Exhibit 10.22Standard Form of OFFICE BUILDING LEASE Developed by PORTLAND METROPOLITAN ASSOCIATION OFBUILDING OWNERS AND MANAGERSOFFICE LEASEThis Lease, made and entered into at Portland, Oregon, this 20th day of June, 2005 by andbetween       LANDLORD: **Union Bank of California as Trustee for Quest Group Trust VI**         and       TENANT: **Pixelworks, Inc.**Landlord hereby leases to Tenant the following: approximately 52,921 rentable square feetknown as Suites 103-400 for a period of March 1, 2006 through July 31, 2006 and 55,821rentable square feet known as Suites 100-400 from August 1, 2006 through February 28, 2009and depicted on Exhibit A attached hereto (**the Premises**), that is located in thatcertain building located at 8100 S.W. Nyberg Road, Tualatin, Oregon, containingapproximately 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 throughJuly 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:   March 1, 2006 through July 31, 2006 $104,685 per monthAugust 1, 2006 through December 31, 2006 $110,908 per month ($23.84 per square foot annually)January 1, 2007 through July 31, 2007 $111,887 per month ($24.05 per square foot annually)August 1, 2007 through August 31, 2007 $112,007 per month ($24.08 per square foot annually)September 1, 2007 through December 31, 2007 $114,251 per month ($24.56 per square foot annually)January 1, 2008 through January 31, 2009 $115,263 per month ($24.78 per square foot annually)February 1, 2009 through February 28, 2009 $115,773 per month ($24.89 per square foot annually)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 thecommencement of the term, commencement will be deferred and Tenant shall owe no rent untilnotice from Landlord tendering possession to Tenant. During the period from the scheduledCommencement Date to the actual Commencement Date, Tenant shall continue to occupy thePremises under the terms of its lease(s) and sublease(s) of the Premises (the “CurrentLease”). If possession is not so tendered within 90 days following commencement of theterm, then Tenant may elect to cancel this Lease by notice to Landlord within 10 daysfollowing expiration of the 90-day period. Landlord shall have no liability to Tenant fordelay in delivering possession, nor shall such delay extend the term of this Lease in anymanner 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 hereinwithout deduction or offset. Rent for any partial month during the lease term shall beprorated 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 sumspayable by Tenant to Landlord under this Lease. Rent not paid when due shall bear interestat the rate of one-and-one-half percent per month until paid. Landlord may at its optionimpose a late charge of $.05 for each $1 of rent for rent payments made more than 10 dayslate in lieu of interest for the first month of delinquency, without waiving any otherremedies available for default. Failure to impose a late charge shall not be a waiver ofLandlord’s rights hereunder.**3.1 Lease Consideration.**Upon execution of the Lease, Tenant has paid the Base Rent for the first full month of thelease term for which rent is payable and in addition has paid the sum of $76,391 as leaseconsideration in addition to the $39,382 Landlord is already holding**.**The total securitydeposit is $115,773. Landlord may apply the lease consideration to pay the cost ofperforming any obligation which Tenant fails to perform within the time required by thisLease, following any applicable notice and cure period, but such application by Landlordshall not be the exclusive remedy for Tenant’s default. If the lease consideration isapplied by Landlord, Tenant shall on demand pay the sum necessary to replenish the leaseconsideration to its original amount. To the extent not applied by Landlord to cure defaultsby 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 reconciliationof operating expenses. Any portion of the lease consideration not used to cover the end ofterm 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 iscured, then without limiting Landlord’s other rights and remedies provided for in this Leaseor at law or equity, the lease consideration shall automatically be increased by an amountequal to two (2) times the original lease consideration.   3/99 - Page 1 Please Initial   Landlord: /s/ JK   Tenant: /s/ HO
 

 
**4.1 Use.**Tenant shall use the Premises as business for corporate business office and operation of anelectronics engineering and testing laboratory and for no other purpose without Landlord’swritten consent. In connection with its use, Tenant shall at its expense promptly complyand cause the Premises to comply with all applicable laws, ordinances, rules and regulationsof any public authority and shall not annoy, obstruct, or interfere with the rights of othertenants of the Building; provided, however, that in no event shall Tenant be responsible forcompliance of the Premises or the Building with any laws relating to fire, life, safety, oraccessibility, and the same shall be the sole responsibility of Landlord. Tenant shallcreate no nuisance nor allow any objectionable fumes, noise, or vibrations to be emittedfrom the Premises. Tenant shall not conduct any activities that will increase Landlord’sinsurance rates for any portion of the Building or that will in any manner degrade or damagethe reputation of the Building.**4.2 Equipment.**Tenant shall install in the Premises only such office equipment as is customary for generaloffice use and shall not overload the floors or electrical circuits of the Premises orBuilding or alter the plumbing or wiring of the Premises or Building. Landlord must approvein advance the location of and manner of installing any wiring or electrical, heatgenerating or communication equipment or exceptionally heavy articles. Alltelecommunications equipment, conduit, cables and wiring, additional dedicated circuits andany additional air conditioning required because of heat generating equipment or speciallighting installed by Tenant shall be installed and operated at Tenant’s expense. Landlordshall have no obligation to permit the installation of equipment by any telecommunicationsprovider whose equipment is not then servicing the Building. Anything to the contrarycontained in this Section notwithstanding, Landlord acknowledges and agrees that theequipment and improvements currently located and used in the Premises under the CurrentLease 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 theBuilding or anything placed on any glass or woodwork of the Premises or positioned so as tobe 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 standardsfor signs and all applicable codes and all signs and sign hardware shall be removed upontermination of this Lease with the sign location restored to its former state unlessLandlord elects to retain all or any portion thereof. Anything to the contrary contained inthis Section notwithstanding, Landlord acknowledges and agrees that all signs, attachments,window coverings, and other items described in this Section that are currently located onthe 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 Gat a location that is mutually acceptable as long as it meets Class A standards. Theexterior sign will be subject to Landlord and City of Tualatin approval. Landlord approvalshall not be unreasonably withheld. Tenant shall also have the right to installnon-illuminated signage at interior locations. Tenant agrees to absorb the cost to removeall signage at the end of the Lease term.Tenant, at its sole expense, shall have the right to locate a monument at the entrance tothe property per Exhibit H, subject to design approval by Landlord, which shall not beunreasonably withheld. Tenant shall not be required to remove the monument at the end ofthe Lease term.Tenant, at its sole expense, shall have the right to locate a decorative rock in theBuilding, subject to the following: 1) Tenant shall provide Landlord with an engineeringreport which confirms that the method of installation shall not damage the existing Buildingstructures; 2) Exact location of decorative rock is subject to Landlord approval; and 3) Anydamage caused by the decorative rock during the Lease term or as a result of its removalshall be the responsibility of Tenant.**5.1 Utilities and Services.**Landlord will furnish water and electricity to the Building at all times and will furnishheat and air conditioning (if the Building is air conditioned) during the normal Buildinghours 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 thespecifications set forth on Exhibit E attached hereto. Tenant may elect, with 60 daysnotice, to provide their own janitorial service, and upon so doing, the Monthly Base Rentalwill be reduced by the amount of monthly charges incurred by the Landlord for the currentjanitorial service. Tenant agrees to use a janitorial contractor signatory to allapplicable collective bargaining agreements. Tenant shall comply with all government lawsor 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 ofTenant’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 suchinterruption is caused by Landlord’s negligence or willful misconduct. Landlord shall takeall reasonable steps to correct any interruptions in service. Electrical service furnishedwill be 110 volts unless different service already exists in the Premises. Tenant shallprovide 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 operationoutside of normal Building hours, high demands from office machinery and equipment,nonstandard lighting, or any other cause, Landlord may impose a reasonable charge forsupplying such extra utilities or services, which charge shall be payable monthly by Tenantin conjunction with rent payments. Landlord acknowledges that Tenant’s utility and servicesusage under the Current Lease is not excessive and no additional charges will be imposed forsuch continued use under this Lease. In case of dispute over any extra charge under thisSection, Landlord shall designate a qualified independent engineer   3/99 - Page 2 Please Initial   Landlord: /s/ JK   Tenant: /s/ HO
 

 
whose decision shall be conclusive on both parties. Landlord and Tenant shall each payone-half of the cost of such determination.**5.3 Security.**Landlord may but shall have no obligation to provide security service or to adopt securitymeasures regarding the Premises, and Tenant shall cooperate with all reasonable securitymeasures adopted by Landlord. Tenant may install a security system within the leasedPremises, with Landlord’s written consent, which will not be unreasonably withheld.Landlord acknowledges that Tenant’s current security system is acceptable. Landlord will beprovided with an access code to any security system and shall not have any liability foraccidentally setting off Tenant’s security system. Landlord may modify the type or amountof 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, exteriorwalls and doors, exterior windows and common areas of the Building, and the electrical,mechanical, plumbing, heating and air conditioning systems, facilities and componentslocated in the Building that are used in common by all tenants of the Building (includingreplacing building standard light bulbs). Tenant shall maintain and repair the Premises ingood condition, including, without limitation, maintaining and repairing all walls, floors,and ceilings (but not any structural elements thereof), all interior doors, partitions andwindows, and all Premises systems, fixtures and equipment that are not the maintenanceresponsibility 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 repairunless written notice of such maintenance or repair is given by Tenant and Landlord fails tocommence efforts to remedy the problem in a reasonable time and manner. Landlord shall havethe right to erect scaffolding and other apparatus necessary for the purpose of makingrepairs, and Landlord shall have no liability for interference with Tenant’s use because ofrepairs and installations, provided that the same is performed in a manner to minimizeinterference with Tenant’s use, to the extent practicable, and completed as expeditiously aspossible. Except as otherwise set forth herein, Tenant shall have no claim against Landlordfor any interruption or reduction of services or interference with Tenant’s occupancy, andno such interruption or reduction shall be construed as a constructive or other eviction ofTenant. Repair of damage caused by negligent or intentional acts or breach of this Lease byTenant, 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 withoutLandlord’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 thePremises and belong to Landlord except for removable machinery and unattached movable tradefixtures. Landlord may at its option require that Tenant remove any improvements,alterations, wiring, cables or conduit installed by or for Tenant and restore the Premisesto the original condition upon termination of this Lease. Tenant shall not be responsiblefor the restoration of any work done previous to the date this Lease is executed, except forthe restoration of the 2nd floor elevator lobby and corridor. Landlord shallhave the right to approve the contractor used by Tenant for any work in the Premises, and topost notices of nonresponsibility in connection with work being performed by Tenant in thePremises. 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 theircurrent lease/sublease and future lease terms, to construct a first floor reception area asindicated on the attached Exhibit I. In addition, Tenant shall have the right at any timeduring the Lease term to construct the showers on the first floor per Exhibit J, with thecost 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 QuestProperty Management with regard to all aspects of this Lease shall be limited to the assetsof Quest Group Trust VI, except if such liability arises out of or is caused by Landlord’snegligence or willful misconduct, or its failure to enforce the rules and regulationsfollowing notice from Tenant.**7.2 Indemnity.**Tenant shall not allow any liens to attach to the Building or Tenant’s interest in thePremises as a result of its activities. Tenant shall indemnify and defend Landlord and itsmanaging 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’sfailure to comply with any term of this Lease. Neither Landlord nor its managing agentshall have any liability to Tenant because of loss or damage to Tenant’s property or fordeath or bodily injury caused by the acts or omissions of other Tenants of the Building, orby 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 shallhave an endorsement naming Landlord and Landlord’s managing agent, if any, as an additionalinsured, cover the liability insured under Section 7.2 of this Lease, and be in form andwith companies reasonably acceptable to Owner. Prior to occupancy, Tenant shall furnish acertificate evidencing such insurance which shall state that the coverage shall not becancelled or materially changed without 10 days advance notice to Landlord and Landlord’smanaging agent, if any. A renewal certificate shall be furnished at least 10 days prior toexpiration of any policy.   3/99 - Page 3 Please Initial   Landlord: /s/ JK   Tenant: /s/ HO
 

 
**8.1 Fire or Casualty.**“Major Damage” means damage by fire or other casualty to the Building or the Premises whichcauses the Premises or any substantial portion of the Building to be unusable, or which willcost more than 25 percent of the pre-damage value of the Building to repair, or which is notcovered by insurance. In case of Major Damage, Landlord may elect to terminate this Leaseby notice in writing to the Tenant within 30 days after such date. Tenant may elect toterminate this Lease by written notice to Landlord within such thirty (30) day period ifLandlord’s time to restore the Premises or the Building is estimated to take more thanninety (90) days or if, after having commenced the restoration of the Premises or theBuilding, Landlord fails to complete the same in the time period for completion stated priorto such commencement. If this Lease is not terminated following Major Damage, or if damageoccurs which is not Major Damage, Landlord shall promptly restore the Premises to thecondition existing just prior to the damage. Tenant shall promptly restore all damage totenant improvements or alterations installed by Tenant or pay the cost of such restorationto Landlord if Landlord elects to do the restoration of such improvements. Unless thecasualty was caused by the negligence or willful misconduct of Tenant, Rent shall be reducedfrom the date of damage until the date restoration work being performed by Landlord issubstantially complete, with the reduction to be in proportion to the area of the Premisesnot useable by Tenant.**8.2 Waiver of Subrogation.**Tenant shall be responsible for insuring its personal property and trade fixtures located onthe 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 ordamage caused by water damage, sprinkler leakage, or any of the risks that are or could becovered 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 otherparty arising out of any such loss. This waiver is binding only if it does not invalidatethe 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 tothe entire Building or a portion sufficient to render the Premises unsuitable for Tenant’suse, then either party may elect to terminate this Lease effective on the date thatpossession is taken by the condemning authority. Rent shall be reduced for the remainder ofthe term in an amount proportionate to the reduction in area of the Premises caused by thetaking. All condemnation proceeds shall belong to Landlord, and Tenant shall have no claimagainst Landlord or the condemnation award because of the taking; provided, however, thatnothing herein shall prevent Tenant from pursuing and obtaining a separate award or awardsfor loss of its leasehold interest, leasehold improvements, moving expenses, and otherclaims.**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 Leaseor sublet all or any portion of the Premises without first obtaining Landlord’s consent inwriting. This provision shall not apply to transfers by operation of law including, but notlimited to, mergers and changes in control of Tenant. No assignment shall relieve Tenant ofits obligation to pay rent or perform other obligations required by this Lease, and noconsent to one assignment or subletting shall be a consent to any further assignment orsubletting. Landlord shall not unreasonably withhold its consent to any assignment orsubletting provided the effective rental paid by the subtenant or assignee is not less thanthe current scheduled rental rate of the Building for comparable space and the proposedTenant is compatible with Landlord’s normal standards for the Building. If Tenant proposesa 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 Premisesproposed to be assigned or sublet and may lease the same directly to the proposed subtenantor assignee. If an assignment or subletting is permitted, one-half of any cash profit, orthe net value of any other consideration received by Tenant as a result of such transactionshall be paid to Landlord promptly following its receipt by Tenant. Tenant shall pay anyreasonable costs incurred by Landlord in connection with a request for assignment orsubletting, including reasonable attorneys’ fees.**11.1 Default.**Any of the following shall constitute a default by Tenant under this Lease: (a) Tenant’s failure to pay rent or any other charge under this Lease within 10days following written notice from Landlord of such nonpayment, or failure to complywith any other term or condition within 30 days following written notice from Landlordspecifying the noncompliance. If such noncompliance cannot be cured within the 30-dayperiod, this provision shall be satisfied if Tenant commences correction within suchperiod and thereafter proceeds in good, faith and with reasonable diligence to effectcompliance as soon as possible. The foregoing notwithstanding, Landlord shall berequired to give Tenant the ten (10) day notice of nonpayment specified in the firstsentence of this subsection (a) and only two (2) times in any consecutive twelve (12)month period. Time is of the essence of this Lease.  (b) Tenant’s insolvency, business failure or assignment for the benefit of itscreditors. Tenant’s commencement of proceedings under any provision of any bankruptcyor insolvency law or failure to obtain dismissal of any petition filed against it undersuch laws within the time required to answer; or the appointment of a receiver for allor any portion of Tenant’s properties or financial records.  (c) Assignment or subletting by Tenant in violation of Section 10.1.  (d) Vacation or abandonment of the Premises without the written consent of Landlordor failure to occupy the Premises within 20 days after notice from Landlord tenderingpossession.**11.2 Remedies for Default.**In case of default as described in Section 11.1 Landlord shall have the right to thefollowing remedies which are intended to be cumulative and in addition to any other remediesprovided under applicable law: (a) Landlord may at its option terminate the lease by notice to Tenant. With orwithout termination, Landlord may retake possession of the Premises and may use orrelet the Premises without accepting a surrender or waiving the right to damages.Following such retaking of possession, efforts by Landlord to relet the Premises shallbe sufficient if Landlord follows its usual procedures for finding tenants for thespace at rates not less than the current rates for other comparable space in theBuilding. If Landlord has other vacant space in the Building, prospective tenants maybe placed in such other space without prejudice to Landlord’s claim to damages or lossof rentals from Tenant.   3/99 - Page 4 Please Initial   Landlord: /s/ JK   Tenant: /s/ HO
 

 
 (b) Landlord may recover all damages caused by Tenant’s default which shall includean amount equal to rentals lost because of the default, lease commissions paid for thisLease, and the unamortized cost of any tenant improvements installed by Landlord tomeet Tenant’s special requirements. Landlord may sue periodically to recover damagesas they occur throughout the lease term, and no action for accrued damages shall bar alater action for damages subsequently accruing. Landlord may elect in any one actionto recover accrued damages plus damages attributable to the remaining term of thelease. Such damages shall be measured by the difference between the rent under thisLease and the reasonable rental value of the Premises for the remainder of the term,discounted to the time of judgement at the prevailing interest rate on judgements.  (c) Landlord may make any payment or perform any obligation which Tenant has failedto perform, in which case Landlord shall be entitled to recover from Tenant upon demandall amounts so expended, plus interest from the date of the expenditure at the rate ofone-and-one-half percent per month. Any such payment or performance by Landlord shallnot waive Tenant’s default.**12.1 Surrender.**On expiration or early termination of this Lease, Tenant shall deliver all keys to Landlordand surrender the Premises vacuumed, swept, and free of debris and in the same condition asat the commencement of the term subject only to reasonable wear from ordinary use. Tenantshall remove all of its furnishings and trade fixtures that remain its property and repairall damage resulting from such removal. Failure to remove shall be an abandonment of theproperty, and Landlord may dispose of it in any manner without liability. If Tenant failsto vacate the Premises when required, including failure to remove all its personal property,Landlord may elect either: (i) to treat Tenant as a tenant from month to month, subject tothe provisions of this Lease except that rent shall be one-and-one-half times the total rentbeing charged when the lease term expired, and any option or other rights regardingextension of the term or expansion of the Premises shall no longer apply; or (ii) to ejectTenant from the Premises and recover damages caused by wrongful holdover.**13.1 Regulations.**Landlord shall have the right but shall not be obligated to make, revise and enforce againstall tenants of the Building regulations or policies consistent with this Lease for thepurpose of promoting safety, health (including moving, use of common areas and prohibitionof smoking), order, economy, cleanliness, and good service to all tenants of the Building.All such regulations and policies shall be complied with as if part of this Lease andfailure to comply shall be a default, subject to notice and the opportunity to cure setforth in Section 11(a) hereof.**14.1 Access.**During times other than normal Building hours, Tenant’s officers and employees or thosehaving business with Tenant may be required to identify themselves or show passes in orderto gain access to the Building. Landlord shall have no liability for permitting or refusingto permit access by anyone. Landlord may regulate access to any Building elevators outsideof normal Building hours. Landlord shall have the right to enter upon the Premises at anytime by passkey or otherwise to determine Tenant’s compliance with this Lease, to performnecessary services, maintenance and repairs or alterations to the Building or the Premises,or to show the Premises to any prospective tenant or purchasers. Except in case ofemergency, such entry shall be following notice and at such times and in such manner as tominimize interference with the reasonable business use of the Premises by Tenant, and shallbe escorted by a representative of Tenant. Tenant shall have electronic access to allexterior doors.**14.2 Furniture and Bulky Articles.**Tenant shall move furniture and bulky articles in and out of the Building or makeindependent use of the elevators only at times approved by Landlord following at least 24hours written notice to Landlord of the intended move. Landlord will not unreasonablywithhold its consent under this Section.**15.1 Notices.**Notices between the parties relating to this Lease shall be in writing, effective whendelivered, or if mailed, effective on the second day following mailing, postage prepaid, tothe address for the party stated in this Lease or to such other address as either party mayspecify by notice to the other. Notice to Tenant may always be delivered to the Premises.Rent shall be payable to Landlord at the same address and in the same manner, but shall beconsidered paid only when received.**16.1 Subordination and Attornment.**This Lease shall be subject to and subordinate to any mortgages, deeds of trust, or landsale contracts (here after collectively referred to as encumbrances) now existing againstthe Building. Landlord shall obtain, not later than one hundred eighty (180) days prior tothe Commencement Date, a written agreement from the holder of all such encumbrances thatsuch holder will not disturb Tenant’s tenancy under this Lease in the event of a foreclosureby the holder of such encumbrance. In the event such nondisturbance agreement(s) is/are notobtained within such period, Tenant shall have the right to terminate this Lease by writtennotice to Landlord and without further liability to Landlord. At Landlord’s option thisLease shall be subject and subordinate to any future encumbrance hereafter placed againstthe Building (including the underlying land) or any modifications of existing encumbrances,and Tenant shall execute such documents as may reasonably be requested by Landlord or theholder of the encumbrance to evidence this subordination; provided, however, that suchsubordination shall be subject to the requirement that if any such encumbrance isforeclosed, the purchaser at foreclosure sale shall recognize and not disturb Tenant’slease, and Tenant shall attorn to such purchaser and this Lease shall continue.**16.2 Transfer of Building.**If the Building is sold or otherwise transferred by Landlord or any successor, Tenant shallattorn to the purchaser or transferee and recognize it as the lessor under this Lease, and,provided the purchaser or transferee assumes all obligations hereunder, the transferor shallhave no further liability hereunder.   3/99 - Page 5 Please Initial   Landlord: /s/ JK   Tenant: /s/ HO
 

 
**16.3** **Estoppels.**Either party will within 10 days after notice from the other execute, acknowledge anddeliver to the other party a certificate certifying whether or not this Lease has beenmodified and is in full force and effect; whether there are any modifications or allegedbreaches by the other party; the dates to which rent has been paid in advance, and theamount of any security deposit or prepaid rent; and any other facts that may reasonably berequested. Failure to deliver the certificate within the specified time shall be conclusiveupon the party of whom the certificate was requested that the lease is in full force andeffect and has not been modified except as may be represented by the party requesting thecertificate. If requested by the holder of any encumbrance, or any ground lessor, Tenantwill agree to give such holder or lessor notice of and an opportunity to cure any default byLandlord under this Lease within thirty (30) days.**17.1 Attorneys’ Fees.**In any litigation arising out of this Lease, the prevailing party shall be entitled torecover attorneys’ fees at trial and on any appeal. If Landlord incurs attorneys’ feesbecause of a default by Tenant, Tenant shall pay all such fees whether or not litigation isfiled.**18.1 Quiet Enjoyment.**Landlord warrants that so long as Tenant complies with all terms of this Lease it shall beentitled to peaceable and undisturbed possession of the Premises free from any eviction ordisturbance by Landlord. Neither Landlord nor its managing agent shall have any liabilityto Tenant for loss or damages arising out of the acts, including criminal acts, of othertenants of the Building or third parties, nor any liability for any reason which exceeds thevalue of its interest in the Building.**19.1 Additional Rent-Tax Adjustment.**Whenever for any July 1 — June 30 tax year the real property taxes levied against theBuilding and its underlying land exceed those levied for the 2005 — 2006 tax year, then themonthly rental for the next succeeding calendar year shall be increased by one-twelfth ofsuch tax increase times Tenant’s Proportionate Share. “Real property taxes” as used hereinmeans all taxes and assessments of any public authority against the Building and the land onwhich it is located, the cost of contesting any tax and any form of fee or charge imposed onLandlord as a direct consequence of owning or leasing the Premises, including but notlimited to rent taxes, gross receipt taxes, leasing taxes, or any fee or charge wholly orpartially in lieu of or in substitution for ad valorem real property taxes or assessments,whether now existing or hereafter enacted. If any portion of the Building is occupied by atax-exempt tenant so that the Building has a partial tax exemption under ORS 307.112 or asimilar statute, then real property taxes shall mean taxes computed as if such partialexemption did not exist. If a separate assessment or identifiable tax increase arisesbecause of improvements to the Premises, then Tenant shall pay 100 percent of such increase.Anything to the contrary contained herein notwithstanding, in the event any such taxes orassessments are payable in installments, Landlord shall elect to pay the same ininstallments over the longest possible period, and only such installments due and payableduring the Lease term shall be considered “real property taxes” hereunder.**19.2 Operating Expense Adjustment.**Tenant shall pay as additional rent Tenant’s Proportionate Share of the amount by whichoperating expenses for the Building increase over those experienced by Landlord during thecalendar year 2006 (base year). Effective January 1 of 2007 each year Landlord shallestimate the amount by which operating expenses are expected to increase, if any, over thoseincurred in the base year. Monthly rental for that year shall be increased by one-twelfthof Tenant’s share of the estimated increase. Following the end of each calendar year,Landlord shall compute the actual increase in operating expenses and bill Tenant for anydeficiency or credit Tenant with any excess collected. As used herein “operating expenses”shall mean all costs of operating and maintaining the Building as determined by standardreal estate accounting practice, including, but not limited to: all water and sewercharges; the cost of natural gas and electricity provided to the Building; janitorial andcleaning supplies and services; administration costs and management fees; superintendentfees; security services, if any; insurance premiums; licenses, permits for the operation andmaintenance of the Building and all of its component elements and mechanical systems; theannual amortized capital improvement cost (amortized over such a period as Landlord mayselect but not shorter than the period allowed under the Internal Revenue Code and at acurrent market interest rate) for any capital improvements to the Building required by anygovernmental authority. Operating expenses shall not include: the cost of capitalimprovements (except as set forth above); depreciation; principal payments of mortgage andother non-operating debts of Landlord; the cost of repairs or other work to the extentLandlord is reimbursed by insurance or condemnation proceeds; costs in connection withleasing space in the Building, including brokerage commissions; lease concessions, rentalabatements and construction allowances granted to specific tenants; costs incurred inconnection with the sale, financing or refinancing of the Building; fines, interest andpenalties incurred due to the late payment of taxes or expenses; organizational expensesassociated with the creation and operation of the entity which constitutes Landlord; or anypenalties or damages that Landlord pays to Tenant under this Lease or to other tenants inthe Building under their respective leases.**19.3 Disputes.**If Tenant disputes any computation of additional rent or rent adjustment under Sections 19.1and 19.2 of this Lease, it shall give notice to Landlord not later than one year after thenotice from Landlord describing the computation in question, but in any event not later than30 days after expiration or earlier termination of this Lease. If Tenant fails to give sucha notice, the computation by Landlord shall be binding and conclusive between the partiesfor the period in question. If Tenant gives a timely notice, the dispute shall be resolvedby an independent certified public accountant mutually agreed to by Landlord and Tenant,whose decision shall be conclusive between the parties. Each party shall pay one-half ofthe fee for making such determination except that if the adjustment in favor of Tenant doesnot exceed three percent (3%) of the escalation amounts for the year in question, Tenantshall pay (i) the entire cost of any such third-party determination; and (ii) Landlord’sout-of-pocket costs and reasonable expenses for personnel time in responding to the audit.In the event the adjustment in favor of Tenant equals or exceeds five percent (5%) of theescalation amounts for the year in question, Landlord shall pay (i) the entire cost of anysuch third party determination, and (ii) Tenant’s out-of-pocket costs and reasonableexpenses for personnel time in connection with the audit. Nothing herein shall reduceTenant’s obligations to make all payments as required by this Lease.   3/99 - Page 6 Please Initial   Landlord: /s/ JK   Tenant: /s/ HO
 

 
**20.1 Complete Agreement; No Implied Covenants.**This Lease and the attached Exhibits and Schedules if any, constitute the entire agreementof the parties and supersede all prior written and oral agreements and representations andthere are no implied covenants or other agreements between the parties except as expresslyset forth in this Lease. Neither Landlord nor Tenant is relying on any representationsother than those expressly set forth herein.**20.2 Tenant Improvement Allowance.**Landlord agrees to provide Tenant with an allowance of $243,622 for the purposes of improving the Premises.**20.3 Captions.**The titles to the Sections of this Lease are descriptive only and are not intended to changeor influence the meaning of any Section or to be part of this Lease.**20.4 Nonwaiver.**Failure by Landlord to promptly enforce any regulation, remedy or right of any kind underthis Lease shall not constitute a waiver of the same and such right or remedy may beasserted at any time after Landlord becomes entitled to the benefit thereof notwithstandingdelay in enforcement.**20.5 Exhibits.**The following Exhibits are attached hereto and incorporated as a part of this Lease:   Exhibit A The PremisesExhibit B The ProjectExhibit C Space PlanExhibit D Building StandardsExhibit E Janitorial SpecificationsExhibit F Rules and Regulations for Office LeaseExhibit G Building SignageExhibit H Building MonumentExhibit I Reception LayoutExhibit J Shower LayoutBilling Information  **20.6 Renewal.**So long as this Lease is not, and has not been in default beyond any applicable notice andcure period during the Lease term, Tenant shall have the right to extend the Lease term fora period of five (5) years at “Fair Market Rent” by providing Landlord written notice ofTenant’s intent to exercise the renewal option at least one hundred eighty (180) days priorto the end of the initial Lease term (the “Exercise Notice”). “Fair Market Rent” shall meanthe minimum rent being charged for comparable space in the Portland Oregon, metropolitanarea with similar amenities and fixtures. Fair Market Rent shall be determined by Landlordwith written notice (the “Notice”) given to Tenant not later than thirty (30) days afterreceipt of the Exercise Notice, subject to Tenant’s right to arbitration as hereinafterprovided. If Tenant disputes the amount claimed by Landlord as Fair Market Rent, andLandlord and Tenant are not able to agree on the Fair Market Rent within ten (10) days ofTenant’s receipt of the Notice, Tenant may require that Landlord submit the dispute toarbitration. Failure on the part of Tenant to demand arbitration within thirty (30) daysafter receipt of the Notice from Landlord shall bind Tenant to the Fair Market Rentdetermined by Landlord. The arbitration shall be conducted and determined in Portland,Oregon in accordance with the then prevailing rules of the American Arbitration Associationor its successor for arbitration of real estate valuation disputes, except that theprocedures mandated by such rules shall be modified as follows: (a) Tenant shall make demand for arbitration in writing within thirty (30) daysafter service of the Notice, specifying the name and address of the person to act asarbitrator on Tenant’s behalf. The arbitrator shall be a real estate broker with atleast ten (10) years full-time experience who is familiar with the Fair Market Rent ofspace similar to the Premises in Portland, Oregon. Within ten (10) business days afterthe service of Tenant’s demand for arbitration, Landlord shall give notice to Tenantspecifying the name and address of the person designated by Landlord to act asarbitrator on Landlord’s behalf, which person shall be similarly qualified. IfLandlord fails to notify Tenant of the appointment of Landlord’s arbitrator within thetime specified, then the arbitrator appointed by Tenant shall be the arbitrator todetermine the Fair Market Rent for the Premises.  (b) If two arbitrators are chosen, the arbitrators so chosen shall meet within ten(10) days after the second arbitrator is appointed and shall appoint a neutralarbitrator who shall be a competent and impartial person with qualifications similar tothose required of the first two arbitrators. If they are unable to agree upon suchappointment within five (5) days, the neutral arbitrator shall be selected by thepresiding judge of the Washington County Circuit Court.  (c) The Fair Market Rent shall be fixed by the three arbitrators in accordance withthe following procedures: Each party-appointed arbitrator shall state, in writing,such arbitrator’s determination of the Fair Market Rent supported by the reasonstherefore and shall make counterpart copies for the other party-appointed arbitratorand the neutral arbitrator. The party-appointed arbitrators shall arrange for asimultaneous exchange of their proposed Fair Market Rent determinations. The role ofthe neutral arbitrator shall be to select whichever of the two proposed determinationsof Fair Market Rent most closely approximates the neutral arbitrator’s owndetermination of Fair Market Rent. The neutral arbitrator shall have no right topropose a middle ground or any modification of either of the two proposeddeterminations of Fair Market Rent. The determination of Fair Market Rent the neutralarbitrator chooses as that most closely approximating the neutral arbitrator’sdetermination of the Fair Market Rent shall constitute the decision of the arbitratorsand shall be final and binding upon the parties. The arbitrators shall have no powerto modify the provisions of this Lease.  (d) The neutral arbitrator’s decision shall be made not later than thirty (30) daysafter the submission by the arbitrators of their proposals with respect to the FairMarket Rent. The parties have included these time limits in order to expedite   3/99 - Page 7 Please Initial   Landlord: /s/ JK   Tenant: /s/ HO
 

 
   the proceeding, but they are not jurisdictional, and the neutral arbitrator may for goodcause allow reasonable extensions or delays, which shall not affect the validity of theaward. Absent fraud, collusion, or willful misconduct by the neutral arbitrator, theaward shall be final, and judgment may be entered in any court having jurisdictionthereof.  (e) Each party shall pay the fees and expenses of its respective arbitrator andboth parties shall share the fees and expenses of the neutral arbitrator equally.IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed thisLease as of the day and year first written above.      LANDLORD: