Document:

SUBLEASE AGREEMENT

Exhibit 10.4

 

SUBLEASE AGREEMENT

 

                This

Sublease Agreement is made and entered into as of the 7th day of

September, 2001, by and between EPICOR

SOFTWARE CORPORATION, a Delaware corporation, herein after called

“Sublandlord,” and PIXELWORKS, INC.,

an Oregon corporation, herein after called “Subtenant.”

 

WITNESSETH:

 

                WHEREAS,

by Lease Agreement dated October 6, 1995, COPPER

MOUNTAIN TRUST CORPORATION AS TRUSTEE FOR QUEST GROUP TRUST VI

(“Landlord”) leased to Sublandlord, on a full service basis, office space (the

“Premises”) consisting of a portion of the building commonly known as Lakeside

Center located at 8100 SW Nyberg Road, Tualatin, Oregon 97062 (the “Building”),

as amended by that certain Addendum to the Lease dated October 1, 1995, that

certain Addendum A dated March 15, 1999, that certain Second Amendment dated

December 13, 2000, that certain Third Amendment dated February 2, 2001, and

that certain Third [sic Fourth]

Amendment dated August 20, 2001 (collectively, the “Master Lease”, attached

hereto and made a part hereof as Exhibit A). 

The Master Lease expires on February 28, 2006.

 

                WHEREAS,

Sublandlord desires to sublease to Subtenant and Subtenant desires to sublease

from Sublandlord a portion of the Premises on the terms and conditions stated

herein;

 

                NOW

THEREFORE, for and in consideration of the mutual covenants contained herein,

it is hereby agreed as follows:

 

                1.  Sublease Premises.  Subject to the terms and conditions of this

Sublease Agreement, Sublandlord hereby subleases to Subtenant and Subtenant

hereby subleases from Sublandlord a portion of the Premises consisting of

approximately 14,679 rentable square feet consisting of the entire third floor

of the Building as shown in Exhibit B attached hereto and made a part hereof

(the “Sublease Premises”).

 

                2.  Sublease Term and Commencement.  The term of the Sublease shall be fifty (50)

months in length with a Commencement Date of January 1, 2002 and a fixed

expiration date of February 28, 2006. 

Subtenant may occupy the Sublease Premises for the purposes of

completing Subtenant’s Alterations (as hereinafter defined) and conducting

Subtenant’s business, at any time following the date that Landlord provides its

written consent to the Sublease Agreement pursuant to Paragraph 10.1 of the

Master Lease and Paragraph 17 hereof.

 

                3.  Condition of Sublease Premises.  Upon the later of the date of full execution

of the Sublease Agreement and the date of receipt of Landlord’s consent to said

agreement, Sublandlord shall deliver the Sublease Premises to Subtenant in

broom-clean condition and free of Sublandlord’s personal furniture, fixtures

and equipment (“FF&E”), provided Sublandlord shall be allowed to leave

within the Sublease Premises any of its 

 

 

 

 

FF&E, if any, included in a separate

purchase/lease agreement to be negotiated between the parties.  Sublandlord has made no representations or

warranties as to the condition of the Sublease Premises or the Building nor has

Sublandlord agreed to perform any alterations, additions, refurbishment or

repairs and maintenance to the Sublease Premises.  At the expiration of the Sublease term, Subtenant shall leave the

Sublease Premises in no worse condition than upon occupancy, ordinary wear and

tear excepted.

 

                4.  Possession.  Subject to paragraphs 2 and 3 hereof, Subtenant shall be allowed

to enter the Sublease Premises prior to the Commencement Date for the purposes

of installing alterations, equipment, furniture, fixtures and all related

network and telecommunications cabling of Subtenant.  Subtenant shall comply with all the terms and conditions of the

Sublease Agreement and Master Lease during any such installations, except for

payment of rent or any additional rent.

 

                5.  Base Rent.  Subtenant agrees to pay Sublandlord a monthly Base Rent in the

amount set forth below, in advance, on or before the first day of each calendar

month during the term hereof.  The Base

Rent for the Sublease Premises shall be on a “full service” basis as outlined

in the Master Lease, as follows:

 

	

  Months

  	

   

  	

  Annual

  Base Rent/SF

  	

   

  	

  Base Rent/Month

  	

   

  
	

  Prior to January 1, 2002:

  	

   

  	

  Rent

  Free

  	

   

  	

  Rent

  Free

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  January 1, 2002 -

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  December 31, 2002:

  	

   

  	

  $

  	

  21.20

  	

   

  	

  $

  	

  25,933.00

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  January 1, 2003 -

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  December 31, 2003:

  	

   

  	

  $

  	

  22.45

  	

   

  	

  $

  	

  27,462.00

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  January 2, 2004 -

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  December 31, 2004:

  	

   

  	

  $

  	

  23.20

  	

   

  	

  $

  	

  28,379.00

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  January 1, 2005 -

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  February 28, 2006:

  	

   

  	

  $

  	

  24.00

  	

   

  	

  $

  	

  29,358.00

  	

   

  

 

                6.  Operating Expenses and Taxes.  In addition to Base Rent, Subtenant shall

pay to Sublandlord, in advance, on or before the first day of each calendar

month during the term hereof, Subtenant’s “proportionate share” of Operating

Expenses (as defined in Paragraphs 19.1, 19.2 and 19.4 of the Master Lease and

as further described in Paragraph 19.4 of the Addendum to the Lease and the

paragraph with the heading “Operating Expenses” in the Second Amendment) and

all other sums owing from Sublandlord to Landlord under the terms of the Master

Lease.  Subtenant’s Base Year shall be

the same as Sublandlord’s under the Second Amendment.  Subtenant’s proportionate share shall be 26.49%.  In the event Subtenant uses a dedicated

cooling system for Subtenant’s computer equipment, then in addition to Base

Rent and Operating Expenses, Subtenant shall pay a monthly fee to Sublandlord

in the amount of $100.00 for additional electricity use.  Subtenant shall not be obligated to pay the

$100 utility surcharge payable by Sublandlord under the Master Lease.

 

                7.  Use. 

The Sublease Premises shall be used and occupied for general office, 

 

 

2

research and development and any other legal

purpose consistent with other tenants of the Building and tenants of office

buildings of comparable quality to the Building in the surrounding area.

 

                8.  Leasehold Improvements.  Any alterations, additions, refurbishment or

repairs and maintenance to the Sublease Premises shall be the sole

responsibility of Subtenant and shall be completed, subject to subparagraph (i)

below, at Subtenant’s sole cost and shall be commenced and completed subject to

the Master Lease.

 

                    (i) 

Sublandlord hereby consents to Subtenant’s planned

alterations/demolition of the Sublease Premises prior to the Commencement Date,

more particularly described on Exhibit C attached hereto and made a part hereof

(“Subtenant’s Alterations”). 

Sublandlord agrees to obtain Master Landlord’s approval of Subtenant’s

Alterations and any subsequent alterations to the Sublease Premises, and all

such work shall be performed in accordance with Paragraph 6.2 of the Master

Lease, Paragraph 6.2 of the Addendum to the Lease, and the paragraph with the

heading “Tenant Improvements” in the Second Amendment.  Sublandlord shall provide Subtenant with a

tenant improvement allowance in the amount of $102,753.00 for completion of

Subtenant’s Alterations, which Sublandlord shall pay to Subtenant within ten

(10) days of demand by Subtenant following completion of Subtenant’s

Alterations.

 

                      (ii) 

at the expiration of the Sublease term, Subtenant will leave the

Sublease Premises in no worse condition than upon occupation, ordinary wear and

tear excepted; provided, however, that Subtenant shall not be obligated to

restore the Sublease Premises to the condition that existed prior to completion

of Subtenant’s Alterations.

 

                      (iii)  Subtenant shall not

make or permit any alterations without the prior written approval of

Sublandlord and Landlord.  All improvements,

alterations or additions made by Subtenant shall be made in compliance with the

terms of the Master Lease and with Landlord’s consent pursuant thereto.

 

                       (iv) 

Subtenant shall indemnify and hold Sublandlord harmless from any and all

claims, liens, attachments or other liabilities whatsoever arising from or

relating to Subtenant’s Alterations or Subtenant’s occupation and use of the

Sublease Premises, including any holdover by Subtenant after the expiration of

the Sublease term, to the extent such claims, liens, attachments or other

liabilities were not caused by the negligence or willful misconduct of Sublandlord.  Any and all such claims, notices of lien, or

attachments for work performed on or materials furnished to the Sublease

Premises shall be cured and removed by Subtenant within thirty (30) days of

Subtenant’s receipt of notice thereof.

 

                        (v) 

Subtenant is responsible for compliance with all federal, state and

local requirements arising out of Subtenant’s use, including the obtaining of

any required occupancy certificates, regardless of whether or not leasehold

improvements are made.

 

                9.  Option to Expand.  At any time after July 21, 2003 (the “Option

Date”) and for the remainder of the term of this Sublease Agreement, Subtenant

shall have the

 

 

3

 

option to expand (“Option to Expand”) the

Sublease Premises to include Sublandlord’s premises on the second floor of the

Building (Suite 203) consisting of 2,870 rentable square feet and Sublandlord’s

premises on the fourth floor of the Building (Suite 400) consisting of 14,679

square feet (collectively, the “Expansion Premises”) provided that: (i)

Subtenant provides Sublandlord with a minimum of six months written notice

prior to date of occupancy of the Expansion Premises (the “Effective Date”);

(ii) Subtenant subleases all, and not less than all, of the Expansion Premises;

(iii) the Effective Date does not occur prior to the Option Date nor on any day

which is either up to and including 21 days prior to, or up to and including 21

days after, the commencement of an accounting quarter (specifically, January 1,

April 1, July 1, and October 1 of each year during the Sublease term); (iv)

Subtenant provides Sublandlord with an Option to Expand fee of $87,745.00 to be

paid at the time the Option to Expand notice is provided; (v) subject to the

exceptions specifically noted in (vi) and (vii) below, the expansion space

shall be occupied by Subtenant under the same terms and conditions of this

Sublease Agreement inclusive of Base Rent (at the then applicable rates under

this Sublease Agreement), Operating Expenses (at the then applicable rates

under the Master Lease), and Security Deposit (to be increased on the Effective

Date by an amount equal to the first months’ Base Rent due for the Expansion

Premises); (vi) Sublandlord shall not be required to provide Subtenant with a

tenant improvement allowance; and (vii) Sublandlord shall not be required to

pay a brokerage commission to any representative of Subtenant in connection

with the exercise of the Option to Expand. If, prior to the Option Date,

Sublandlord intends to sublease the Expansion Premises (or any portion

thereof), Subtenant shall have the option to sublease such space on the terms

and conditions set forth herein, except that Subtenant shall not be required to

pay the fee set forth in subparagraph (iv) of this paragraph. In the event

Sublandlord so elects to put any or all of the Expansion Premises on the market

for sublease at any time after the Option Date, the Option to Expand shall

remain in effect, however, Subtenant may elect instead to negotiate terms for

any space marketed for sublease by Sublandlord on terms other than those

specified in this paragraph, such other terms to be mutually agreed upon by the

parties. In the event Subtenant declines to exercise its expansion options

under this Paragraph 9 and Sublandlord subsequently subleases all or any of the

Expansion Premises to a third party, Subtenant’s expansion options under this

Paragraph 9 shall terminate and be of no further force or effect.

 

                10.    Parking.    Throughout the Sublease term, Subtenant shall be entitled to

use, free of charge, up to 3.75 parking stalls per 1,000 rentable square feet

subleased, on a non-exclusive, unreserved basis in the Building parking

facility.

 

                11.    Security Deposit.    Subtenant shall deposit with Sublandlord

upon execution of this Sublease the sum of $25,933.00, representing the

equivalent of one month’s Base Rent, as security for Subtenant’s faithful

performance of Subtenant’s obligations hereunder (“Security Deposit”). If

Subtenant fails to pay rent or other charges when due under this Sublease, or

fails to perform any of its other obligations hereunder, Sublandlord may use or

apply all or any portion of the Security Deposit for the payment of any rent or

other amount then due hereunder and unpaid, for the payment of any other sum

for which Sublandlord may become obligated by reason of Subtenant’s default or

breach, for any loss or damage sustained by Sublandlord as a result of

Subtenant’s default

 

4

 

or breach, or the performance of Subtenant’s

obligations. If Sublandlord so uses any portion of the Security Deposit,

Subtenant shall, within thirty (30) days after written demand by Sublandlord,

restore the Security Deposit to the full amount originally deposited, and

Subtenant’s failure to do so shall constitute a default under this Sublease.

Sublandlord shall not be required to keep the Security Deposit separate from

its general accounts, and shall have no obligation or liability for payment of

interest on the Security Deposit. In the event Sublandlord assigns its interest

in this Sublease, Sublandlord shall deliver to its assignee so much of the

Security Deposit as is then held by Sublandlord. Within thirty (30) days after

the Term has expired, or Subtenant has vacated the Sublease Premises, or any

final adjustment pursuant to the Master Lease has been made, whichever shall

last occur, and provided Subtenant is not then in default of any of its

obligations hereunder, the Security Deposit, or so much thereof as had not

theretofore been applied by Sublandlord, shall be returned to Subtenant or to

the last assignee, if any, of Subtenant’s interest hereunder.

 

                                                12.           First Months’ Rent.    Upon Subtenant’s execution of this

Sublease Agreement, Subtenant shall be required to submit to Sublandlord

$25,933.00 representing the first full month’s rent. Subtenant shall also be

responsible for one hundred percent of all additional rent and other sums

pertaining to the Sublease Premises billed by the Landlord to Sublandlord from

the Commencement Date pursuant to the Master Lease.

 

                                                13.           Subtenant Insurance and

Indemnification Obligations.   

Subtenant shall maintain in full force and effect a policy or policies

of insurance protecting Sublandlord and Subtenant (and Landlord as required) in

accordance with the provisions of Paragraph 7.2 of the Master Lease. The policy

shall include coverage for Sublandlord’s personal property. Prior to any

possession by Subtenant, Subtenant shall provide a certificate of insurance to

Sublandlord and to the Landlord evidencing such coverage, naming all reasonable

parties as additional insureds.

 

                                                14.           Signage.    Subtenant shall have the exterior/monument

signage rights described in Paragraph 20.13 of the Addendum to the Lease. Prior

to installing any sign, Subtenant shall be required to obtain the approval of

the Landlord and City of Tualatin and the reasonable approval of Sublandlord.

Subtenant’s signage rights shall be non-transferable.

 

                                                15.           Damage to Person and Property.    Subtenant covenants at all times to

indemnify, defend and hold Sublandlord harmless from liability for damages and

losses suffered or claimed to have been suffered by any other person, persons

or corporation for personal injury, including death, or damage to tangible

property occurring on or about the Sublease Premises during the term or as a

result of any act or omission on the part of Subtenant, its agents, servants,

employees or invitees except to the extent such damages and losses were caused

by the negligence or willful misconduct of Sublandlord.

 

 

5

 

                                                16.           Master Lease.    Sublandlord’s interest in the Sublease

Premises is as Tenant under the Master Lease. This Sublease Agreement is

expressly made subject to all the terms and conditions of the Master Lease.

Subtenant agrees to use the Sublease Premises in accordance with the terms of

the Master Lease and not to do or omit to do anything which will constitute a

breach of any of the terms of the Master Lease. Except for Exhibit C to the

Master Lease; Paragraphs 3.1, 20.7, 20.9, 20.11, 20.12, and 20.16 of the

Addendum to the Lease; Paragraphs 2, 3, 4, 5 & 6 of Addendum A; and the

paragraphs with the headings “Rental Rate”, “Audit Right”, “Tenant

Improvements”, “First Right of Refusal”, “Renewal Options”, “Holdover”,

“Security Deposit”, and “Commission” of the Second Amendment, all applicable

terms and conditions of the Master Lease are incorporated into and made a part

of this Sublease Agreement as if Sublandlord were the Landlord thereunder and

Subtenant were the Tenant thereunder, and except that Sublandlord shall not be

obligated to perform Landlord’s obligations under the Master Lease, but shall

exercise due diligence in attempting to cause Landlord to perform its

obligations under the Master Lease for the benefit of Subtenant.  Subtenant assumes and agrees to perform the

Tenant’s obligations under the Master Lease during the Term to the extent that

such obligations are applicable to the Sublease Premises, except that the

obligation to pay rent to Landlord under the Master Lease shall be considered

performed by Subtenant to the extent rent is paid to Sublandlord in accordance

with this Sublease Agreement. Subtenant shall not commit or suffer any act or

omission that will violate any of the provisions of the Master Lease. If the

Master Lease terminates, this Sublease shall terminate and the parties shall be

relieved of any further liability or obligation under this Sublease. If the

Master Lease gives Sublandlord any right to terminate the Master Lease in the

event of the partial or total damage, destruction, or condemnation of the

Premises or the building or project of which the Premises are a part, the

exercise of such right by Sublandlord shall only be done with the consent of

Subtenant and not constitute a default or breach hereunder.

 

                With

regard to the Option to Terminate Lease set forth in Paragraph 20.10 of the

Master Lease, Sublandlord covenants and agrees that it will not exercise the

same without Subtenant’s prior written consent, in which event Sublandlord and

Subtenant shall share pro rata the termination fee required to be paid to

Landlord, whereupon this Sublease Agreement will terminate concurrent with the

Master Lease.

 

                All

capitalized terms not otherwise defined herein shall have the meanings assigned

in the Master Lease.

 

                                                17.           Sublandlord’s Compliance with

Master Lease.

 

                                                                (a)    Sublandlord covenants that it holds a valid leasehold estate

for the Sublease Premises, has the full right to make this Sublease Agreement,

and that with full compliance with all of its obligations hereunder, Subtenant

shall have

 

 

6

quiet and peaceful enjoyment of the Sublease

Premises during the term of this Sublease Agreement.  Sublandlord represents and warrants that (i) the Master Lease

attached as Exhibit A is a true, correct and complete copy of the Master Lease,

(ii) the Master Lease has not been amended or modified except as expressly set

forth herein, and (iii) to the best of its knowledge, there does not exist any

event of a default or breach under the Master Lease or any circumstance or

condition which with the giving of notice and/or passage of time would

constitute such an event.  Sublandlord

further covenants that Sublandlord will not enter into any modification of the

Master Lease that adversely affects Subtenant’s rights under this Sublease

Agreement without first obtaining Subtenant’s prior written consent, which

consent shall not unreasonably be withheld.

 

                (b)           Master Lease Payments.  Sublandlord hereby covenants that it will

comply with all of its obligations as tenant under the Master Lease.  Sublandlord will pay to Landlord under the

Master Lease, as and when due, all rents and other amounts required to be paid

pursuant to the terms of the Master Lease, and that Sublandlord will not do any

act, nor fail to do any act, which would cause the Master Lease to become in

default.

 

                (c)           Master Lease Default.  Sublandlord agrees to immediately forward to

Subtenant a copy of any notices received by Sublandlord from Landlord which may

affect Subtenant’s rights hereunder.  In

the event Sublandlord fails to make any payments when due under the Master

Lease, or is otherwise in default thereunder for an obligation that is not

Subtenant’s hereunder, Subtenant may, but is not obligated to, following notice

to Sublandlord specifying the payment to be made or action to be taken, make

such payments on behalf of Sublandlord, or take such other action as may be

necessary, in Subtenant’s estimation, to cure such default, or to prevent the

Master Lease from being terminated.  All

amounts so paid by Subtenant, and all costs of taking such actions on behalf of

Sublandlord, together with any interest or penalty required to be paid in

connection therewith, shall be payable on demand by Sublandlord to Subtenant,

and if not so paid by Sublandlord and except if Sublandlord disputes such

amount in accordance with this sentence, may be applied by Subtenant to reduce

subsequent rent payments owed to Sublandlord under this Sublease Agreement;

provided, however, that if Sublandlord notifies Subtenant within five (5)

business days of Subtenant’s notice that it disputes with Landlord the amount

proposed to be paid or the action to be taken by Subtenant pursuant to the preceding

sentence, Sublandlord shall not be obligated to Subtenant for such amounts in

accordance with this sentence, unless and until it is finally determined (the

“Final Determination”) that such amounts paid or actions taken (or any portions

thereof) were, in fact, required of Sublandlord under the Master Lease.  If after such Final Determination, the

amounts are not so paid by Sublandlord to Subtenant, then Subtenant may reduce

subsequent rent payments owed to Sublandlord under this Sublease Agreement by

the amount finally determined.

 

18.                                 Subject to

Landlord’s Consent.  This

Sublease Agreement is conditioned upon and shall not become effective without

the Landlord’s consent, as required under the Master Lease, in the form set

forth on the last page hereof.  Subtenant

hereby relieves Sublandlord of any liability due to 

 

 

7

 

                                                Landlord’s

failure to consent to this Sublease Agreement. 

Sublandlord agrees to seek and obtain execution by Landlord of the

consent at the end of this Sublease Agreement, as required under Paragraph 10.1

of the Master Lease.  Time being of the

essence, if Sublandlord fails to obtain written approval from Landlord within

fifteen (15) days of the date of execution hereof by Subtenant, Subtenant may

cancel this Sublease Agreement, in which event Sublandlord shall immediately

return to Subtenant the first months’ rent paid pursuant to Paragraph 11

hereof, and the parties shall thereafter have no further obligations hereunder.

 

19.                                 Holdover.  In the event that Subtenant holds over after

the expiration of the Sublease terms or the earlier termination thereof,

Subtenant shall pay holdover rent equal to 125% of the rent in effect during

the last month of the Sublease term, plus any consequential damages incurred by

Sublandlord and/or Landlord due to Subtenant’s holdover.  Holdover for any partial month shall be

prorated on a daily basis.

 

20.                                 Brokerage

Commissions.  Upon

execution of this Sublease Agreement and written consent thereto by Landlord,

Sublandlord shall pay leasing commissions of $69,615.00 to Corporate Property

Services — CORFAC International for representing the Subtenant in regards to

the Sublease and $41,769.00 to Trammell Crow Company/Portland for representing

the Sublandlord.  Said commissions shall

be due and payable one-half upon full execution of the Sublease Agreement and

the balance upon commencement of Subtenant’s rent payments.  Sublandlord and Subtenant each warrant that

they have dealt with no other real estate broker or agent in connection with

this Sublease Agreement and Subtenant agrees to indemnify and hold Sublandlord

harmless from any cost, expense or liability (including reasonable attorneys’

fees) for any compensation, commission or charges claimed by any other real estate

broker or agent employed or claiming to represent or to have been employed by

Subtenant in connection with the negotiation of this Sublease Agreement.

 

21.                                 Notice.  All notices and demands which may or are to

be required or permitted to be given by either party on the other hereunder

shall be in writing.  Any notice, bill,

statement or payment may be given (and shall be deemed to have been duly given

upon receipt) if delivered personally, if sent via recognized overnight

delivery service, or mailed in a post-paid envelope, certified mail, return

receipt requested, addressed as follows, as the case may be:

 

Sublandlord

 

Epicor Software Corporation

195 Technology Drive

Irvine, California 92618

Attn: Director of Corporate

Facilities — Jon R. Johnson

 

 

 

8

 

Subtenant

 

Pixelworks, Inc.

7700 SW Mohawk

Tualatin, OR 97062

Attn: Chief Financial

Officer

 

Any party may change its address for purposes

hereof by written notice.

 

22.                                 Captions.  All captions to the paragraphs and

subparagraphs of this Sublease Agreement have been inserted for convenience of

reference only and shall not be construed as a part hereof.

 

23.                                 Time is of the

essence.  Time is of

the essence of this Sublease Agreement and each and all of its provisions.

 

24.                                 Entire

Agreement.  This

Sublease Agreement constitutes the entire agreement among the parties with

respect to the subject matter hereof, and it supersedes all prior or

contemporaneous agreements, negotiations or understandings with respect to said

subject matter.  This Sublease Agreement

may not be altered, changed or amended, except by an instrument in writing

signed by Sublandlord and Subtenant and consented to in writing by the Landlord

if such consent is required under the Master Lease.

 

 

                IN

WITNESS WHEREOF, the parties have executed this Sublease Agreement as of the

date first herein above set forth.

 

	

  AGREED

  AND ACCEPTED:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  SUBLANDLORD:

  	

   

  	

  SUBTENANT:

  
	

   

  	

   

  	

   

  
	

  EPICOR SOFTWARE COMPANY

  	

   

  	

  PIXELWORKS, INC.

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Lee Kim 

  	

   

  	

  By:

  	

  /s/ Hans H. Olsen

  
	

   

  	

   

  	

   

  	

  /s/ Jeff Bouchard

  
					

 

 

 

9

 

	

  Title:

  	

   CFO

  	

   

  	

  Title:

  	

   EXE Vice President, Chief Financial Officer

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Date:

  	

   9-17-01

  	

   

  	

  Date:

  	

   9/7/01

  

 

 

CONSENT:

 

The undersigned, Landlord under the Master

Lease, hereby consents to the foregoing Sublease without waiver of any

restriction in the Master Lease concerning further assignment or

subletting.  Provided Subtenant's

Alterations are completed pursuant to the Master Lease, Landlord also hereby

consents to Subtenant's Alterations and acknowledges that the Sublease Premises

need not be restored to the condition existing prior to Subtenant's Alterations

at the end of the term of the Sublease or the Master Lease.  Landlord certifies that, as of the date of

the Landlord's execution hereof, Sublandlord is not in default or breach of any

of the provisions of the Master Lease, and that the Master Lease has not been

amended or modified except as expressly set forth in the foregoing

Sublease.  Landlord agrees to send to

Subtenant at its address set forth in the Sublease Agreement, a copy of any

notice to Sublandlord under the Master Lease, and to accept any cure of a

default under the Master Lease made by Subtenant on behalf of Sublandlord.

 

LANDLORD:

 

COPPER

MOUNTAIN TRUST CORPORATION

AS TRUSTEE FOR QUEST GROUP TRUST VI

 

 

	

  By:

  	

  /s/ Tim West

  
	

   

  	

   

  
	

  Title:

  	

   Vice President

  
	

   

  	

   

  
	

  Date:

  	

   9/19/01

  
	

   

  	

   

  
	

   

  	

  /s/ Monte Johnson

  

 

 

10Exhibit 10

Exhibit 10.13

 

THIRD AMENDMENT TO LEASE

 

THIS

AGREEMENT, dated

for reference purposes only, March 1, 2002, is made by and between Copper

Mountain Trust Corporation, Trustees, for Quest Group Trust VI (“Landlord”),

and Pixelworks,

Inc., an Oregon Corporation (“Tenant”).

 

RECITALS:

 

A.                                   The

parties hereto entered into a Lease dated May 1, 1998, and amended by Addendum

A dated May 1, 1998 and First Amendment to Lease dated August 11, 2000, and

Second Amendment to Lease dated January 24, 2001 (the “Lease”), for certain

real property commonly known as Suite 111, 997 rentable square feet, Suite 110,

1,742 rentable square feet, Suite 107, 1,910 rentable square feet, and Suite

100, 3,029 rentable square feet, for a total of 7,678 rentable square feet,

known as “Existing Premises”, located in Lakeside Center, a Class A office

building described as 8100 S.W. Nyberg Road, Tualatin, Oregon 97062.

 

B.                                     The

parties desire to expand the Premises and to amend certain provisions thereof.

 

NOW, THEREFORE,

the parties hereto hereby agree as follows:

 

 

1.                                       Effective

April 1, 2002 Tenant shall expand into an additional 6,018 rentable square

feet, Suites 105 (1,347 rsf) and 207 (4,671 rsf), known as the “Expansion

Premises” as outlined on the attached Exhibits A-1 and A-2. Tenant and Landlord

also agree to extend the Existing Premises lease term 13 months effective

September 1, 2002.  The lease

termination date for both the Existing and Expansion Premises shall be

September 30, 2003.  Total

rentable square footage for Tenant as of 

April 1, 2002 shall be 13,696 rentable square feet.

 

2.                                       Effective

April 1, 2002 and continuing throughout the Lease Term, the additional monthly

rent for the Expansion Premises plus the current base rent, per the Lease is as

follows:

 

	

   

  	

   

  	

  Suites 100/107/110/111

  	

   

  	

   

  	

   

  	

  Suites 105/207

  	

   

  	

   

  
	

   

  	

   

  	

  Existing Premises

  	

   

  	

   

  	

   

  	

  Expansion Premises

  	

   

  	

  Total Rent

  
	

  04/01/02

  - 08/31/02

  	

   

  	

  $

  	

  14,564.00/mo.

  	

   

  	

  +

  	

   

  	

  $

  	

  11,033.00/mo.

  	

   

  	

  $

  	

  25,597.00/mo.

  
	

  09/01/02 - 09/30/03

  	

   

  	

  $

  	

  15,036.00/mo.

  	

   

  	

  +

  	

   

  	

  $

  	

  11,033.00/mo.

  	

   

  	

  $

  	

  26,069.00/mo.

  
													

 

3.                                       Tenant

will lease the Expansion and Existing Premises in “as is” condition.  Any tenant improvements to the Expansion and

Existing Premises would be at Tenant’s cost with Landlord approval.  Any tenant improvement construction work

must be performed by a contractor signatory to the construction unions.

 

4.                                       Tenant

shall deposit with Landlord additional security deposit in the amount of

$11,505.00 on April 1, 2002.  Tenant’s

total security deposit will be $26,069.00.

 

5.                                       Tenant’s

base year for operating expenses for the Existing and Expansion Premises shall

be calendar year 2002.  Prorata share of

operating expenses for the Existing and Expansion Premises shall be

24.72%.  Tenant shall continue to pay

prorata share of operating expenses on Existing Premises as stipulated in the Lease

Agreement and Amendments through August 31, 2002.

 

6.                                       Landlord

will provide Tenant one 48-month option to extend the lease term. Tenant must

provide Landlord 120 days prior written notice of Tenant’s intent to exercise

renewal option.  The rent schedule for

the renewal option is as follows:

10/01/03 - 12/31/04                               $23.50/sf

01/01/05 - 09/30/07                               $24.00/sf

 

7.                                       Landlord

shall pay a 5% broker fee to Corporate Property Services on the Expansion

Premises (Suites 105 and 207).  Landlord

does not pay a broker fee on the Existing Premises lease extension.

 

8.                                       As

amended by this Third Amendment to Lease, the Lease shall remain in full force

and effect, including all items in the Third Amendment to Lease now signed.

 

IN WITNESS WHEREOF,

the parties hereto have executed this Lease Amendment.

 

	

  LANDLORD:

  	

   

  	

  TENANT:

  
	

  Copper Mountain Trust, as

  Trustee for

  	

   

  	

  Pixelworks, Inc., an Oregon

  Corporation

  
	

  Quest Group Trust VI

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  By:

  	

   

   /s/ Tim West

  	

   

  	

   

  By

  	

   

   /s/ Hans Olsen

  
	

  Tim West, Vice

  President

  	

   

  	

  Hans Olsen, Executive

  Vice President

  
	

   

  Date:

  	

   

           3/21/02

  	

   

  	

   

  Date:

  	

   

           3/11/02

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