Liens

Tenant shall pay when and as due all claims for work done on the Premisesor for services rendered or materials furnished to the Premises and shall keep thePremises free from any liens other than liens created by Landlord. If Tenant fails to paysuch claim or to discharge any lien, Landlord may do so and collect such amount asadditional rent. Amounts paid by Landlord shall bear interest and be repaid by Tenant asprovided in Section 14.3 below. Such payment by Landlord shall be in addition to anyother right or remedy and shall not constitute a waiver of any right or remedy Landlordmay have because of Tenant's breach of this Lease.

13.2 Holding Over

If Tenant does not vacate the Premises and remove property and/or restorethe Premises as required by this Lease upon the expiration or earlier termination of thisLease, 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 that the Term will be month to monthand the Base Rent will be150% percent of the Base Rent payable by Tenant immediatelyprior to the end of the Term), or to eject Tenant from the Premises and recover damagescaused by wrongful hold over.

13.3 Rights of Landlord

Landlord shall have the right to change the name or designation of theMetro West Holdings IV. LLC without notice or liability to Tenant. Landlord shall alsohave the right to grant to anyone the exclusive right to conduct a particular business orundertaking in the Metro West Holdings IV. LLC.Without implying consent to any use notincluded in Section 1.7, Tenant shall not use the Premises for any use which violates anyexclusivity provision in any lease at the Metro West Holdings IV. LLC. now in existence, ornotice of which is given to Tenant prior to Tenant’s Metro West Holdings IV. LLC initiationof such use.

13.4 Priority of Lease

This Lease shall be subject and subordinated at all times to the lien of allmortgages, deeds of trust and other financing instruments now in effect or subsequentlyplaced upon the Metro West Holdings IV. LLC. all without the necessity of having furtherinstruments executed by Tenant to effectuate such subordination. If any party providingfinancing or funding to Landlord requires that Tenant execute any document evidencingsuch subordination or requiring Tenant to give it written notice of any default by Landlord,giving such party the right to cure any such default and preventing Tenant fromterminating this Lease unless such default remains uncured after foreclosure has beencompleted, or any other reasonable provisions, Tenant shall execute and deliver anyagreement required by such party in order to accomplish this purpose within ten daysafter Landlord's written request therefore.

Attornment

Tenant shall, in the event of the sale or assignment of Landlord’s interest in

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the Premises and/or Metro West Holdings IV. LLC. any proceedings are brought for theforeclosure of such interest, the exercise of the power of sale under any mortgage madeby Landlord covering the Premises and/or Metro West Holdings IV. LLC. or the eviction ofLandlord under any underlying lease by Landlord, attorn to the purchaser-transferee andrecognize such purchaser-transferee or lessor as the Landlord under this Lease,notwithstanding the fact that this Lease my terminate upon the termination of Landlord’sinterest. Such attornment shall be self-operative upon demand without the execution ordelivery of any further instrument by Tenant. However, no such attornment (except in theevent of the sale for value of the Premises and/or Metro West Holdings IV. LLC) shallcause such subsequent landlord to be liable for any act or omission of Landlord or subjectit to any offsets or defenses against Landlord or bind it for any rent or additional rentwhich Tenant may have paid in advance.

Non-disturbance

Landlord will use reasonable efforts to obtain for Tenant a non-disturbanceagreement from Landlord’s construction mortgagee. Tenant agrees to reasonablycooperate with Landlord and its mortgagee and/or deed-of-trust holder and to agree uponthe terms and provisions of the applicable non-disturbance agreement provided byLandlord’s mortgagee and/or deed-of-trust holder. Landlord will also use reasonableefforts to deliver non-disturbance terms and provisions to Tenant with respect to anyfuture mortgagee or deed-of-trust holder providing subsequent financing whichencumbers, among other things, the Premises. The non-disturbance terms andprovisions should be commercially reasonable as to form and substance and shallprovide, among other things, that the mortgagee or deed-of-trust holder will not disturbTenant’s rights under this Lease, so long as Tenant is not in default hereunder.

13.5 Landlord's Liability: Sale

The liability of Landlord under this Lease shall be limited to Landlord'sinterest in Metro West Holdings IV. LLC. and any judgment against Landlord shall beenforceable solely against Landlord's interest in the Metro West Holdings IV, LLC. In theevent the original Landlord hereunder, or any successor owner of Metro West HoldingsIV. LLC , shall sell, convey, or otherwise transfer its interest in Metro West Holdings IV,

LLC. all liabilities and obligations on the part of the original Landlord, or such successorowner, under this Lease accruing thereafter shall terminate. All liabilities and obligationsof Landlord accruing thereafter shall be binding upon the new owner. Tenant agrees toattorn to such new owner.

13.6 Estoppel Certificate

Within five days after Landlord’s written request, Tenant shall deliver awritten statement stating the amount of all rent, the date to which the rent and otherchanges have been paid, whether the Lease is unmodified and in full force and effect,and any other matters that may reasonably be requested by Landlord or by anyprospective lender or purchaser.

13.7 Rules and RegulationsTenant agrees to comply with all rules, regulations and requirements for

Metro West Holdings IV. LLC. as adopted and modified by Landlord from time to time (the“Rules and regulations”) and to cause Tenant’s customers, independent contractors,employees, agents, and invitees to abide by the Rules and Regulations. Tenant agreesthat Landlord shall not be responsible to Tenant for the noncompliance by any othertenant or occupant of the Metro West Holdings IV, LLC with the Rules and Regulations.

13.8 Existing Restrictions

This Lease is subject to all easements, restrictions, agreements of record,mortgages and deeds of trust, zoning and building laws, and all other laws, statutes,codes, ordinances, rules, regulations and other governmental requirements now in effector becoming effective after the date this Lease is executed (collectively, "Laws").

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13.9 Covenant of Quiet Eniovment

Landlord covenants that, as long as no event of default shall have occurred,Tenant shall peaceably and quietly have, hold and enjoy the Premises during the term ofthis Lease without any interruption or disturbance from Landlord or any party claiming, by,through, or under Landlord, subject to the terms and conditions of this Lease.

SECTION 14 DEFAULTS: REMEDIES

14.1 Default

The following shall be events of default:

14.1.1 Payment Default

Failure of Tenant to make any Base Rent or Additional Rent payment, orany other payment under this Lease when it is due.

14.1.2 Unauthorized Transfer

Tenant makes any transfer without Landlord's prior written consent asrequired under Section 10.

14.1.3 Abandonment of Premises

Tenant vacates or abandons the Premises during the Term, unless suchfailure is excused under other provisions of this Lease.

14.1.4 Default in Certain Covenants

Failure of Tenant to deliver the instruments described in Section 13.4 orSection 13.6 as and when required in such Sections, as applicable, or failure of Tenant tocomply with any applicable Law when and as required by the applicable governmentalauthority.

14.1.5 Default in Other Covenant

Failure of Tenant to comply with any other term or condition of this Lease orto fulfill any other obligation of this Lease within thirty days after written notice by Landlordspecifying the nature of the failure with reasonable particularity. No notice and noopportunity to cure shall be required if Landlord has previously given Tenant notice offailure to comply with such term or condition or fulfill such other obligation of this Leasetwo or more times in any twelve-month period during the Term.

14.1.6 Insolvency Defaults

Dissolution, termination of existence, insolvency on a balance sheet basisor business failure of Tenant; the commencement by Tenant of a voluntary case underthe federal bankruptcy laws or under any other federal or state law relating to insolvencyor debtor's relief; the entry of a decree or order for relief against Tenant in an involuntarycase under the federal bankruptcy laws or under any other applicable federal or state lawrelating to insolvency or debtor's relief; the appointment of or the consent by Tenant to theappointment of a receiver, trustee or custodian of Tenant or of any of Tenant's property;an assignment for the benefit of creditors by Tenant; Tenant's failure generally to pay itsdebts as such debts become due; the making or suffering by Tenant of a fraudulenttransfer under applicable federal or state law; concealment by Tenant of any of itsproperty in fraud of creditors; or the imposition of a lien through legal proceedings ordistraint upon any of the property of Tenant which is not discharged or bonded. Duringany period in which there is a Guarantor(s) of this Lease, each reference to "Tenant" inthis paragraph shall be deemed to refer to "Guarantor or Tenant" separately.

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14.2 Remedies on Default

Upon default, Landlord may exercise any one or more of the followingremedies, or any other remedy available under applicable law:

14.2.1 Retake Possession

To the extent permitted by law, Landlord may re-enter and retakepossession of the Premises, with notice, either through self-help, by summaryproceedings, any other applicable action or proceeding, or other means. Landlord mayuse the Premises for Landlord's own purposes or relet it upon any reasonable termswithout prejudice to any other remedies that Landlord may have by reason of Tenant'sdefault. None of these actions will be deemed an acceptance of surrender by Tenant. Tothe extent permitted by law, and except as expressly provided in this Lease, Tenantwaives the sen/ice of any notice of intention to terminate this Lease or to retake thePremises, and waives service of any demand for payment of rent or for possession, andof any and every other notice or demand required or permitted under applicable law.

14.2.2 Relet the Premises

Landlord at its option may relet the whole or any part of the Premises, fromtime to time either in the name of Landlord or otherwise, to such tenants, for such termsending before, on, or after the expiration date of the Term, at such rentals and upon suchother conditions (including concessions and free rent periods) as Landlord, in its solediscretion, may determine to be appropriate. Landlord shall have no obligation to relet thePremises or any part and shall not be liable for refusal or failure to relet the Premises, orin the event of any such reletting, for refusal or failure to collect any rent due upon suchreletting. No such refusal or failure shall operate to relieve Tenant of any liability underthis Lease or otherwise affect Tenant's liability. If there is other comparable un-leasedspace in Metro West Holdings IV. LLC, Landlord shall have no obligation to attempt torelet the Premises prior to leasing other space in Metro West Holdings IV. LLC.

Upon occurrence of any breach, Landlord shall have the option to terminatethis Lease and Landlord may, in addition to all other remedies, recover all damagesincurred by such breach, including the cost of recovering the Premises, reasonableattorneys’ fees, the cost of reletting and the present worth at termination of the excess, ifany, of the amount of rent and charges equivalent to rent reserved in this Lease for theremainder of the stated term over the-then reasonable rental value of the Premises forthe remainder of the stated Term over the-then reasonable rental value of the Premisesfor the remainder of the stated Term and all such amounts shall be immediately due andpayable. Such present worth shall be computed by discounting the excess to the date oftermination at the rate of four percent (4%) per annum.

14.2.3 Damages for Default

Whether or not Landlord retakes possession of or relets the Premises,Landlord may recover all damages caused by the default (including but not limited tounpaid rent, attorneys' fees reasonably incurred, and costs of reletting). Landlord maysue periodically to recover damages as they accrue during the remainder of the Termwithout barring a later action for further damages. Landlord may at any time bring anaction for accrued damages plus damages for the remaining Term as allowed by law.

14.3 Cure of Tenant's Default

Without prejudice to any other remedy for default, Landlord may performany obligation of Tenant or make any payment required by Tenant under this Lease ifTenant fails to do so. The cost of performance, including reasonable attorneys' fees andall disbursements, shall immediately be repaid by Tenant upon demand, together withinterest from the date of expenditure until fully paid at the prime rate as declared by amajor bank in Oregon, plus two percentage points, but not in any event at a rate greater

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than the maximum rate of interest permitted by law.

SECTION 15 SECURITY DEPOSIT

Tenant shall, upon execution of this Lease, deposit with Landlord the sumset forth in Section 4.3 (the "Security Deposit"), as security for the full and faithfulperformance by Tenant of every provision of this Lease. If Tenant violates any provisionof this Lease, Landlord may, but shall not be obligated to, apply all or any part of theSecurity Deposit to remedy such violation. If any portion of the Security Deposit is soapplied, Tenant shall immediately deposit with Landlord cash in an amount sufficient torestore the Security Deposit to its original amount. Landlord may commingle the SecurityDeposit with Landlord's funds and Tenant shall not be entitled to interest on the SecurityDeposit. If Tenant shall fully and faithfully perform every provision of this Lease, theSecurity Deposit or any balance thereof shall be returned to Tenant within Sixty days afterVacating the space. Any damages to return premise to original state at occupancy shallbe deleted from deposit at Landlords sole discretion.

SECTION 16 LANDLORD'S AND TENANT'S WORKSECTION

Landlord shall perform the work described as Landlord's Work, if any, asset forth in the Section 17.5, Work Agreement. Tenant shall perform all other workrequired to ready the Premises for Tenant's use and conduct of its business inaccordance with Section 17.5, Work Agreement.

SECTION 17 MISCELLANEOUS

17.1 Waivers

No waiver by Landlord of performance of any provision of this Lease shallbe deemed to be a waiver of nor prejudice Landlord's right to otherwise requireperformance of the same provision or any other provision.

17.2 Recording

Tenant shall not record this Lease without the prior written consent ofLandlord, which consent Landlord may withhold in its sole discretion.

17.3 Notices

Except as otherwise expressly set forth in this Lease, all notices under thisLease shall be in writing and signed by the party to be bound. Any notice or payment willbe deemed given when personally delivered or delivered by facsimile transmission,provided that a hard copy, together with electronic confirmation of delivery, is sent by firstclass mail, or will be deemed given on the day following delivery of the notice by reputableovernight courier, or through mailing in the United States mail, certified, return receiptrequested, postage prepaid, by the applicable party to the address of the other partyshown in this Lease in Section 1.2 and 1.5, or at such other address as may bedesignated by either party by notice to the other given in accordance with this Section17.3, unless that day is a Saturday, Sunday, or legal holiday, in which event it will bedeemed delivered on the next following business day. If the deadline under this Lease fordelivery of a notice or payment is a Saturday, Sunday, or legal holiday, such last day willbe deemed extended to the next following business day.

17.4 Exhibits

The following Exhibits are attached to this Lease and are a part of thisLease as if set forth in full in this Lease.

17.5 Construction

Tenant accepts the Premises “AS IS”.

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(a) This Lease shall be construed and governed by the laws of theState of Oregon; (b) the invalidity or non-enforceability of any provision hereof shall notaffect or impair any other provisions hereof; (c) this Lease constitutes the entireagreement of the parties and supersedes all prior agreements or understandings betweenthe parties with respect to the subject matter hereof; (d) this Lease may not be modifiedor amended except by written agreement signed by both parties; (e) if there be more thanone tenant, the obligations hereunder imposed upon Tenant shall be joint and several; (f)time is of the essence of this Lease and each and every provision hereof; (g) nothingcontained herein shall create the relationship of principal and agent or of partnership or ofjoint venture between the parties hereto and no provisions contained herein shall bedeemed to create any relationship other than that of landlord and tenant; (h) allprovisions, the full performance of which is not required prior to the expiration or earliertermination of this Lease shall survive the expiration or earlier termination of this Leaseand shall be fully enforceable thereafter; (i) there have been no representations made byLandlord or its agents or understandings made between the parties other than those setforth in this Lease; and (j) no recalculation of square footage shall affect the obligations ofTenant under this Lease including, without limitation, the amount of Base Rent orAdditional Rent payable by Tenant.

Work Agreement::

Tenant accepts the Premises “AS IS”.

17.6 Successors

Subject to any limitations on assignments in this Lease, all of the provisionsof this Lease shall inure to the benefit of and be binding upon the successors and assignsof the parties to this Lease.

17.7 Attorneys1 Fees

In the event suit or action is instituted to interpret or enforce any term of thisLease, the prevailing party shall be entitled to recover from the other party such sum asthe court may adjudge reasonable as attorneys' fees at trial, on petition for review, or onappeal, in addition to all other sums provided by law.

17.8 Environmental Laws

17.8.1Tenant shall comply with any Environmental Laws for operations andconditions at the Premises and be solely responsible for costs and expenses relating tocompliance with Environmental Laws. As used in this Lease, “Environmental Laws”means any and all applicable federal, regional, state, county or municipal statutes, laws,codes, ordinances, licenses, permits, orders, approvals, plans, authorizations,concessions, franchises, rules or regulations, whether now in force or as amended orenacted in the future, pertaining to public health and safety, worker health and safety,or the environment (including, without limitation, ambient air, surface water,groundwater, wetlands, land surface, or subsurface strata); including, without limitation,CERCLA, the Hazardous Materials Transportation Control Act of 1970 (49 USC § 1802et seq.), the Resource Conservation and Recovery Act of 1976 (42 USC § 6901 etseq.), the Federal Water Pollution Control Act (33 USC § 1251 et seq.), the SafeDrinking Water Act (42 USC § 300h et seq.), the Clean Air Act (42 USC § 1857 et seq.),the Toxic Substance Control Act (15 USC § 2601 et seq.), the Emergency Planning andCommunity Right-to-Know Act (42 USC § 11001 et seq.), the Federal Insecticide,Fungicide and Rodenticide Act (7 USC § 136 et seq.), the Oil Pollution Act of 1990 (33USC § 1321 et seq.), and all State of Oregon Statutory or other legal equivalents to theMichigan Natural Resources and Environmental Protection Act (“NREPA”), MCLA §323.1, et seq., and common law actions, including, without limitation, negligence,nuisance, trespass, toxic tort, assault, and battery.

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17.8.2 Tenant shall not transport, use, store, maintain, generate, manufacture,handle, dispose, release, discharge any Contaminant upon or about the Premises, norpermit Tenant’s employees, agents, contractors, and other occupants of the Premisesto engage in such activities, upon or about the Premises, except with respect tosubstances customarily used in offices substantially similar to Tenant’s offices locatedin the Premises, provided that (1) such substances are used and maintained in suchquantities as are reasonably necessary for Tenant’s permitted use of the Premises,strictly in accordance with applicable laws, including Environmental Laws, andmanufacturers’ instructions, (2) such substances are transported to and from thePremises and disposed strictly in accordance with applicable laws, includingEnvironmental Laws, and at no time disposed on the Premises, (3) Tenant exercisesdue care in the use, handling, storage and disposal of such substances, and (4) anyremaining substances that remain after the expiration or earlier termination of thisLease are properly and lawfully removed by Tenant. As used in this Lease,“Contaminant” means all substances and compounds defined as “hazardoussubstances,” “hazardous materials,” “hazardous waste,” or “toxic substances” in anyEnvironmental Law and any regulations and guidance promulgated by administrativeagencies or regulators under said laws, including, without limitation, materialscontaining asbestos or urea formaldehyde, polychlorinated biphenyls (“PCBs”),flammables, toxics, explosives, gasoline and petroleum products, used oil, pesticides,and radioactive materials.

17.8.3 Tenant will promptly notify, and at its own expense provide all notices,pleadings, correspondence and other documentation to, Landlord upon becomingaware of (1) any violation or alleged violation of Environmental Laws relating to theoperations at the Premises, (2) any enforcement, cleanup, or other regulatory actiontaken or threatened against either party by any federal, state or local governmental orregulatory authority with respect to the presence of Contaminants on the Premises orthe migration therefore from or to other property, (3) any demands or Claims made orthreatened by any party against either party hereto relating to any loss or injury resultingfrom Contaminants, (4) any unlawful release, discharge or nonroutine, improper orunlawful disposal or transportation of Contaminants on or from the Premises, and (5)any matters where the Tenant is required by law to give notice to any federal, state orlocal governmental or regulatory authority respecting any Contaminants. Landlord shallhave the right, but not the obligation, to join and participate in any legal oradministrative proceedings or actions affecting the Premises initiated in connection withany Environmental Laws. As used in this Lease, “Claims” means any written notice,information request, communication, inquiry, warning, citation, claim, action, lawsuit,administrative order, administrative adjudication or proceeding brought or instigated byany governmental authority in connection with any Environmental Laws and third-partyclaims, judgments, damages, losses, penalties, fines, liabilities (including strict liability),encumbrances, liens or settlements, whether or not such is ultimately defeated, basedon common law or statutory law, including, but not limited to, diminution in value,restriction in use, constructive eviction, lost profits, negligence, trespass, strict liability,nuisance, toxic tort, citizen suits or any claim based on activity detrimental to humanhealth, safety or welfare due to a release of Contaminants or a violation ofEnvironmental Laws.

17.8.4 In the event Contaminants are released, discharged or disposed on thePremises during the Lease term in violation of Tenant’s duties identified herein orpursuant to Environmental Laws, Tenant shall immediately, properly and in compliancewith Environmental Laws, cleanup and remove the Contaminants from the Premisesand any other affected property and cleanup or replace any affected personal propertyat Tenant’s expense. Such activity shall be subject to Landlord’s prior written approval,not to be unreasonably withheld or delayed, and shall include, without limitation, anytesting, investigation, operation, maintenance, monitoring, studies, and the preparationof any remedial action plan required by Environmental Laws, federal, state or localregulatory authority or reasonably required by Landlord. If Tenant fails to comply withthe provisions of this Article 4B within five (5) days after written notice by Landlord, orsuch shorter time as may be required by Environmental Laws or federal, state or local

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regulatory authority or as required to prevent or minimize any hazard or damage topersons, property or the environment, Landlord has the option, but not the obligation, toarrange for such compliance directly and Tenant shall be responsible to Landlord for allcosts and expenses related thereto (including reasonable attorney’s and consultant’sfees). Tenant shall not negotiate with, fulfill any requirements or claims made byfederal, state or local regulatory authorities or third parties, settle or contest suchrequirements without the express approval of Landlord, and Landlord shall have theright to participate fully in any and all meetings, negotiations or decisions relevant to theinvestigation, response, or remediation.

17.8.5 Landlord has the right to enter and inspect the Premises, and Tenant hasthe duty to cooperate with respect to any such inspection. Such inspections include,but are not limited to, all structures on the Premises and the business operations of theTenant, upon reasonable notice and in a manner that will not interfere unreasonablywith Tenant’s operations, to investigate the possibility of Environmental Conditions ornoncompliance with Environmental Laws at the Premises. During such inspections,Landlord may take such samples as it may determine in its sole discretion to benecessary or advisable. Tenant shall have the right to split samples of any samplestaken by Landlord, at Tenant’s sole expense. As used in this Lease, “EnvironmentalConditions” means conditions of the environment, including natural resources (includingflora and fauna), wetlands, soil, surface water, groundwater, any present or potentialdrinking water supply, subsurface strata or the ambient air, relating to or arising out ofthe use, handling, storage treatment, recycling, generation, transportation, release,spilling, leaking, pumping, pouring, emptying, discharging, injecting, escaping, leaching,disposal, dumping or threatened release of Contaminants by Tenant, Tenant’s agents,representatives, employees or independent contractors.

The provisions of this Article shall survive and remain in full force and effect afterthe date hereof and the termination of the lease term.

17.8.6 Tenant shall indemnify, defend, and hold harmless Landlord against andfrom any and all claims, actual direct damages, liability, fire, cost and/or expense arisingfrom any Environmental Conditions (as defined in Article 17), or the remediation of anyEnvironmental Conditions, or Environmental Noncompliance arising out of, resultingfrom, or attributable to, the assets, business or operations of Tenant at the Premises.This indemnity shall survive, and remain in full force and effect after the date of thisLease and termination of the lease term. As used in this Lease, “EnvironmentalNoncompliance” means any violation of laws, orders, regulations, requirements ordemands of federal, state or local governmental authorities with authority overEnvironmental Conditions, which are based upon or in any way related to Contaminants(as defined in Article 17.8) or a violation of Environmental Laws (as defined in Article17.8).

17.9 Force Maieure

Whenever a period of time is prescribed in this Lease for action to be takenby Landlord, Landlord shall not be liable or responsible for, and there shall be excludedfrom the computation for any such period of time, any delays due to strikes, riots, acts ofGod, shortages of labor or materials, war, Laws, or any other causes of any kindwhatsoever which are beyond the control of Landlord.

17.10 Brokerage

Tenant represents and warrants that it has dealt with no broker, agent, orother person in connection with this transaction other than the brokers described inSections 1.14 and 1.15. Tenant agrees to indemnify and hold Landlord harmless fromand against any claims by any broker, agent, or other person claiming a commission orother form of compensation by virtue of having dealt with Tenant with regard to thisleasing transaction, except for the brokers described in the next sentence. This obligationshall not apply to Landlord's broker whose name is set forth in Section 1.15 of this Leaseor any broker with whom Landlord has entered into a written brokerage agreement which

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is in effect at the time this Lease is executed. Landlord and Tenant acknowledge that J.J.Unaer of NAI Norris. Beaas & Simpson are acting as the representative of Tenant in thistransaction and shall be paid a commission by the Landlord equal to 5% of the Net rentfor the initial term of the lease. Said fee shall be earned and payable at Lease execution.17.11 Authority

The person executing this Lease on behalf of Tenant hereby covenants andwarrants that the execution of this Lease is duly authorized by Tenant, that Tenant isqualified to do business in Oregon, and that the person signing on behalf of Tenant wasauthorized by Tenant to bind Tenant to this Lease. Upon Landlord's request, Tenantshall provide Landlord with evidence reasonably satisfactory to Landlord confirming theforegoing covenants and warranties.

17.12 No Offer

This Lease is submitted to Tenant on the understanding that it will not beconsidered an offer and will not bind Landlord in any way until (a) Tenant has dulyexecuted and delivered duplicate originals of this Lease to Landlord and (b) Landlord hasexecuted and delivered one of such originals to Tenant.17.13 Early Termination bv Tenant:

Notwithstanding any contrary provision of this Lease, and so long as Tenantis not then in default of any provision of this Lease, if Tenant is unable toobtain the requisite state or local licensing or any change in applicableOregon statutes and regulations or local ordinances and regulations hasmade it infeasible for Tenant to carry on its business for the Permitted Useset out in Section 1.7 above, Tenant shall have the right to terminate thisLease at any time after the sixth month of the first Lease Year, by 60 daysadvance notice in writing to Landlord given after the end of such sixthmonth. If the early termination is necessary because of regulatoryrequirements the deposit of $11272.82 will be forfeited to the Landlord

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The parties have executed this Lease to be effective on October 3, 2013

Landlord:

Tenant:

Metro West Holdings IV,^LC/Z

/Mark-R. Madden,!

Its Member

Date h' Z i -n

C\LS£3DA vb Lic .

By.

Its: Member

o

Date: U I t I I

By.

Its: Guarantor

Date (i 2 ( / /'S

CONSULT YOUR ATTORNEY. THIS DOCUMENT HAS BEEN PREPARED FORSUBMISSION TO YOUR ATTORNEY FOR REVIEW AND APPROVAL PRIOR TOSIGNING. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THEGREATER PORTLANDA/ANCOUVER COMMERCIAL ASSOCIATION OF REALTORS7OR BY THE REAL ESTATE LICENSEES INVOLVED WITH THIS DOCUMENT AS TOTHE LEGAL SUFFICIENCY OR TAX CONSEQUENCES OF THIS DOCUMENT.

THIS FORM SHOULD NOT BE MODIFIED WITHOUT SHOWING SUCHMODIFICATIONS BY REDLINING, INSERTION MARKS, OR ADDENDA.

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