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Governing Law: Oregon     Date: 1/30/2004
Industry: Food Processing    

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                            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:



      <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



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



            (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



      4.2   Tenants Obligations.   All repairs and maintenance of the premises

shall be the responsibility of Tenant including and without limitation the



            (1)   Repairs and maintenance of the roof and gutters, exterior

walls (including painting), bearing walls, structural members, floor slabs, and



            (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



            (5)   Repair and maintenance of interior walls, ceilings, doors,

windows, and related hardware, light fixtures, switches, and wiring and



            (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



      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



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



Section 9.   Eminent Domain


      9.1   Partial Taking.   If a portion of the Premises is condemned and

Section 9.2 does not apply, the lease shall continue on the following terms:


            (1)   Landlord shall be entitled to all of the proceeds of

condemnation, and Tenant shall have no claim against Landlord as a result of

the condemnation.


             (2)   Landlord shall proceed as soon as reasonably possible to make

such repairs and alterations to the Premises as are necessary to restore the

remaining Premises to a condition as comparable as reasonably practicable to

that existing at the time of the condemnation.


            (3)   After the date on which title vests in the condemning

authority or an earlier date on which alterations or repairs are commenced by

Landlord to restore the balance of the Premises in anticipation of taking, the

rent shall be reduced in proportion to the reduction in value of the Premises

as an economic unit on account of the partial taking.   If the parties are

unable to agree on the amount of the reduction of rent, the amount shall be

determined by arbitration in the manner provided in Section 17.


            (4)   If a portion of Landlords property not included in the

Premises is taken, and severance damages are awarded on account of the

Premises, or an award is made for detriment to the Premises as a result of

activity by a public body not involving a physical taking of any

portion of the Premises, this shall be regarded as a partial condemnation to

which Sections 9.1(1) and 9.1(3) apply, and the rent shall be reduced to the

extent of reduction in rental value of the Premises as though a portion had

been physically taken.


            (5)   Tenant shall have the right to seek its own remedy against the

condemning authority for claims it may have due to the partial taking.


      9.2   Total Taking.   If a condemning authority takes all of the Premises

or a portion sufficient to render the remaining premises reasonably unsuitable

for the use that Tenant was then making of the premises, the lease shall

terminate as of the date the title vests in the condemning authorities.  

Landlord shall be entitled to all of the proceeds of condemnation other than an

award made to Tenant for the value of Tenants leasehold interest in the

Premises, and Tenant shall have no claim against Landlord as a result of the



      9.3   Sale in Lieu of Condemnation.   Sale of all or part of the premises

to a purchaser with the power of eminent domain in the face of a threat or

probability of the exercise of the power shall be treated for the purposes of

this Secti

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