TERMINATION OF LEASE AGREEMENT
THIS TERMINATION OF LEASE
AGREEMENT (this "Agreement") is made as of this 30th day of January,
2009, by and between Continental 2361/2381 LLC, a California limited liability
company ("Lessor"), and Peerless Systems Corporation, a Delaware corporation
("Lessee").
RECITALS
WHEREAS Lessor and Lessee
entered into that certain Lease Agreement (the "Lease") dated August 1, 2006,
pursuant to which Lessor leased to Lessee and Lessee leased from Lessor those
certain premises (the "Premises"), commonly known as ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇. Any capitalized terms
used herein but not defined herein shall have the meaning ascribed to them in
the Lease;
WHERAS Lessee and Kyocera
Technology Development, Inc., a California corporation (“Kyocera”), entered into
that certain Standard Sublease dated April 30, 2008 (the “Sublease”);
and
WHEREAS the parties hereto
wish to provide for the termination of the Lease and the assignment and
assumption of the Sublease subject to certain conditions and certain other
matters, all as more particularly set forth below,
NOW, THEREFORE, the parties
hereto do hereby agree as follows:
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A.
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Termination
of Lease-Conditions.
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1. Lessor
and Lessee hereby agree that the Lease shall be terminated on January 31, 2009
(the “Effective Date”). Lessee shall be permitted to occupy, free of
charge, through February 28, 2009, the space that Lessee is presently occupying
on the fourth (4th) floor of the Building and on the third (3rd) floor of the
Building; however, until such time that Lessee shall completely vacate the
Premises, Lessee shall continue to comply with all of the terms and conditions
of the Insurance and Indemnification provisions set forth in Article 14 of the
Lease. Upon vacating the Premises, Lessee shall be permitted to leave
the Premises in its “AS-IS” condition, and Lessee shall not be required to
comply with any restoration obligation under the Lease, except, however, that
Lessee shall be required to remove all of its furniture, furnishings and
equipment from the Premises, and that Lessee shall surrender the Premises, in
good working order and condition, free from damage, commercially ordinary wear
and tear excepted.
2. Each
of Lessor and Lessee acknowledges that the other party will continue, through
the date Lessee shall vacate its Premises as indicated in Section 1 above, to
fully perform all obligations to be performed by such party under the Lease
(except, however, that Lessee shall be permitted to occupy the Premises free of
charge after January 31, 2009, pursuant to Section 1 above, and that Lessor
shall not be required to provide any janitorial services to Lessee after January
31, 2009).
3.
Concurrently with the return of this executed document by Lessee to Lessor,
Lessee shall pay Lessor a cancellation fee of Two Million Three Hundred
Ninety-Nine Thousand Dollars ($2,399,999.00). Lessee shall also
forfeit its security deposit of $110,000.00. The aforementioned fee
takes into consideration (1) all outstanding rent, parking and other charges due
to Lessor under the Lease through the Effective Date, (2) the credit to Lessee
of $69,300.00, which represents the difference between the security deposit of
$110,000.00 paid by Lessee under the Lease and the security deposit of
$40,700.00 paid to Lessee by its sublessee, Kyocera Technology Development, and
(3) a credit to Lessee of $329,587.00 for the unused Construction
Allowance.
4. Lessee
shall not be obligated to pay Lessor any outstanding charges for Operating
Expenses, to the extent that Lessee’s estimated payments towards said Operating
Expenses were less than the actual obligation owed, and Lessor shall not be
obligated to reimburse Lessee for any overpayment towards Operating Expenses, to
the extent that Lessee’s estimated payments towards said Operating Expenses were
more than the actual obligation owed.
5. Lessee
shall not be required to reimburse Lessor for any unpaid electricity charges
incurred through January 31, 2009, and Lessee shall not be required to reimburse
Lessor for any Operating Expenses or electricity charges incurred by Lessee from
February 1, 2009 through February 28, 2009.
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B.
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Mutual
Release.
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1. As of
the date that Lessee shall vacate the Premises, Lessee shall irrevocably and
unconditionally release and forever discharge Lessor, and Lessor's predecessors,
successors, assigns, executors and administrators, agents, employees,
representatives, attorneys, affiliates and all persons acting by, through, under
or in concert with Lessor (collectively, “Lessor's Releasees") or any of them,
from all actions, debts, liens, agreements, obligations, liabilities, claims,
rights, demands, damages, judgments, losses, costs and expenses, including,
without limitation, attorneys' fees, of any nature whatsoever, known or unknown
("Claim" or "Claims"), which Lessee now has, claims to have, at any time
heretofore had, claimed to have, against Lessor or any of Lessor's Releasees,
including, without limitation, any and all such Claims which arose from, were
based upon, or were related to Lessor's performance under the Lease and Lessee's
occupancy of the Premises thereunder.
2. Except
as regards all provisions in the Lease that specifically survive the termination
or earlier expiration of the Lease, including, but not limited to, subsections
B.2(a) through B.2(d) below, as of the date that Lessee shall vacate the
Premises, Lessor shall irrevocably and unconditionally release and forever
discharge Lessee, and Lessee's predecessors, successors, assigns, executors and
administrators, agents, employees, representatives, attorneys, affiliates and
all persons acting by, through, under or in concert with Lessee (collectively,
“Lessee's Releasees") or any of them, from all actions, debts, liens,
agreements, obligations, liabilities, claims, rights, demands, damages,
judgments, losses, costs and expenses, including, without limitation, attorneys'
fees, of any nature whatsoever, known or unknown ("Claim" or "Claims"), which
Lessor now has, claims to have, at any time heretofore had, claimed to have,
against Lessee or any of Lessee's Releasees, including, without limitation, any
and all such Claims which arose from, were based upon, or were related to
Lessee's performance under the Lease and Lessee's occupancy of the Premises
thereunder . The parties understand that Lessor shall not release and
discharge Lessee from the following obligations and liabilities under the Lease,
understanding that the following obligations and liabilities survive the
termination of the Lease:
(a)
Lessee's obligation to indemnify, defend and hold Lessor and Lessor's employees
harmless from and against any and all liabilities, costs, expenses, claims,
judgments, damages, penalties, fines and losses (including, without limitation,
diminution in value of the Premises, or other portions of the building, damages
for the loss or restriction or use of rentable and usable space or of any
amenity of the Premises or other portions of the Building, and sums paid in
settlement of claims, attorney's fees, consultant's fees and expert fees) which
arise as a result of the contamination of the premises or other portions of the
Project or building by Hazardous Materials caused or permitted by Lessee,
Lessee's employees or Lessee's invitees, or Lessee's sublessees or their
invitees;
(b)
Lessee's obligation to, at Lessee's expense, protect, defend, indemnify and hold
Lessor and Lessor's agents, contractors, licensees, employees, directors,
officers, partners, trustees and invitees, and any and all of Lessor's lenders
and mortgagees, harmless from and against any and all claims, arising out of or
in connection with, Lessee's use of the premises, the Building or the property,
the conduct of Lessee's business, any activity, work or things done, permitted
or allowed by Lessee in or about the premises or the property, Lessee's or
Lessee's employees nonobservance or nonperformance of any statute, ordinance,
rule, regulation or other law, or any negligence or willful act or failure to
act of lessee or lessee's employees (for which Lessee was required to purchase
and maintain Liability Insurance, Property Insurance, and/or other coverage
dictated by the Lease);
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(c) Lessee's
obligation to indemnify, defend and hold Lessor harmless from and against the
payment of all unpaid governmental taxes, fees and other charges (all of which
are defined in the Lease as "Assessments") as provided in Section 3.2
of the Lease;
(d)
Lessee's obligation to indemnify, defend, protect, and hold Lessor harmless from
and against any and all claims for mechanics, materialmen's or other liens in
connection with any alterations, repairs, or other work performed, materials
furnished or obligations incurred by or for Lessee.
3. Lessee
represents and warrants that Lessee is the sole owner of the tenant's interest
in the Lease and that it has not made any assignment, sublease, transfer,
encumbrance, conveyance, or other disposition of: (a) any interest it has in the
Lease; or (b) any claim, demand, obligation, liability, action, or cause of
action arising under or relating to the terms of the Lease, to any person or
entity.
4. Each
party represents and warrants to the other party and such other party's
Releasees that it has not assigned or transferred or purported to assign or
transfer any Claim or any portion thereof of any interest therein, and agrees to
indemnify, defend, and hold the other party and such other party's Releasees
harmless from and against any Claim based on or arising out of any such
assignment or transfer, or purported assignment or transfer.
5. The
releases set forth in Sections B.1 and B.2 above shall be effective
notwithstanding any law, whether statutory or common law, to the contrary,
including but not limited to California Civil Code Section 1542, which reads as
follows:
"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 HIS OR HER
SETTLEMENT WITH DEBTOR."
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C.
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Assignment of
Sublease.
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Lessee
assigns and transfers to Lessor all right, title, and interest in the Sublease
and Lessor accepts from Lessee all right, title, and interest. Lessor
assumes and agrees to perform and fulfill all the terms, covenants, conditions,
and obligations required to be performed and fulfilled by Lessee as Sublessor
under the Sublease.
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D.
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Miscellaneous.
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1. This
Agreement shall be binding upon the heirs, administrators, executors, successors
and assigns of each of the parties hereto.
2. Each
of the parties hereto, without further consideration, agrees to execute and
deliver such other documents and take such other action as may be necessary to
consummate more effectively the subject matter hereof.
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3. This
Agreement shall be construed in accordance with and all disputes hereunder shall
be governed by the internal laws of the State of California.
4. In the
event of any controversy or dispute arising out of this Agreement, the
prevailing party or parties shall be entitled to recover from the non-prevailing
party or parties, reasonable expenses, including, without limitation, attorneys'
fees and costs actually incurred.
5. As
used in this Agreement, the masculine, feminine or neuter gender and the
singular or plural number shall be deemed to include the others whenever the
context so indicates or requires.
6. The
section headings used in this Agreement are intended solely for convenience of
reference and shall not in any manner amplify, limit, modify or otherwise be
used in the interpretation of any of the provisions hereof.
7. This
Agreement shall not be effective until executed by both Lessor and
Lessee.
IN WITNESS WHEREOF, the
parties have executed this agreement on the date first set forth above,
acknowledging that each has carefully read each and every provision of this
agreement, and has entered into this agreement of its own free will and
volition.
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"LESSOR"
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"LESSEE"
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Continental
2361/2381 LLC
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Peerless
Systems Corporation
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a
California limited liability company
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a
Delaware corporation
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By:
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Continental
2361/2381, Inc.
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a
Delaware corporation
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its
Managing member
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By:
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By:
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President
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Name:
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Title:
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By:
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By:
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▇. ▇▇▇▇▇▇▇▇▇, ▇▇
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Secretary
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Print
Name:
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Title:
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