Exhibit 10.49
AGREEMENT
THIS AGREEMENT is made and entered into as of the 4th day of October,
2002, by and among Integrated Information Systems, Inc., a Delaware corporation
("IIS"), Action Performance Companies, Inc., an Arizona corporation ("Action"),
and xxxxxxxx.xxx, inc., an Arizona corporation, successor by merger to
xxxxxxxx.xxx, inc., a Delaware corporation (together "goracing" and collectively
with Action, "A/G").
RECITALS
A. Action entered into a certain Master Equipment Lease with General
Electric Capital Corporation, a New York corporation ("GECC") dated as of
December 22, 1998, including Computer Equipment Schedule No. 1 dated December
22, 1998, Computer Equipment Schedule No. 2 dated February 18, 1999, and
Addendum to Schedules No. 001 and 002 to Master Lease Agreement dated as of
February 18, 1999 (collectively the "Action Master Equipment Lease"), whereby
Action leased certain equipment (the "Action Equipment") from GECC.
B. goracing entered into a certain Master Equipment Lease with GECC
dated as of August 9, 1999, including Computer Equipment schedule No. 01 dated
October 1, 1999, Computer Equipment Schedule No. 02 dated November 5, 1999,
Furniture Schedule No. 003 dated December 29, 1999, and Furniture Schedule No.
004 dated January 24, 2000 (collectively the "goracing Master Equipment Lease")
from GECC. (The Action Equipment and the goracing Equipment are hereinafter
collectively referred to as the "Equipment").
C. Action, as lessor, and IIS, as lessee, entered into a sublease dated
March 28, 2000 (the "1480 Sublease") with respect to premises located 0000 Xxxxx
Xxxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000 (the "Building");
D. H-B Tempe, L.L.C., an Arizona limited liability company, by Xxxxxx
Development Corporation, an Arizona corporation ("H-B"), as prime landlord with
respect to the premises located 0000 Xxxxx Xxxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000,
consented to the 1480 Sublease;
E. Action and goracing, as sublessors, and IIS, as sublessee, entered
into an equipment sublease dated March 28, 2000 ( "Equipment Sublease 1") with
respect to certain Equipment Action and goracing had leased from GECC;
F. goracing, as sublessee, and IIS, as sublessor, entered into an
equipment sublease dated March 28, 2000 ("Equipment Sublease 2") with respect to
a portion of the Equipment goracing had leased from GECC under the goracing
Master Lease Agreement;
G. goracing, as seller, and IIS, as purchaser, entered into an asset
purchase agreement dated March 28, 2000 (the "Asset Purchase Agreement"),
pursuant to which goracing sold to IIS certain office and computer equipment;
H. goracing and IIS entered into a services agreement dated March 28,
2000 (the "Services Agreement"), pursuant to which goracing agreed to purchase a
certain amount of services from IIS within two years of the date of the Services
Agreement;
I. As of March 22, 2002, Action and GECC amended Computer Equipment
Schedule No.1 and Computer Equipment Schedule No. 2 to the Action Master
Equipment Lease in order to extend the term through March 2003 and to provide
for a purchase of the equipment leased under such schedules upon expiration of
the schedules at a purchase price of $1.00;
J. IIS is in the process of negotiating a restructuring with its
lenders and creditors, regarding its vacated facilities, leases, equipment
leases, and certain other obligations and obtaining funding to settle such
obligations ("Restructuring"); and
K. The parties desire to fully settle, resolve, and compromise all
issues arising out of the 1480 Sublease, Equipment Sublease 1, Equipment
Sublease 2, the Asset Purchase Agreement and the Services Agreement
(collectively, the "March 2000 Agreements") through the date hereof consistent
with the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants set forth in this Agreement, and as full, complete and total
accord, compromise, satisfaction and settlement of and for all issues arising
under or with respect to the March 2000 Agreements, the parties agree as
follows:
1. EFFECT ON THE 1480 SUBLEASE; ENTRY INTO NEW SUBLEASE. The 1480
Sublease is hereby terminated as of the date hereof, and IIS and Action agree to
execute and deliver a new sublease (the "Revised 1480 Sublease") in the form of
EXHIBIT A hereto. Action agrees to use its best efforts to obtain the consent of
H-B to the Revised 1480 Sublease. The Revised 1480 Sublease calls for IIS to pay
total Rent in the amount of $40,184.98 per month (the "Revised 1480 Rent") and a
pro rata share of the Additional Rent (the "Revised Additional Rent"), on a
month-to-month basis for the second floor of the Building. IIS and Action, as
between themselves, agree that the amount of the Revised 1480 Rent and Revised
Additional Rent shall not increase in the event Action is unable to obtain the
consent of H-B to the Revised 1480 Sublease.
2. EFFECT ON EQUIPMENT SUBLEASE 1 AND EQUIPMENT SUBLEASE 2. Equipment
Sublease 1 and Equipment Sublease 2 are hereby terminated as of the date hereof.
Except as may otherwise be agreed upon in writing, IIS shall cease use of the
equipment subleased from A/G as of the date hereof. IIS shall identify and
deliver to A/G all Equipment subleased to IIS under Equipment Sublease 1 and
Equipment Sublease 2.A/G will use best efforts to help
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assist IIS in separating leased equipment from equipment owned by IIS in order
that A/G may return such leased equipment to GECC or make other arrangements for
its use or disposition.
3. EFFECT ON ASSET PURCHASE AGREEMENT. IIS, Action and goracing
acknowledge and agree that there are no continuing obligations under the Asset
Purchase Agreement and that this Agreement shall have no effect on the transfers
of title accomplished by and under the Asset Purchase Agreement.
4. EFFECT ON SERVICES AGREEMENT; ENTRY INTO PREFERRED PROVIDER
AGREEMENT. The Services Agreement is terminated as of the date hereof. IIS and
Action agree to execute and deliver a new agreement for services (the "Preferred
Provider Agreement"), in the form of EXHIBIT B hereto, pursuant to which IIS
will be the preferred provider of Microsoft solutions to Action for a period of
one(1) year with automatically renew thereafter for additional periods of one
(1) year each unless either party gives the other written notice of non-renewal
at least thirty (30) days prior to the expiration of the then current term.
5. CONSIDERATION. As consideration for the full, complete and total
accord, compromise, satisfaction and settlement of and for all issues arising
under or with respect to the March 2000 Agreements, IIS agrees to pay Action
$190,000 upon completion of the Restructuring and $750,000 in 16 quarterly
payments of $46,875 commencing October 1, 2003 and continuing each January 1,
April 1, July 1 and October 1 thereafter through July 1, 2007. Upon execution
and delivery of this Agreement, each of Action and goracing authorizes IIS to
complete and file one or more UCC Financing Statement Amendments as may be
necessary to terminate any Financing Statement(s) either previously filed which
name IIS as the debtor.
6. RESTRUCTURING. IIS' performance under this Agreement is expressly
conditioned upon the approval of this Agreement by the Board of Directors of
IIS, upon IIS' completion of accounts receivable backed financing and upon
acceptance of settlement offers by all of the major creditors and obligors of
IIS in the Restructuring.
7. CONFIDENTIALITY. The terms and conditions contained in this
Agreement are and will remain confidential between the parties and no party may
disclose any of the provisions contained in this Agreement to any third party or
entity other than to its lenders, attorneys, agents, and the like who have a
legitimate business reason to know such information, except as may be required
under applicable law, including governmental orders, securities laws and the
rules and regulations of any stock exchange upon which the disclosing party's
securities are listed or otherwise admitted for trading.
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8. RELEASES.
(a) RELEASE OF THE CLIENT PARTIES. IIS, for itself and on behalf of
each of its shareholders, officers, directors, agents, employees, successors and
assigns (collectively, the "IIS Parties") hereby releases and forever discharges
A/G and each of their respective shareholders, officers, directors, agents,
employees, successors and assigns (collectively, the "A/G Parties") of and from
any and all obligations and defaults, acts, actions, causes of action, suits,
disputes, rights, claims and demands at law or in equity (whether real or
contingent, known or unknown), that each IIS party ever had, now has or may
hereafter have against any of the A/G Parties, arising from or related to the
March 2000 Agreements, or any of them, at any time prior to the date of this
Agreement, EXCEPTING, only the obligations of the parties, created by, arising
out of, or by virtue of the terms and conditions of this Agreement or any
agreement delivered pursuant hereto, and EXCEPTING actual fraud or fraud in the
inducement.
(b) RELEASE OF THE IIS PARTIES. A/G, for itself and on behalf of
each of the A/G Parties, hereby releases and forever discharges each of the IIS
Parties of and from any and all obligations and defaults, acts, actions, causes
of action, suits, proceedings, disputes, rights, claims and demands at law or in
equity (whether real or contingent, known or unknown), that each A/G Party ever
had, now has, may hereafter have against any of the IIS Parties, arising from or
related to the March 2000 Agreements, or any of them, at any time prior to the
date of this Agreement, EXCEPTING, only the obligations of the parties, created
by, arising out of, or by virtue of the terms and conditions of this Agreement
or any agreement delivered pursuant hereto, and EXCEPTING actual fraud or fraud
in the inducement.
9. REPRESENTATIONS AND WARRANTIES. Each of the parties represents and
warrants that it has the full legal right, power and authority to enter into
this Agreement and to consummate its obligations as contemplated by this
Agreement, and that this Agreement constitutes a valid and binding agreement of
it and is enforceable against it in accordance with its terms.
10. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the
representations, warranties, covenants and agreements set forth in this
Agreement shall survive the execution, delivery, and performance of the
obligations of and under this Agreement.
11. REPUTATION AND GOODWILL. From and after the date hereof, neither
party shall take any action that is injurious to the reputation or goodwill of
the other party.
12. NOTICES. All notices required or permitted to be given hereunder
shall be in writing and shall be deemed received, delivered, and given when
delivered in person against receipt, or 24 hours after having been sent via
facsimile with confirmation copy, or five days after being deposited in the
United States mail, postage prepaid, registered or certified mail, addressed as
follows:
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If to IIS: Integrated Information Systems, Inc.
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: 000-000-0000
If to Action Action Performance Companies, Inc.
or goracing: 0000 Xxxx Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: 000-000-0000
Any party may change the address to which notices are to be given by providing
notice of such change in conformance with the provisions of this paragraph.
13. ADDITIONAL ACTIONS. Each party agrees to do all acts and things and
to make, execute and deliver such written instruments and documents, as shall
from time to time be reasonably required to carry out the terms, provisions and
intentions of this Agreement.
14. COVENANT NOT TO XXX. The parties understand and agree that this
Agreement may be pleaded as a complete bar to any action or suit before any
administrative body, arbitrator or court with respect to any claim under
federal, state, local, or other law relating to any possible claim that existed
or may have existed (whether now known or unknown) at any time up through the
date of this Agreement, with respect to the March 2000 Agreements, excepting
only claims relating to the obligations of the parties arising out of the terms
and conditions of this Agreement, and excepting actual fraud or fraud in the
inducement.
15. ATTORNEYS' FEES. In the event of any claim, controversy or dispute
arising out of or relating to this Agreement, or the breach hereof, the
prevailing party in that action, as determined by the applicable trier of fact,
shall be entitled to receive reasonable attorneys' fees and costs actually
incurred by the prevailing party in connection with such claim, controversy or
dispute.
16. SEVERABILITY. In the event a court of competent jurisdiction
determines that any portion of this Agreement is in violation of any statute or
public policy, then only the portions of this Agreement that violate that
statute or public policy will be stricken. All portions of this Agreement that
do not violate any statute or public policy will continue in full force and
effect. Further, any court order striking any portion of this Agreement shall
modify the stricken terms as narrowly as possible to give as much effect as
possible to the intentions of the parties under this Agreement.
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17. WAIVER. Failure to insist upon strict compliance with any of the
terms, covenants or conditions under this Agreement will not be deemed a waiver
of that term, covenant or condition, nor will any waiver or relinquishment of,
or failure to insist upon strict compliance with, any right or power under this
Agreement at any one or more times be deemed a waiver or relinquishment of that
right or power at any other time or times.
18. INTEGRATION. This Agreement represents the entire agreement between
the parties with respect to the subject matter of this Agreement. Except as set
forth herein, all agreements previously entered into with respect to the subject
matter of this Agreement are superseded by this Agreement, and no
representations, warranties, inducements or oral agreements have been made by
the parties except as expressly set forth in this Agreement.
19. REMEDIES IN THE EVENT OF BREACH. Except as expressly stated herein,
this Agreement is fully effective upon delivery and is not dependent upon and
may not be defeated by any further performance or non-performance of any
obligations, conditions, covenants, promises, warranties or similar undertakings
to be performed or not to be performed in the future by the parties under the
March 2000 Agreements or any of them. The breach of any such duties or of this
Agreement shall give rise only to a cause of action for a breach of this
Agreement and shall not reinstate any claim released under this Agreement.
20. CONSTRUCTION; COUNTERPARTS. The parties agree that each has had an
opportunity to participate in the drafting of this Agreement and to have its
respective counsel review this Agreement and that any rule of construction to
the effect that ambiguities are to be resolved against the drafting party will
not apply to the interpretation of this Agreement. This Agreement may be
executed in any number of counterparts, each of which will be deemed an
original, and all of which will together constitute one and the same instrument.
21. GOVERNING LAW. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement shall be governed by and
construed, interpreted and enforced in accordance with the laws of the State of
Arizona, notwithstanding any Arizona or other conflict of laws provisions to the
contrary.
22. BINDING NATURE OF AGREEMENT; AMENDMENT. This Agreement is binding
on and inures to the benefit of the parties and their respective successors and
assigns. This Agreement may be amended only by a written agreement executed by
all parties affected by the amendment.
* * * THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY. * * *
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written by their duly authorized officers.
Integrated Information Systems, Inc., Action Performance Companies, Inc.
a Delaware corporation an Arizona corporation
By: /s/ Xxxxxxx X. Xxxxx By: /s/ R. Xxxxx Xxxxxx
Name: Xxxxxxx X. Xxxxx Name: R. Xxxxx Xxxxxx
Title: EVP & CFO Title: CFO
xxxxxxxx.xxx, Inc.
an Arizona corporation as successor to
xxxxxxxx.xxx, Inc.
a Delaware corporation
By: /s/ R. Xxxxx Xxxxxx
Name: R. Xxxxx Xxxxxx
Title: CFO
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