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Exhibit 10.22
Standard Form of OFFICE BUILDING LEASE Developed by PORTLAND
METROPOLITAN ASSOCIATION OF BUILDING OWNERS AND MANAGERS
OFFICE LEASE
This Lease, made and entered into at Portland, Oregon, this 20th
day of June, 2005 by and between
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LANDLORD:
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Union Bank of California as Trustee for Quest
Group Trust VI
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and
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TENANT:
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Pixelworks, Inc.
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Landlord hereby leases to Tenant
the following: approximately 52,921 rentable square feet known as
Suites 103-400 for a period of March 1, 2006 through
July 31, 2006 and 55,821 rentable square feet known as Suites
100-400 from August 1, 2006 through February 28, 2009 and
depicted on Exhibit A attached hereto ( the
Premises ), that is located in that certain building located at
8100 S.W. Nyberg Road, Tualatin, Oregon, containing approximately
55,821 rentable square feet as depicted/described on Exhibit B
attached hereto (the Building) .
Tenant’s Proportion Share for purposes of Section 19
shall be 95% from March 1, 2006 through July 31, 2006 and
100% from August 1, 2006 through February 28, 2009.
This Lease is for a term commencing March 1, 2006
and continuing through February 28, 2009 at a Monthly
Base Rental as follows:
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March 1, 2006 through July 31,
2006
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$104,685 per month
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August 1, 2006 through December 31,
2006
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$110,908 per month ($23.84 per square foot
annually)
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January 1, 2007 through July 31,
2007
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$111,887 per month ($24.05 per square foot
annually)
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August 1, 2007 through August 31,
2007
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$112,007 per month ($24.08 per square foot
annually)
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September 1, 2007 through December 31,
2007
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$114,251 per month ($24.56 per square foot
annually)
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January 1, 2008 through January 31,
2009
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$115,263 per month ($24.78 per square foot
annually)
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February 1, 2009 through February 28,
2009
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$115,773 per month ($24.89 per square foot
annually)
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Rent is payable in advance on
the first day of each month commencing March 1,
2006.
Landlord and Tenant covenant and agree as follows:
1.1 Delivery of Possession.
Should Landlord be unable to deliver possession of the Premises
on the date fixed for the commencement of the term, commencement
will be deferred and Tenant shall owe no rent until notice from
Landlord tendering possession to Tenant. During the period from the
scheduled Commencement Date to the actual Commencement Date, Tenant
shall continue to occupy the Premises under the terms of its
lease(s) and sublease(s) of the Premises (the "Current Lease"). If
possession is not so tendered within 90 days following
commencement of the term, then Tenant may elect to cancel this
Lease by notice to Landlord within 10 days following
expiration of the 90-day period. Landlord shall have no liability
to Tenant for delay in delivering possession, nor shall such delay
extend the term of this Lease in any manner unless the parties
execute a written extension agreement.
2.1 Rent Payment.
Tenant shall pay the Base Rent for the Premises and any
additional rent provided herein without deduction or offset. Rent
for any partial month during the lease term shall be prorated to
reflect the number of days during the month that Tenant occupies
the Premises. Additional rent means amounts determined under
Section 19 of this Lease and any other sums payable by Tenant
to Landlord under this Lease. Rent not paid when due shall bear
interest at the rate of one-and-one-half percent per month until
paid. Landlord may at its option impose a late charge of $.05 for
each $1 of rent for rent payments made more than 10 days late
in lieu of interest for the first month of delinquency, without
waiving any other remedies available for default. Failure to impose
a late charge shall not be a waiver of Landlord’s rights
hereunder.
3.1 Lease Consideration.
Upon execution of the Lease, Tenant has paid the Base Rent for
the first full month of the lease term for which rent is payable
and in addition has paid the sum of $76,391 as lease consideration
in addition to the $39,382 Landlord is already holding . The
total security deposit is $115,773. Landlord may apply the lease
consideration to pay the cost of performing any obligation which
Tenant fails to perform within the time required by this Lease,
following any applicable notice and cure period, but such
application by Landlord shall not be the exclusive remedy for
Tenant’s default. If the lease consideration is applied by
Landlord, Tenant shall on demand pay the sum necessary to replenish
the lease consideration to its original amount. To the extent not
applied by Landlord to cure defaults by Tenant, the lease
consideration shall be applied to costs at the end of the Lease
term, including but not limited to, repairs in excess of "normal
wear and tear" and reconciliation of operating expenses. Any
portion of the lease consideration not used to cover the end of
term expenses shall be refundable. If Tenant is in default under
this Lease more than two (2) times within any twelve-month
period, irrespective of whether or not such default is cured, then
without limiting Landlord’s other rights and remedies
provided for in this Lease or at law or equity, the lease
consideration shall automatically be increased by an amount equal
to two (2) times the original lease consideration.
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4.1 Use.
Tenant shall use the Premises as business for corporate business
office and operation of an electronics engineering and testing
laboratory and for no other purpose without Landlord’s
written consent. In connection with its use, Tenant shall at its
expense promptly comply and cause the Premises to comply with all
applicable laws, ordinances, rules and regulations of any public
authority and shall not annoy, obstruct, or interfere with the
rights of other tenants of the Building; provided, however, that in
no event shall Tenant be responsible for compliance of the Premises
or the Building with any laws relating to fire, life, safety, or
accessibility, and the same shall be the sole responsibility of
Landlord. Tenant shall create no nuisance nor allow any
objectionable fumes, noise, or vibrations to be emitted from the
Premises. Tenant shall not conduct any activities that will
increase Landlord’s insurance rates for any portion of the
Building or that will in any manner degrade or damage the
reputation of the Building.
4.2 Equipment.
Tenant shall install in the Premises only such office equipment
as is customary for general office use and shall not overload the
floors or electrical circuits of the Premises or Building or alter
the plumbing or wiring of the Premises or Building. Landlord must
approve in advance the location of and manner of installing any
wiring or electrical, heat generating or communication equipment or
exceptionally heavy articles. All telecommunications equipment,
conduit, cables and wiring, additional dedicated circuits and any
additional air conditioning required because of heat generating
equipment or special lighting installed by Tenant shall be
installed and operated at Tenant’s expense. Landlord shall
have no obligation to permit the installation of equipment by any
telecommunications provider whose equipment is not then servicing
the Building. Anything to the contrary contained in this Section
notwithstanding, Landlord acknowledges and agrees that the
equipment and improvements currently located and used in the
Premises under the Current Lease is approved and may be used by
Tenant without further approval.
4.3 Signs.
No signs, awnings, antennas, or other apparatus shall be painted
on or attached to the Building or anything placed on any glass or
woodwork of the Premises or positioned so as to be visible from
outside the Premises without Landlord’s written approval as
to design, size, location, and color. All signs installed by Tenant
shall comply with Landlord’s standards for signs and all
applicable codes and all signs and sign hardware shall be removed
upon termination of this Lease with the sign location restored to
its former state unless Landlord elects to retain all or any
portion thereof. Anything to the contrary contained in this Section
notwithstanding, Landlord acknowledges and agrees that all signs,
attachments, window coverings, and other items described in this
Section that are currently located on the Premises, as well as
replacements thereof, are approved by Landlord.
Tenant, at its sole expense, shall have the right to erect an
illuminated sign per Exhibit G at a location that is mutually
acceptable as long as it meets Class A standards. The exterior
sign will be subject to Landlord and City of Tualatin approval.
Landlord approval shall not be unreasonably withheld. Tenant shall
also have the right to install non-illuminated signage at interior
locations. Tenant agrees to absorb the cost to remove all signage
at the end of the Lease term.
Tenant, at its sole expense, shall have the right to locate a
monument at the entrance to the property per Exhibit H,
subject to design approval by Landlord, which shall not be
unreasonably withheld. Tenant shall not be required to remove the
monument at the end of the Lease term.
Tenant, at its sole expense, shall have the right to locate a
decorative rock in the Building, subject to the following: 1)
Tenant shall provide Landlord with an engineering report which
confirms that the method of installation shall not damage the
existing Building structures; 2) Exact location of decorative rock
is subject to Landlord approval; and 3) Any damage caused by the
decorative rock during the Lease term or as a result of its removal
shall be the responsibility of Tenant.
5.1 Utilities and Services.
Landlord will furnish water and electricity to the Building at
all times and will furnish heat and air conditioning (if the
Building is air conditioned) during the normal Building hours as
established by Owner, which in no event shall be less than 7:00
a.m. to 6:00 p.m., Monday through Friday . Janitorial service
will be provided in accordance with the specifications set forth on
Exhibit E attached hereto. Tenant may elect, with 60 days
notice, to provide their own janitorial service, and upon so doing,
the Monthly Base Rental will be reduced by the amount of monthly
charges incurred by the Landlord for the current janitorial
service. Tenant agrees to use a janitorial contractor signatory to
all applicable collective bargaining agreements. Tenant shall
comply with all government laws or regulations regarding the use or
reduction of use of utilities on the Premises. Interruption of
services or utilities shall not be deemed an eviction or
disturbance of Tenant’s use and possession of the Premises,
render Landlord liable to Tenant for damages, or relieve Tenant
from performance of Tenant’s obligations under this Lease,
unless such interruption is caused by Landlord’s negligence
or willful misconduct. Landlord shall take all reasonable steps to
correct any interruptions in service. Electrical service furnished
will be 110 volts unless different service already exists in the
Premises. Tenant shall provide its own surge protection for power
furnished to the Premises.
5.2 Extra Usage.
If Tenant uses excessive amounts of utilities or services of any
kind because of operation outside of normal Building hours, high
demands from office machinery and equipment, nonstandard lighting,
or any other cause, Landlord may impose a reasonable charge for
supplying such extra utilities or services, which charge shall be
payable monthly by Tenant in conjunction with rent payments.
Landlord acknowledges that Tenant’s utility and services
usage under the Current Lease is not excessive and no additional
charges will be imposed for such continued use under this Lease. In
case of dispute over any extra charge under this Section, Landlord
shall designate a qualified independent engineer
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whose decision shall be
conclusive on both parties. Landlord and Tenant shall each pay
one-half of the cost of such determination.
5.3 Security.
Landlord may but shall have no obligation to provide security
service or to adopt security measures regarding the Premises, and
Tenant shall cooperate with all reasonable security measures
adopted by Landlord. Tenant may install a security system within
the leased Premises, with Landlord’s written consent, which
will not be unreasonably withheld. Landlord acknowledges that
Tenant’s current security system is acceptable. Landlord will
be provided with an access code to any security system and shall
not have any liability for accidentally setting off Tenant’s
security system. Landlord may modify the type or amount of security
measures or services provided to the Building or the Premises at
any time.
6.1 Maintenance and Repair.
Landlord shall maintain and repair in good condition the
Building structure, roof, exterior walls and doors, exterior
windows and common areas of the Building, and the electrical,
mechanical, plumbing, heating and air conditioning systems,
facilities and components located in the Building that are used in
common by all tenants of the Building (including replacing building
standard light bulbs). Tenant shall maintain and repair the
Premises in good condition, including, without limitation,
maintaining and repairing all walls, floors, and ceilings (but not
any structural elements thereof), all interior doors, partitions
and windows, and all Premises systems, fixtures and equipment that
are not the maintenance responsibility of Landlord, as well as
damage caused by Tenant, its agents, employees, contractors or
invitees.
Landlord shall have no liability for failure to perform required
maintenance and repair unless written notice of such maintenance or
repair is given by Tenant and Landlord fails to commence efforts to
remedy the problem in a reasonable time and manner. Landlord shall
have the right to erect scaffolding and other apparatus necessary
for the purpose of making repairs, and Landlord shall have no
liability for interference with Tenant’s use because of
repairs and installations, provided that the same is performed in a
manner to minimize interference with Tenant’s use, to the
extent practicable, and completed as expeditiously as possible.
Except as otherwise set forth herein, Tenant shall have no claim
against Landlord for any interruption or reduction of services or
interference with Tenant’s occupancy, and no such
interruption or reduction shall be construed as a constructive or
other eviction of Tenant. Repair of damage caused by negligent or
intentional acts or breach of this Lease by Tenant, its employees
or invitees shall be at Tenant’s expense.
6.2 Alterations.
Tenant shall not make any alterations, additions, or
improvements to the Premises without Landlord’s prior written
consent which may be withheld in Landlord’s reasonable
discretion. The foregoing notwithstanding, Tenant may make
cosmetic, non-structural changes, e.g., painting, floor covering,
etc., without Landlord’s consent. Any such improvements,
alterations, wiring, cables or conduit installed by Tenant shall at
once become part of the Premises and belong to Landlord except for
removable machinery and unattached movable trade fixtures. Landlord
may at its option require that Tenant remove any improvements,
alterations, wiring, cables or conduit installed by or for Tenant
and restore the Premises to the original condition upon termination
of this Lease. Tenant shall not be responsible for the restoration
of any work done previous to the date this Lease is executed,
except for the restoration of the 2 nd floor
elevator lobby and corridor. Landlord shall have the right to
approve the contractor used by Tenant for any work in the Premises,
and to post notices of nonresponsibility in connection with work
being performed by Tenant in the Premises. Work by Tenant shall
comply with all laws then applicable to the Premises.
Tenant, at its sole expense, shall have the right at any time
during the Lease term of their current lease/sublease and future
lease terms, to construct a first floor reception area as indicated
on the attached Exhibit I. In addition, Tenant shall have the
right at any time during the Lease term to construct the showers on
the first floor per Exhibit J, with the cost to construct the
showers to be split equally between Landlord and Tenant.
7.1 Limitation of Liability.
The liability of Union Bank of California, Quest Investment
Management Inc. and Quest Property Management with regard to all
aspects of this Lease shall be limited to the assets of Quest Group
Trust VI, except if such liability arises out of or is caused by
Landlord’s negligence or willful misconduct, or its failure
to enforce the rules and regulations following notice from
Tenant.
7.2 Indemnity.
Tenant shall not allow any liens to attach to the Building or
Tenant’s interest in the Premises as a result of its
activities. Tenant shall indemnify and defend Landlord and its
managing agents from any claim, liability, damage, or loss
occurring on the Premises, arising out of any activity by Tenant,
its agents, or invitees or resulting from Tenant’s failure to
comply with any term of this Lease. Neither Landlord nor its
managing agent shall have any liability to Tenant because of loss
or damage to Tenant’s property or for death or bodily injury
caused by the acts or omissions of other Tenants of the Building,
or by third parties (including criminal acts).
7.3 Insurance.
Tenant shall carry liability insurance with limits of not less
than One Million Dollars ($1,000,000) combined single limit bodily
injury and property damage which insurance shall have an
endorsement naming Landlord and Landlord’s managing agent, if
any, as an additional insured, cover the liability insured under
Section 7.2 of this Lease, and be in form and with companies
reasonably acceptable to Owner. Prior to occupancy, Tenant shall
furnish a certificate evidencing such insurance which shall state
that the coverage shall not be cancelled or materially changed
without 10 days advance notice to Landlord and
Landlord’s managing agent, if any. A renewal certificate
shall be furnished at least 10 days prior to expiration of any
policy.
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8.1 Fire or Casualty.
"Major Damage" means damage by fire or other casualty to the
Building or the Premises which causes the Premises or any
substantial portion of the Building to be unusable, or which will
cost more than 25 percent of the pre-damage value of the
Building to repair, or which is not covered by insurance. In case
of Major Damage, Landlord may elect to terminate this Lease by
notice in writing to the Tenant within 30 days after such
date. Tenant may elect to terminate this Lease by written notice to
Landlord within such thirty (30) day period if
Landlord’s time to restore the Premises or the Building is
estimated to take more than ninety (90) days or if, after
having commenced the restoration of the Premises or the Building,
Landlord fails to complete the same in the time period for
completion stated prior to such commencement. If this Lease is not
terminated following Major Damage, or if damage occurs which is not
Major Damage, Landlord shall promptly restore the Premises to the
condition existing just prior to the damage. Tenant shall promptly
restore all damage to tenant improvements or alterations installed
by Tenant or pay the cost of such restoration to Landlord if
Landlord elects to do the restoration of such improvements. Unless
the casualty was caused by the negligence or willful misconduct of
Tenant, Rent shall be reduced from the date of damage until the
date restoration work being performed by Landlord is substantially
complete, with the reduction to be in proportion to the area of the
Premises not useable by Tenant.
8.2 Waiver of Subrogation.
Tenant shall be responsible for insuring its personal property
and trade fixtures located on the Premises and any alterations or
tenant improvements it has made to the Premises. Neither Landlord,
its managing agent nor Tenant shall be liable to the other for any
loss or damage caused by water damage, sprinkler leakage, or any of
the risks that are or could be covered by a special all risk
property insurance policy, or for any business interruption, and
there shall be no subrogated claim by one party’s insurance
carrier against the other party arising out of any such loss. This
waiver is binding only if it does not invalidate the insurance
coverage of either party hereto.
9.1 Eminent Domain.
If a condemning authority takes title by eminent domain or by
agreement in lieu thereof to the entire Building or a portion
sufficient to render the Premises unsuitable for Tenant’s
use, then either party may elect to terminate this Lease effective
on the date that possession is taken by the condemning authority.
Rent shall be reduced for the remainder of the term in an amount
proportionate to the reduction in area of the Premises caused by
the taking. All condemnation proceeds shall belong to Landlord, and
Tenant shall have no claim against Landlord or the condemnation
award because of the taking; provided, however, that nothing herein
shall prevent Tenant from pursuing and obtaining a separate award
or awards for loss of its leasehold interest, leasehold
improvements, moving expenses, and other claims.
10.1 Assignment and Subletting.
This Lease shall bind and inure to the benefit of the parties,
their respective heirs, successors, and assigns, provided that
Tenant shall not assign its interest under this Lease or sublet all
or any portion of the Premises without first obtaining
Landlord’s consent in writing. This provision shall not apply
to transfers by operation of law including, but not limited to,
mergers and changes in control of Tenant. No assignment shall
relieve Tenant of its obligation to pay rent or perform other
obligations required by this Lease, and no consent to one
assignment or subletting shall be a consent to any further
assignment or subletting. Landlord shall not unreasonably withhold
its consent to any assignment or subletting provided the effective
rental paid by the subtenant or assignee is not less than the
current scheduled rental rate of the Building for comparable space
and the proposed Tenant is compatible with Landlord’s normal
standards for the Building. If Tenant proposes a subletting or
assignment to which Landlord is required to consent under this
Section, Landlord shall have the option of terminating this Lease
for that portion of the Premises proposed to be assigned or sublet
and may lease the same directly to the proposed subtenant or
assignee. If an assignment or subletting is permitted, one-half of
any cash profit, or the net value of any other consideration
received by Tenant as a result of such transaction shall be
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