COMMERCIAL LEASE
Date:
_________________, 2003
Between:
PENTE INVESTMENTS, LLC
(Landlord)
an Oregon Limited Liability Company
1300 S.W. Sixth, Suite 300
Portland, Oregon
97201
And:
Yocream International, Inc.
(Tenant)
an Oregon Corporation
5858 N.E. 87th
Portland, Oregon 97220
Landlord leases
to Tenant and Tenant leases from Landlord the following
described property (the Premises) on the
terms and conditions stated below:
Land and improvements (including all personal property situated
thereon
for use in connection therewith) located at 8715 N.E. Columbia
Blvd,
Portland, Oregon 97220 and legally described as Lot 1, Block 3,
A.P.
INDUSTRIAL PARK, City of Portland, Multnomah County, Oregon.
Section 1. Occupancy
1.1
Original Term.
The term of this lease
shall be for a period of
fifteen (15) years commencing October 1,
2003, and continuing through September
30, 2018, unless sooner terminated as
hereinafter provided.
1.2
Possession.
Tenants right to
possession and obligations under the
lease shall commence on October 1, 2003, or
as soon thereafter as the Premises
are acquired by Landlord pursuant to the
existing purchase and sale agreement
between Landlord and the current owner of
the Premises. If
Landlord is not
able to give Tenant possession of the
Premises on or before December 1, 2003,
either party may rescind this lease by
notice in writing to the other party
given at any time thereafter prior to the
date on which possession is tendered
by Landlord.
Section 2. Rent
2.1
Base Rent.
During the lease term,
Tenant shall pay to Landlord as
base rent the following sums:
<TABLE>
<S>
<C>
First
through Third Year. . . . . . $ 12,848.00 per month
Fourth
through Sixth Year . . . . . . 14,040.00 per month
Seventh
through Ninth Year. . . . . . 15,342.00 per month
Tenth
through Twelfth Year. . . . . . 16,765.00 per month
Twelfth
through Fifteenth Year
. . . 18,320.00
per month
</TABLE>
For purposes of this Section 2.1, the term
Year shall mean that period
between October 1 through September 30 of
the following year for each year
during the term stated in Section 1.1.
Rent shall be payable on the first day of
each month in advance at such place
as may be designated by Landlord except
that rent for the first month and last
month has been paid upon the execution of
this lease, and Landlord acknowledges
receipt of this sum.
2.2
Security Deposit.
To secure Tenants
compliance with all terms of
this lease, Tenant has paid Landlord the
sum of $20,000.00 as a deposit. The
deposit shall be a debt from Landlord to
Tenant, refundable within 30 days
after expiration of this lease term or
other termination not caused by Tenants
default. Landlord may commingle the deposit
with its funds and Tenant shall
not be entitled to interest on the deposit.
Landlord shall have the right to
offset against the deposit any sums owing
from Tenant to Landlord and not paid
when due, any damages caused by Tenants
default, the cost of curing any default
by Tenant should Landlord elect to do so,
and the cost of performing any repair
or cleanup that is Tenants responsibility
under this lease.
Offset against the
deposit shall not be an exclusive remedy in
any of the above cases, but may be
invoked by Landlord, at its option, in
addition to any other remedy provided by
law or this lease for Tenants
nonperformance.
Landlord shall give notice to
Tenant each time an offset is claimed
against the deposit, and, unless the
lease is terminated, Tenant shall within 10
days after such notice deposit with
Landlord a sum equal to the amount of the
offset so that the total deposit
amount, net of offset, shall remain
constant throughout the lease term.
2.3
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 manufacture and
storage of food products and for no other
purpose without the consent of
Landlord, which consent shall not be
withheld unreasonably.
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 Tenants own
expense any failure of compliance created
through Tenants fault or
by reason of Tenants use.
(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-term 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.
(6) 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 3.1.
Tenant may store such
Hazardous
Substances on the Premises only in
quantities necessary to satisfy Tenants
reasonably anticipated needs. Tenant shall comply with all
Environmental Laws
and exercise reasonable 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. Upon
the expiration or termination of this
Lease, Tenant shall remove all Hazardous
Substances from the Premises. 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
Landlords Obligation.
Landlord shall be
under no obligation to
make or perform any repairs, maintenance,
replacements, alterations, or
improvements on the Premises as the parties
intend this to be a triple net
lease.
4.2
Tenants Obligations.
All repairs and
maintenance of the premises
shall be the responsibility of Tenant
including and without limitation the
following:
(1) Repairs and
maintenance of the roof and gutters, exterior
walls (including painting), bearing walls,
structural members, floor slabs, and
foundation.
(2) Repair and
maintenance of sidewalks, driveways, curbs and
parking areas.
(3) Repair and
maintenance of exterior water, sewage, gas, and
electrical services.
(4) Repair and
maintenance of the heating and air conditioning
system.
(5) Repair and
maintenance of interior walls, ceilings, doors,
windows, and related hardware, light
fixtures, switches, and wiring and
plumbing.
(6) Any repairs
necessitated by the negligence of Tenant, its
agents, employees, and invitees.
(7) Any repairs or
alterations required under Tenants obligation
to comply with laws and regulations as set
forth in Section 3.2(1).
(8) All other repairs
and maintenance to the premises.
4.3
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 10% 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 not perform repairs which are
the obligation of the Tenant and
charge the Tenant for the resulting expense
unless written notice is given to
Tenant at least 10 days before work is
commenced outlining with reasonable
particularity the repairs required and
Tenant fails within that time to
initiate such repairs in good faith.
4.4
Inspection of
Premises. Landlord
shall have the right to inspect
the Premises at any reasonable time or
times for any lawful purpose. Landlord
shall use reasonable efforts to provide
notice prior to any inspection
authorized by this Section 4.4.
Section 5. Alterations
5.1
Alterations
Prohibited. Tenant
shall make no improvements to or
alterations on (alterations) the Premises
of any kind without first obtaining
Landlords written consent except as
permitted in this Section 5.1 below.
Tenant is permitted to undertake
nonstructural alterations not to exceed $2,500
in cumulative costs during the term of this
Lease. 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.
Tenant may make
improvements or alterations to fixtures and
equipment owned by Tenant without
Landlords consent, provided such
improvements or alterations do not alter the
Premises.
5.2
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 Landlords consent
specifically provides otherwise.
Improvements and alterations installed by
Tenant shall, at Landlords option, be
removed by Tenant and the premises
restored unless the applicable Landlords
consent specifically provides
otherwise.
Section 6. Insurance
6.1
Insurance Required.
Tenant shall keep the
Premises insured at
Tenants expense against fire and other
risks covered by a standard fire
insurance policy with an endorsement for
extended coverage.
Such insurance
shall name Landlord as an additional
insured and contain a loss payable clause
in favor of the Landlord. Certificates evidencing such
insurance and bearing
endorsements requiring 30 days written
notice to Landlord prior to any change
or cancellation shall be furnished to
Landlord prior to Tenants occupancy of
the Premises and upon request of Landlord
thereafter.
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, personal property taxes and special
assessments levied against the
Premises. As used herein, real property
taxes, personal property taxes and
special assessments includes any fee or
charge relating to the ownership, use,
or rental of the Premises, other than taxes
on the net income of Landlord.
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 7.1.
Tenant shall also have
the right to make
the election described above provided that
this Lease is within the last three
(3) years of its term and Tenant has not
renewed or extended the Lease.
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 Landlords
interest in the Premises will be
foreclosed for nonpayment.
7.4
Proration of Taxes.
Tenants 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.
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 using the casualty
insurance proceeds. Repairs shall be accomplished with
all reasonable dispatch
subject to interruptions and delays from
labor disputes and matters beyond the
control of Landlord.
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,
Landlord may elect to terminate the lease
as of the date of the damage or
destruction by notice given to the Tenant
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 Landlord elects not to
terminate, Landlord shall
proceed to restore the Premises with
available insurance proceeds 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 Landlords
reasonable control.
8.3
Rent Abatement.
Rent shall be abated
during the repair of any
damage to the extent the premises are
untenantable, except that there shall be
no rent abatement where the damage occurred
as the result of the fault of
Tenant.
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
