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                                                                   Exhibit 10.60

                           LEASE TERMINATION AGREEMENT
                           ---------------------------


         This Lease Termination Agreement ("AGREEMENT") is made and entered into
as of October 14, 2002, by and between WATER GARDEN COMPANY L.L.C., a Delaware
limited liability company ("LANDLORD") and INTEGRATED INFORMATION SYSTEMS, INC.,
a Delaware corporation ("TENANT") with reference to the following facts and
objectives:

                                    RECITALS
                                    --------

         A. LEASE. Landlord and Tenant are parties to that certain Office Lease
dated as of March 10, 2000 (the "LEASE") for premises located at 1620 26th
Street, Suite 2040 North, Santa Monica, California, all as more particularly
described in the Lease (the "PREMISES"). All capitalized terms used herein,
unless otherwise defined in this Agreement, shall have the meaning assigned to
them in the Lease.

         B. LETTER OF CREDIT. Tenant's obligations under the Lease were secured
by an irrevocable letter of credit in the original amount of Two Hundred Thirty
Thousand Dollars ($230,000.00) and the proceeds thereof (collectively, the
"LETTER OF CREDIT"), which Letter of Credit has been fully drawn by Landlord in
accordance with its terms and the terms of the Lease.

         C. TENANT'S DEFAULT; LANDLORD'S DAMAGES. Tenant acknowledges that it is
in default under the Lease, an Event of Default has occurred under the Lease,
and that any applicable period provided in the Lease for the cure of such
default has expired. As a result of such default, Landlord has sustained damages
under the Lease net of the Letter of Credit in excess of Three Hundred Fifty
Thousand Dollars ($350,000.00).

         D. COMPLAINT. On May 24, 2002, Landlord filed its Complaint for Damages
for Breach of Written Lease ("COMPLAINT") in the Superior Court of the State of
California for the County of Los Angeles, West District, commencing Case No. SC
072270, to terminate the Lease and recover its damages.

         E. LEASE TERMINATION. Landlord and Tenant desire to enter into this
Agreement to terminate the Lease, to confirm Tenant's vacation of the Premises,
to confirm Landlord's right to retain the full amount of the Letter of Credit,
and to release one another from their respective obligations under the Lease,
except as otherwise provided herein.

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein and the payment of the sum set forth below, the parties hereby agree as
follows:


                                    AGREEMENT
                                    ---------

1.       TERMINATION AND RELEASE.
         -----------------------

         Landlord and Tenant hereby agree that, conditioned upon the performance
by Tenant of the provisions of this Agreement, including without limitation,
Tenant's payment of the Termination Fee and Attorney Fees as specified in
Section 3 below, the Lease will terminate and be of no further force and effect.



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2.       SURRENDER OF PREMISES.
         ---------------------

         Tenant has vacated the Premises. Tenant hereby surrenders and delivers
exclusive possession of the Premises to Landlord. Hereafter, Landlord shall be
entitled to lease and/or use the Premises in its sole and absolute discretion
and Tenant shall have no further rights in and to the Premises or any personal
property or improvements located therein. Tenant hereby assigns and transfers to
Landlord all right, title and interest of Tenant in and to any personal property
and tenant improvements located on or about the Premises.

3.       TERMINATION FEE; WAIVER OF CIVIL CODE SECTION 1951.2.
         ----------------------------------------------------

         (a) In consideration for Landlord's execution of this Agreement, (a)
Tenant shall pay to Landlord the sum of (i) Eighty Thousand Dollars ($80,000.00)
(the "TERMINATION FEE") plus (ii) the fees and expenses of Landlord's attorneys
for negotiating and documenting this Agreement in the amount of Four Thousand
Seven Hundred Fifty Dollars ($4,750.00) ("ATTORNEY FEES"), and (b) Landlord
shall be entitled to retain, without liability to Tenant, and Tenant hereby
relinquishes to Landlord, all sums previously paid to and/or deposited with
Landlord, including, without limitation, all proceeds of the Letter of Credit.

         (b) Tenant hereby waives Civil Code Section 1951.2 and further waives
and relinquishes any statutory or other obligation of Landlord to mitigate its
damages; Landlord shall have the absolute right to receive and retain the
Termination Fee, Attorney Fees, and the Letter of Credit proceeds without regard
to any prior or subsequent mitigation of its damages.

         (c) Within three (3) business days after the date of this Agreement,
Tenant shall pay to Landlord the Termination Fee and the Attorney Fees by wire
transfer of good U.S. federa1 funds in accordance with the wire transfer
instructions attached hereto as Exhibit "A".

         (d) If Tenant fails to pay Landlord the Termination Fee and Attorney
Fees with good funds, Landlord shall be entitled to keep all amounts previously
received from Tenant pursuant to this Agreement or otherwise, the obligations
and liabilities (but not the rights) of Tenant under the Lease shall
automatically be reinstated, Tenant's failure to pay the Termination Fee or the
Attorney Fees shall be an automatic Event of Default under the Lease, with no
notice being necessary to Tenant and with no cure or grace periods or rights,
and Landlord shall be entitled to exercise any and all rights and remedies
available to it under the Lease, as well as at law or in equity.

         (e) Within five (5) days after receipt of payment of the Termination
Fee and Attorney Fees with good funds, Landlord shall file a Request for
Dismissal without prejudice of the Complaint.

4.       RELEASE OF LIABILITY; CONTINUING LIABILITY.
         ------------------------------------------

         4.1 RELEASE OF LIABILITY.
             --------------------

         Except as otherwise provided in Sections 3, 4.2, 5 and 6 hereof, upon
payment to Landlord of the Termination Fee and the Attorney Fees, Landlord and
Tenant and any assignee of Tenant's or Landlord's interest under the Lease (and
their respective agents, employees, representatives, successors and assigns)
shall be deemed irrevocably and unconditionally discharged and released from any
and all liability, whether known or unknown, under the Lease or any documents or
understandings arising under the Lease, and the Lease shall be deemed to be
terminated. Consistent with the foregoing, each of the parties expressly and
voluntarily waives and relinquishes all rights and benefits under Section 1542
of the



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California Civil Code if in any way applicable to this Agreement. Section
1542 of the California Civil Code provides as follows:

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

         Each party acknowledges that it has received the advice of legal
counsel with respect to the aforementioned waiver and understands the terms
thereof.

         4.2 CONTINUING LIABILITY.
             --------------------

         Notwithstanding anything to the contrary in this Agreement, if the
Termination Fee or the Attorney Fees should be set aside or should Landlord be
forced to disgorge any portion of the Termination Fee, the Attorney Fees, the
proceeds of the Letter of Credit, or other payment to Landlord hereunder as an
avoidable transfer or preferential transfer under any federal or state law, or
if Tenant's representations and warranties set forth in subclause (e) of Section
5 shall be false in any material respect, then the claims of Landlord for the
full amount of damages to which it is entitled under the Lease as a result of
Tenant's default thereunder shall be revived without regard to the terms and
conditions of this Agreement (in which case Section 3(b) hereof shall not be
applicable). Tenant shall indemnify, defend, protect and hold Landlord harmless
from and against all losses, costs, expenses (including, without limitation,
reasonable attorneys' fees and costs), and judgments incurred by Landlord as a
result of any challenge to the Termination Fee, the Attorney Fees, other payment
by Tenant made pursuant to this Agreement or the proceeds of the Letter of
Credit, or any breach of Tenant's representations and warranties set forth in
subclause (e) of Section 5.

5.       REPRESENTATIONS OF TENANT.
         -------------------------

         Tenant represents and warrants to Landlord that: (a) Tenant has not
assigned or sublet all or any portion of its interest in the Lease; (b) no other
person, firm or entity has any right, title or interest in the Lease, and there
are no mechanic's liens or other liens affecting the Premises or the Lease
created by or on behalf of Tenant; (c) Tenant has the full right, legal power
and actual authority to enter into this Agreement and to terminate the Lease
without the consent of any person, firm or entity; (d) the individual(s)
executing this Agreement on behalf of Tenant has the full right, legal power and
actual authority to bind Tenant to the terms and conditions hereof; and (e) the
detailed financial information about Tenant enclosed in the letters dated June
27, 2002 and September 26, 2002 from Tenant's General Counsel Mark Rogers to
Christine Page and/or Paul S. Rutter of Gilchrist & Rutter is true, correct and
complete in all material respects. Notwithstanding the termination of the Lease
and the release of liability provided herein, the representations and warranties
set forth in this Section 5 shall survive the termination of the Lease and the
closing of the transactions contemplated hereunder and Tenant shall be liable to
Landlord for any inaccuracy or any breach thereof.

6.       EQUAL TREATMENT WITH OTHER SIMILARLY SITUATED CREDITORS.
         -------------------------------------------------------

         Tenant acknowledges and agrees that Landlord's willingness to
compromise its actual damages for Tenant's default under the Lease is based and
conditioned upon, in part, no current unsecured creditor of Tenant receiving a
larger percentage payment on its unsecured net claim than Landlord ("unsecured
net claims" are calculated, in the case of a lease, as the lesser of (i) one
year's rent or (ii) the rent for the


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balance of the lease term, plus (iii) any unpaid past due rent, less (iv) any
security deposits or credits held by the lessor under the lease). Accordingly,
if Tenant pays, or agrees to pay, any other landlord, equipment lessor or
account payable in excess of $100,000 ("OTHER CREDITOR") a larger percentage
payment on its unsecured net claim than that which is being paid to Landlord
hereunder using the same methodology as was used to calculate Landlord's net
claim, then within five (5) days of such payment or agreement, Tenant shall pay
to Landlord such additional amount as is necessary so that the total of the
Termination Fee and such additional amount or amounts paid pursuant to this
Section 6 will equal the percentage payment to such Other Creditor. Concurrently
with any payment to, or the entering into an agreement to pay, an Other
Creditor, Tenant shall deliver to Landlord a copy or evidence of such payment or
agreement together with a certificate of the Chief Financial Officer of Tenant
certifying the percentage of the unsecured net claim of such Other Creditor
being paid and such other information and documents reasonably requested by
Landlord to verify compliance with this Section 6.

7.       MISCELLANEOUS.
         -------------

        7.1 BINDING AGREEMENT.
            -----------------

        This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their legal representatives, successors and permitted assigns.

        7.2 COSTS AND ATTORNEYS' FEES.
            --------------------------

        If any action or proceeding is brought by Landlord or Tenant to
interpret the provisions hereof or to enforce either party's respective rights
or obligations hereunder, the prevailing party shall be entitled to recover from
the unsuccessful party therein all costs incurred by the prevailing party in
such action or proceeding, including reasonable attorneys' fees to be fixed by
the court having jurisdiction thereof.

        7.3 HEADINGS.
            --------

        Section headings or captions contained in this Agreement are used for
reference only and shall not be deemed to govern, limit, or extend the terms of
this Agreement.

        7.4 ENTIRE AGREEMENT.
            ----------------

        All agreements, covenants, representations and warranties, express or
implied, oral or written, of Landlord or Tenant regarding the termination of the
Lease are contained herein. All prior and contemporaneous conversations,
negotiations, possible and alleged agreements, representations, covenants and
warranties by and between Landlord or Tenant concerning the subject matter
hereof other than those referred to herein are merged herein. This is an
integrated agreement.

        7.5 INDEPENDENT ADVICE OF COUNSEL.
            -----------------------------

        The parties hereto represent and declare that in executing this
Agreement they relied solely upon their own judgment, belief and knowledge, and
the advice and recommendations of their own independently selected counsel,
concerning the nature, extent and duration of their rights and claims, and that
they have not been influenced to any extent whatsoever in executing the same by
any representations or statements by one party to the other not expressly
contained or referred to in this Agreement.

        7.6 COUNTERPARTS.
            ------------


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        This Agreement may be executed in one or more counterparts, and each set
of duly delivered identical counterparts which includes all signatories shall be
deemed to be one original document.

        7.7 GOVERNING LAW
            -------------

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

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                    LANDLORD:

                                    WATER GARDEN COMPANY L.L.C.,
                                    a Delaware limited liability company


                                    By: /s/ David Chen
                                    Name: David Chen
                                    Title: Vice President
                                    Date Signed: October 14, 2002


                                    TENANT:

                                    INTEGRATED INFORMATION SYSTEMS, INC.,
                                    a Delaware corporation


                                    By: /s/ Mark N. Rogers
                                    Name: Mark N. Rogers
                                    Title: SVP & General Counsel
                                    Date Signed: October 14, 2002


                                    By: /s/ William A. Mahan
                                    Name:   William A. Mahan
                                    Title: EVP & CFO
                                    Date Signed: October 14, 2002