LEASE TERMINATION AND SETTLEMENT AGREEMENT
This Lease Termination and Settlement Agreement ("Agreement") is entered
into as of the 25th day of February, 2002 ("Effective Date"), by and between
PWREF/MCC-CHINA BASIN, LLC., a Delaware limited liability company ("Landlord"),
and RATEXCHANGE CORPORATION, a Delaware corporation ("Tenant"). (Landlord and
Tenant shall hereinafter collectively be referred to as the "Parties".)
R E C I T A L S :
A. BRE/CBL, L.L.C., a Delaware limited liability company ("BRE"),
predecessor-in-interest to Landlord with respect to the Building described
below, and Tenant entered into that certain Office Lease ("Original Lease")
dated October 14, 1999, as amended by the First Amendment to Office Lease, dated
February 21, 2000 (the "First Amendment"), and the Second Amendment to Office
Lease, dated June 15, 2000 (the "Second Amendment"), whereby BRE leased to
Tenant, and Tenant leased from BRE, approximately 5,571 rentable square feet of
space, commonly known as Suites 3705 and 3515 (the "Premises") located on the
third (3rd) floor of the Wharfside Building at 000 Xxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000 (the "Building"). The Original Lease, the First Amendment and
the Second Amendment are collectively referred to as the "Lease", a copy of
which is attached hereto as Exhibit A.
B. Pursuant to the terms of the Lease, Landlord holds the proceeds of a
letter of credit in the amount of One Hundred Forty Five Thousand Nine Hundred
Thirty Seven Dollars and 25/00 ($145,937.25) (the "Letter of Credit"), which
Letter of Credit was provided by Tenant for the benefit of Landlord and BRE
pursuant to the Lease. The Letter of Credit was drawn upon in accordance with
the terms of the Lease.
C. In October, 2001, Tenant vacated the Premises and filed a lawsuit
against Landlord for breaching the covenant of quiet enjoyment ("Tenant's
Claims") and Landlord responded to Tenant's complaint and cross-complained
against Tenant for breach of the Lease ("Landlord's Claims"), which claims are
presently pending in the Superior Court of the State of California, in and for
the City and County of San Francisco as Action No. 324564 (hereinafter the
"Pending Action").
D. In order to avoid litigation of the matters alleged in the Pending
Action, as well as other disputed issues between the Parties, Landlord and
Tenant have agreed to enter into this Agreement to settle their claims and
release one another from any further liability, except as otherwise provided
herein.
A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing recitals and the
conditions and the covenants hereinafter contained, and for other consideration
hereinafter set forth, the receipt
and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby
agree as follows:
1. Settlement of Claims and Termination of the Lease. Upon the receipt by
Landlord of (1) the payment by Tenant in the amount of Fifty Thousand and 00/100
dollars ($50,000), in lawful money of the United States and (2) the delivery by
Tenant to Landlord of both (x) a stock certificate or certificates for Fifty
Thousand shares (50,000) of common stock of Tenant, which common stock shall be
restricted stock pursuant to Rule 144 promulgated by the Securities and Exchange
Commission and which shall bear a legend so stating, and (y) a duly executed
Registration Rights Agreement in the form attached hereto as Exhibit B, then as
of the Effective Date of this Agreement, the Lease shall immediately be deemed
terminated and of no further force or effect and the Mutual Release set forth in
Section 4 of this Agreement shall also become effective.
2. Letter of Credit. Tenant hereby waives any rights or claims to the
proceeds from the Letter of Credit, which proceeds are hereby deemed earned by
Landlord under the Lease as of the Effective Date of this Agreement.
3. Dismissal of Pending Action. Upon delivery by Tenant of the
consideration provided in Section 1 and upon the complete execution and delivery
of this Agreement, Tenant will file a dismissal with prejudice of Tenant's
Claims, and Landlord shall file a dismissal without prejudice of Landlord's
Claims.
4. Mutual Release of Liability. The Parties, for themselves and for their
respective successors, predecessors, agents, employees, attorneys, and assigns,
and any person or entity claiming by, under, or through any of them, hereby
release, acquit and forever discharge each other, including their respective
successors, predecessors, agents, employees, attorneys, and assigns, of and from
any and all actions, causes of action, suits, debts, liens, contracts, rights,
agreements, obligations, promises, liabilities, claims, demands, damages,
controversies, losses, costs and expenses (including, but not limited to,
attorney's fees and costs actually incurred), past, present or future, known or
unknown, fixed or contingent, suspected or unsuspected, of any nature or kind
whatsoever between them, including (without limiting the generality of the
foregoing) all claims or causes of action arising out of, or relating in any way
to, the matters alleged, or which could have been alleged, in the Pending
Action. Each of the Parties acknowledges that there is a risk that subsequent to
the execution of this Agreement, one or both of the Parties could decide or
determine that obligations exist to it or that it has incurred or suffered
damages which were unknown or unanticipated at the time this Agreement was
executed, which if known may have materially affected its decision to execute
this Agreement. Each of the Parties further acknowledges and agrees that, by
reason of the release contained herein, it is assuming the risk of such unknown
matters and agrees that this release applies thereto. Therefore, the risk of
such unknown matters having been bargained for between the Parties as a part of
the consideration for this Agreement, each of the Parties expressly waives and
releases all rights and benefits conferred upon it by the provisions of Section
1542 of the California Civil Code, which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT
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TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY 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 release and waiver and understands the terms
thereof.
5. Representations of Tenant. Tenant represents and warrants to Landlord as
follows:
(a) Tenant has not heretofore 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;
(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) Tenant is a corporation duly organized, validly existing,
authorized to exercise all its corporate powers, rights and privileges, and in
good standing in the States of California and Delaware and all other
jurisdictions in which it is doing business; and
(e) All issued and outstanding shares of Tenant's common stock (i)
have been duly authorized and validly issued, (ii) are fully paid and
nonassessable, and (iii) to the best of Tenant's knowledge, formed after a
reasonable and good faith inquiry, have been issued in compliance with all
applicable state and federal laws concerning the issuance of such securities.
Notwithstanding the termination of the Lease and the release of liability
provided for herein, the representations and warranties set forth in this
Section 5 shall survive the termination of the Lease and Tenant shall be liable
to Landlord for any material inaccuracy or breach thereof.
6. Representations of Landlord. Landlord represents and warrants to Tenant
as follows:
(a) Landlord has sufficient liquid and other assets and experience and
sophistication in investment matters that it does and would qualify as an
"Accredited Investor" within the meaning of the federal and state securities
laws and regulations;
(b) Landlord has conducted its own independent due diligence, with the
assistance of its own legal and financial advisors having appropriate expertise
in such matters, concerning the present and potential financial and business
condition and prospects of Tenant and into the present and/or potential value of
the common stock of Tenant, and has relied solely on the results thereof,
including the advice of its own advisers, in deciding to accept 50,000 shares of
common stock of Tenant as part of the consideration for this Agreement;
(c) Other than as expressly represented in this Agreement, Landlord
has not relied upon anything stated, orally or in writing, expressly or by
implication, by Tenant in
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deciding to enter into this Agreement and/or to accept 50,000 shares of common
stock of Tenant as part of the consideration for this Agreement;
(d) Landlord understands and acknowledges that the 50,000 shares of
common stock of Tenant which are to be delivered as part of the consideration
for this agreement are restricted shares which have not been registered pursuant
to either state or federal securities laws, that there is presently no available
market for such shares and that such shares may not be freely transferred or
sold. Landlord further understands and acknowledges that Tenant makes no
representation, express or implied, that there ever will be a market or means of
transferring or selling such shares;
(e) Landlord understands and acknowledges that (i) the 50,000 shares
are restricted securities (as defined under Rule 144) and may not be offered,
sold or otherwise transferred unless and until registered under the Securities
Act or pursuant to an exemption from the registration requirements thereof and
(ii) the certificates representing the Shares will bear a legend substantially
in the following form:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF THE SECURITIES MAY BE
EFFECTED BY THE COMPANY OR ITS TRANSFER AGENT, IN THE ABSENCE OF SUCH
REGISTRATION OR ANY EXEMPTION THEREFROM."
(f) Landlord shall rely solely on its own legal and financial advisors
with respect to the transferability of such shares at any time in the future.
Notwithstanding the termination of the Lease and the release of liability
provided for herein, the representations and warranties set forth in this
Section 6 above shall survive the termination of the Lease and Landlord shall be
liable to Tenant for any material inaccuracy or breach thereof.
7. Continuing Liability. Notwithstanding the termination of the Lease and
the release of liability provided herein, Tenant shall remain liable, with
respect to the period of its tenancy prior to the Effective Date, for the
performance of Tenant's indemnification obligations in Article 10 of the Lease
and Landlord shall have all rights and remedies with respect to such Tenant
obligations as set forth in the Lease, but only to the extent that Tenant's
obligations are paid or performed by the insurance policies required to be held
by Tenant under the Lease.
8. Integration. This Agreement constitutes the entire agreement between the
Parties and supersedes all prior and contemporaneous contracts, agreements,
promises, and understandings between the parties concerning the subject matter
of this Agreement. This Agreement may not be altered, modified, or otherwise
changed in any respect except by a writing duly executed by both Parties. No
representations, circumstances, or conditions existing before the Agreement
shall be used in any way to modify the Agreement.
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9. Attorneys' Fees. Should any dispute arise between the parties hereto or
their legal representatives, successors and assigns concerning the
interpretation or performance of any provision of this Agreement or the rights
and duties of any person in relation thereto, the party prevailing in such
dispute shall be entitled, in addition to such other relief that may be granted,
to recover from the other party reasonable attorneys' fees and legal costs in
connection with such dispute.
10. Severability. Should any provision of this Agreement be held invalid or
illegal, such illegality shall not invalidate the whole of this Agreement, but,
rather, the Agreement shall be construed as if it did not contain the illegal
part, and the rights and obligations of the Parties shall be construed and
enforced accordingly.
11. Governing Law. This Agreement shall be governed and construed under the
laws of the State of California.
12. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but such counterparts, when taken together,
shall constitute one agreement.
13. Binding Effect. This Agreement shall inure to the benefit of, and shall
be binding upon, the parties hereto and their respective legal representatives,
successors and assigns.
14. Authority. The person executing this Agreement on behalf of each Party
represents and warrants that such person has the authority to execute it on
behalf of such party.
15. Time of the Essence. Time is of the essence of this Agreement and the
provisions contained herein.
16. Further Assurances. Landlord and Tenant hereby agree to execute such
further documents or instruments as may be necessary or appropriate to carry out
the express provisions of this Agreement.
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17. Voluntary Agreement. The parties have read this Agreement and mutual
release as contained herein, and on the advice of counsel they have freely and
voluntarily entered into this Agreement.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Agreement as of
the day and year first above written.
"LANDLORD"
PWREF/MCC-CHINA BASIN L.L.C.,
a Delaware limited liability company
By: ________________________________
Its: ___________________________
"TENANT"
RATEXCHANGE CORPORATION,
a Delaware corporation
By: ________________________________
Its: ___________________________
By: ________________________________
Its: ___________________________
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EXHIBIT A
OFFICE LEASE
EXHIBIT A
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EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
EXHIBIT B
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