**Exhibit10.06**

 

**LEASE TERMINATION AGREEMENT AND MUTUAL RELEASE OF CLAIMS**

 

This Lease Termination Agreement and Mutual Release ofClaims (“Agreement”) is made, for reference purposes, as of the 4th day ofOctober, 2002, by and between SQUARE 24 ASSOCIATES dba SQUARE 24 ASSOCIATES,L.P. (“Landlord”), on the one hand, and ZAMBA CORPORATION (“Tenant”), on theother hand, with reference to the following facts:

 

A.            Landlordand Tenant entered into an Office Lease dated as of September 14, 1998 (the“Original Lease”), as amended by that certain First Amendment to Lease dated asof October 15, 1998 (the “First Amendment”), that certain Second Amendment toLease dated as of December 21, 2000 (the “Second Amendment”), and that certainThird Amendment to Lease dated as of February 6, 2002 (collectively, the“Lease”), pursuant to which Tenant agreed to lease from Landlord certain officespace located at Hacienda West, Suite 345, 3875 Hopyard Road, Pleasanton, CA(“the Premises”), which Premises are more fully described in the Lease.

 

B.            Underthe Original Lease, Tenant provided Landlord with a security deposit in theamount of $10,791.00.  Under the SecondAmendment, Tenant provided Landlord with an additional security deposit of$24,815.91.  The original securitydeposit and the additional security deposit shall be referred to collectivelyas the Security Deposit.

 

C.            Onor about January 9, 2002, Tenant and Park Place Capital Corporation (“ParkPlace”) entered into a Sublease dated as of January 9, 2002 (the “Sublease”), pursuantto which Park Place agreed to sublease from Tenant approximately 6,201 rentablesquare feet, as more particularly described in the Sublease (the “SubleasePremises”).  Landlord granted itsconsent to the Sublease pursuant to that certain Sublease Consent and Agreementdated as of February 7, 2002 between Landlord, Tenant, and Park Place (the“Consent”).

 

D.            Onor about July 12 and July 15, 2002, Landlord served Tenant with a Three-DayNotice To Pay Or Quit Possession Of The Premises And Notice Of Termination.

 

E.             Onor about July 12, 2002, Landlord served Park Place with a Notice Of Election ToContinue Sublease Following Termination Of Master Lease pursuant to Section4.1(a) of the Sublease Consent and Agreement (the “Notice”).

 

F.             Exceptfor Park Place’s continued occupancy of the Sublease Premises, Tenant hasvacated the Premises.

 

G.            Theparties now desire to settle and compromise any and all claims which they haveagainst each other arising out of the Lease and/or the Premises.

 

NOW, THEREFORE, in consideration of the foregoing, andthe mutual promises contained herein, and for other good and valuableconsideration, the parties agree as follows:

 

1.             Payment.  Tenant shall pay Landlord as follows:

 

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(a)           Uponexecution of the Agreement, Tenant relinquishes all right, interest andentitlement to the Security Deposit.

 

(b)           Onor before October 4, 2002, Tenant shall pay, by cashier’s check made payable to“Square 24 Associates,” the sum of Thirty Thousand Dollars and no cents($30,000.00).

 

(c)           Onor before October 18, 2002, Tenant shall pay, by cashier’s check madepayable to “Square 24 Associates,” the sum of Twenty Thousand Dollars and nocents ($20,000.00).

 

2.             Assignment of Tenant’s Interest in Sublease. Tenant hereby acknowledges that, pursuant to Section 4.1(a) of theConsent, Landlord has elected to continue the Sublease as a direct lease,subject to the provisions of Section 4.2 of the Consent.  In connection therewith, Tenant herebyassigns and transfers to Landlord all of Tenant’s right, title and interest inand to the Sublease, effective as of July 19, 2002.  Without limiting the foregoing, Tenant hereby irrevocably assignsto Landlord any and all claims, of any nature whatsoever, arising from orrelating to the Sublease which Tenant has against Park Place.  If the assignment of any of such claims isdeemed to be unlawful or otherwise unenforceable, Tenant shall nevertheless beobligated to assign the other, assignable claims to Landlord.  Nothing herein shall obligate the Landlordto prosecute or take any other action on the claims assigned to them byTenant.  In addition, Tenant agrees thatit shall take all action necessary to transfer to Landlord all of Tenant’srights in connection with the security deposit provided by Park Place pursuantto the Sublease.

 

3.             Lease Termination. Landlord and Tenant acknowledge and agree that the Lease is deemedterminated as of July 19, 2002, and Tenant and Landlord shall have no furtherrights, obligations, or claims with respect to each other arising under theLease, except for (a) the waivers of claims or rights and the releases and theobligations of Tenant under the Lease to indemnify, protect, defend and holdharmless Landlord and other Indemnitees (as defined in Section 5 below), and(b) any obligations arising under this Agreement.  Tenant hereby agrees that any and all options granted to Tenantunder the Lease to extend the term of the Lease and any rights of first refusalor first offer granted to Tenant under the Lease, if any, shall be of nofurther force or effect.

 

4.             Releases.

 

(a)           Releaseof Tenant.  Following satisfactionof the payment obligations specified in Paragraph 1, Landlord, for itself andits past, present and future parents, subsidiaries, affiliated entities,directors, partners, officers, shareholders, members, agents, employees,successors and assigns, and each of them (the “Landlord Releasing Parties”), dohereby release and forever discharge Tenant, its past, present and futureparents, subsidiaries, affiliated entities, directors, partners, officers,shareholders, members, agents, employees, successors and assigns (collectively“the Tenant Released Parties”) of and from any and all claims, demands,damages, debts, liabilities, actions and causes of action of every kind andnature whatsoever (hereinafter “Claims”), whether now known or unknown, whichthe Landlord Releasing Parties ever had, now have, or may have against theTenant Released Parties, or any of them, which relate in any

 

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way to the Lease, the Premises, the Sublease, and/or the Consent,except as specified in paragraph 3 hereof. Nothing herein, however, shall be construed as a release of any Claimsthat the Landlord Releasing Parties may have against Park Place.

 

(b)           Releaseof Landlord.  Upon execution of theAgreement, Tenant, for itself and its past, present and future parents,subsidiaries, affiliated entities, directors, partners, officers, shareholders,members, agents, employees, successors and assigns, and each of them(collectively, the “Tenant Releasing Parties”), do hereby release and foreverdischarge Landlord, its past, present and future parents, subsidiaries,affiliated entities, directors, partners, officers, shareholders, members,agents, employees, successors and assigns, and each of them (the “LandlordReleased Parties”), of and from any and all Claims, whether now known orunknown, which the Tenant Releasing Parties ever had, now have, or may have againstthe Landlord Released Parties, or any of them, which relate in any way to theLease, the Premises, the Sublease, and/or the Consent.

 

(c)           Waiverof Civil Code Section 1542.  It isunderstood that there is a risk that subsequent to the execution of thisAgreement, each of the Parties might incur or suffer loss, damage or injurywhich is in some way related to, or caused by, matters or transactions whichare the subject of this Agreement, but which were unknown or unanticipated atthe time this Agreement is signed.  Itis understood that the facts with respect to which this general release isgiven may hereafter turn out to be different from the facts now known to it orbelieved to be true, and each of the Parties expressly assume the risk of thefacts turning out to be so different and agree that the foregoing generalrelease shall be in all respects effective and not subject to termination orrescission as a result of any such difference in facts.  Each of the Parties acknowledge that theyhave been advised by legal counsel and are familiar with the provisions ofCalifornia Civil Code section 1542, which provides as follows:

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**A general release does not extend to claims which thecreditor does not know or suspect to exist in his favor at the time of executingthe release, which is known by him must have materially affected his settlementwith the debtor.**

 

Each of the Parties hereto, being aware of said code section, with fullknowledge and intent to execute a full and complete release, hereby expressly waiveany rights they may have thereunder, as well as under any other statute orcommon law principles of similar effect.

 

5.             Representations and Warranties.

 

(a)           Tenant’sRepresentation.  Tenant representsand warrants to Landlord that (i) with the exception of the Sublease, Tenanthas not assigned, encumbered or otherwise transferred the Lease or any interestunder the Lease or any claim, obligation, action or cause of action arisingfrom the Lease; (ii) all corporate action has been taken by Tenant to approvethis Agreement, and the person signing this Agreement on behalf of Tenant hasbeen duly authorized to sign and deliver this Agreement on behalf of Tenant;(iii) no proceeding has been commenced by or against Tenant which seeks todeclare Tenant a bankrupt or an insolvent or to liquidate or dissolve thecorporation, Tenant has made no general assignment of its assets for thebenefit of its creditors, and no corporate action has been taken by Tenantauthorizing any such proceeding,

 

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action, or assignment; (iv) to the best of Tenant’s knowledge, Tenantdid not use, manufacture, store, or dispose of any hazardous or controlledsubstances or wastes which are regulated by any state, local or federal laws orordinances on the Premises and to the best of Tenant’s knowledge, no suchhazardous or controlled substances or wastes have been spilled or otherwisedisposed of on the Premises during the term of this Lease; and (v) thisAgreement constitutes a legal, valid and binding Agreement of Tenantenforceable against Tenant in accordance with its terms.

 

(b)           Landlord’sRepresentation.  Landlord representsto Tenant that (i) all partnership and/or corporate action has been taken byLandlord to approve this Agreement and the person signing the Agreement onbehalf of Landlord has been duly authorized to sign and deliver this Agreementon behalf of Landlord; and (ii) this Agreement constitutes a legal, valid andbinding Agreement of Landlord enforceable against Landlord in accordance withits terms.

 

6.             Miscellaneous.

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(a)           VoluntaryAgreement.  This Agreement isexecuted voluntarily and without duress or undue influence on the part of or onbehalf of the parties, or of any other person, firm or other entity.

 

(b)           PartiesRepresented by Counsel.  The partiesrepresent and acknowledge that each of them has been represented by counsel oftheir choice in the negotiations for and in the preparation of this Agreementand all matters covered by or related to this Agreement.  Each party has read this Agreement and hasbeen advised by such counsel with respect to all rights which are affected bythis Agreement and is fully aware of the contents of this Agreement and itslegal effect.  Each party herebyauthorizes and directs its respective attorneys to execute and deliver suchother and further documents as may be required to carry out the terms of thisAgreement.

 

(c)           Constructionand Enforceability.  This Agreementis the product of negotiations between the Landlord and Tenant and shall not beconstrued strictly for or against either party.  If any provision of this Agreement shall be held to be invalid orunenforceable, it shall be adjusted rather than voided, if possible, in orderto give effect to the intent of the Landlord and Tenant, and all otherprovisions of this Agreement shall continue in full force and effect to theextent permitted by law.

 

(d)           EntireAgreement.  The parties agree andacknowledge that this Agreement represents the entire understanding betweenthem, and that no promises or representations of any kind other than as setforth herein have been made by, or on behalf of, the parties to oneanother.  Each party specifically agreesthat, in entering into this Agreement, he, she or it has not relied on anyrepresentation or opinion of fact, law or otherwise, made by any other party orattorney, other than the representations set forth in writing herein.

 

(e)           Successorsand Assigns.  This Agreement isbinding upon and shall inure to the benefit of the Parties and their respectivesuccessors, assigns, predecessors, agents, servants, partners, officers,directors, attorneys, employees and representatives, and their respectivepresent, former and future heirs, executors and administrators.

 

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(f)            Attorneys’Fees and Costs.  Landlord and Tenantshall each bear their own costs and attorneys’ fees incurred in connection withthis Agreement.  In any arbitration,quasi-judicial or administrative proceedings or any action in any court ofcompetent jurisdiction, brought by either party to enforce any party’s rightsor remedies under this Agreement, including any action to collect any paymentsrequired under this Agreement, the prevailing party shall be entitled toreasonable attorneys’ fees and all costs, expenses and disbursements inconnection with such action, including the costs of reasonable investigation,preparation and professional or expert consultation, which sums may be includedin any judgment or decree entered in such action in favor of the prevailingparty.  This provision is separate andseveral and shall survive the merger of this Agreement into any judgment onthis Agreement.

 

(g)           Venue.  Any suit, action, arbitration or otherproceeding of any nature whatsoever filed or initiated to enforce or interpretthe provisions of this Agreement shall be filed in the Superior Court of theCity and County of Alameda, California or in the Federal District Court for theNorthern District of California, if appropriate under federal law, and in noother forum.

 

(h)           GoverningLaw.  This Agreement is entered intoin accordance with the laws of the State of California and shall be governed byand interpreted in accordance with those laws.

 

(i)            Modificationsand Amendments.  No amendment,change or modification of this Agreement shall be valid unless made in writingand signed by all parties hereto.

 

(j)            FurtherAssurances.  Each of the partieshereto shall execute and deliver any and all additional papers, documents andother assurances and shall do any and all acts or things reasonably necessaryin connection with the performance of their obligations hereunder to carry outthe express intent of the parties hereto.

 

(k)           Partiesto Bear Own Costs.  All parties tothis Agreement shall bear their own attorneys’ fees and costs of suit in thenegotiations for and completion of this Agreement.

 

(l)            Headings.  The various headings used in this Agreementare solely for the convenience of the parties and shall not be used tointerpret this Agreement.

 

(m)          Authority.  Each signatory hereto represents that eachhas the requisite and actual authority to bind the party for whom suchsignatory signs.

 

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IN WITNESSWHEREOF, the undersigned have executed this Agreement as of the first datehereinabove written.

 
| TENANT:                                                  | LANDLORD:                                                |
|----------------------------------------------------------|----------------------------------------------------------|
|                                                     |                                                     |
| ZAMBA CORPORATION,  a Delaware corporation               | SQUARE 24 ASSOCIATES  (d.b.a. Square 24 Associates L.P.) |
|                                                     |                                                     |
|                                                     | By:                                                      | Carr Real Estate Services, L.L.C., |
| By:                                                      | /s/ Ian Nemerov                                          |   | Its: | General Partner |
|                                                     |                                                     |
| Name: Ian Nemerov                                        | By:                                                      | Carr Real Estate Services Partnership |
|                                                     | Its:                                                     | Managing Partner |
| Its:      General  Counsel |                                                     |
|                                                     | By:                                                      | Carr Realty, L.P., |
|                                                     | Its:                                                     | Managing Partner |
|                                                     |                                                     |
|                                                     | By:                                                      | CarrAmerica Realty Corporation |
|                                                     | Its:                                                     | General Partner |
|                                                     |                                                     |
|                                                     | By:                                                      | /s/ Christopher Peatross |   |
|                                                     |                                                     | Christopher Peatross  Managing Director |
|                                                          |                                                          |  |  |  |  |  |  |  |  |  |  |  |

 

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