Exhibit 10.58
SETTLEMENT, LEASE TERMINATION
AGREEMENT AND MUTUAL GENERAL RELEASE
THIS SETTLEMENT, LEASE TERMINATION AGREEMENT AND MUTUAL GENERAL RELEASE
("Agreement") made and entered into on October 15, 2002, by and between Peridot
Properties III, LLC, a Colorado limited liability company ("Landlord"), and
Integrated Information Systems, Inc., a Delaware corporation ("Tenant").
RECITALS:
WHEREAS, by Office Lease, dated May 26, 2000, Tenant entered into a
lease ("Lease") with MONY/BDP Office I, L.L.C. ("MONY/BDP") for Suite 150, 00000
Xxxx Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("Premises");
WHEREAS, on or about June 29, 2001, the Lease was assigned to Landlord
when Landlord purchased the real property of which the Premises is a part;
WHEREAS, on August 2, 2002, Landlord commenced an unlawful detainer
action to regain possession of the premises and to recover monetary damages in a
case styled: Peridot Properties III, LLC v. Integrated Information Systems,
Inc., case no. 02CV2858, District Court, County of Arapahoe, State of Colorado
("Unlawful Detainer Proceedings");
WHEREAS, in the Unlawful Detainer Proceedings, a judgment for
possession of the Premises was entered in favor of Landlord and against IIS on
August 15, 2002;
WHEREAS, all claims for monetary damages asserted by Landlord against
Tenant in the Unlawful Detainer Proceedings will be dismissed without prejudice
upon execution of this Agreement and obtainment of the Approvals defined in
Section 1 of this Agreement, it being understood that any claim thereafter
asserted by Landlord shall be limited to a claim to enforce the terms of this
Agreement;
WHEREAS, the parties desire to terminate the Lease;
WHEREAS, the parties acknowledge that Tenant is going through a
negotiated restructuring with its lenders and creditors, regarding its vacated
facilities, leases, equipment leases, and certain other obligations and an
effort to obtain funding to settle such obligations;
WHEREAS, this settlement is expressly conditioned upon the approval by
Tenant's Board of Directors, completion of accounts receivable backed financing,
and acceptance of settlement offers by all of the major creditors and obligors
of Tenant; and
WHEREAS, Landlord and Tenant are desirous of terminating the Lease and
settling the Unlawful Detainer Proceedings as well as settling any and all
claims, known or unknown, demands, actions, and potential lawsuits of any kind
or nature between them, based in whole or in any part upon any contracts,
agreements, promises, leases, facts, conduct, activities,
transactions, events, or occurrences, known or unknown, which have or allegedly
have existed, occurred, happened, arisen, or transpired from the beginning of
time to the date of this Agreement, including but not limited to the Unlawful
Detainer Proceedings.
NOW, THEREFORE, in consideration of the foregoing, of certain payments
described below, the mutual undertakings of the parties, and the terms,
conditions, warranties, mutual general releases and mutual covenants not to xxx
hereinafter contained, the sufficiency and receipt of which are hereby
acknowledged, the parties agree as follows:
1. APPROVALS. Tenant's performance under this Agreement is expressly
conditioned upon the approval of this Agreement by Tenant's board of directors,
completion of accounts receivable backed financing, and acceptance of settlement
offers by all of the major creditors and obligors of Tenant (all of which shall
be referred to hereinafter as the "Approvals"). If the Approvals are not
obtained by October 31, 2002, this Agreement shall be deemed null and void and
of no further effect, and the parties shall be deemed to have such rights and
obligations as existed prior to the execution hereof.
2. LEASE TERMINATION. Notwithstanding anything to the contrary in this
Agreement, upon the execution of this Agreement by all parties, the obtainment
of the Approvals, and the performance by the Tenant under the provisions of
paragraph 3(a) of this Agreement, the Lease shall be deemed to have been
terminated and of no further force and effect for any purpose, and Tenant's
security deposit shall be deemed to have been forfeited to Landlord. At such
time, the parties shall be deemed to have mutually released each other from any
and all further obligations of any sort or nature whatsoever under the Lease.
3. PAYMENTS BY TENANT. Subject only to the parties executing this
Agreement and the Approvals being obtained, Tenant shall pay Landlord a total of
$106,256 as follows:
a. $64,256 shall be paid on or before October 31, 2002 (the "First
Payment Date"); and
b. The balance of $42,000 shall be paid in twenty (20) equal
quarterly installments of $2,100 each, commencing on the ninetieth day after the
First Payment Date and continuing quarterly thereafter until paid in full.
4. MUTUAL GENERAL RELEASES IN FAVOR OF LANDLORD. Subject only to the
obligations set forth in this Agreement and the Approvals being obtained, Tenant
hereby releases, acquits, remises and forever discharges Landlord and its
directors, officers, members, agents, assigns, representatives, attorneys,
heirs, executors, administrators, beneficiaries, and all persons acting by,
through, under or in concert with Landlord, or any of them of and from any and
all claims, demands, rights, liabilities, losses, judgments, actions, causes of
action, suits, obligations, or liability of any kind or nature (including but
not limited to, attorneys' fees, expenses of litigation, bad faith, and punitive
damages) that have arisen or occurred or that may arise or occur at any time in
the future based in whole or in any part upon any promises, agreements,
contracts, leases, facts, conduct, activities, transactions, events or
occurrences, known or unknown, which have or allegedly have existed, occurred,
happened, arisen or transpired from the beginning of time to the date of this
Agreement, including but not limited to,
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all claims asserted or that could have been asserted in the Unlawful Detainer
Proceedings and/or in any other civil action related in any way to the Lease.
5. MUTUAL GENERAL RELEASE IN FAVOR OF TENANT. Subject only to the
obligations set forth in this Agreement and the Approvals being obtained,
Landlord hereby releases, acquits, remises and forever discharges Tenant and its
directors, officers, stockholders, agents, assigns, representatives, attorneys,
heirs, executors, administrators, beneficiaries, and all persons acting by,
through, under or in concert with Tenant, or any of them of and from any and all
claims, demands, rights, liabilities, losses, judgments, actions, causes of
action, suits, obligations, or liability of any kind or nature (including but
not limited to, attorneys' fees, expenses of litigation, bad faith, and punitive
damages) that have arisen or occurred or that may arise or occur at any time in
the future based in whole or in any part upon any promises, agreements,
contracts, leases, facts, conduct, activities, transactions, events or
occurrences, known or unknown, which have or allegedly have existed, occurred,
happened, arisen or transpired from the beginning of time to the date of this
Agreement, including but not limited to, all claims asserted or that could have
been asserted in the Unlawful Detainer Proceedings and/or in any other civil
action related in any way to the Lease.
6. MUTUAL COVENANTS NOT TO XXX. Subject only to the obligations set
forth in this Agreement and the Approvals being obtained, Tenant on the one hand
and Landlord on the other hand do hereby mutually covenant not to institute any
suit or action at law or in equity against each other in any way related to the
Lease, Unlawful Detainer Proceedings, or any claims that were raised or could
have raised in the Unlawful Detainer Proceedings or in any other civil action
between them prior to the date of this Agreement. ("Subject Matter of the Mutual
Covenants"). These mutual covenants not to xxx xxx be plead and treated as a
complete defense to any action or proceeding that may be brought, instituted, or
taken by any party to this Agreement against the other party with regard to the
Subject Matter of the Mutual Covenants, and they shall forever be a complete bar
to the commencement or prosecution of any such action, litigation, arbitration,
or proceeding with respect to the Subject Matter of the Mutual Covenants. The
purpose of these mutual covenants not to xxx is to avoid further litigation.
7. CONFIDENTIALITY. The parties to this Agreement agree to maintain in
confidence the terms and conditions of this Agreement, except that they may
disclose the same as needed among themselves, their counsel, accountants and
lenders and as required by any regulatory or taxing authority or the rules of
any stock exchange, and in response to lawful process. If any party is served
with legal process that may require it to testify regarding any aspect of this
Agreement or the circumstances surrounding it then that party shall immediately
tender the defense of the legal process to the other parties, allowing the other
parties to defend against the process at their own expense and, if the defense
is unsuccessful and the other party is required to testify regarding this
Agreement, or the circumstances surrounding it the defending party may at its
own expense endeavor to limit such testimony to the minimum amount of
information required to be given by law. Any breach of this provision by any
party shall subject that party to any and all damages allowed in law as well as
to equitable relief. This confidentiality provision shall not apply to any legal
process brought by any of the parties to this Agreement to enforce any of the
obligations under it.
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8. TERMINATION OF THE UNLAWFUL DETAINER PROCEEDINGS. Subject only to
the parties executing this Agreement and the Approvals being obtained, Landlord
will immediately file a dismissal without prejudice of the Unlawful Detainer
Proceedings.
9. NO ADMISSION OF LIABILITY. The parties agree and understand that the
above-recited considerations are being paid or given in full accord,
satisfaction, and compromise of disputed claims and that the payments and
considerations are not admissions of liability by any party, but are being made
for the purpose of terminating all disputes and litigation, pending or proposed,
between the parties hereto.
10. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties and fully supersedes any and all prior agreements or
understandings between the parties with respect to the subject matter, and any
and all prior discussions, negotiations, communications, commitments, and
understandings related hereto are merged herein. This Agreement is executed on
behalf of and is intended to bind the parties and their respective successors
and assigns.
11. REMEDIES IN EVENT OF BREACH OF THIS AGREEMENT. Except as expressly
stated herein, this Agreement is fully effective upon delivery to the parties.
Except as expressly stated herein, the validity of this Agreement 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. Except as expressly stated herein, the breach of this Agreement
shall give rise only to a cause of action for that breach and shall not
reinstate the claims released under this Agreement. In the event of any
litigation, the prevailing party shall be entitled to recover its reasonable
attorneys fees from the other party.
12. MODIFICATION. This Agreement may not be amended, modified, or
terminated, in whole or in part, except by a written agreement executed by the
parties.
13. VOLUNTARY. This Agreement is executed voluntarily by each of the
parties after full disclosure hereto without any duress or undue influence on
the part of or on behalf of any of them. The parties hereto acknowledge that
they have been represented, or have had the opportunity to be represented, in
the negotiations for and in the performance of this Agreement by counsel of
their own choice; they have read this Agreement; they have had it fully
explained to them by such counsel or have had such opportunity; and they are
fully aware of the contents of this Agreement and of its legal effect.
14. CONTROLLING LAW. The validity, performance, construction,
interpretation, enforcement, and effect of this Agreement shall be governed by
and enforced in accordance with the substantive laws of the State of Colorado.
15. MISCELLANEOUS.
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a. If any provision of this Agreement is adjudged illegal,
invalid, or unenforceable, the entire Agreement shall not be construed to be
invalid, and all remaining terms or provisions shall continue in full force and
effect.
b. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original and all of which, taken
together, shall constitute one and the same instrument.
c. The Agreement is a fully negotiated document, and it shall
be deemed to have been jointly drafted by the parties. It shall not be more
strictly construed against any party as the draftsman.
d. Each party hereby represents and warrants that it has not
assigned or otherwise transferred any claim(s) which otherwise would be released
under this Agreement.
e. The parties to this Agreement hereby swear and affirm on
oath that all representations of fact appearing in them are true and correct to
the best of their knowledge.
f. Each party shall be responsible for its own fees and
expenses, including attorney's fees.
g. The parties hereto warrant that those persons signing on
behalf of the corporate entities have the requisite corporate authority to
execute and deliver this Agreement on behalf of the parties hereto.
h. The parties to this Agreement shall, without delay, execute
any documents, perform all acts, and do all things necessary to effectuate any
of the terms and provisions of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed, sealed and delivered as of the date first set forth above.
PERIDOT PROPERTIES III, LLC,
A COLORADO LIMITED LIABILITY COMPANY
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Manager
INTEGRATED INFORMATION SYSTEMS, INC.,
A DELAWARE CORPORATION
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: SVP, General Counsel
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