Exhibit 10.122


 


LEASE SURRENDER AND TERMINATION AGREEMENT


 


I.                                         PARTIES AND DATE.


 


This Lease Surrender and
Termination Agreement (“Agreement”) is made and entered into as of this 10 day
of February, 2009, between THE IRVINE COMPANY LLC, a Delaware limited liability
company, formerly The Irvine Company (“Landlord”), and MEADE INSTRUMENTS CORP.,
a Delaware corporation (“Tenant”).


 


II.                                     RECITALS.


 


Pursuant to a lease (“Lease”)
dated December 20, 1996, Landlord leased to Tenant those certain premises
(“Premises”) located at 6001 Oak Canyon, Irvine, California, as more fully
described in the Lease.


 


Landlord and Tenant
desire to terminate the Lease upon the terms and conditions contained in this
Agreement.


 


III.                                 TERMINATION.


 


For valuable
consideration:


 


A.                                   Termination Date. 
Subject to the timely performance by Tenant of its obligations herein,
Landlord and Tenant agree that the Lease shall terminate on February 15,
2009  (“Termination Date”).  Tenant shall quit and surrender possession of
the Premises to Landlord on or before February 28, 2009 in the condition
more particularly provided in Section III.H of this Agreement.


 


B.                                     Termination Payment. 
Tenant hereby agrees to pay Landlord, in addition to all Basic Rent and
Operating Expenses due and owing through the Termination Date, the sum of One
Million Two Hundred Thousand Dollars ($1,200,000.00) (the “Termination Payment”),
payable as follows:  (i) Five
Hundred Thousand Dollars ($500,000.00) shall be paid in cash concurrently with
the execution and delivery of this Agreement, and (ii) the balance of the
Termination Payment shall be paid by the delivery of a promissory note (the “Note”)
in favor of Landlord, in the form and with the content of Exhibit A
attached to this Agreement.  The Note
shall be secured by a letter of credit in the amount of the principal sum of
the Note (the Letter of Credit”) issued by Bank of America or by another
financial institution acceptable to Landlord, and delivered to Landlord
concurrently with the execution and delivery of this Agreement.


 


The Letter of Credit
shall be maintained in full force and effect through that date which is thirty
(30) days following the last scheduled payment date for principal amounts under
the Note.  Upon any default by Tenant
under the Note, Landlord shall be entitled to draw upon said Letter of Credit
by the issuance of Landlord’s sole written demand to the issuing financial
institution, which draw shall be in an amount necessary to pay any sum which
Tenant is obligated to pay under the Note.  
Any such draw shall be without waiver or any rights Landlord may have
under this Agreement or at law or in equity as a result of the default.  If any portion of the Letter of Credit is
drawn after a default by Tenant, Tenant shall within ten (10) days after
written demand by Landlord restore the Letter of Credit.  Failure to so restore said Letter of Credit
within said ten (10) days shall be a default by Tenant under this
Agreement.  Partial drawings upon said
Letter of Credit shall be permitted.


 


C.                                     Security Deposit. 
Landlord currently holds the sum of One Hundred Twenty-nine Thousand
Seven Hundred Forty-five Dollars ($129,745.00) as the Security Deposit under Section 4.3
of the Lease.  Of this amount, (i) Landlord
shall retain Sixty-Five Thousand Dollars ($65,000.00) as the “Security Deposit”
under the new “Hubble Lease” (as defined in Section III.G below), and (ii) the
remaining balance (in the amount of Sixty-Four Thousand Seven Hundred
Forty-Five Dollars ($64,745.00)) shall be returned to Tenant within thirty (30)
days following the Termination Date, provided that Tenant fully performs its
obligations under the Lease and this Agreement, including without limitation,
Tenant’s obligations under Section III.H below.


 


D.                                    Landlord’s Conditional Release of Tenant. 
Except for (i) the payment required to be made by Tenant pursuant
to Section III.B above, (ii) any rent or other charges owed by
Tenant, or other obligations required of Tenant set forth in the Lease from and
after the date of this Lease through including the Termination Date, and (iii) any
obligations, liabilities or losses which are based on this Agreement or any
indemnity or hold harmless agreement set forth in the Lease (collectively the “Excluded
Claims”), effective upon the ninety-first (91st)
day after Landlord’s receipt of the full amount of the Termination Payment
(which shall include all payments under the Note), Landlord forever releases
and discharges Tenant from any and all rights, causes of action, actions,
judgments, liens, indebtedness, damages, losses, claims, claims in bankruptcy,
liabilities, and demands of every kind and character in any way related to or
arising from the Lease, provided  however, that the release
granted by Landlord in this Section III.D shall: (x) all times be
subject to the provisions of Section III.E and Article IV of this
Agreement, and (y) not become effective and shall be null and void if a “Bankruptcy
Event” (as defined in Section III.E below) occurs on or before the
ninetieth (90th) day after Landlord’s receipt of the
Termination 


 

















 


Payment (which shall
include all payments under the Note).  In
connection with the foregoing conditional release (which does not include the
Excluded Claims), Landlord hereby expressly waives the provisions of Section 1542
of the California Civil Code, which provides:


 


“A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER, MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.”


 


It is understood by
Landlord that if the facts or law with respect to which the foregoing
conditional release is given hereafter turn out to be other than or different
from the facts or law in that connection not known to be or believed by
Landlord to be true, then Landlord hereto expressly assumes the risk of the
facts or law turning out to be so different, and agrees that the foregoing
conditional release shall be in all respects effective and not subject to
termination or rescission based upon such differences in facts or law.


 


E.                                      Bankruptcy Event. 
The parties agree (and Tenant acknowledges Landlord’s express reliance
thereon) that upon (i) Tenant filing a voluntary petition or becoming the
subject of an involuntary petition seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under an
present or future federal, state or foreign act or law relating to bankruptcy
or insolvency, including without limitation, Chapters 7 and 11 of the United
States Bankruptcy Code (collectively and each individually, a “Bankruptcy Event”),
and (ii) the initiation in any such proceeding of an action to avoid or
recover the payments made to Landlord under this Agreement (including, without
limitation, the Termination Payment) pursuant to the provisions of Chapter 5 of
the Bankruptcy Code or any similar state or foreign law, the release set forth
in Section III.D above, at Landlord’s election, shall be null and void and
Landlord shall retain any and all claims that may exist under the Lease or
otherwise against Tenant.


 


F.                                      Tenant’s Unconditional Release of
Landlord.  Effective upon the date of this Agreement,
Tenant forever releases and discharges Landlord from any and all rights, causes
of action, actions, judgments, liens, indebtedness, damages, losses, claims,
claims in bankruptcy, liabilities and demands of every kind and character in
any way related to or arising from the Lease. 
Not by way of limitation of the foregoing, Tenant represents that
Landlord has not failed to perform, and is not in any respect in default or
otherwise liable in the performance of, any of its obligations under the Lease,
nor in connection with the negotiation and execution of the Lease, the
administration of the Lease, and the leasing, operations, or management of the
Building.  In connection with the
foregoing unconditional release, Tenant hereby expressly waives the provisions
of Section 1542 of the California Civil Code, which provides:


 


“A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER, MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.”


 


It is understood by
Tenant that if the facts or law with respect to which the foregoing release is
given hereafter turn out to be other than or different from the facts or law in
that connection not known to be or believed by Tenant to be true, then Tenant
hereto expressly assumes the risk of the facts or law turning out to be so
different, and agrees that the foregoing release shall be in all respects
effective and not subject to termination or rescission based upon such
differences in facts or law.


 


G.                                     Contingency.   
Tenant understands and agrees that the effectiveness of this Agreement
is contingent upon the mutual execution and delivery of a new lease agreement
by and between Landlord and Tenant for approximately 25,136 rentable square
feet of space located in a building at 27 Hubble, Irvine, California (the “Hubble
Lease”).


 


H.                                    Restoration. 
Notwithstanding the provisions of Sections 7.3 and 15.3 of the Lease,
Tenant shall restore the Premises, at its sole cost and expense on or before
the Termination Date, only in the following particulars (together with the
accompanying repairs to the Premises):


 


(i)                                     the removal of the optics/lab area
portion of the Premises (including all mechanical and electrical);


 


(ii)                                  the removal of the compressed air system
in the warehouse portion of the Premises;


 


(iii)                               the removal of all “above-standard”
electrical systems in the warehouse portion of the Premises and restoration of
the original electrical system;


 


(iv)                              the removal of the observatory and all
related equipment;


 


(v)                                 the removal of all racking equipment in
the warehouse portion of the Premises; and


 


(vi)                              the removal of Tenant’s signage, cabling,
security system(s) and all of Tenant’s personal property and debris from
the Premises.


 


2

















 


IV.                                 TENANT’S REPRESENTATIONS AND WARRANTIES.


 


A.  Authorization/Reasonably Equivalent Value:  Tenant represents and warrants:  (i) that Tenant was not acting under any
misapprehension as to the effect of this Agreement, and acted freely and
voluntarily and was not acting under any coercion or duress; (ii) that the
execution of this Agreement was duly authorized by Tenant; and (iii) that
Tenant believed and now believes that the consideration given by each party for
this Agreement represents reasonably equivalent value.


 


B.  Solvency of Tenant:  Tenant represents and warrants that it is not
currently insolvent as that term is defined in Section 101(32) of Title 11
of the United States Bankruptcy Code, nor will Tenant become insolvent as a
result of this Agreement.


 


C.  Agreement Improves Tenant’s Financial
Position:  Tenant represents and
warrants that the completion of this Agreement will enhance Tenant’s overall
financial position and that Tenant has proffered and requested this Agreement
to improve its financial position.


 


V.                                     GENERAL.


 


A.  Counterparts.  If this Agreement is executed in
counterparts, each shall be considered an original.  Any photographic, photostatic, or other copy
of this Agreement may be introduced in a proceeding subject to state or federal
rules of evidence without foundation.


 


B.  Defined Terms.  All words commencing with initial capital
letters in this Agreement which are not defined in this Agreement shall have
the same meaning in this Agreement as in the Lease.


 


C.  Corporate and Partnership Authority.  If Tenant is a corporation or partnership, or
is comprised of either or both of them, each individual executing this
Agreement for the corporation or partnership represents that he or she is duly
authorized to execute and deliver this Agreement for the corporation or
partnership and that this Agreement is binding upon the corporation or
partnership in accordance with its terms.


 


D.  Attorneys’ Fees.  The provisions of the Lease respecting
payment of prevailing attorneys’ fees shall also apply to this Agreement.


 


VI.                                 EXECUTION.


 


Landlord and Tenant have
executed this Agreement as of the day and year first written above.


 


	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  THE IRVINE COMPANY LLC,

  	
   

  	
  MEADE INSTRUMENTS
  COPR.,

  
	
  a Delaware limited
  liability company

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/E. Valjean Wheeler

  	
   

  	
  By:

  	
  /s/Paul E. Ross

  
	
   

  	
  E. Valjean Wheeler

  	
   

  	
   

  	
  Paul E. Ross

  
	
   

  	
  President, Office
  Properties

  	
   

  	
   

  	
  Senior Vice President -
  Finance Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/Christopher J. Popma

  	
   

  	
  By:

  	
  /s/Steven G. Murdock

  
	
   

  	
  Christopher J. Popma

  	
   

  	
   

  	
  Steven G. Murdock

  
	
   

  	
  Vice President
  Operations, Office Properties

  	
   

  	
   

  	
  Chief Executive Officer

  



 


3
















 


PROMISSORY NOTE


 


$700,000.00             


 


                        ,
200 


 


1.                                      MAKER’S PROMISE TO PAY


 


FOR VALUE RECEIVED, MEADE INSTRUMENTS CORP.,
a Delaware corporation (“Maker”),
promises to pay to the order of THE IRVINE COMPANY LLC, a Delaware limited liability company
(“Payee”), at the address set
forth in Section 3 hereof, the principal sum of Seven Hundred Thousand
Dollars ($700,000.00), together with accrued interest on the unpaid principal
balance at the applicable rate as set forth in Section 2 hereof.  Maker acknowledges and agrees that Payee may
assign or otherwise transfer this Note at any time.  Payee or anyone who takes this Note by any
such transfer and who is entitled to receive payments under this Note is
sometimes hereinafter referred to as the “Note
Holder.”


 


2.                                      INTEREST


 


No
interest shall accrue on the principal balance of this Note. Notwithstanding
the foregoing, upon the occurrence of an Event of Default as described in Section 6(a) below,
and for so long as such default continues, the sum(s) of principal then
due and payable hereunder, whether by acceleration or otherwise, shall bear
interest at the per annum rate of ten percent (10%) (the “Default Rate”).


 


3.                                      PAYMENTS


 


NOTICE
TO MAKER:  THE PAYMENT OF PRINCIPAL AND
INTEREST AND ANY OTHER SUMS THEN DUE HEREUNDER IS A BALLOON PAYMENT.  MAKER HAS NO RIGHT WHATSOEVER TO EXTEND OR
RENEW THIS NOTE WHEN THE BALLOON PAYMENT BECOMES DUE ON THE MATURITY DATE.  NOTE HOLDER IS UNDER NO OBLIGATION TO
REFINANCE THE LOAN AT THAT TIME.


 


Maker
shall make payments of principal under this Note in accordance with the
following schedule:


 


(a)                                  Two Hundred Thousand Dollars
($200,000.00) on May 1, 2009;


 


(b)                                 Two Hundred Thousand Dollars
($200,000.00) on August 1, 2009; and


 


(c)                                  Three Hundred Thousand Dollars ($300,000.00)
on November 1, 2009 (the “Maturity Date”).


 


On the
Maturity Date, the entire unpaid principal balance hereof, together with
accrued but unpaid interest thereon and any other sums then due hereunder,
shall immediately become due and payable in full.


 


Any
payments received by Note Holder pursuant to the terms hereof shall be applied
first to the payment of any sums, other than principal and interest, due Note
Holder pursuant to the terms hereof, next to the payment of all interest
accrued to the date of such payment, and then to the payment of principal.  All payments hereunder are payable in lawful
money of the United States of America and shall be wired to the following
account of Note Holder, or shall be payable at such other place as the Note Holder
hereof may designate from time to time:


 


Wells Fargo Bank


San Francisco, CA


Account No:
4944677699


Account Name: TIC
- Tech Portfolio


Routing No:
121000248


[Amount of Wired
Amount or ACH]


Mead Instruments
Corp. - 663841-S29453


 


4.                                      MAKER’S RIGHT TO PREPAY


 


Maker
shall have the right to prepay all or part of the unpaid principal balance
hereof, together with accrued but unpaid interest thereon, at any time without
penalty.


 


EXHIBIT “A” TO LEASE SURRENDER

AND TERMINATION AGREEMENT


 


1

















 


5.                                      INTEREST RATE LIMITATION


 


If it
is determined that the transaction contemplated hereby is subject to the usury
laws of the State of California, Note Holder and Maker stipulate and agree that
none of the terms and provisions contained herein or in any document or
instrument executed in connection herewith shall ever be construed to create a
contract for the use, forbearance or detention of money requiring payment of
interest at a rate in excess of the maximum interest rate permitted to be
charged by the laws of the State of California. 
If any Note Holder shall collect monies which are deemed to constitute
interest which would otherwise increase the effective interest rate on this
Note to a rate in excess of the maximum rate permitted to be charged by the
laws of the State of California, all such sums deemed to constitute interest in
excess of such maximum rate shall, at the option of Note Holder, be credited to
the payment of the sums due hereunder or returned to Maker.


 


6.                                      DEFAULT


 


The
occurrence of any of the following shall be deemed to be an “Event of Default” under this Note:


 


(a)           the failure of Maker to pay
principal, interest and any other sums when due pursuant to the terms hereof;
or


 


(b)           the failure of Maker to fully comply
with any other covenant or obligation under this Note.


 


7.                                      REMEDIES


 


Upon
the occurrence of an Event of Default hereunder, Note Holder may, in its sole
and absolute discretion and without demand or notice to Maker, (a) declare
the entire unpaid balance hereof, together with accrued but unpaid interest
thereon and any other sums then due hereunder, immediately due and payable, and
(b) exercise any and all rights and powers and pursue any and all remedies
now or hereafter available under applicable law.  No delay or omission on the part of Note
Holder in exercising any right or remedy under this Note shall operate as a
waiver of such right or remedy.


 


8.                                      LATE CHARGE


 


If any
payment due hereunder is not received by the Note Holder within ten (10) calendar
days after the date such payment is due, Maker shall pay to Note Holder,
without demand, a late charge in an amount equal to four percent (4%) of the
amount past due.  It would be
impracticable or extremely difficult to fix the Note Holder’s actual damages if
payment is not paid when due hereunder, and said late charge shall be deemed to
be the Note Holder’s damage for any such late payment, but shall not limit the
Note Holder’s right to compel prompt performance of any obligation or to
exercise any other remedy under this Note. 
No late charge assessed shall exceed the maximum permitted by law.


 


9.                                      NOTICES


 


Any
notice, request, demand, instruction or other communication to be given to any
party hereunder shall be in writing and shall be deemed to have been duly given
three (3) business days after deposit in the United States mail or, if
personally delivered or sent by registered or certified mail, return receipt
requested, when delivered, as follows:


 


If to
Maker:                                  MEADE INSTRUMENTS CORP.


27 Hubble


Irvine, CA  92618


Attention:


 


If to
Payee:                                    THE IRVINE COMPANY LLC


550 Newport Center
Drive


Newport Beach, CA 
92660


Attn:  Vice
President Operations, Irvine Office Properties - Technology Portfolio


 


The
addressees and addresses for the purpose of this paragraph may be changed by
giving written notice of such change in the manner herein provided for giving
notice.  However, unless and until such
written notice of change is actually received, the last address and addresses
as stated by written notice, or provided herein if no written notice of change
has been received, shall be deemed to continue in effect for all purposes
hereunder.


 


10.                               WAIVERS


 


Maker
hereby waives diligence, presentment, protest and demand, notice of protest,
demand, dishonor and nonpayment of this Note, and notice of intention to
accelerate the maturity of this Note and expressly agrees that, without in any
way affecting the liability of Maker hereunder, Note Holder may extend 


 


2

















 


any maturity date or the time for payment of any
installment due hereunder, accept additional security, release any party liable
hereunder and release any security now or hereafter securing this Note.  Maker further waives, to the full extent
permitted by law, the right to plead any and all statutes of limitations as a
defense to any demand on this Note, or on any deed of trust, security
agreement, lease assignment, guaranty or other instrument now or hereafter
securing this Note.  Maker hereby waives
all rights of setoff and counterclaim with respect to this Note, including
rights of setoff and counterclaim with respect to this Note which may arise
from claims heretofore unknown to Maker.


 


11.                               ATTORNEYS’ FEES


 


If the Note Holder
seeks legal advice following a default by Maker hereunder or refers this Note
to collection or to reclaim, protect, preserve or enforce its interest in this
Note or under any instrument securing this Note, then Maker shall pay all
attorneys’ fees and expenses and other costs relating thereto.


 


12.                               THIS NOTE IS SECURED
BY A LETTER OF CREDIT.  This Note is secured by a Letter of Credit in the amount of Seven Hundred
Thousand Dollars ($700,000.00) issued by Bank of America (the “Letter of Credit”).


 


13.                               SEVERABILITY


 


Every
provision of this Note is intended to be severable.  In the event any term or provision hereof is
declared by a court of competent jurisdiction to be illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the balance
of the terms and provisions hereof, which terms and provisions shall remain
binding and enforceable.


 


14.                               NUMBER AND GENDER


 


In
this Note the singular shall include the plural and the masculine shall include
the feminine and neuter gender, and vice versa, if the context so requires.


 


15.                               TIME IS OF THE ESSENCE


 


Time
is strictly of the essence under this Note and any amendment, modification or
revision hereof.


 


16.                               CHOICE OF LAW


 


This
Note shall be governed by and construed in accordance with the laws of the
State of California.


 


17.                               JOINT AND SEVERAL LIABILITY


 


If
this Note should be signed by more than one party, the liability under this
Note of each party shall be joint and several. 
In addition, if Maker is a partnership, the liability under this Note of
each general partner of Maker, and the liability of each general partner of a
partnership which is itself a general partner of Maker, shall be joint and
several.


 


MAKER:


 


MEADE INSTRUMENTS CORP.,


a Delaware corporation


 


	
  By:

  	
  /s/Paul E. Ross

  	
   

  
	
   

  	
  Paul E. Ross

  	
   

  
	
   

  	
  Senior Vice President -
  Finance Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/Steven G. Murdock

  	
   

  
	
   

  	
  Steven G. Murdock 

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  



 


3