EXHIBIT 10.1
Lease Termination and Release Agreement.
Legacy Bank of Texas ("Legacy"), collateral assignee under the
Assignment Rents and Leases (the "Assignment"), dated as of November 6, 2001
and signed by Legacy and C-Gate Construction, Inc. ("C-Gate") of certain
rights under that Lease Agreement dated November 6, 2001, (the "Lease")
between C-Gate and Integrated Performance Systems, Inc. ("IPFS"), and IPFS,
tenant under the Lease, hereby agree upon the termination of the Lease and
mutual release of claims upon the following terms and conditions:
1. Effective upon timely receipt of the total payment of $500,000.00
in cash paid ("Release Price") by IPFS to Legacy, the Lease shall be
terminated by Legacy and IPFS and all claims arising under the Lease
shall be released by Legacy, pursuant to and to the extent of Legacy's
authority to release claims and terminate (by termination, cancellation
or modification) the Lease under the Assignment and the Court Order, and
all claims which Legacy may have against IPFS shall become released under
paragraph 7 hereof.
2. The Release Price shall be paid as follows:
a. IPFS shall deposit with Legacy the sum of $100,000.00 by
5:00 p.m. on June 24, 2005 to be held in escrow ("Escrow Account") pending
approval of the release of claims and termination of the Lease by the United
States Bankruptcy Court for the Eastern District of Texas, Sherman Division
("Bankruptcy Court") in C-Gate's bankruptcy case ("Bankruptcy Case").
b. Within three (3) business days after the entry of the
Bankruptcy Court's order approving the release of claims and termination of
the Lease, but in no event later than July 31, 2005, IPFS shall pay Legacy
$400,000.00 and release all claims to the funds in the Escrow Account which
shall there upon be applied by Legacy toward payment of the balance of the
Release Price.
c. Legacy shall also apply the Release Price received from IPFS
hereunder toward payment of its claim against C-Gate in the Bankruptcy Case.
3. IPFS and Legacy shall file with the Bankruptcy Court a joint
motion (the "Motion") seeking the Court's authorization for either C-Gate or
Legacy to agree, on behalf of the bankruptcy estate of C-Gate, to terminate
the Lease and release IPFS from all claims arising under the Lease. Such
approval by the Bankruptcy Court can be in the form of an approval coupled
with the dismissal of the Bankruptcy Case. However, the dismissal of the
Bankruptcy Case will not include the dismissal of the adversary proceeding
wherein IPFS and Best Circuit Boards, Inc. are third party plaintiffs
against various parties.
4. If IPFS pays the Release Payment in full as required in this
agreement, IPFS shall be allowed until the end of the day on July 31, 2005
to vacate the premises described by the Lease at no rent. Provided that IPFS
provides written notice to Legacy not later than July 20, 2005, IPFS may
extend the date to vacate the leased premises until the end of the day on
August 31, 2005 at no rent. IPFS and Legacy (pursuant to and to the extent
of its authority under the Assignment) shall abide by the following
provisions of the Lease while it is in possession of the leased premises,
notwithstanding termination of the Lease: 2.01, 3.04 - 3.10, Article 4
(except for 4.04), 5.01, 5.02, 5.03 Article 6, 7.02(A)(1)(2) and 7.02B,
8.05 - 8.08, and until IPFS vacates the premises, and "Event of Default"
shall mean a default that remains uncured seven (7) days after IPFS receives
written notice thereof from Legacy. Legacy shall have no liability or
obligation to IPFS with respect to its possession and use of the premises
whatsoever at any time or under any circumstances. If IPFS does not vacate
the premises by July 31, 2005 (unless extended to August 31, 2005 pursuant
to this Agreement) and the Lease has been terminated, IPFS shall pay hold
over rent of $1,000 a day to Legacy. Legacy and its agent may show the
premises to prospective purchasers while IPFS is in possession.
5. IPFS hereby ratifies and renews all of its obligations under the
Lease and acknowledges that the Lease Modification dated as of November 1,
2004, is null and void and does not affect the obligations of IPFS under
the Lease agreement. IPFS also waives any rights it may have, if any,
under the Lease Modification and all defenses related thereto or arising
thereunder, and agrees that the Lease is in full force and effect, unamended
by the Lease Modification. The agreement in this paragraph is effective and
enforceable even if the Bankruptcy Court does not grant the Motion.
6. IPFS hereby releases Legacy, its officers, directors,
shareholders, employees and attorneys, from any and all claims, actions
or causes of action arising out of or related to the Lease, the Lease
Modification, the Bankruptcy Case, and all other claims, actions or causes
of action which IPFS may have or assert against any of the released parties,
except claims arising under this Agreement; IPFS warrants and represent that
it has not assigned any claim it may have against the released parties to
any other person, firm or corporation. The agreement in this paragraph is
effective and enforceable even if the Bankruptcy Court does not grant the
Motion.
7. Effective upon payment of the full Release Price to Legacy as
herein provided, Legacy (on its behalf and pursuant to and to the extent of
Legacy's authority under the Assignment and, if authorized by the Bankruptcy
Court, for and on behalf of the estate of C-Gate) releases IPFS, its
officers, directors, shareholders, employees and attorneys, from any and all
claims, actions or causes of action arising out of or related to the Lease,
the Lease Modification, the Bankruptcy Case, and all other claims, actions
or causes of action which Legacy or C-Gate may have or assert against any
of the released parties, except claims arising under this Agreement; Legacy
warrants and represent that it has not assigned any claim it may have
against the released parties to any other person, firm or corporation;
provided, however, this provision shall not become effective or be
enforceable unless the full Release Payment of $500,000 is paid by IPFS to
Legacy as required herein. The agreement in this paragraph is effective and
enforceable even if the Bankruptcy Court does not grant the Motion.
8. If IPFS fails to pay the full $500,000 Release Payment to Legacy
for any reason by July 31, 2005, Legacy may apply the $100,000 Escrow
Account to the Lease obligations of IPFS and IPFS shall remain fully liable
under the Lease for all payments and obligations due thereunder, un-amended
by either this agreement or the Lease Modification.
9. The agreement establishing the Escrow Account will provide that
the initial payment of the Release Price of $100,000 will be held by Legacy
in escrow pending the approval of this Agreement by the Bankruptcy Court.
The funds may be released to Legacy by either a subsequent written consent
of IPFS or an Order of the Bankruptcy Court or other Court having
jurisdiction, as provided herein.
10. IPFS and Legacy do not waive, reduce or release any claims of any
kind or character (whether known or unknown, sounding in tort or contract)
that IPFS and Legacy or either of them may have against C-Gate, its
officers, directors, shareholders or its affiliates.
Signed: June 22, 2005
Agreed and Accepted:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Legacy Bank of Texas
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Senior Vice President
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/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Integrated Performance Systems, Inc.
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: CFO
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