Complaint PlayDate v Pearl PDX Sept 2015

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5 IN THE CIRCUIT COURT OF THE STATE OF OREGON

6 FOR THE COUNTY OF MULTNOMAH

7 PLAYDATE PDX, LLC, an Oregon limited ) Case No. liability company, )

8 ) COMPLAINT FOR DAMAGES,Plaintiff, ) DECLARATORY RELIEF AND

9 ) INJUNCTIVE RELIEFv. )

10 )PEARL PDX, LLC, an Oregon limited ) (Damages sought: at least $30,000 plus

11 liability company; ) costs and attorneys' fees))

12 Defendant. ) CLAIM NOT SUBJECT TO) MANDATORY ARBITRATION

13 )

14 For its Complaint against Pearl PDX, LLC ("Pearl PDX"), plaintiff PlayDate PDX

15 LLC ("PlayDate"), alleges as follows:

16 GENERAL ALLEGATIONS

17 1.

18 At all material times, PlayDate was and is an Oregon limited liability company

19 with its principal place of business in Portland, Oregon. PlayDate is an indoor children's

20 playground with an attached café for parents and private party rooms. PlayDate

21 operates in a building owned by Pearl PDX. The address of the building is 1420-1434

22 NW 17th Ave, Portland, Oregon (the "Building"), which is located in Multnomah County,

23 Oregon.

24 ,2.

25 At all material times, defendant Pearl PDX was and is an Oregon limited liability

26 company with its principle place of business in Portland, Oregon.

Page 1 — COMPLAINT

SUSSMAN SHANK LLP, ATTORNEYS AT LAW1000 SW BROADWAY, SUITE 1400, PORTLAND, OREGON 97205-3089

TELEPHONE (503) 227-1111 I FACSIMILE (503) 248-0130

1 3.

2 Shaowen Yu ("Yu") and his wife are the members of Pearl PDX. Yu is the

3 manager and operator of Pearl PDX. Yu operates a business at the Building called US

4 Wushu Center. Yu also owns and operates Monkey King Play House LLC, another

5 indoor children's playground that also caters to parents with an attached café.

6 4.

7 As of 2010, Yu and Allport were co-owners of the Building. In February 2010,

8 Plaintiff signed a lease (the "Lease") to rent space at the Building. Allport signed the

9 Lease on behalf of both Yu and Allport.

10 5.

11 Yu acted as landlord in conjunction with Allport from, in relevant part, February

12 2010 to December 11, 2013. He was involved in negotiation and performance of the

13 Lease, and he exercised control of the Building:

14 a) Yu and Allport were business partners who jointly owned the Building.

15 b) Yu reviewed the Lease prior to its being executed.

16 c) He reviewed Plaintiffs business plan and financial information in order to

17 determine whether Plaintiff would be a suitable tenant.

18 d) He asked to meet with Plaintiff and its realtor prior to agreeing to allow

19 Plaintiff to become a tenant in the Building.

20 e) He established himself as the contact person for repairs and maintenance

21 of the Building and Plaintiffs rented Premises.

22 f) He was primarily responsible for the build-out of the premises for use by

23 Plaintiff.

24 g) He approved and disapproved of third-party vendors who performed

25 services at the Building and in Plaintiffs premises.

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TELEPHONE (503) 227-1111 l FACSIMILE (503) 248-0130

1 h) PlayDate — as well as the other tenants at the Building — were instructed

2 to, and did, tender monthly rent checks payable to both Allport and Yu,

3 who jointly owned a bank account for operation of the Building, and then

4 eventually solely to Yu.

5 6.

6 On December 11, 2013, Yu and his wife accepted assignment of the Lease.

7 7.

8 On February 26, 2014, Yu and his wife assigned the Lease to defendant Pearl

9 PDX. Pearl PDX took the Lease "subject to the covenants, conditions and provisions

10 therein mentioned."

11 8.

12 On May 6, 2015, PlayDate and Pearl PDX entered into an Amendment to Retail

13 Lease Dated February 18, 2010 (the "Amendment") by which the Lease was amended.

14 The Lease and Amendment will be referred to collectively herein as the "Amended

15 Lease." Unless otherwise noted for purposes of this Complaint, a reference to terms of

16 the Amended Lease is the same as a reference to the terms of the Lease; only a few

17 sections of the Lease were changed through the May 2015 Amendment. A copy of the

18 Amended Lease is attached as Exhibit 1 and incorporated herein by this reference.

19 FIRST CAUSE OF ACTION

20 (BREACH OF LEASE AGREMENT)

21 Count 1

22 9.

23 PlayDate hereby incorporates paragraphs 1 through 8, as though set forth in full

24 herein.

25 / / /

26 / / /




1 10.

2 The Amended Lease defines PlayDate's premises to include the premises

3 outlined in Exhibit A to the Amended Lease. Exhibit A to the Amended Lease outlines

4 not only the interior of the premises, but also the western front of the covered, outside

5 walkway abutting the interior of the premises and facing the front of the Building along

6 17th Street (the "Premises"). Further, during Lease negotiations in 2010, Allport and Yu

7 both advised PlayDate that its Premises included the walkway. But for these

8 representations, PlayDate would not have executed the Lease.

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10 The Amended Lease permits PlayDate to use the Premises "for Children's

11 recreation and play area including use of a professionally designed climbing structure to

12 be monitored at all times; a learning facility and related café associated with these uses

13 and for no other purpose without Landlord's written consent." (Ex. 1 § 5.)

14 12.

15 Since renting space at the Building beginning in August 2010, PlayDate has used

16 the walkway outside the front of its interior space as part of the café that the Lease and

17 Amended Lease entitle PlayDate to operate.

18 13.

19 In addition to the explicit inclusion of the walkway in the Premises through the

20 incorporation of, Exhibit A into the Lease (and now the Amended Lease), the course of

21 dealing between the Building's landlords (first Allport/Yu, then Yu and his wife, and now

22 Pearl PDX) indicates, and equity requires, that the Premises include the use of a portion

23 of the walkway as a café.

24 14.

25 Pearl PDX, as the successor-in-interest to Allport and Yu's joint venture, as well

26 as Yu and his wife as owners of the Building immediately prior to Pearl PDX, had




1 knowledge of PlayDate's longstanding use of the walkway, the installation of the garage

2 doors to facilitate such use, the representations that PlayDate could use the walkway as

3 part of its café, and Allport's and Yu's approval of PlayDate's use of the walkway.

4 Allport and Yu both reviewed the Lease and were involved in lease negotiations with

5 PlayDate and were involved in the buildout of the Premises, including the installation of

6 two garage doors that abut the walkway.

7 15.

8 PlayDate reasonably has relied on the Lease's definition of "Premises", the

9 landlords' representations, and those landlords' approval of PlayDate's use of the

10 walkway as part of the Premises in conducting its business over the past 5 years and

11 agreeing to rent space at the Building in the first place.

12 16.

13 On September 29, 2015, after more than 5 years of PlayDate using the front

14 walkway as its Premises, Pearl PDX issued a notice to PlayDate claiming the walkway

15 was not part of PlayDate's Premises and requested PlayDate to "immediately cease

16 business use of the walkway and remove all its equipment (tables and chairs) from the

17 walkway."

18 17.

19 Prior to filing this lawsuit, PlayDate requested that Pearl PDX suspend the notice

20 concerning the walkway to allow the opportunity for Pearl PDX and PlayDate to resolve

21 the parties' dispute through mediation without litigation. Pearl PDX refused to suspend

22 the notice concerning the walkway.

23 18.

24 Also pursuant to the Amended Lease, "Landlord warrants that as long as Tenant

25 complies with all terms of this Lease it shall be entitled to possession of the Premises

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TELEPHONE (503) 227-1111 l FACSIMILE (503) 248-0130

1 free from any eviction or disturbance by Landlord or parties claiming through Landlord."

2 (Ex. 1 § 32.)

3 19.

4 PlayDate has complied with all terms of the Amended Lease. PlayDate has

5 performed all conditions precedent required of it under the Amended Lease.

6 20.

7 Pearl PDX's actions in breaching the Amended Lease have damaged PlayDate

8 in that it has been precluded from using a part of its Premises for the purposes agreed

9 upon in the Amended Lease, and has been precluded from enjoying without disturbance

10 all of the Premises it has the right to use for its business under the Amended Lease.

11 21.

12 The amount of PlayDate's damages will be proven at trial, but include labor costs

13 to remove its personal property from the walkway, storage costs to store its personal

14 property, lost profits resulting from the absence of an outdoor café seating area, rent

15 abatement based on the percentage of the Premises it has been denied from using for

16 however long such denial lasts and attorneys' fees and costs in interpreting and

17 attempting to enforce the Amended Lease.

18 22.

19 Pursuant to the Amended Lease, PlayDate is entitled to recover attorneys' fees

20 incurred in connection with bringing this action, plus its costs and disbursements

21 incurred herein.

22 Count 2

23 23.

24 PlayDate hereby incorporates and re-alleges paragraphs 1 through 8, as though

25 set forth in full herein.

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1 24.

2 Paragraph 5 of the Amendment which is part of the Amended Lease states: "Any

3 reference to parking in Section 5(f) of the Lease is stricken in its entirety and no longer

4 of any force or effect. The parking agreement between the parties is set forth in Exhibit

5 A attached [to the Amendment] and incorporated herein by this reference. Further, the

6 back parking lot will be designated for customers only. [Pearl PDX] will enforce the

7 parking requirements among all tenants in the building and will do so in an even —

8 handed and uniform manner, without favoring one tenant over another tenant."

9 25.

10 A triangular portion of the Northeast end of the rear parking lot is owned by the

11 Oregon Department of Transportation (the "State-Owned Portion"). Exhibit A to the

12 Amendment states that the State-Owned Portion will remain "unregulated."

13 26.

14 Contrary to this promise, on July 21, 2015, Pearl PDX announced that the State-

15 Owned Portion of the rear lot was to be reserved parking only for the US Wushu Center,

16 which is another tenant in the building which is wholly owned and operated by Yu.

17 Signs setting forth these regulations were installed at the direction of Pearl PDX on July

18 22, 2015.

19 27.

20 Further, on September 16, 2015, Pearl PDX issued property rules (the "Rules")

21 that included parking regulations. A copy of the rules is attached as Exhibit 2 and

22 incorporated herein by reference.

23 28.

24 The July 21 policy, the posted signs, and the rules violate the Amended Lease in

25 that they purport to regulate the State-Owned Portion.

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TELEPHONE (503) 227-11111 FACSIMILE (503) 248-0130

1 29.

2 As a result, PlayDate has been damaged in an amount to be proven at trial.

3 30.

4 All conditions precedent to performance of Pearl PDX's parking obligations have

5 occurred or been performed.

6 31.

7 Pursuant to the Amended Lease, Plaintiff is entitled to recover the attorneys' fees

8 Plaintiff has paid for interpreting or enforcing any provision of the Amended Lease or

9 with respect to any dispute relating to the Amended Lease. (Ex. 1 § 26.)

10 SECOND CAUSE OF ACTION

11 (Declaratory Relief)

12 32.

13 PlayDate hereby incorporates and re-alleges paragraphs 1 through 8 and 24

14 through 31 as though set forth in full herein.

15 33.

16 On September 16, 2015 Pearl PDX issued the Rules, a copy of which is attached

17 as Exhibit B and incorporated herein by this reference.

18 34.

19 Paragraph 31(h) of the Amended Lease states that it shall not be amended or

20 modified except•by agreement in writing, signed by the parties thereto.

21 35.

22 Section 5(f) of the Lease authorizes Pearl PDX to issue reasonable rules

23 respecting the use of the Premises. Prior to the Lease Amendment, section 5(f) also

24 authorized Pearl PDX to issue rules concerning parking. However, pursuant to the

25 Lease Amendment, any reference to parking in section 5(f) is stricken and the

26 agreement between PlayDate and Pearl PDX concerning parking is set forth in the




1 Lease Amendment, section 4. The parking agreement in section 4 of the Lease

2 Amendment does not allow Pearl PDX to issue new, additional, or different rules from

3 that agreed to between the parties in the Lease Amendment.

4 36.

5 Pearl PDX's Rules violate the Amended Lease as follows:

6 a) Pearl PDX has issued regulations concerning parking that are not

7 allowed by the Amended Lease. Specifically, the Amended Lease

8 does not allow Pearl PDX to install parking signs that differ from the

9 Amended Lease provisions or impose any other regulations on the

10 back parking lot.

11 b) Pearl PDX has imposed regulations on the State-Owned Portion of the

12 lot, despite Pearl PDX's promise in the Amended Lease that the State-

13 Owned Portion of the lot would remain unregulated.

14 c) Pearl PDX attempts to "incorporate by reference" the Rules into the

15 Amended Lease. The Amended Lease does not allow Pearl PDX to

16 unilaterally change the terms of the Amended Lease.

17 37.

18 PlayDate- has attempted to resolve its differences with Pearl PDX prior to filing

19 this action without success. Indeed, Pearl PDX has refused to suspend or withdraw

20 either its Rules or its notice to PlayDate that PlayDate has violated the Rules. As such,

21 a justiciable controversy exists between the parties. PlayDate seeks a declaration from

22 the court setting forth the rights and obligations of the parties with respect to the matters

23 set forth above.

24 38.

25 Pursuant to the Lease, Plaintiff is entitled to recover attorneys' fees in connection

26 with bringing this action.




1 THIRD CAUSE OF ACTION

2 (Breach of Covenant of Good Faith and Fair Dealing)

3 39.

4 PlayDate hereby incorporates and re-alleges paragraphs 32 through 38 as

5 though set forth in full herein.

6 40.

7 Pearl PDX has certain discretion in maintaining and managing the Building. For

8 example, Pearl PDX may enact "reasonable" rules as set forth in Section 5(f) of the

9 Amended Lease.

10 41.

11 As discussed in paragraphs 26, 27, 28, and 36, above, the Rules promulgated by

12 Pearl PDX are not reasonable.

13 42.

14 Additionally, after agreeing to receive a fixed sum from PlayDate for maintenance

15 expenses pursuant to the Amended Lease, Pearl PDX chose to reduce the level of

16 maintenance services at the Building, especially as to power washing and cleaning the

17 parking lots. PlayDate has had to perform those maintenance tasks using its own labor

18 and expense.

19 43.

20 By exercising its discretion is the foregoing manner, Pearl PDX has breached the

21 covenant of good faith and fair dealing.

22 44.

23 Pearl PDX's misfeasance appears to be motivated in part by the desire of Pearl

24 PDX's principal, Yu, to compel PlayDate to leave the Building so that Yu may operate in

25 PlayDate's Premises, or at the very least so that Yu may more effectively compete with

26 PlayDate in his own business, Monkey King Play House LLC ("Monkey King"). This




1 motive is evidericed by the following, among other things:

2 a. Yu owns and operates Monkey King, which is also an indoor children's play

3 space with a café for parents (and which opened after PlayDate provided its

4 business plan to Yu in conjunction with PlayDate's tenancy application);

5 b. During a discussion between Allport and Yu in 2010, when the co-landlords

6 were deciding the terms of PlayDate's lease and the buildout of PlayDate's

7 space, Yu told Allport that if PlayDate moved out because of harsh lease

8 terms, Yu would take over PlayDate's space and run its business;

9 c. In 2013, Yu told patrons at his Monkey King business that they should not

10 patro6ize PlayDate due to personal injury lawsuits (strangely, the lawsuits

11 had not yet been filed or covered in the media, suggesting that Yu and the

12 plaintiffs attorneys had been discussing the matter);

13 d. Pearl PDX has imposed its "Rules," and taken other actions (including filming

14 and harassing PlayDate employees attempting to use the common area

15 restroom) in order to conjure some argument that PlayDate is in default under

16 the Amended Lease.

17 e. Pearl PDX's conversations with the Oregon Department of Transportation

18 (ODOT) in May 2015 — contemporaneous with negotiations over the

19 Amended Lease which addressed parking issues at the Building — in which

20 Yu and his representative asked ODOT to block the State Owned Portion of

21 the rear parking lot which PlayDate employees and customers use; and

22 f. Pearl PDX and PlayDate recently concluded a year-long litigation settled by,

23 among other things, creation of the Amended Lease.

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25 PlayDate has suffered damages from Pearl PDX's breaches of the covenant of

26 good faith and fair dealing. The amount of PlayDate's damages will be proven at trial,



TELEPHONE (503) 227-1111 FACSIMILE (503) 248-0130

1 but include labor costs to remove its personal property from the walkway, storage costs

2 to store its personal property, lost profits based on the inability to use the walkway as an

3 outdoor café, rent abatement based on the percentage of the Premises blocked from

4 PlayDate's use, the costs of maintenance PlayDate has had to perform because Pearl

5 PDX has not, and the attorneys' fees associated with addressing the various rules,

6 notices and conduct in which Pearl PDX has engaged.

7 45.

8 Pursuantto the Lease, Plaintiff is entitled to recover attorneys' fees in connection

9 with bringing this action — in addition to recovering the attorneys' fees expended prior to

10 bringing this lawsuit.

11 FOURTH CAUSE OF ACTION

12 (PROMISSORY FRAUD)

13 46.

14 Plaintiff hereby incorporates paragraphs 39 through 45 as though set forth in full.

15 47.

16 The Lease was amended as of May 2015, to form the Amended Lease, which is

17 attached as Exhibit 1 and incorporated herein by reference.

18 48.

19 A material term of the Amended Lease were the regulations concerning parking

20 as set forth in the text of the Amended Lease itself and in the exhibits thereto. Pearl

21 PDX knew that, parking was a material term as the parties had negotiated about it

22 repeatedly and even consulted a mediator concerning it.

23 49.

24 When the Amended Lease eventually was executed, it incorporated an Exhibit A

25 specifying that the State-Owned Portion of the lot would remain unregulated.

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1 50.

2 Pearl PDX intended that PlayDate rely on this material term of the Amended

3 Lease. Indeed, that term was offered in order to induce PlayDate to settle litigation that

4 it had filed in this Court against Pearl PDX, Yu and his wife. (Case No. 1404-05068.)

5 51.

6 Pearl PDX knew that its representation that it would leave the State-Owned

7 Portion unregulated was false, and Pearl PDX had no intention of allowing the State-

8 Owned Portion to remain that way.

9 52.

10 In fact, Pearl PDX, through Mr. Yu and other agents had been asking the Oregon

11 Department of Transportation to barricade that portion of the lot so as to deny the

12 Building's tenants, and those tenants' customers, use of the lot. Copies of pertinent

13 notes and correspondence obtained from the Oregon Department of Transportation are

14 attached collectively as Exhibit 3 and incorporated herein by reference.

15 53.

16 PlayDate has been damaged as a result of Pearl PDX's fraud in that it has

17 expended resources and attorneys' fees in interpreting and enforcing the Amended

18 Lease, including documenting the amendment to the Lease that Pearl PDX never

19 intended to follow; paying one half of the fee for a mediator to interpret the amendment

20 to the Lease that Pearl PDX never intended to follow; uncovering Pearl PDX's

21 fraudulent conduct by ordering and reviewing correspondence from the Oregon

22 Department of Transportation; and analyzing and responding to Pearl PDX's various

23 notices, conduct and proclamations concerning parking — all of which violate the

24 Amended Lease. PlayDate has incurred approximately $32,171.02 in attorneys' fees

25 and costs stemming from the foregoing.

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1 54.

2 The Amended Lease authorizes PlayDate to recover its attorney fees "in the event of a

3 suit, action, arbitration or other proceeding of any nature whatsoever." (Ex. 1 § 26.).

4

5 WHEREFORE, Plaintiff prays for the following relief:

6 On the First Cause of Action:

7 1. Damages according to proof, including attorneys' fees incurred in interpreting

8 and attempting to enforce the Amended Lease (per § 26).

9 2. An injunction requiring compliance with the Amended Lease.

10 3. Reasonable attorneys' fees incurred in this action.

11 On the Second Cause of Action:

12 1. A declaration that:

13 a. The Rules are not incorporated into the Amended Lease.

14 b. The Amended Lease authorizes only two parking regulations in the

15 rear parking lot: no parking over three hours and parking for customers

16 only.

17 c. Pearl PDX may not impose any regulations, such as painting stripes or

18 placing signs, on the State-Owned Portion of the rear parking lot.


20 On the Third Cause of Action:

21 1. Damages according to proof, including attorneys' fees incurred in interpreting

22 and attempting to enforce the Amended Lease (per § 26).

23 2. An injunction requiring compliance with the Amended Lease.


25 On the Fourth Cause of Action:

26 1. Damages according to proof, but estimated to exceed $30,000.00.




1 2. Reasonable attorneys' fees incurred in interpreting and attempting to enforce

2 the Amended Lease (per § 26).

3 On All Causes of Action:

4 1. Costs and disbursements.

5 2. Such further relief as the Court deems necessary and just.

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7 Dated this 9th day of October 2015.

8 SUSSMAN SHANK LLP

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10 By s/ Clifford S. Davidson Jason W. Alexander, OSB No. 962098

11 jalexandersussmanshank.com Clifford S. Davidson, OSB No. 125378

12 [email protected] Attorneys for Plaintiff

13Trial Attorneys: Jason W. Alexander

14 Clifford S. Davidson

15 *22558-003(02192470)

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Standard Form of RETAIL LEASE0 2004 PORTLAND METROPOLITAN ASSOCIATION OF BUILDING OWNERS AND MANAGERS

RETAIL LEASE

Between:

Michael Allport("Landlord")

And

PlayDate PDX

("Tenant")

Dated RE) , 1 , 2010

ExhibitPage of D-''

TABLE OF CONTENTS

1. TERM(c)Place of Payment

2. SECURITY DEPOSIT

3. ADDITIONAL RENT(a) NNN Expenses(b) Payment of NNN Expenses

4. INSURANCE; INDEMNITY(a) Insurance(b) Increases in Premiums(c) Indemnity; Tenant's Insurance

5. USE OF PREMISES

6. TENANT IMPROVEMENTS AND ALTERATIONS

7. REPAIRS AND MAINTENANCE(a) Landlord's Responsibilities(b) Tenant's Responsibilities(c) Inspections(d) Landlord's Work

8. LIENS; TENANTS TAXES

9. UTILITIES

10. ICE, SNOW, AND DEBRIS

11. WAIVER OF SUBROGATION

12. INJURY TO TENANTS PROPERTY

13. DAMAGE OR DESTRUCTION(a) Partial Destruction(b) Substantial Damage(c) Restoration

14. EMINENT DOMAIN(a) Partial Taking(b) Substantial Taking of the Property(c) Substantial Taking of Premises(d) Definition

15. BANKRUPTCY

16. DEFAULT

17. REMEDIES ON DEFAULT

18. SURRENDER AT EXPIRATION(a) Condition of Premises(b) Fixtures(c) Holdover

19. ASSIGNMENT AND SUBLETTING(a) Landlords Consent(b) Payment to Landlord and Termination of Lease

20. SUBORDINATION

21. ESTOPPEL CERTIFICATE

22. PERFORMANCE BY LANDLORD

23. LANDLORD'S RIGHT TO CURE DEFAULT

24. INSPECTION

25. FOR SALE AND FOR RENT SIGNS

26. ATTORNEYS' FEES

27. NOTICES

Page

23

3

333

4444

4

5

66677

7

7

7

7

7

7788

88888

8

8

9

10101010

101011

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11

11

11

11

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12

Exhibit Page

28. BROKERS 12

29. LATE CHARGES 12

30. NO PERSONAL LIABILITY 12

31. MISCELLANEOUS PROVISIONS 12

32. QUIET ENJOYMENT 13

33. WAIVER OF JURY TRIAL 13

34. EXHIBITS AND ADDITIONAL PROVISIONS 13

ii

ExhibitPage_-i_of

Standard Form of RETAIL LEASE

2004 PORTLAND METROPOLITAN ASSOCIATION OF BUILDING OWNERS AND MANAGERS

SUMMARY OF FUNDAMENTAL PROVISIONS

Following is a summary of the basic provisions contained in the Lease. In the event of any conflict between any provisioncontained in this Summary and a provision contained in the balance of the Lease, the latter shall control.

A. Name of Landlord: Michael Allport

B. Address and Facsimile Numberfor Notices to Landlord: 2627 NE Thompson

Portland , OR 97212

503 223 9182 Fax

503 939 8226 cell

C. Address for Rent Payments: Same

D. Name of Tenant and Address of Premises:

E. Address and Facsimile Numberfor Notices to Tenant:

D. Trade Name Under Which Tenant WillOperate at Premises:

E. Business To Be Conducted By Tenantat Premises:

PlayDate PDX LLC

1434 NW 17th Ave

Portland, OR 97209

Same

1434 NW 17th Ave.

Portland, OR 97209

PlayDate PDX

Children's play and recreation area, learning facility and associated cafe facility

F. Approximate Floor Area of Premises: 7652

G. Lease Term: Five (5) years and six (6) months

H. Estimated Commencement Date: April 15, 2010

I. Base Rent: See Section 1(b)

J. Initial NNN Per Sq. ft. Rate: 29 (cents)

K. Landlord's Broker: None

L. Tenant's Broker: Debbie Thomas Real Estate

M. Prepaid Rent $9219

N. Security Deposit: $10,781

O. Guarantors Name and Address: Shawn Van Deusen

3400 SE 165th Ave.

Vancouver, WA. 98683

Exhibit Page y of

Standard Form of RETAIL LEASE

I • " • 1' • u I' • "0 IL • .1. • • ► • Alk Lk, 141\.1

THIS LEASE is entered into this day of February, 2010, between Michael Allport ("Landlord"), and PlayDatePDX LLC ("Tenant").

Landlord Is constructing or will construct certain improvements listed below in (the "Building") on that certainproperty located at 1434 NW 171h Ave., in the City of Portland, County of Multnomah, and State of Oregon (the "Property').

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord certain space on the Propertyconsisting of approximately 7652 square feet, as outlined on the attached Exhibit A (the "Premises") on the terms andconditions set forth in this Lease.

1. TERM

The term of this Lease (the "Term") shall be for a period of sixty six (66) months, commencing on the first to occur of the followingdates: (a)) the date on which Tenant begins to transact business on, at, or from the Premises, or (b) 0 days after Landlord hasdelivered possession of the Premises to Tenant with any work to be performed by Landlord In the Premises (as agreed by LandlordIn an exhibit attached to this Lease) substantially completed (the "Commencement Date"). Tenant shall complete any work requiredin the Premises, and approved by Landlord pursuant to Section 6, within 10 days after Landlord delivers possession of the Premisesto Tenant. If the first day of the Term shall be a day other than the first day of a calendar month, then the Term shall be deemedextended by the number of days between the Commencement Date of this Lease and the first day of the first calendar monththereafter, so that the Term shall expire at the end of a calendar month. In the event Landlord allows Tenant the right to earlypossession of the Premises for the purpose of installation of Tenant's improvements to the Premises or for other purposes, Tenant'sentry Into the Premises shall be subject to all terms and conditions of this Lease except the payment of Rent. Tenant's entry shallmean entry by Tenant, its officers, contractors, employees, licensees, agents, servants, guests, invitees, and visitors. If Landlord,for any reason, does not deliver possession of the Premises on the estimated commencement date set forth in the Summary ofFundamental Provisions (the "Estimated Commencement Date"), this Lease shall not be void or voidable, nor shall Landlord beliable to Tenant for any loss or damage resulting from such delay. In that event, however, Landlord shall deliver possession of thePremises as soon as reasonably practicable. If Landlord is delayed in delivering possession to Tenant for any reason attributable toTenant, this Lease shall commence on the Estimated Commencement Date set forth in the Summary of Fundamental Provisions.

(a) Contingencies

If Landlord, for any reason not attributable to Tenant, Is unable to deliver possession of the Premises within 120 days following theEstimated Commencement Date, then either party may terminate this Lease by written notice given within ten days following suchparty's acquiring knowledge of such delay.

RENT

Beginning on the Commencement Date and continuing during the entire Term, Tenant shall pay to Landlord as rent for each ''LeaseYear "Base Rent" as defined in this Section and "Additional Rent" as defined In this Section. The term "Lease Year shall mean theperiod from the Commencement Date through the first December 31st following the Commencement Date, January 1st throughDecember 31st for each subsequent full calendar year during the Term, and January 1st to the end of the Term for the final LeaseYear. All Rent shall be paid when due without notice, offset, or deduction or for any reason.

(b)Base Rent

The initial monthly base rent during the Term ("Base Rent") shall be $7000 except as follows:

Months 1-2 FREE RENT/only NNN* due

Month 3 $7,000 plus NNN from deposit

Month 4 Free/only NNN due

Month 5 $3500 plus NNN





Standard Form of RETAIL LEASEPage 2May 2001

ExhibitPage__S_of D-A

Please Initial

/214 r°7Land rd Ten.

Months 10-36 $7,000.00 plus NNN*

Months 36-48 $7,210.00 plus NNN*

Months 48-66 $7418.00 plus NNN

Base Rent shall be paid in advance on or before the first day of each calendar month during the Term, except for the first calendarmonth. Upon execution of this Lease, Tenant shall pay to Landlord Base Rent for the first full calendar month of the Term which isset forth on the Summary of Fundamental Provisions. If the first month of the Term shall be a partial month, Base Rent shall beprorated on a daily basis, based on the actual number of days in such month, and the amount due for such partial month shall bepaid on or before the first day of the first full calendar month following the Commencement Date.

(c)Place of Payment

Tenant shall pay Rent and other amounts required to be paid by Tenant hereunder to Landlord at the addressfor Landlord set forth on the Summary of Fundamental Provisions of this Lease, or at such other place as Landlord may from time totime designate in writing.

2. SECURITY DEPOSIT

Upon execution of this Lease, Tenant shall pay to Landlord a sum equal to the amount set forth on the Summary of FundamentalProvisions, as security for the full and faithful performance by Tenant of all of the covenants and terms of this Lease required to beperformed by Tenant. Such security deposit shall be returned to Tenant after the expiration of this Lease, provided Tenant has fullyand faithfully carried out all of Tenant's obligations hereunder, including the payment of all amounts due to Landlord hereunder andthe surrender of the Premises to Landlord in the condition required in this Lease. However, Landlord, at its option, may apply suchsum on account of the payment of the last month's Base Rent or other unpaid Tenant obligations, in which latter event, Tenant shallreplace any such sum applied by Landlord immediately upon notice from Landlord of such requirement. Such sum may becommingled with other funds of Landlord and shall not bear interest. In the event of a sale of the Property, Landlord shall have theright to transfer the security deposit to the purchaser to be held under the terms of this Lease, and Landlord shall thereupon bereleased from all liability for the return of the security deposit. Tenant agrees to look solely to the new landlord for the return of thesecurity deposit.

3. ADDITIONAL RENT

(a) NNN Expenses

In addition to Base Rent, Tenant shall pay to Landlord an amount determined annually which will cover Tenant's share of all realproperty taxes and assessments levied, assessed, or imposed during the Term upon the Property (Taxes") and the costs ofinsurance provided by Landlord pursuant to Section 4(a) ("Insurance"). a proportionate share of the Operating Expenses incurred byLandlord in connection with the Property. The term "NNN Expenses" shall mean all expenses paid or incurred by Landlord or onLandlords behalf, as reasonably determined by Landlord to be necessary or appropriate for the efficient operation, management,maintenance, and repair of the land and the Building and including amounts for all water and sewer facilities, garbage collection,recycling,. NNN Expenses shall also Include the cost of any reasonable capital improvement to the Property or Building, amortizedwith a reasonable finance charge over the shorter period of (i) its useful life or (II) the longest period during which the cost can beamortized under applicable tax laws; provided, however, that such capital improvements shall not increase the NNN expenserelated to capital improvements by more than 20% over the prior year's NNN amount. Capital expenditures contemplated in thissection shall not include roof repairs that shall remain the sole responsibility of the Landlord unless such repairs are necessitated bythe Tenants actions. NNN Expenses might also include a reasonable management fee to be paid by Tenant to Landlord in anamount equal to Landlord's total management fee multiplied by Tenant's share of NNN Expenses for the leased areas of theBuilding. The reasonable management fee shall not exceed 10% of the total NNN expenses. Tenant shall pay to Landlord anamount each month which is equal to 1/12 of the estimated Annual NNN Expenses, as provided in Section 3(b) below. Tenant'sProportionate Share of Operating Expenses shall .29 cents per square foot per month times the square footage of leased spaceddefined by the lease.

(b) Payment of NNN Expenses

Landlord shall notify Tenant of Tenant's required estimated monthly payments of NNN expenses. Beginning on theCommencement Date, and continuing throughout the Term, Tenant shall make such monthly payments on or before the first day ofeach calendar month. Landlord may, from time to time, by written notice to Tenant, change the estimated monthly amount to bepaid. No interest or earnings shall be payable by Landlord to Tenant on any amount paid under this Section 3, and Landlord maycommingle such payments with other funds of Landlord. Landlord shall, within 90 days after the close of each calendar year or assoon thereafter as is practicable, deliver to Tenant a written statement setting forth the actual NNN Expenses for the prior yeartogether with a computation of the charge or credit to Tenant of any difference between the actual cost and the estimated cost paidby Tenant for such period; and any such difference shall be applied to amounts subsequently due from Tenant to Landlord, or if nosuch sums are or will be owed, then such sums shall be paid or reimbursed, as applicable, within ten days after Landlord givesTenant notice thereof. If Tenant has any objections to the annual statement made by Landlord, such objections shall be made inwriting given to Landlord within 30 days after the statement is submitted to Tenant. If no objection is made within such time period,the annual statement shall be conclusive and binding on Tenant. If Tenant desires to review any of Landlord's records pertaining toStandard Form of RETAIL LEASE Please InitialPage 3May 2001

Landlord TExhibit Page. L__of > %

NNN Expenses, Tenant may do so after reasonable prior notice given to Landlord, but no more often that once during any calendaryear. Such review shall take place where such records are kept, and shall be conducted by a certified public accountant chosen byTenant subject to Landlords prior written approval, which shall not be unreasonably withheld. Tenant shall pay all costs of suchreview including without limitation reimbursement for time incurred by Landlord's representatives and photocopy charges.

4. INSURANCE; INDEMNITY

(a) Insurance

During the Term, Landlord shall maintain in full force a policy or policies of standard multi-peril insurance covering the Building andother improvements (exclusive of Tenants trade fixtures, tenant improvements and other property) situated on the Property for theperils of fire, lightening, windstorm, and other perils commonly covered in such policies. Additionally, the perils of earthquake,landslide, flood, and/or other perils may be covered at the election of Landlord. During the Term, Landlord shall maintain in full forcea comprehensive liability insurance policy in amounts considered appropriate by Landlord insuring Landlord against liability forbodily injury and property damage occurring in, on, or about the Property. Landlord shall use its reasonable efforts to secure saidinsurance at competitive rates.

(b) Increases In Premiums

This Lease is entered into on the basis that Tenant's occupancy will not affect the Property's classification for insurance ratingpurposes. If the insurance premiums on the Property are increased during the Term as a result of the installation of equipment onthe Premises by Tenant, by reason of Tenant's maintaining certain goods or materials on the Premises, or as a result of other use oroccupancy of the Premises by Tenant, Tenant shall pay the additional cost of the insurance for any such buildings (whether or notLandlord has consented to the activity resulting in the increased insurance premiums). Tenant shall refrain from any activity in itsuse of the Premises which would make it Impossible to insure the Premises or the buildings situated on the Property againstcasualty or which would increase the insurance rate of any such buildings or prevent Landlord from taking advantage of the ruling ofthe Insurance Rating Bureau of the state in which the Premises are situated or its successors allowing Landlord to obtain reducedpremium rates for long term fire insurance policies, unless Tenant pays the additional cost of the insurance. All of Tenant's electricalequipment shall be U-L approved. If Tenant installs any electrical equipment that overloads the lines in the Premises or in any suchbuildings, Tenant shall at its own expense make whatever changes are necessary to comply with the requirements of the insuranceunderwriters and governmental authorities having jurisdiction. Any insurance premiums to be paid by Tenant by reason of its initialintended use of the Premises or any increase in fire insurance premiums attributable to Tenants use or occupancy of the Premisesduring the Term shall be paid by Tenant to Landlord within thirty days after Landlord bills Tenant for the same.

(c) Indemnity; Tenant's Insurance

Tenant shall indemnify, defend, and save harmless Landlord from any and all liability, damage, expenses, attorneys' fees, causes ofactions, suits, claims, or judgments, arising out of or connected with (i) the use, occupancy, management, or control of thePremises, (ii) any failure of Tenant to comply with the terms of this Lease, and (iii) the acts or omissions of Tenant, its agents,officers, directors, employees, or invitees; provided, however, that Tenant shall not be liable for claims caused by the solenegligence of Landlord. Tenant shall, at its own cost and expense, defend any and all suits which may be brought against Landlordeither alone or in conjunction with others upon any such above-mentioned cause or claim, and shall satisfy, pay, and discharge anyand all settlements paid by or judgments that may be entered against Landlord regardless of whether a lawsuit is actually filed.Tenant shall at its own expense during the Term carry in full force and effect a comprehensive public liability insurance policy withlimits of not less than Two Million Dollars ($2,000,000) combined single limit bodily injury and property damage per occurrence andin aggregate, and (b) business automobile liability insurance covering owned, non-owned, and hired vehicles with a limit of not lessthan One Million Dollars ($1,000,000), with an insurance carrier satisfactory to Landlord, naming Landlord, Landlord's managementagent, and Landlord's lender as additional insureds. Said insurance policies shall insure against any and all liability of Tenant withrespect to the Premises and under this Lease including without limitation Tenants indemnity obligations under this Lease, or arisingout of the maintenance, use or occupancy of the Premises. Tenant shall carry insurance which fully covers repair and replacementof broken storefront windows. If engaged in the sale or distribution of alcoholic beverages, Tenant shall carry liquor liabilityinsurance in a form and in such amounts satisfactory to Landlord. Such policy shall provide that the insurance shall not becancelable or modified without at least 30 days' prior written notice to Landlord, and shall be deemed primary and noncontributingwith other insurance available to Landlord. On or before the Commencement Date, Tenant shall furnish Landlord with a certificateor other acceptable evidence that such insurance Is In effect. Tenant shall also provide and maintain insurance to comply withWorker's Compensation and Employers Liability Laws.

5. USE OF PREMISES

The Premises shall be used for Children's' recreation and play area Including use of a professionally designed climbing structure tobe monitored at all times; a learning facility and a related cafe associated with these uses and for no other purpose withoutLandlord's written consent. In connection with the use of Premises, Tenant shall, at Tenants sole cost and expense except asspecifically provided otherwise herein:

a) Conform to all applicable laws, statutes, rules, ordinances, orders, regulations, and requirements of any public authority("Laws") affecting the Premises and the use of the Premises and correct, at Tenants own expense, any failure of compliancecreated through Tenant's fault or by reason of Tenant's use, unless such failure is due to Landlord's default in the performance ofthe agreements set forth in this Lease to be kept and performed by Landlord. Without limiting the generality of the foregoing, Tenantshall comply with the Americans with Disabilities Act as it applies to the Premises and all obligations pertaining to asbestos asrequired by the Occupational Safety and Health Administration (OSHA) applicable to the Premises and to Tenants employees. IfTenants permitted use includes operating as a "dry cleaning facility" as defined under ORS 465.515, then Tenant shall take allsteps necessary to obtain exemption from administrative and judicial action and exemption from liability under ORS 465.503, asmay be amended;Standard Form of RETAIL LEASE Please InitialPage 4May 2001

Exhibit Landlord

Page of

Tena

b) Refrain from any activity which would be unreasonably offensive to Landlord, to other tenants in any buildings situated on

the Property, or to owners or users of the adjoining premises, or which would tend to create a nuisance or damage the reputation of

the Premises or of any such buildings. Without limiting the generality of the foregoing, Tenant shall not permit any noise or odor toescape or be emitted from the Premises nor permit the use of flashing (strobe) lights nor permit the sale or display of offensivematerials as reasonably determined by Landlord;

c) Refrain from loading the floors, electrical systems, plumbing systems, or heating, ventilating and air conditioning systems

("HVAC"), beyond the point considered safe by a competent engineer or architect selected by Landlord and refrain from usingelectrical, water, sewer, HVAC, and plumbing systems in any harmful way. If Landlord employs an engineer, architect, electrical, or

other consultant to determine whether Tenant's use of the Premises is in violation of this Section 5(c), Tenant shall pay thereasonable costs incurred in connection with that employment if a violation is found that requires remedy. Tenant shall use hairinterceptors, grease traps, or other drain protection devices as needed to avoid such harmful use;

d) Not permit any pets or other animals in the Premises except for Seeing Eye dogs;

e) Refrain from making any marks on or attaching any sign, insignia, antenna, window covering, aerial, or other device to theexterior or interior walls, windows, or roof of the Premises without the written consent of the Landlord, which consent shall not beunreasonably withheld. Landlord need not consent to any sign that fails to conform to the design concept of the buildings situatedon the Property, and all policies and procedures as established by Landlord. Prior to installing any signs, Tenant shall submitdetailed color drawings to Landlord for approval indicating the location, size, layout, design, and color of proposed sign, including alllettering and graphics. Electrical service to all signs shall be at Tenant's sole expense. Free standing or monument signs areprohibited. Notwithstanding Landlords consent to any signs, Tenant shall (i) comply with all Laws and obtain any necessary permitsand governmental approvals related to such signs at its own cost and expense, and (ii) within 15 days after Lease expiration orearlier termination, remove all such signs and repair any damage to the Premises caused thereby, at Tenant's own cost andexpense;

f) Comply with any reasonable rules respecting the use of the Premises promulgated by Landlord from time to time andcommunicated to Tenant in writing. Without limiting the generality of the foregoing, such rules may establish hours during which thecommon area shall be open for use, may regulate deliveries to the Premises and may regulate parking by employees andcustomers. During 2010 customers of Tenant will be able to park in any reasonably available parking space on the premises parkingareas. Beginning in 2011 Landlord will provide a plan after consulting with Tenant that will specify the building parking rules that bestbalances the needs of all tenants. Recognizing that it is in the best interests of all tenants to accommodate the parking needs ofcustomers, Landlord reserves the right to require employees of Tenant to park in designated areas of the common area or to parkoutside of the common area if Landlord determines that the extent of employee parking is detrimental to the businesses of thetenants or any of them. Tenant shall use its best to prevent delivery trucks or other vehicles serving the Premises to park or stand Infront of the locations of other tenants;

g) Comply with any no smoking (and other health related) policies and procedures established by any Law or by Landlordfrom time to time;

h) Not permit any cash, credit card, or coin-operated vending, novelty, or gaming machines or equipment on the Premiseswithout the prior written consent of Landlord; and not permit the use of any part of the Premises for a second-hand store, nor for anauction, distress, or fire sale, or bankruptcy or going-out-of-business sale or the like;

i) Refrain from violating or causing the violation of any exclusive use provision granted to any tenant or other occupant ofthe Property as to which Tenant has been given written notice;

j) Not commit or suffer any harm to the Premises including without limitation the improvements thereon or any part thereof;and Tenant shall keep the Premises In a neat, clean, sanitary, and orderly condition;

k) Refrain from any use of any area on the Property which is outside of the Premises unless such use is specificallypermitted In writing by Landlord in advance;

I) Not generate, release, store, or deposit on the Premises any environmentally hazardous or toxic substances, materials,wastes, pollutants, oils, or contaminants, as defined or regulated by any federal, state, or local law or regulation or any other Law(collectively, "Hazardous Substancee), except that Tenant may have and use small quantities of Hazardous Substances on thePremises as required in the ordinary course of Tenant's business. Tenant shall indemnify, defend, and hold harmless Landlord fromand against any and all claims, losses, damages, response costs, and expenses of any nature whatsoever (including withoutlimitation attorneys', experts', and paralegals' fees) arising out of or in any way related to the generation, release, storage, or depositof Hazardous Substances on the Premises or on Landlord's property by Tenant or any other person or entity other than Landlord onand/or after the date of this Lease;

m) Not allow or permit any conduct or omission at the Premises, or anywhere on Landlords property, that will promote orallow the production or growth of mold, spores, fungus, or any other similar organism, and shall indemnify and hold Landlordharmless from any claim, demand, cost, and expense (including attorneys' fees) arising from or caused by Tenant's failure to strictlycomply with its obligations under this provision; and

n) Comply with the requirements of all operation and easement agreements and all other agreements and requirements ofrecord on the Property.

6. TENANT IMPROVEMENTS ANDALTERATIONS

Unless otherwise specified in any Rider or Exhibit to this Lease, Tenant accepts the Premises AS IS in their condition as of theCommencement Date and Tenant shall pay for all tenant improvements, whether the work is performed by Landlord or by Tenant. Ifany improvements or alterations to the Premises or any other work on the Premises by Tenant causes the need to comply with any


Exhibit I

Please Initial

Landlord Tena

Laws in areas outside of the Premises including without limitation the Americans with Disabilities Act or regulations pertaining toearthquake codes, Tenant shall pay the cost thereof as well. Tenant shall make no improvements or alterations on the Premises ofany kind, including the initial work to be performed by Tenant in the Premises, without the prior written consent of Landlord, whichconsent shall not be unreasonably withheld. Prior to the commencement of any work by Tenant, Tenant shall first submit thefollowing to Landlord and obtain Landlords written consent to all of the following, which consent shall not be unreasonably withheld:Tenant's plans and specifications; Tenant's estimated costs; and the names of all of Tenants contractors and subcontractors. IfLandlord is to perform the work for some or all of such work, Landlord shall have the right to require Tenant to pay for the cost of thework in advance or in periodic installments. If the work Is to be performed by Tenant, Landlord shall have the right to require Tenantto furnish adequate security to assure timely payment to the contractors and subcontractors for such work. All work performed byTenant shall be done in strict compliance with all applicable building, fire, sanitary, and safety codes, and other Laws, and Tenantshall secure all necessary permits for the same. Tenant shall keep the Premises free from all liens in connection with any suchwork. All work performed by Tenant shall be carried forward expeditiously, shall not interfere with Landlord's work or the work to beperformed by or for other tenants, and shall be completed within a reasonable time. Landlord or Landlord's agents shall have theright at all reasonable times to inspect the quality and progress of such work. All improvements, alterations, and any other workperformed on the Premises by either Landlord or Tenant shall be the property of Landlord when installed, except for Tenant's tradefixtures, and may not be removed at the expiration of this Lease unless the applicable Landlord's consent specifically providesotherwise. Notwithstanding Landlord's consent to Improvements or alterations by Tenant, all such improvements, alterations, orother work to be performed by Tenant shall be at the sole cost and expense of Tenant.

7. REPAIRS AND MAINTENANCE

(a) Landlord's Responsibilities

The following shall be the responsibility of Landlord, provided that the cost thereof shall be recoverable by Landlord as OperatingExpenses to the extent provided in Section 3(a):

i. Structural repairs and maintenance and repairs necessitated by structural disrepair or defects;

ii. Repair and maintenance of the exterior walls, roof, gutters, downspouts, and the foundation of the Building. Thisshall not include maintenance of the operating condition of doors and windows or replacement of glass, nor maintenance of thestorefront; and

iii. Repair of interior walls, ceilings, doors, windows, floors, and floor coverings when such repairs are made necessarybecause of failure of Landlord to keep the structure in repair as above provided in this Section 7(a).

(b) Tenant's Responsibilities

The following shall be the responsibility of Tenant:

i. The interior of the Premises including any interior decorating;

ii. Any repairs and replacements necessitated by the negligence or use of the Premises by Tenant, its agents,employees and invitees;

Maintenance, repair, and replacement of the HVAC systems and sprinkler systems, if any. However, Landlordreserves the right to contract with a service company for the maintenance and repair of the foregoing systems, or any of them;and Tenant's share of such expenses shall be paid by Tenant to Landlord monthly;

iv. Maintenance and repair of the interior walls and floor coverings (both hard surfaces and carpeting);

v. Any repairs or alterations required under Tenant's obligation to comply with all applicable Laws as set forth in thisLease; and

vi. All other repairs, maintenance, and replacements to the Premises which Landlord Is not expressly required to makeunder Section 7(a) above, which includes, without limiting the generality of the foregoing, the replacement of all glass whichmay be broken or cracked during the Term with glass of as good or better quality than that in use at the commencement of theTerm, the storefront, wiring, plumbing, drainpipes, sewers, and septic tanks including without limitation, repairs outside of thePremises if the need for the repair arises from Tenant's use of the Premises. All of Tenant's work shall be in full compliancewith then current building code and other governmental requirements. Tenant shall contract with a qualified pest exterminationcompany for regular extermination services to keep the Premises free of pests, vermin, and rodents.


Exhibit Page of

Please Initial

Landlord Tenant

(c) Inspections

Landlord shall have the right to inspect the Premises at any reasonable time or times to determine the necessity of repair. Whetheror not such inspection is made, the duty of Landlord to make repairs as outlined above in any area in Tenants possession andcontrol shall not mature until a reasonable time after Landlord has received from Tenant written notice of the necessity of repairs,except in the event emergency repairs may be required and in such event Tenant shall attempt to give Landlord immediate noticeconsidering the circumstances.

(d) Landlord's Work

All repairs, replacements, alterations, or other work performed on or around the Premises by Landlord shall be done in such a wayas to interfere as little as reasonably possible with the use of the Premises by Tenant. Tenant shall have no right to an abatement ofRent nor any claim against Landlord for any inconvenience or disturbance resulting from Landlords performance of repairs andmaintenance pursuant to this Section 7. Landlord shall have no liability for failure to perform required maintenance and repairunless written notice of such maintenance or repair is given by Tenant and Landlord fails to commence efforts to remedy theproblem in a reasonable time and manner. Landlord shall have the right to erect scaffolding and other apparatus necessary for thepurpose of making repairs or alterations to the Building. Work may be done during normal business hours. Tenant shall have noclaim against Landlord for any interruption or reduction of services or interference with Tenants occupancy caused by Landlordsmaintenance and repair, and no such interruption or reduction shall be construed as a constructive or other eviction of Tenant.

8. LIENS; TENANT'S TAXES

Tenant shall keep the Premises free from all liens, including mechanic's liens, arising from any act or omission of Tenant or thoseclaiming under Tenant. Landlord shall have the right to post and maintain on the Premises or the Building such notices ofnonresponsibility as are provided for under the lien laws of the state in which the Premises are located. Tenant shall be responsiblefor and shall pay when due all taxes assessed during the Term against any leasehold or personal property of any kind owned by orplaced upon or about the Premises by Tenant.

9. UTILITIES

Tenant shall pay promptly and all other facilities and utility services used by Tenant or provided to the Premises during the Term. Ifthe heating and air-conditioning systems or any other utility service is not on separate meters, Tenant shall pay its proportionateshare of such charges as reasonably determined by Landlord provided in Section 3(a) of this Lease. Tenant shall arrange forregular and prompt pickup of trash and garbage and shall store such trash and garbage in only those areas designated by Landlord.However, if Landlord elects to arrange for garbage collection on a cooperative basis for Tenant and other tenants, Tenant shall payits proportionate share as reasonably determined by Landlord as provided in Section 3(a) of this Lease. Tenant shall comply withany recycling programs required by any Law or reasonably required by Landlord. Landlord shall not be liable or responsible for anyinterruption of utility service to the Premises and any such interruption shall not entitle Tenant to any abatement of rent, unless suchinterruption is caused solely by the negligence of Landlord.

10. ICE, SNOW, AND DEBRIS

Tenant shall keep the walks in front of the Premises free and clear of ice, snow, rubbish, debris, and obstructions. Tenant shallindemnify and hold Landlord harmless from any injury whether to Landlord or Landlord's property or to any other person or propertycaused by Tenants failure to perform Tenant's obligations under this Section 10. Tenants obligations under this Section 10 shall beperformed at Tenants cost and expense. Landlord reserves the right to cause the removal of ice, snow, debris and obstruction fromthe area in front of the Premises and Tenant shall pay the cost thereof within ten days after billing therefor.

11. WAIVER OF SUBROGATION

Neither party shall be liable to the other for any loss or damage caused by fire or any of the risks enumerated in a standard multiperilInsurance policy, including sprinkler leakage insurance if the Premises have sprinklers, to the extent that any such insuranceactually pays any such loss or damage. All claims or rights of recovery for any and all such loss or damage, however caused, arehereby waived. Without limiting the generality of the foregoing, said absence of liability shall exist whether or not such loss ordamage is caused by the negligence of either Landlord or Tenant or by any of their respective agents, servants, or employees.

12. INJURY TO TENANTS PROPERTY

Landlord shall not be liable for any injury to the goods, stock, merchandise, or any other property of Tenant or to any person in orupon the Premises or to the leasehold improvements in the Premises resulting from fire or collapse of the Building or any portionthereof or any other cause, including but not limited to damage by water or gas, or by reason of any electrical apparatus in or aboutthe Premises. Tenant shall carry adequate insurance coverage at its sole cost and expense to cover the risks described in thissection.

13. DAMAGE OR DESTRUCTION

(a) Partial Destruction

If the Premises shall be partially damaged by fire or other cause, and Section 13(b) below does not apply, the damages to thePremises shall be repaired by Landlord, and all Base Rent until such repair shall be made shall be apportioned according to the partof the Premises which is usable by Tenant, except when such damage occurs because of the fault of Tenant. The repairs shall beaccomplished with all reasonable dispatch. Landlord shall bear the cost of such repairs unless the damage occurred from a riskwhich would not be covered by a standard fire insurance policy with an endorsement for extended coverage, including spripklerleakage, and the damage was the result of the fault of Tenant, in which event Tenant shall bear the expense of the repairs.Standard Form of RETAIL LEASE Please InitialPage 7

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Exhibit l Landlord Tenan

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(b) Substantial Damage

If the buildings situated on the Property or the Building or the Premises, or any of them, are 25% or more destroyed during the Termby any cause, Landlord may elect to terminate the Lease as of the date of damage or destruction by notice given to Tenant in writingnot more than 60 days following the date of damage. In such event all rights and obligations of the parties shall cease as of the dateof termination. In the absence of an election to terminate, Landlord shall proceed to restore the Premises, if damaged, tosubstantially the same form as prior to the damage or destruction, so as to provide Tenant usable space equivalent in quantity andcharacter to that before the damage or destruction. Work shall be commenced as soon as reasonably possible, and thereafterproceed without interruption, except for work stoppages on account of matters beyond the reasonable control of Landlord. From thedate of damage until the Premises are restored or repaired, Base Rent shall be abated or apportioned according to the part of thePremises usable by Tenant, unless the damage occurred because of the fault of Tenant. Landlord shall bear the cost of suchrepairs unless the damage occurred from a risk which would not be covered by a standard fire insurance policy with anendorsement for extended coverage, including sprinkler leakage, and the damage was the result of the fault of Tenant, in whichevent Tenant shall bear the expense of the repairs.

(c) Restoration

If the Premises are to be restored by Landlord as above provided in this Section 13, Tenant, at its expense, shall be responsible forthe repair and restoration of all items which were initially installed at the expense of Tenant (whether the work was done by Landlordor Tenant) or for which an allowance was given by Landlord to Tenant, together with Tenants stock in trade, trade fixtures,furnishings, and equipment; and Tenant shall commence the installation of the same promptly upon delivery to it of possession ofthe Premises and Tenant shall diligently prosecute such installation to completion.

14. EMINENT DOMAIN

(a) Partial Taking

If a portion of the Premises is condemned and neither Section 14(b) nor Section 14(c) apply, the Lease shall continue in effect.Landlord shall be entitled to all the proceeds of condemnation, and Tenant shall have no claim against Landlord as a result ofcondemnation. Landlord shall proceed as soon as reasonably possible to make such repairs and alterations to the Premises as arenecessary to restore the remaining Premises to the condition as comparable as reasonably practicable to that existing at the time ofcondemnation. Base Rent shall be abated to the extent that the Premises are untenantable during the period of alteration andrepair. After the date on which title vests in the condemning authority, Base Rent shall be reduced commensurately with thereduction in the objective value of the Premises as an economic unit on account of the partial taking.

(b) Substantial Taking of the Property

If a condemning authority takes any substantial part of the Property or any substantial part of the Building, the Lease shall, at theoption of Landlord, terminate as of the date title vests in the condemning authority. In such event all rights and obligations of theparties shall cease as of the date of termination. Landlord shall be entitled to all of the proceeds of condemnation, and Tenant shallhave no claim against Landlord as a result of the condemnation. Tenant shall be free to make a separate claim for its movingexpenses and lost trade fixtures so long as such claim does not interfere with or reduce Landlord's claim or award.

(c) Substantial Taking of Premises

If a condemning authority takes all of the Premises or a portion sufficient to render the remaining Premises reasonably unsuitable forTenants use, Tenant shall have the option to terminate this Lease upon written notice to Landlord given within 60 days of Tenantsreceipt of notice of the taking. In such event, the Lease shall terminate as of the date title vests In the condemning authority.Landlord shall be entitled to all of the proceeds of condemnation, and Tenant shall have no claim against Landlord as a result of thecondemnation. Tenant shall be free to make a separate claim for its moving expenses and lost trade fixtures so long as such claimdoes not Interfere with or reduce Landlord's claim or award.

(d) Definition

Sale of all or any part of the Premises to a purchaser with the power of eminent domain in the face of a threat or probability of theexercise of the power shall be treated for the purpose of this Lease as a taking by condemnation.

15. BANKRUPTCY

Subject to Section 16, this Lease shall not be assigned or transferred voluntarily or involuntarily by operation of law. It may, at theoption of Landlord, be terminated, if Tenant be adjudged bankrupt or Insolvent, or makes an assignment for the benefit of creditors,or files or is a party to the filing of a petition in bankruptcy, or commits an act of bankruptcy, or in case a receiver or trustee isappointed to take charge of any of the assets of Tenant or sublessees or assignees in or on the Premises, and such receiver ortrustee is not removed within 30 days after the date of his appointment, or in the event of judicial sale of the personal property in oron the Premises upon judgment against Tenant or any sublessees or assignee hereunder, unless such property or reasonablereplacement therefor be installed on the Premises. To the extent permitted by law, this Lease or any sublease hereunder shall notbe considered as an asset of a debtor-in-possession, or an asset in bankruptcy, Insolvency, receivership, or other judicialproceedings. This Lease shall be considered a lease of real property in a shopping center within the meaning of Section 365(b)(3)of the U.S. Bankruptcy Code.

16. DEFAULT

The following shall be events of default:

a) Failure of Tenant to pay any Rent when due or failure of Tenant to pay any other charge required under this Lease withinten days after it is due.

Standard Form of RETAIL LEASE Please InitialPage 8May 2001

Exhibit

AC2-11Landlord Tenant

Page l \ of /(41

b) Failure of Tenant to execute the documents described in Section 20 or 21 within the time required under such Sections;

failure of Tenant to provide or maintain the insurance required of Tenant pursuant to Section 4(c); or failure of Tenant to comply with

any Laws as required pursuant to Section 5 within 24 hours after written demand by Landlord.

c) Failure of Tenant to comply with any term or condition or fulfill any obligation of this Lease (other than the failuresdescribed in Sections 17(a) or 17(b) above) within ten days after written notice by Landlord specifying the nature of the default withreasonable particularity. If the default Is of such nature that It cannot be completely remedied within the ten-day period, thisprovision shall be complied with if Tenant begins correction of the default within the ten-day period and thereafter proceeds withreasonable diligence and in good faith to effect the remedy as soon as practicable. Landlord shall not be obligated to give writtennotice for the same type of default more than twice; at Landlord's option, a failure to perform an obligation after the second noticeshall be an automatic event of default, without notice or any opportunity to cure.

d) The abandonment of the Premises by Tenant or the failure of Tenant for 15 days or more to occupy the Premises for oneor more of the designated purposes of this Lease unless such failure is excused under other provisions of this Lease.

e) The bankruptcy or insolvency of Tenant or the occurrence of other acts specified in Section 15 of this Lease which giveLandlord the option to terminate.

f) The assignment or subletting or purported assignment or subletting of Tenants interest under this Lease in violation ofSection 19.

17. REMEDIES ON DEFAULT

In the event of a default, Landlord may, at Landlord's option, exercise any one or more of the rights and remedies available to alandlord in the state in which the Premises are located to redress such default, consecutively or concurrently, including the following:

a) Landlord may elect to terminate Tenants right to possession of the Premises or any portion thereof by written noticeto Tenant. Following such notice, Landlord may re-enter, take possession of the Premises, and remove any persons orproperty by legal action or by self-help with the use of reasonable force and without liability for damages. To the extentpermitted by law, Landlord shall have the right to retain the personal property belonging to Tenant which is on the Premises atthe time of re-entry, or the right to such other security interest therein as the law may permit, to secure all sums due or whichbecome due to Landlord under this Lease. Perfection of such security interest shall occur by taking possession of suchpersonal property or otherwise as provided by law.

b) Following re-entry by Landlord, Landlord may relet the Premises for a term longer or shorter than the Term and uponany reasonable terms, including the granting of rent concessions to the new tenant. Landlord may alter, refurbish, or otherwisechange the character or use of the Premises in connection with such reletting. Landlord shall not be required to relet for anyuse or purpose which Landlord may reasonably consider injurious to its property or to any tenant which Landlord mayreasonably consider objectionable. No such reletting by Landlord following a default by Tenant shall be construed as anacceptance of the surrender of the Premises. If rent received upon such reletting exceeds the Rent received under this Lease,Tenant shall have no claim to the excess.

c) Landlord shall have the right to recover from Tenant the following damages:

I. All unpaid or other charges for the period prior to re-entry, plus interest at the greater of 15% per annum or a rateequal to five percentage points in excess of the discount rate, including any surcharge on the discount rate, on 90-daycommercial paper declared by the Federal Reserve Bank In the Federal Reserve District in which Portland, Oregon, is locatedon the date the charge was due (the "Interest Rate).

li. An amount equal to the Rent lost during any period during which the Premises are not relet, if Landlord usesreasonable efforts to relet the Premises. If Landlord lists the Premises with a real estate broker experienced in leasingcommercial property in the metropolitan area in which the Premises are located, such listing shall constitute the taking ofreasonable efforts to relet the Premises.

iii. All costs incurred in reletting or attempting to relet the Premises, Including but without limitation, the cost of clean-upand repair in preparation for a new tenant, including any improvements to the Premises and the cost of correcting any defaultsor restoring any unauthorized alterations and the amount of any real estate commissions and advertising expenses.

iv. The difference between the Rent reserved under this Lease and the amount actually received by Landlord afterreletting, as such amounts accrue.

v. Reasonable attorneys' fees and legal expenses incurred in connection with the default, whether or not any litigationIs commenced.

d) EARLY TERMINATION OPTION: Tenant shall have the right to avoid the liability set forth herein and avoid theLandlord remedies described herein by providing written notice to Landlord 90 days in advance of Tenant's intention toterminate the Lease and pay an early termination penalty of $50,000.00 (Fifty thousand dollars) This entire amount will be dueand payable by Tenant and any Guarantor 90 days after providing notice. Tenant and Guarantor shall be responsible for the$50,000.00 termination penalty plus any amounts due or in arrears under the Lease at the time payment of the ETP Is due.

e) In the event Tenant remains in possession following default and Landlord does not elect to re-enter, Landlord mayrecover all back Rent and other charges, and shall have the right to cure any nonmonetary default and recover the cost of suchcure from Tenant, plus interest from the date of expenditure at the Interest Rate. In addition, Landlord shall be entitled torecover attorneys' fees reasonably incurred in connection with the default, whether or not litigation is commenced. Landlord


Exhibit

Please Initial

Landlord Tenan

Page of )-

may sue to recover such amounts as they accrue, and no one action for accrued damages shall bar a later action for damagessubsequently accruing.

f) The foregoing remedies shall not be exclusive but shall be in addition to all other remedies and rights provided underapplicable law, and no election to pursue one remedy shall preclude resort to another remedy.

18. SURRENDER AT EXPIRATION

(a) Condition of Premises

Upon expiration of the Term or earlier termination, Tenant shall deliver all keys to Landlord and surrender the Premises in first-classcondition and broom clean. Improvements, alterations, wiring, cables, or conduit constructed by or for Tenant shall not be removedor restored to the original condition unless the terms of Landlord's consent provides otherwise or unless Landlord requests Tenantto remove all or any of such improvements, alterations, wiring, cables, or conduit in which event Tenant shall remove thosedesignated by Landlord for removal and restore the Premises at Tenant's sole cost and expense. Depreciation and wear fromordinary use for the purpose for which the Premises were let need not be restored, but all repair for which Tenant is responsibleshall be completed to the latest practical date prior to such surrender. Tenant's obligations under this Section 18 shall be subject tothe provisions of Section 13 relating to damages or destruction.

(b) Fixtures

i. All fixtures placed upon the Premises during the Term, other than Tenant's trade fixtures, shall, at Landlord option,become the property of Landlord. Movable furniture, decorations, floor covering other than hard surface bonded or adhesivelyfixed flooring, curtains, drapes, blinds, furnishings and trade fixtures shall remain the property of Tenant if placed on thePremises by Tenant; provided, however, if Landlord granted Tenant an allowance for improvements, installation, floorcoverings, curtains, drapes, blinds or other items, such items shall at Landlords option become the property of Landlord,notwithstanding the installation thereof by Tenant.

ii. If Landlord so elects, Tenant shall remove any or all fixtures, wiring, cables, or conduit which would otherwise remainthe property of Landlord, and shall repair any damage resulting from the removal. If Tenant fails to remove such fixtures,wiring, cables, or conduit Landlord may do so and charge the cost to Tenant with interest at the Interest Rate. Tenant shallremove all furnishings, furniture, and trade fixtures which remain the property of Tenant and shall repair any damage resultingfrom the removal. If Tenant fails to do so, this shall be an abandonment of the property, and following ten days' written noticeLandlord may remove or dispose of it in any manner without liability. Tenant shall be liable to Landlord for the cost of removal,transportation to storage, with interest on all such expenses from the date of expenditure at the Interest Rate.

iii. The time for removal of any property or fixtures which Tenant Is required to remove from the Premises upontermination shall be as follows:

(1) On or before the date the Lease terminates because of expiration of the Term or because of a defaultunder Section 17.

(2) Within ten days after written notice from Landlord requiring such removal where the property to beremoved is a fixture which Tenant is not required to remove except after such notice by Landlord, and such datewould fall after the date on which Tenant would be required to remove other property.

(c) Holdover

If tenant does not vacate the Premises at the time required, Landlord shall have the option to treat Tenant as a tenant frommonth-to-month, subject to all of the provisions of this Lease except the provision for the Term, and except the Base Rent providedherein shall double during the period of the month-to-month tenancy. Failure of Tenant to remove fixtures, furniture, furnishings ortrade fixtures or to repair any damage caused by such removal which Tenant is required to remove and repair under this Lease shallconstitute a failure to vacate to which this Section 18(c) shall apply if the property not removed or repaired will interfere withoccupancy of the Premises by another tenant or with occupancy by Landlord for any purpose including preparation for a new tenant.

19. ASSIGNMENT AND SUBLETTING

(a) Landlord's Consent

Tenant shall not, either voluntarily or by operation of law, sell, assign, or transfer this Lease or sublet the Premises or any partthereof, or assign any right to use the Premises or any part thereof (each a "Transfer") without the prior written consent of Landlord,which consent shall not be unreasonably withheld, and any attempt to do so without such prior written consent shall be void and, atLandlord's option, shall terminate this Lease. If Tenant requests Landlord's consent to any Transfer, Tenant shall promptly provideLandlord with a copy of the proposed agreement between Tenant and its proposed transferee and with all such other informationconcerning the business and financial affairs of such proposed transferee as Landlord may request. Landlord may withhold suchconsent unless the proposed transferee (i) is satisfactory to Landlord as to credit, managerial experience, net worth, character andbusiness or professional standing, (ii) is a person or entity whose possession of the Premises would not be inconsistent withLandlords commitments with other tenants or with the mix of uses Landlord desires at the Property, (iii) will occupy the Premisessolely for the use authorized under this Lease, (iv) expressly assumes and agrees in writing to be bound by and directly responsiblefor all of Tenant's obligations hereunder, (v) will conduct a business which does not adversely impact the use of the Property'scommon areas, and (vi) will conduct its business in the Premises In such a manner so that the Percentage Rent payable to Landlordunder this Lease will not likely be less than the Percentage Rent which would have been payable to Landlord had there been noTransfer. Landlord's consent to any such Transfer shall in no event release Tenant from its liabilities or obligations hereunder,including any renewal term, nor relieve Tenant from the requirement of obtaining Landlord's prior written consent to any furtherTransfer. Landlord's acceptance of rent from any other person shall not be deemed to be a waiver by Landlord of any provision of


Exhibit \ Landlord Tena

Page 13 of

Please Initial

this Lease or a consent to any Transfer. No modification, amendment, assignment, or sublease shall release Tenant, any assignee,or any guarantor of its liabilities or obligations under this Lease.

(b) Payment to Landlord and Termination of Lease

i. Landlord may, as a condition to its consideration of any request for consent to a proposed Transfer, impose a fee tocover Landlord's administrative and legal expenses in connection therewith. Such fee shall (i) be payable by Tenant upondemand, (ii) include all legal fees incurred by Landlord, and (iii) be retained by Landlord regardless of whether such consent isgranted.

ii. If any such proposed Transfer provides for the payment of, or if Tenant otherwise receives, rent, additional rent, orother consideration for such Transfer which is in excess of the Rent and all other amounts which Tenant is required to payunder this Lease (regardless of whether such excess is payable on a lump-sum basis or over a term), then in the eventLandlord grants its consent to such proposed Transfer, Tenant shall pay Landlord the amount of such excess as it is receivedby Tenant. Any violation of this paragraph shall be deemed a material and noncurable breach of this Lease.

If Tenant proposes a sublease or assignment, Landlord shall have the option to terminate this Lease and dealdirectly with the proposed sublessee, assignee, or any third party with regard to the Premises.

iv. If Tenant is a corporation, an unincorporated association, a partnership, a limited partnership, or a limited liabilitycompany, the transfer, assignment or hypothecation of any stock or interest in such entity in the aggregate in excess of 25%shall be deemed a Transfer of this Lease within the meaning and provisions of this Section 19.

20. SUBORDINATION

Tenants interest hereunder shall be subject and subordinate to all mortgages, trust deeds, and other financing and securityinstruments in place upon the Commencement Date or placed on the Premises by Landlord from time to time (hereafter"Mortgage"), except that no assignment or transfer of Landlord's rights hereunder to a lending institution as collateral security inconnection with a Mortgage shall affect Tenants right to possession, use, and occupancy of the Premises so long as Tenant shallnot be in default under any of the terms and conditions of this Lease. The provisions of this Section 20 shall be self-operating.Nevertheless, Tenant agrees to execute, acknowledge and deliver to Landlord within ten days after Landlord's written request, aninstrument in recordable form which expressly subordinates Tenants interest hereunder to the interests of the holder of anyMortgage, and which includes any other reasonable provisions requested by the holder or prospective holder of any Mortgage. AtLandlords request, Tenant shall furnish Landlord current balance sheets, operating statements, and other financial statements inthe form as reasonably requested by Landlord or by the holder or prospective holder of any Mortgage, certified by Tenant asaccurate and current. Tenant agrees to sign an authorization for Landlord to' conduct a check of Tenants credit as requested byLandlord from time to time.

21. ESTOPPEL CERTIFICATE

Tenant shall from time to time, upon not less than ten days' prior notice, submit to Landlord, or to any person designated byLandlord, a statement in writing, in the form submitted to Tenant by Landlord, certifying that this Lease is unmodified and in full forceand effect (or if there have been modifications, identifying the same by the date thereof and specifying the nature thereof), that tothe knowledge of Tenant no uncured default exists hereunder (or if such uncured default does exist, specifying the same), the datesto which the Rent and other sums and charges payable hereunder have been paid, that Tenant has no claims against Landlord andno defenses or offsets to rental except for the continuing obligations under this Lease (or if Tenant has any such claims, defenses,or offsets, specifying the same), and any other information concerning this Lease as Landlord reasonably requests.

22. PERFORMANCE BY LANDLORD

Landlord shall not be deemed in default for the nonperformance or for any interruption or delay in performance of any of the terms,covenants, and conditions of this Lease if the same shall be due to any labor dispute, strike, lockout, civil commotion, or likeoperation, invasion, rebellion, hostilities, military or usurped power, sabotage, governmental regulations or controls, inability toobtain labor, services or materials, through acts of God, or other cause beyond the reasonable control of Landlord, providing suchcause is not due to the willful act or neglect of Landlord.

23. LANDLORD'S RIGHT TO CURE DEFAULT

If Tenant shall fail to perform any of the covenants or obligations to be performed by Tenant, Landlord, in addition to all otherremedies provided herein, shall have the option (but not the obligation) to cure such failure to perform after 15 days' written notice toTenant. All of Landlord's expenditures incurred to correct the failure to perform shall be reimbursed by Tenant upon demand withinterest from the date of expenditure at the Interest Rate. Landlord's right to cure Tenants failure to perform Is for the soleprotection of Landlord and the existence of this right shall not release Tenant from the obligation to perform all of the covenantsherein provided to be performed by Tenant, or deprive Landlord of any other right which Landlord may have by reason of default ofthis Lease by Tenant.

24. INSPECTION

Landlord, Landlord's agents and representatives, shall have the right to enter upon the Premises at any time in the event ofemergency and, in other events, at reasonable times after prior verbal notice for the purpose of inspecting the same, for the purposeof making repairs or Improvements to the Premises or the Building, for showing the Premises during the final 90 days of the Term,or for any other lawful purpose.

25. FOR SALE AND FOR RENT SIGNS


Exhibit

Please Initial

Landlord Tena

Page of ?.1

During the period of 180 days prior to the date for the termination of this Lease, Landlord may post on the Premises or in thewindows thereof signs of moderate size notifying the public that the Premises are "for sale or "for rent" or "for lease."

26. ATTORNEYS' FEES

In the event a suit, action, arbitration, or other proceeding of any nature whatsoever, including without limitation any proceedingunder the U.S. Bankruptcy Code, is instituted, or the services of an attorney are retained to interpret or enforce any provision of thisLease or with respect to any dispute relating to this Lease, the prevailing or nondefaultIng party shall be entitled to recover from thelosing or defaulting party its attorneys', paralegals', accountants', and other experts' fees and all other fees, costs, and expensesactually incurred and reasonably necessary in connection therewith. In the event of suit, action, arbitration, or other proceeding, theamount thereof shall be determined by the judge or arbitrator, shall include fees and expenses incurred on any appeal or review,and shall be in addition to all other amounts provided by law.

27. NOTICES

Any notice required or permitted under this Lease shall be in writing and shall be deemed given when actually delivered or whendeposited in the United States mail as certified or registered mail, addressed to the addresses set forth in the Summary ofFundamental Provisions of this Lease or to such other address as may be specified from time to time by either of the parties in themanner above provided for the giving of notice. Notice may also be given by facsimile or telecopy transmission and shall beeffective upon the date shown in a transmittal record when sent to the party at the facsimile or telecopy number set out in theSummary of Fundamental Provisions of this Lease or such other number as provided by either party, as long as a copy of any suchnotice Is deposited in the United States mail to such party at the above-mentioned address on the same date the electronictransmission is sent.

28. BROKERS

Tenant covenants, warrants, and represents that it has not engaged any broker, agent, or finder who would be entitled to anycommission or fee in connection with the negotiation and execution of this Lease except as set forth in the Summary ofFundamental Lease Provisions attached hereto. Tenant agrees to indemnify and hold harmless Landlord against and from anyclaims for any brokerage commissions and all costs, expenses, and liabilities in connection therewith, including attorneys' fees andexpenses, arising out of any charge or claim for a commission or fee by any broker, agent, or finder on the basis of any agreementsmade or alleged to have been made by or on behalf of Tenant except for brokers listed on the Summary of Fundamental LeaseProvisions. The provisions of this Section 28 shall not apply to any brokers with whom Landlord has an express written brokerageagreement. Landlord shall be responsible for payment of any such brokers.

29. LATE CHARGES

Tenant acknowledges that late payment by Tenant to Landlord of any Rent or other charge due hereunder will cause Landlord toincur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs mayinclude, without limitation, processing and accounting charges and late charges which may be imposed on Landlord under the termsof any Mortgage. Accordingly, if any Rent or other charge is not received by Landlord within10 days after it is due, Tenant shall payto Landlord a late charge equal to five percent (5%) of the overdue amount. The parties hereby agree that such late chargerepresents a fair and reasonable estimate of the costs incurred by Landlord by reason of the late payment by Tenant. Acceptanceof any late charge by Landlord shall in no event constitute a waiver of Tenant's default with respect to the overdue amount Inquestion, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder.

30. NO PERSONAL LIABILITY

The liability of Landlord to Tenant for any default by Landlord under the terms of this Lease shall be limited to the interest ofLandlord in the Building and the Property, and neither Landlord nor any of its owners, principals, employees, or agents shall beliable for any deficiency.

31. MISCELLANEOUS PROVISIONS

a) This Lease does not grant any rights of access to light or air over any part of the Property.

b) Time is of the essence of this Lease.

c) The acceptance by Landlord of any Rent or other benefits under this Lease shall not constitute a waiver of any default.

d) Any waiver by Landlord of the strict performance of any of the provisions of this Lease shall not be deemed to be a waiverof subsequent breaches of the same character or of a different character, occurring either before or subsequent to suchwaiver, and shall not prejudice Landlord's right to require strict performance of the same provision In the future or of anyother provision of this Lease.

e) This Lease contains the entire agreement of the parties and supersedes all prior written and oral agreements andrepresentations and there are no implied covenants or other agreements between the parties, except as expressly setforth in this Lease.

Neither Landlord nor Tenant is relying on any representations except as expressly set forth in this Lease.

The parties acknowledge and agree that any calculations of square footage in the Premises and on the Property areapproximations. Except as provided herein, no recalculation of square footage shall affect the obligations of Tenant underthis Lease including without limitation the amount of Base Rent or other Rent payable by Tenant under this Lease.

h) This Lease shall not be amended or modified except by agreement in writing, signed by the parties hereto.

i)

9)


ExhibitPage. .of

Please Initial

Landlord Tenan

0 Subject to the limitations on the assignment or transfer of Tenant's interest In this Lease, this Lease shall be binding uponand Inure to the benefit of the parties, their respective heirs, personal representatives, successors, and assigns.

No remedy herein conferred upon or reserved to Landlord or Tenant shall be exclusive of any other remedy hereinprovided or provided by law, but each remedy shall be cumulative.

k) In interpreting or construing this Lease, it is understood that Tenant may be more than one person, that if the context sorequires, the singular pronoun shall be taken to mean and include the plural, and that generally all grammatical changesshall be made, assumed, and implied to make the provisions hereof apply equally to corporations, partnerships, andindividuals.

0 Section headings are for convenience and shall not affect any of the provisions of this Lease.

m) if any provision of this Lease or the application thereof to any person or circumstance Is, at any time or to any extent, heldto be invalid or unenforceable, the remainder of this Lease, or the application of such provision to persons orcircumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby, and eachprovision of this Lease shall be valid and enforceable to the fullest extent permitted by law.

n) All agreements (including, but not limited to, indemnification agreements) set forth in this Lease, the full performance ofwhich are not required prior to the expiration or earlier termination of this Lease, shall survive the expiration or earliertermination of this Lease and be fully enforceable thereafter.

32. QUIET ENJOYMENT

Landlord warrants that as long as Tenant complies with all terms of this Lease it shall be entitled to possession of the Premises freefrom any eviction or disturbance by Landlord or parties claiming through Landlord. Neither Landlord nor its managing agent shallhave any liability to Tenant for loss or damages arising out of the acts, including criminal acts, of other tenants of the Building orthird parties, and no such acts shall constitute an eviction, construction or otherwise.

j)

33. WAIVER OF JURY TRIAL

To the maximum extent permitted by law, Landlord and Tenant each waive their right to trial by jury in any litigation arising out of orwith respect to this Lease.

34. EXHIBITS AND ADDITIONAL PROVISIONS

Exhibit A, which Is referred to in this Lease, Is attached hereto and by this reference incorporated herein. Additional provisions, ifany, are set forth in the Personal Guaranty and Riders #1 and #2, attached hereto and by this reference incorporated herein.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease in duplicate as of the day and year first abovewritten, any corporate signature being by authority of the Board of Directors of the corporation.

Michael Allport, L• ndlord PlayDate-PDX-L-LO--

26 2-7 WE 111)Alvsb,. fo\r-HAAI NZ 17742—

Address


By Shawn Van Deusen

Exhibit

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/114 Id )7,7„›Landlord fiena

Page...412_0f -ag

PERSONAL GUARANTY

In consideration of the agreement of Michael Allport ("Landlord"), to enter into a Lease dated January 13, 2010(the "Lease) between Landlord and PlayDate PDX LLC ('Tenant"), pertaining to certain premises located at 1434 NW 171" Ave.Portland Oregon, the undersigned Shawn Van Deusen ("Guarantor") hereby unconditionally and personally guarantees thepunctual payment of all amounts due under the Early Termination Penalty and additional liabilities described therein, as defined inthe Lease in Section 18 (d), including payments required to be paid by Tenant, and the prompt performance of all other obligationsof Tenant under the Lease arising before the early termination penalty clause was exercised. If Guarantor consists of more thanone person or entity, all liability of Guarantor hereunder shall be joint and several.

Guarantor shall be directly and primarily liable to Landlord for any amount due from Tenant under the earlytermination provision of this Lease (Section 18 (d), without requiring that Landlord first proceed against Tenant, join Tenant in anyproceeding brought to enforce this Guaranty, or exhaust any security held by Landlord. Guarantor agrees that Landlord may dealwith Tenant in any manner in connection with the Lease without the knowledge or consent of Guarantor and without affectingGuarantor's liability under this Guaranty. Without limiting the generality of the foregoing, Guarantor agrees that any extension oftime, assignment of the Lease, amendment, or modification to the Lease, delay or failure by Landlord In the enforcement of any rightunder the Lease, or compromise of the amount of any obligation or liability under the Lease made with or without the knowledge orconsent of Guarantor shall not affect Guarantors liability under this Guaranty. Guarantors liability under this Guaranty shall not beaffected by any bankruptcy, reorganization, insolvency or similar proceeding affecting Tenant, nor by any termination ordisaffirmance of the Lease or any of Tenant's obligations thereunder in connection with such proceeding. This Guaranty shallremain in full force and effect until the performance in full to Landlord's satisfaction of all obligations of Tenant under the Lease.

Guarantor hereby waives any claim or other right now existing or hereafter acquired against Tenant that arisesfrom the performance of Guarantors obligations under this Guaranty, including, without limitation, any rights of contribution,indemnity, subrogation, reimbursement, or exoneration. Guarantor hereby agrees to indemnify Landlord and hold it harmless fromand against all loss and expense, including legal fees, suffered or Incurred by Landlord as a result of claims to avoid any paymentreceived by Landlord from Tenant with respect to the obligations of Tenant under the Lease.

Guarantor hereby waives presentment, protest, notice of default, demand for payment, and all other suretyshipdefenses whatsoever with respect to any payment guaranteed under this Guaranty, and agrees to pay unconditionally upon demandall amounts owed under the Lease. Guarantor further waives any setoff, defense, or counterclaim that Tenant or Guarantor mayhave or claim to have against Landlord and the benefit of any statute of limitations affecting Guarantor's liability under this Guaranty.

If Landlord retains an attorney to enforce this Guaranty or to bring any action or any appeal in connection withthis Guaranty, the Lease, or the collection of any payment under this Guaranty or the Lease, Landlord shall be entitled to recover itsattorneys' fees, legal expenses, costs, and disbursements in connection therewith, as determined by the court before which suchaction or appeal is heard, in addition to any other relief to which Landlord may be entitled. Any amount owing under this Guarantyshall bear interest from the date such amount was payable to Landlord to the date of repayment at a rate equal to the lesser of 15%and the maximum rate permitted by law.

Landlord shall have the unrestricted right to assign this Guaranty in connection with an assignment of the Leasewithout the consent of, or any other action required by, Guarantor. Each reference in this Guaranty to Landlord shall be deemed toinclude its successors and assigns, to whose benefit the provisions of this Guaranty shall also inure. Each reference In thisGuaranty to Guarantor shall be deemed to Include the successors and assigns of Guarantor, all of whom shall be bound by theprovisions of this Guaranty. Within ten days after delivery of written demand therefor from Landlord, Guarantor shall execute anddeliver to Landlord a statement in writing certifying that this Guaranty is unmodified and In full force and effect, which statement maybe conclusively relied upon by any prospective purchaser or encumbrancer of the premises or property. If any provision of thisGuaranty is held to be invalid or unenforceable, the validity and enforceability of the other provisions of this Guaranty shall not beaffected.

1.q_ kL 4inGUARANTOR:

SY)clUL)`(Th u8-3.(N Social Security No.: 51-1.3 " Social Security No.:

Drivers License No.:4NQ Df 142rStpQQ Drivers License No.:

State Issuing Drivers License: t A-A

Address for Notices: • Address for Notices:

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State Issuing Driver's License:

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Landlord Tenan

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EXIST. WINDOW

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PARTY ROOM 'A'

16 X 19

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PlayDate, LLC

EXIST. WINDOW

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BASE C B.

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RTYF'200

6 X 16

111 in

SUSPENDED CEILING

'CLOUD' ABOVE

FLOOR PATTERN

COFFEE

STORAGE

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SECURITY GATE

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Rider #1

OPTION TO EXTEND

1. Right to Extend

As long as this Lease remains free from default, and so long as Tenant does not assign the Lease or sublet any portion ofthe Premises, Tenant shall have the option to extend the term of this Lease for 2 successive term(s) of 5 years each, on the termsand conditions contained herein, except for Base Rent which shall be determined as hereinafter provided. Other than as set forthherein, Tenant shall have no further option to extend this Lease. Exercise of each extension option shall be by written notice givento Landlord at least 180 and not more than 210 days prior to expiration of the original term, or the preceding extended term, if any.

2. Determination of Rent

During each extended term, Base Rent shall be adjusted to the Base Rent, and Additional NNN Rent payable by Tenantimmediately prior to the commencement of the extended term in question. Within 30 days after Tenant's notice of exercise of itsright to extend, Landlord shall notify Tenant of its determination of the fair rental value based on Portland Oregon CPI adjustments(as determined by the University of Oregon on libweb.uoregon.edu/govdocs/cpi.html) for all prior years of the lease unless theyhave already been captured in the base rent calculation under the existing lease. Each new 5 year term will contain annual rentincreases based on this same Portland, Oregon CPI. Within 30 days after the effective date of such notice, Tenant shall either (i)notify Landlord of Tenant's acceptance of Landlord's determination of the fair rental value, in which event Base Rent for theextended term in question shall be as so determined by Landlord; or (ii) notify Landlord of Tenant's rejection of Landlord'sdetermination of the fair rental value.


Exhibit

Please Initial

Mgt Landlord

Rider #2

WORK AGREEMENT

SECTION 1. IMPROVEMENTS PROVIDED BY LANDLORD

Unless otherwise agreed by Landlord and Tenant in an addendum to the Lease, Landlord shall provide the followingimprovements in the Premises ("Landlord's Wore) and shall obtain, at Landlord's cost, the permits therefor:

Landlord at its sole expense, except as provided below, shall build tenant improvementsspecified and mutually agreed upon in the Basic and Working Plans described below. Landlordshall not purchase any trade fixtures for Tenant's café, play structure or childcare business.Landlord will provide and install reasonable specialty lighting and finishes to be agreed upon inthe plan for café area. All levels of finish will be consistent with the standards exemplified by theworkmanship of Pearl Court. The Premises will be zoned for Tenant's intended use and hold avalid A or E occupancy designation for assembly and education consistent with the businessuse contemplated.

SECTION 2. IMPROVEMENTS PROVIDED AT TENANTS EXPENSE

2.1 Unless otherwise agreed by Landlord and Tenant in an addendum attached to the Lease, all improvementsconstructed in the Premises in addition to those identified in the Basic and Working Plans of this Work Agreement shall be approvedin writing by Landlord pursuant to Section 3 of this Work Agreement and the cost thereof, including the cost of obtaining allnecessary permits and approvals, shall be paid by Tenant.

SECTION 3. DESIGN OF TENANT IMPROVEMENTS

3.1 Tenant shall retain the services of a licensed qualified architect or engineer, approved in advance by Landlord, toprepare the necessary drawings, including without limitation Basic Plans and Working Plans as described below for construction ofthe tenant improvements ("Tenant's Plans"). The first $5000 worth of architectural services of Tenant's Plans shall be prepared atTenant's expense.

3.2 Tenant's architect or engineer shall determine that the work shown on Tenant's Plans is compatible with the basicBuilding plans and that necessary basic Building modifications are included in Tenant's Plans. The architect should also determinethat the premises can be delivered to Tenant with A or E classification under the applicable Building Codes as required for Tenant'suse.

3.3 The Basic Plans shall include fully dimensional architectural floor plans showing partition layout, clearly identifyingand locating equipment requiring special plumbing or mechanical systems, areas subject to above normal loads, special openings inthe floor, ceiling, or walls, and other major or special features. Four sets of the Basic Plans shall be delivered to Landlord within 10days after the parties sign the Lease.

3.4 Landlord shall review the Basic Plans and shall either approve the Basic Plans or reject them, in which caseLandlord shall specify the deficiencies in the Basic Plans as submitted. If the Basic Plans are rejected, Tenant shall resubmitrevised Basic Plans as soon as practicable until Landlord's approval has been obtained. Following Landlord's approval of the BasicPlans, Tenant's architect or engineer shall produce full working drawings for construction sufficient to obtain all necessary permitsand with sufficient detail to construct the improvements, including specifications for every item included thereon (the ''WorkingPlans"). The Working Plans shall be delivered to Landlord within 15 days after Landlord's approval of the Basic Plans.

3.5 Tenant shall be responsible for delays and additional costs in completion of Tenants improvements caused bychanges made to any of Tenant's Plans after the delivery dates specified above in this Section 3, by inadequacies in any of Tenant'sPlans, or by delays in delivery of special materials requiring long lead times, and for any other costs or expenses that do not resultfrom the negligence or default of Landlord.

SECTION 4. CONSTRUCTION OF TENANT IMPROVEMENTS

4.1 Upon completion of the Working Plans, Landlord and its contractor shall commence work on the Premises and buildout the improvements specified in the Plans.

4.2 If Tenant desires any change to its improvements, Tenant shall submit a written request for such change to Landlord,together with all plans and specifications necessary to show and explain changes from the approved Working Plans. Any suchchange shall be subject to Landlord's approval. If Landlord's contractor is constructing Tenant's improvements, Landlord or suchcontractor shall notify Tenant in writing of the amount, if any, which will be charged or credited to Tenant to reflect the cost of suchchange.

4.3 If any work is to be performed in connection with the improvements on the Premises by Tenant's contractor, suchwork shall conform to the following requirements:

4.3.1Such work shall proceed only upon Landlord's written approval of the public liability and property damageinsurance carried by Tenant's contractor. Landlord shall have the right to require Tenant's contractor to post a payment orperformance bond in an amount equal to the estimated cost of the work to be performed by such contractor. Tenant shall supply


Exhibit

Please Initial

Landlord Tenant

Page 0 of

Landlord with the name, address, and emergency telephone number for Tenant's contractor and all subcontractors retained by

Tenants contractor.

4.3.2A11 such work shall be done in conformity with valid building and other permits when required, copies of

which shall be furnished to Landlord before such work Is commenced, and in any case, all such work shall be performed in

accordance with all applicable governmental regulations and all applicable safety regulations established by Landlord or Its

contractor for the Building generally. Notwithstanding any failure by Landlord to object to any such work, Landlord shall have no

responsibility for Tenant's failure to comply with all applicable governmental regulations.

4.3.3A11 such work shall be scheduled through Landlord and shall be performed in a manner and at times which

do not impede or delay any work on the Premises being performed by Landlord's contractor.

4.3.4Tenant's contractor shall store any materials only in the Premises or in such other space as may be

designated by Landlord or its contractor from time to time. All trash and surplus construction materials shall also be stored within

the Premises and shall be promptly removed from the Building.

4.4 Tenant's entry into the Premises for any purpose, including without limitation inspection or performance of work by

Tenant's contractor, prior to the Commencement Date, shall be subject to all the terms and conditions of the Lease, including

without limitation the provisions of the Lease relating to the maintenance of insurance and indemnification by Tenant, but excluding

the provisions of the Lease relating to the payment of rent. Tenant's entry shall mean entry by Tenant, its officers, contractors,

licensees, agents, servants, employees, guests, invitees, or visitors.

4.5 Tenant shall indemnify and hold harmless Landlord from and against any and all claims, losses, liabilities, and

expenses (including without limitation attorneys' fees) arising out of or in any way related to the activities of Tenant's contractors

(and any subcontractors) in the Premises or the Building. Without limiting the generality of the foregoing, Tenant shall promptly

reimburse Landlord upon demand for any extra expense incurred by Landlord as a result of faulty work done by Tenant or its

contractors, any delays caused by such work, or inadequate clean-up.

4.6 If Landlords contractor is to construct Tenant's improvements Landlord's contractor shall complete the improvements

in accordance with the Working Plans. Any additional amounts payable by Tenant for the actual cost of the improvements shall be

paid on or before the commencement of the Lease, or upon receipt of the final accounting. If cash is deposited by Tenant as

provided above in this Section 4, any excess paid by Tenant over the actual cost of the improvements shall be promptly refunded to

Tenant by Landlord.

4.7 If Tenant desires any change to its improvements, Tenant shall submit a written request for such change to Landlord,

together with all plans and specifications necessary to show and explain changes from the approved Working Plans. Any such

change shall be subject to Landlords approval. If Landlord's contractor is constructing Tenant's improvements, Landlord or such

contractor shall notify Tenant in writing of the amount, if any, which will be charged or credited to Tenant to reflect the cost of such

change.

4.8 If any work is to be performed in connection with the Improvements on the Premises by Tenant's contractor asprovided in Section 4.1 of this Work Agreement, such work shall conform to the following requirements:

4.8.1 Such work shall proceed only upon Landlord's written approval of the public liability and property damage

Insurance carried by Tenant's contractor. Landlord shall have the right to require Tenant's contractor to post a payment orperformance bond in an amount equal to the estimated cost of the work to be performed by such contractor. Tenant shall supplyLandlord with the name, address, and emergency telephone number for Tenant's contractor and all subcontractors retained byTenant's contractor.

4.8.2A11 such work shall be done in conformity with valid building and other permits when required, copies ofwhich shall be furnished to Landlord before such work is commenced, and in any case, all such work shall be performed inaccordance with all applicable governmental regulations and all applicable safety regulations established by Landlord or itscontractor for the Building generally. Notwithstanding any failure by Landlord to object to any such work, Landlord shall have noresponsibility for Tenants failure to comply with all applicable governmental regulations.

4.8.3A11 such work shall be scheduled through Landlord and shall be performed In a manner and at times whichdo not Impede or delay any work on the Premises being performed by Landlord's contractor.

4.8.4Tenant's contractor shall store any materials only in the Premises or in such other space as may be

designated by Landlord or its contractor from time to time. All trash and surplus construction materials shall also be stored withinthe Premises and shall be promptly removed from the Building.

4.9 Tenant's entry into the Premises for any purpose, including without limitation inspection or performance of work by

Tenants contractor, prior to the Commencement Date, shall be subject to all the terms and conditions of the Lease, includingwithout limitation the provisions of the Lease relating to the maintenance of insurance and indemnification by Tenant, but excludingthe provisions of the Lease relating to the payment of rent. Tenant's entry shall mean entry by Tenant, its officers, contractors,licensees, agents, servants, employees, guests, invitees, or visitors.

4.10 Tenant shall indemnify and hold harmless Landlord from and against any and all claims, losses, liabilities, and

expenses (including without limitation attorneys' fees) arising out of or in any way related to the activities of Tenant's contractors(and any subcontractors) in the Premises or the Building. Without limiting the generality of the foregoing, Tenant shall promptlyreimburse Landlord upon demand for any extra expense incurred by Landlord as a result of faulty work done by Tenant or itscontractors, any delays caused by such work, or inadequate clean-up.


Exhibit Pageof

Please Initial

Landlord Tenant

AMENDMENT TO RETAIL LEASEDATED FEBRUARY 18, 2010

This Amendment to Retail Lease ("Amendment') is between Pearl PDX, LLC and

PlayDate PDX, LLC and is deemed effective on May 6, 2015, regardless of subsequent

execution by the parties.

RECITALS:

A. On February 18, 2010, Michael Allport and PlayDate PDX, LLC ("Tenant")

executed a retail lease dated February 18, 2010 (the 'Lease), for certain commercial

space located at 1434 NW 17th Avenue, Portland, Oregon.

B. Subsequent to the execution of the Lease, Michael Allport assigned his

interest in the Lease to Shaowen Yu and Jiamin Gao, who subsequently assigned their

interest in the Lease to Pearl PDX, LLC ("Landlord").

C. Landlord and Tenant desire to amend the Lease, as set forth in this

Amendment.

NOW, THEREFORE, in consideration of the foregoing premises and the

covenants set forth below, the receipt and sufficiency of which is hereby acknowledged

by the parties, the parties agree as follows:

1. Base Rent. Effective June 1, 2015, Section 1(b) of the Lease is stricken in

its entirety, no longer of any force or effect, and replaced with the following:

Base Rent between June 1, 2015 and June 30, 2021 shall be $7,250 per month.

Base Rent between July 1, 2021 and June 30, 2026, shall be $7,750 per month.

This provision assumes Tenant exercises both 5 year options set forth in Rider #1 to the Lease. Nothing in this provision is intended to require Tenant to exercise

any option to extend the term of the Lease.

2. NNN Expenses. Effective June 1, 2015, Section 3(a) of the Lease is

stricken in its entirety, no longer of any force or effect, and replaced with the following:

In addition to Base Rent, starting June 1, 2015, Tenant shall pay to Landlord 22

cents per square foot per month as its contribution to NNN expenses. Theparties agree that Tenant's Premises comprise 7,652 square feet. BeginningJune 1, 2016, and continuing on June 1 or each subsequent year, Tenant'sobligation to pay this additional rent shall increase by 1 cent. For example,between June 1, 2016 and May 30, 2017, Tenant shall pay 23 cents per squarefoot per month and between June 1, 2017, and May 30, 2018, Tenant shall pay24 cents per square foot per month, Tenant shall pay this obligation to Landlord

Exhibit

on or before the first day of each month. This monthly payment shall constitute

Tenant's only obligation with respect to payment of NNN expenses to Landlord.

3. Payment of NNN Expenses. Effective June 1, 2015, Section 3(b) of the

Lease is stricken in its entirety and no longer of any force or effect.

4. Utilities. Effective May 6, 2015, Section 9 of the Lease is stricken in its

entirety and no longer of any force or effect, It shall be replaced with the

following:

Tenant shall arrange and pay for regular pickup of trash, garbage, and

recycling, and shall store such trash, garbage, and recycling in only those

areas reasonably designated by Landlord. Tenant shall comply with any

recycling programs required by law. Once Landlord installs a separate

meter for water/sewer for Tenant's Premises, Tenant shall also pay for its

water/sewer usage. The costs of all other common utilities used or

consumed by Tenant is included in the NNN payments required by

Section 2 herein. Landlord shall not be liable or responsible for any

interruption of utility service to the Premises and any such interruption

shall not entitle Tenant to any abatement of rent, unless such interruption

is caused solely by the negligence of Landlord.

5. Parking. Effective May 6, 2015, Section 5(f) of the Lease is amended as

follows:

Any reference to parking in Section 5(f) of the Lease is stricken in its

entirety and no longer of any force or effect. The parking agreement

between the parties is set forth in Exhibit A attached hereto and

incorporated herein by this reference. Further, the back parking lot will be

designated for customers only. Landlord will enforce the parking

requirements among all tenants in the building and will do so in an even-

handed and uniform manner, without favoring one tenant over another

tenant.

6. Determination of Rent During Option. Effective May 6, 2015, Section 2

{Determination of Rent) of Rider # 1 to the Lease is stricken in its entirety and no longer

of any force or effect. Rather, the amount of Base Rent during any extended term of the

Lease shall be governed by paragraph 1 of this Amendment. Landlord acknowledges

that, as of May 6, 2015, no event has occurred that would allow Landlord to reject

Tenant's attempt to exercise the Option To Extend granted by Rider # 1 to the Lease.

(Exhibit Page )-3 of

7. Effect on Lease. Except as amended herein, the Lease remains in fullforce and effect. However, if any provision in this Amendment conflicts with anyprovision in the Lease. the provision of this Amendment shall control.

PLAYDATE PD

By Name: ?„,,,text-Title: A.( Mdse

PEARL PDX LLC

By .„.--r,?-=

Name* 511 et owe X,41111c: 0 Ywilps

11.$0.6011PLAVOATES 5121lt5 VERSIOk OF LEASE AMEMOVENT 102110744/0

ExhibitPage 2-14 of )

A Lew Ame,41

----- Forwarded MessageFrom: Pearl PDX <[email protected]>Date: Wed, 8 Apr 2015 19:57:50 -0700To: Pearl PDX <[email protected]>Subject: Parking Lot

Dear Tenants,

From everyone's responses, it seems that option 3 (3 Kt parking in the back and the front spaces divided by tenant)would accommodate most peoples needs. We also believe this plan would best fit the current parking situation.

We have been monitoring the front and back parking lot over the past week or so (see the attached pictures - theyare actually from 1 hour after the time stamp says, since the system clock never changed for daylight savings)* andcongestion in the lot does not seem quite as bad as we had feared it would be. The changes to street parking haveundoubtedly helped, since they have encouraged more movement and therefore spaces opening up morefrequently. This has also made it easier for those who have gotten their M zone permits to find street parkingduring the day.

That said, we believe continuing with a parking plan would still improve the overall parking situation, especially withregard to people parking in the lot and then going to other buildings, as well as being a good way to forestall futurecongestion. We axe hoping that option 3 will work best to prevent that behavior while also giving us someflexibility in terms of the use of parking spots.

We are attaching the current plan for the tenant-specific spaces in the front lot. The amount of parking spot(s) pertenant was determined by the size of each tenant's space and the location of the spot(s) was placed as close to saidspace as possible. One of the U. S. Wushu spots will be designated as a general property management/servicespot.

ExhibitPage 5of g

For the back parking lot, we will place 3 hour parking signs up around the lot, except for the Northeast comer,which is state property and will remain unregulated (see attached picture).

As we mentioned in the previous e-mail, these restrictions would only be in place between 9 am and 6pra (withovernight parking also prohibited without a permit). We will be trying out various methods for monitoring the lot,starting with spot checks of the surveillance cameras. If that proves ineffective, we will look into contracting atowing company to monitor the lot.

Because we axe unsure how things will be developing in the future, this is very much an experiment. That is why,after 3 months, we plan to evaluate how the system is working and whether you and your customers are satisfied.

Thank you all so much for your input!

Pearl PDX LLC Management [email protected]

*There is one photo from April 2nd of what appears to be someone dumping cardboard in our recycling dumpster -which is a good reminder to all of us to keep the dumpsters locked!

----- End of Forwarded Message

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ExhibitPage 2.A of _L

t

Pearl PDX Property Rulesv-2.0 Sept 16, 2015

West Covered Walkway1. The walkway must have a cleared area at least 5-foot wide at all times.2. The area within a 3-foot radius from the fire sprinkler valve must be kept clear at all times.3. Tenant must ensure that the walkway west of Tenant's premises is free of trash and

obstructions overnight.4. Smoking is prohibited on the walkway.5. Do not dispose of cigarettes in the planters (this is a fire hazard!).6. Bikes must be locked to a bike rack and not a railing.7. Unattended animals are prohibited at all times. Animals are prohibited inside the building

unless expressly permitted by law.8. Tenant use of the walkway for a business purpose obligates Tenant to (a) keep the

walkway clean and safe at all times and (b) obtain liability insurance equivalent to thatrequired by Tenant's lease and provide proof of such insurance to Landlord.

Common Areas1. Common area bathrooms are the 3 single unisex bathrooms in the common hallway.2. The common hallway must be kept free of obstructions at all times.3. Smoking is prohibited within 10 feet of a building entrance.4. Shower use is prohibited without Landlord's prior written permission and payment of a

user fee.5. Tenants who use hallway to load/unload shipments must keep such activities as short as

possible and clean up afterwards.

Parking1. East/back parking is for customers only and is limited to 3 hours maximum from 9:00 am

to 6:00 pm.2. West/front parking spots are labeled by tenant.3. Parking signs must be obeyed at all times.4. Overnight parking is prohibited without Landlord's prior written permission.

These rules are incorporated by reference into Tenant's lease with Pearl PDX LLC. Violation ofthese rules is a breach of the lease. Repeated violations may incur cleaning fees or similarcharges.

Exhibit .)--

Page l of ___I—._

Page 7 of 10

From: THORESON Rebecca L * Becky On Behalf Of Ask ODOTSent: Friday, May 09, 2014 1:48 PMTo: MUMA Steven LCc: SMITH David S; STRAUCH Michael LSubject: Yu, Shaowen

<< File: —CiB9B5.pdf >> << File: yu map.pdf»

Gentlemen: I believe Steven will be the primary contact for Mr. Yu because his

biggest issue is to determine where ODOT property drops off and his begins. If we

can help him with this he will be able to monitor the vehicles that are trespassing and

have them towed which should deter other people from encroaching on his customerparking spaces. I think David can confirm if signs are needed and someone fromROW can let Mr. Yu know if or when that might happen.

However, if we would post the area as no parking/no trespassing we may also be able

to avoid future problems if someone decides to make this area permanent employee or

transient parking. Even though it barely accommodates 2 vehicles people are trying to

squeeze more into a tight space. If we ever need to access it for maintenance work itwould be impossible for any ODOT workers or vehicles to get into the area.

Please respond to this inquiry within 5 business days (5/16/14) or forward to theappropriate person upon receipt.Also, please provide a copy of the response by e-mail to [email protected]<mailto:[email protected]> or provide confirmation that the citizen hasbeen contacted, for our records. (A11 referrals from ASK ODOT are monitored underagency performance measures with the standard response of 5 business days.)Thank you for your assistance in this matter and, please don't hesitate to contact me ifyou have any questions.

BeckyRebecca L. ThoresonODOT Citizens' RepresentativeMS 11 355 Capitol St. NESalem, OR. 97301-3871503-986-4366 Fax [email protected] <mailto:[email protected]>

[email protected] <mailto:[email protected]>"Your aspirations are your possibilities."(Samuel Johnson)

Exhibit 3Page I of -1

http://odotremedy/arsys/servlet/ReportServlet/1439831521416 8/17/2015

Page 8 of 10

From: MUMA Steven LSent: Friday, May 16, 2014 8:24 AMTo: Ask ODOTCc: SMITH David S; STRAUCH Michael LSubject: RE: Yu, Shaowen

All,

I spoke with Mr. Yu (Shaowen) this morning at 8:15AM. I relayed to him that we(Survey Unit) have been researching R/W in the issue area. We will have a surveycrew on site today looking for evidence of existing R/W. I told Shaowen that theODOT R/W line in the area will be staked either this afternoon, or Monday at thelatest.

He wanted to know if signs were going to be erected. I told him that was up to ourMaintenance forces and that I was going to send you all an email letting you know Ihave contacted him.

Let me know if you need anything else.

Working together,Steven L. Muma, PLSRegion Right-of-Way & Survey Units ManagerRegion 1 Technical Center123 NW Flanders StreetPortland, Oregon 97209Office: (503) 731-3240Cell: (503) 341-7890FAX: (503) 731-8531Email - mailto:[email protected],or.us

5/12/14 Very impatient customer - he called this morning because no one has come tosee him about the parking issue. I assured him someone would contact him by the endof the week but because they have other jobs scheduled for maintenance and etc. hisissue may not have a priority status. Becky

Wants information about the location of ROW line and parking under 1405:

Mr. Yu's business abuts the ramp on I 405 at Quinby and 16th Street. His customerparking lot is being used as overflow parking by area employees who park under theramp which allows for 2 1/2 parking spaces and when it is full they use his parking.Although the ODOT ROW is posted as "No Parking and No Trespassing" further upthe street it is not posted in this area.He would like to know where ODOT't property line is located so he can paint a linealong his parking lot and post it for subject to towing signage. He would also likeODOT to post the area under the ramp behind his store as "No Parking" so the publicdoes not use the area. He would like to see the ODOT ROW map and use theinformation on footage designated as state ROW.He has confronted the people parking in this area and asked them to stay off of his

http ://odotremedy/arsys/servlet/ReportServlet/1439831521416Exhibit Page ;-)- of 1 8/17/2015

Page 9 of 10

property. He indicated that some of them were rude and told him to prove they are onhis lot. He does not want to accidently tow a customers vehicle which is why hehesitates to call a towing service.

From: THORESON Rebecca L * Becky On Behalf Of Ask ODOTSent: Friday, May 09, 2014 1:48 PMTo: 'MUMA Steven L'Cc: 'SMITH David S; STRAUCH Michael LSubject: Yu, Shaowen

Gentlemen: I believe Steven will be the primary contact for Mr. Yu because hisbiggest issue is to determine where ODOT property drops off and his begins. If wecan help him with this he will be able to monitor the vehicles that are trespassing andhave them towed which should deter other people from encroaching on his customerparking spaces. I think David can confirm if signs are needed and someone fromROW can let Mr. Yu know if or when that might happen.

However, if we would post the area as no parking/no trespassing we may also be ableto avoid future problems if someone decides to make this area permanent employee ortransient parking. Even though it barely accommodates 2 vehicles people are trying tosqueeze more into a tight space. If we ever need to access it for maintenance work itwould be impossible for any ODOT workers or vehicles to get into the area.

Please respond to this inquiry within 5 business days (5/16/14) or forward to theappropriate person upon receipt.Also, please provide a copy of the response by e-mail to [email protected]<mailto:[email protected]> or provide confirmation that the citizen hasbeen contacted, for our records. (All referrals from ASK ODOT are monitored underagency performance measures with the standard response of 5 business days.)Thank you for your assistance in this matter and, please don't hesitate to contact me ifyou have any questions.

BeckyRebecca L. ThoresonODOT Citizens' RepresentativeMS 11 355 Capitol St. NESalem, OR 97301-3871503-986-4366 Fax [email protected] <mailto:Rebecca.L.Thoreson odot.state.or.us>

[email protected] <xnailto:[email protected]>"Your aspirations are your possibilities."(Samuel Johnson)

http://odotremedy/arsys/servlet/ReportServlet/1439831521416 Exhibit S 8/17/2015

Page 10 of 10

Exhibithttp://odotremedy/arsys/servlet/ReportServlet/1439831521416 Page 1-4 of 8/17/2015

Since there's an apparent issue with parking at this location, l would put up signs if we can.One of the businesses (Play Date PDX) gets very busy. Parking is very limited and streetparking fills up. Since this whole area is paved, its hard to tell whether parking is allowedalong the eastern border of the lot (ODOT's property). l think the placement of the"customer parking only" sign makes it even more confusing for people entering the lot andlooking for a parking spot.

Let me know if you want to discuss.

Thanks,--Tamara

From: STRAUCH Michael L

Sent: Monday, May 18, 2015 3:55 PMTo: PATRICK Tamara S * ODOT; Ask ODOT; DAGNESE Susanne L; MILLER Theodore C; COWLES DavidD; PETERS Jacob DSubject: RE: cit rep inquiry by phone - Eva Menek

Sue,

Do you know if this area would require a traffic study to add the signs or not? l guessthe second question would go to Tamara: What is your recommendation for this lot?Signs or no signs? l am not very familiar with this site so we can go with what makesthe most sense here

Thanks,

Michael Strauch

ODOT 2B District Manager

971-673-6215 Office503-519-6665 Cell

From: PATRICK Tamara S * ODOT

Sent: Monday, May 18, 2015 2:13 PMTo: Ask ODOT; DAGNESE Susanne L; MILLER Theodore C; STRAUCH Michael L; COWLES David DSubject: RE: cit rep inquiry by phone - Eva Menek

I just talked to Ms. Menek and her boss (Shaowen Yu), who owns the building. He is notinterested in leasing the property and would like to have the ODOT property signed for NoParking.

So, the sign issue isn't moot after all.

Thanks,—Tamara

Exhibit 3

Page___a_of -7

From: PATRICK Tamara S * ODOTTo: 'Tear! PDX"

Subject: RE: Lease of ODOT Property at NW 16th and NW Quimby

Date: Wednesday, May 20, 2015 8:36:26 AM

Even if our rules/regulations allowed us to make this area No Parking (through signageand/or pavement markings), pavement markings don't physically restrict use of the area.People can still put their cars there — and often figure out pretty quickly that "no parking"isn't being enforced. So, we'd want to make the area inaccessible to cars to truly resolvethe issue.

Let me know if you'd like to discuss.

Thanks,--Tamara

From: Pearl PDX [mailtoSent: Tuesday, May 19, 2015 4:31 PMTo: PATRICK Tamara S * ODOTSubject: Re: Lease of ODOT Property at NW 16th and NW Quimby

Hello Tamara,

Thank you so much for this! We wanted to ask about a possible alternative if we ended up notleasing. Could you just stripe that section of the parking lot with diagonal no parking stripesrather than making and policing a sign?

Let us know what you think!

Thank you!

Pearl PDX LLC Mana ement Team

On Tue, May 19, 2015 at 4:12 PM, PATRICK Tamara S * ODOT‹"Famara,S.PATR [email protected]> wrote:As you requested, I am sending you information on leasing the ODOT property on thesouthwest corner of NW 16th and NW Quimby in Portland. The lease term would be for 5years, with two possible 5 year extensions. The initial monthly lease amount is based on arate of $.135 per square foot per month for the 2,000 square foot leased area. Themonthly lease amounts would be:

Year 1 - $270 per monthYear 2 - $278 per monthYear 3 - $286 per monthYear 4 - $295 per monthYear 5 - $304 per month

I've attached a sample lease document for your information. If you are interested in movingforward with a lease, please let me know. Also, I will need the following information inorder to get the process started:

Exhibit Page of

From: PATRICK Tamara S * ODOT

To: "Pearl PDX"; '2liam.5111111111Mir

Subject: RE: Lease of ODOT Property at NW 16th and NW Quimby

Date: Friday, July 10, 2015 3:46:53 PM

Attachments: 36134-LA Lease (US WUSHU Ctr).docExhibit A,pdf

Attached is the lease document for the property at NW 16th Ave. and NW Quimby St. The lease allows

use of the property for parking beginning August 1, 2015. The lease rate is $270 per month for the first

year. See page 2 of the lease for the rate for subsequent years. Please print the lease (including the

color exhibit) and have it signed on behalf of U.S. WUSHU CENTER INCORPORATED. Please return

the signed lease to me, along with (a) check in the amount of $270 for the first month's rent and (b) a

certificate of insurance showing that the required insurance is in place,. (See Section 16 of the lease for

the insurance requirements — including naming ODOT etc. as an additional insureds.)

If you have any questions, please let me know.

Thanks,--Tamara

From: PATRICK Tamara S * ODOTSent: Thursday, July 02, 2015 3:48 PMTo: 'Pearl PDX'Subject: RE: Lease of ODOT Property at NW 16th and NW Quimby

I'll have them update the info. I should have the lease document sometime next week.

Thanks,--Tamara

From: Pearl PDX [mailto:pearlpdxlIcOgmail,com]Sent: Wednesday, July 01, 2015 6:58 PMTo: PATRICK Tamara S * ODOTSubject: Re: Lease of ODOT Property at NW 16th and NW Quimby

Hello Tamara,

We would like to change the lessee name from Pearl PDX LLC to U. S. Wushu Center, Inc.

The rest of the information will remain the same, except for the e-mail address which will beuswashu(4,,mail.com.

Please let us know if you need anything as we would like to get this signed as soon aspossible.

Thank you!

Pearl PDX LLC Management Teampearlpdx110_,,i)gmail.com

On Wed, Jun 24, 2015 at 9:26 AM, PATRICK Tamara S * ODOT<Tamara.S,PATRIC1Wodot,state.or.us> wrote:

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Complaint PlayDate v Pearl PDX Sept 2015