EXHIBIT 10.21
AGREEMENT TO TERMINATE LEASE
This Agreement to Terminate Lease (the "Agreement") is made as of March
6, 2003 by and between Sequoia M&M LLC, a California limited liability company
("Landlord"), and Icarian Inc., a Delaware corporation (collectively "Tenant"),
and Workstream, Inc., a Canadian corporation ("Workstream") with reference to
the following facts.
RECITALS
WHEREAS, Landlord and Tenant have entered into that certain Lease
Agreement dated September 2, 1999, as amended (hereinafter the "Lease"); and
WHEREAS, pursuant to the Lease, the Lease Term for the Premises will
end on September 14, 2004 (the "Original Expiration Date"); and
WHEREAS, Tenant has requested that Landlord agree to terminate the
Lease, as well as any other rights or interests Tenant may have in the Premises
or any other premises at the Building, and Landlord has agreed to such request
upon the terms and conditions set forth in this Agreement; and
WHEREAS, Tenant is a wholly-owned subsidiary of Workstream; and
WHEREAS, Landlord and Tenant now wish to terminate the Lease on the
Termination Date (hereafter defined), a date prior to the Original Expiration
Date, on the terms and conditions set forth below.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. RECITALS; CAPITALIZED TERMS. Landlord and Tenant hereby agree that
the recitals set forth hereinabove are true and correct and incorporated into
this Agreement. The capitalized terms used in this Agreement and not otherwise
defined in this Agreement have the meanings assigned to such terms in the Lease.
2. LEASE TERMINATION. Landlord and Tenant hereby agree that the Lease
shall terminate effective as of 11:59 p.m. January 31, 2003 (the "Termination
Date") with the same force and effect as if the Original Expiration Date was the
Termination Date, effective as of the Termination Date, Landlord and Tenant
shall have no further rights, obligations, liabilities or claims with respect to
each other arising from the Lease for the performance of the terms and
conditions thereof or any other documents related thereto, except for those
indemnity obligations of Tenant arising under the Lease prior to the Termination
Date, which are expressly required to survive and continue after the termination
or expiration of the Lease. On or before the Termination Date, Tenant shall
vacate and surrender possession of the Premises to Landlord in accordance with
the terms of the Lease.
3. TERMINATION OF OPTIONS AND RIGHTS OF FIRST REFUSAL. Any and all
options of any kind or nature, including without limitation, options to extend
the term of the Lease, rights of first refusal and/or first refusal and/or first
offer granted to Tenant under the Lease shall be terminated and be of no further
force or effect.
4. ABANDONED PROPERTY. Any furniture, fixtures, shelving, cabinets,
tables, equipment, lighting, and other fixtures or personal property in, on or
attached to the Premises and remaining in or on the Premises after the
Termination Date (the "Abandoned Property"), whether or not belonging to Tenant,
shall be deemed abandoned by the parties, and Landlord may dispose of the
Abandoned Property in its sole discretion and at its sole cost. Tenant shall not
be entitled to any proceeds received by Landlord as a result of the disposition
of the Abandoned Property. Tenant waives, to the greatest extent permitted by
law, all of its rights under California Civil Code Sections 1980, et. seq., as
the same may be amended from time to time, and any related and successor
statutes thereto.
5. SECURITY DEPOSIT. The security deposit held by Landlord under the
Lease in the amount of Eighty Five Thousand Dollars ($85,000) will be forfeited
by Workstream and shall, pursuant to this Agreement, belong to Landlord.
6. LETTER OF CREDIT. Simultaneously with the execution of this
Agreement, Landlord shall deliver, in escrow, to Xxxxxx Xxxxx, Esquire of Cozen
X'Xxxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 (the "L/C
Holder"), that certain original irrevocable standby letter of credit number
IMDC/TOR/S/368292 dated November 14, 2002 (the "L/C") issued by the Bank of
Montreal in the amount of Seventy Thousand Dollars ($70,000.00) referencing
Workstream as the applicant and Landlord as the beneficiary. The L/C Holder
shall hold the L/C in escrow until receipt of written authorization from
Landlord (delivered via facsimile to (000)000-0000) to release the L/C to
Workstream. Landlord agrees to deliver such authorization to the L/C Holder upon
its actual receipt of the payment of Ninety Five Thousand Dollars ($95,000.00)
due one business day after the execution of this Agreement, under Paragraph 8
below. In the event the L/C Holder has not received authorization to release the
L/C to Workstream from Landlord by 3PM on the seventh (7th) day following the
execution of this Agreement, , the L/C Holder shall immediately, without further
notice or request, return the L/C to Landlord by overnight courier.
7. PAYMENT OF CAM CHARGES. Simultaneously with the execution of this
Agreement, Tenant agrees to pay to Landlord outstanding CAM and Additional Rent
charges in the amount of Thirty-Nine Thousand Three Hundred Seventy-One and
56/100 Dollars ($39,371.56) (the "Additional Rent"). Payment of the Additional
Rent by Tenant shall be conclusive evidence of an accord and satisfaction of all
payments due under the Lease up to and including the Termination Date. Landlord
further acknowledges and agrees that upon such payment, Tenant shall have no
further Rent, Additional Rent or other charges under the Lease.
8. PAYMENT OF TERMINATION FEE.
A. In addition to the other provisions of this Agreement, in
consideration for Landlord's agreement to terminate this Lease, and in
satisfaction of all other sums which would have become due and owing by Tenant
during the portion of the Lease occurring after the Termination Date, Tenant
shall pay to Landlord a termination fee in the amount of Two Hundred Sixty-Five
Thousand Dollars ($265,000.00) (the "Termination Fee"). The Termination Fee
shall be payable in installments, without interest, as follows:
One (1) business day following the execution of
this Agreement: $95,000.00
On April 1, 2003: $25,000.00
On May 1, 2003: $25,000.00
On June 1, 2003: $25,000.00
On July 1, 2003: $25,000.00
On August 1, 2003: $25,000.00
On September 1, 2003: $25,000.00
On October 1, 2003: $20,000.00
----------
TOTAL OF PAYMENTS $265,000.00
B. All installments of the Termination Fee, other than the
initial installment] (which shall be by Tenant's wire transfer), shall be made
by ACH debits from the operating account of Workstream. The ACH debit shall
follow the above payment schedule. Landlord and Workstream shall reasonably
cooperate to arrange for and set up such ACH debits with their respective banks.
Workstream or Tenant shall have the right to pre-pay the Termination Fee at any
time, without penalty.
C. In the event Tenant or Workstream shall fail to pay any
scheduled installment of the Termination Fee within five (5) business days after
Landlord's written notice of such non-payment, the Landlord, subject to the
terms of Section 9 hereof, shall have the right to enter the "Judgment by
Confession" in an amount equal to Four Hundred Forty Thousand Dollars
($440,000.00), as set forth in Paragraph 9, and enforcement thereof shall
reflect any amounts previously paid to Landlord pursuant to this Section 8.
9. CONFESSION OF JUDGMENT ESCROW.
A. Simultaneously with the execution of this Agreement, Tenant
shall execute and deliver, in escrow, to Xxxxxx X. Mount, Esquire of Mount &
Stoelker, 000 Xxxx Xxx Xxxxxx, Xxxxx0000, Xxx Xxxx, Xxxxxxxxxx 00000 (the
"Escrow Agent"), an Attorney's Certificate of Examination, a Statement
Authorizing Judgment of Confession, and a Judgment of Confession, each in
substantially the form attached hereto as Exhibit A, B and C (collectively, the
"Confession Documents"), respectively. Escrow Agent shall hold the Confession
Documents in escrow in accordance with the terms of this Section 9.
B. In the event of a default, beyond any applicable notice and
cure periods, by Tenant or Workstream under Section 8, Escrow Agent, upon five
(5) days written notice to Tenant and Workstream, shall be permitted to release
the Confession Documents to Landlord for filing with the appropriate court
having jurisdiction thereover, provided, however, that any order of enforcement
or instruction by the court to the Sheriff shall contain an express provision
that the amount demanded shall be reduced by the amount of any installments
previously received pursuant to Section 8 hereof. All documents filed with the
court shall be served on Xxxxxxx X. Xxxxxxx, Esquire, Cozen X'Xxxxxx, 000 Xxxx
Xxxxxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000, as counsel for Tenant. Prior
to any attempt to enforce the Judgment of Confession, including recording of an
Abstract of Judgment, Landlord shall file with the Court and serve on Xxxxxxx X.
Xxxxxxx, Esquire, Cozen X'Xxxxxx, 000 Xxxx Xxxxxxxx, Xxxxx 0000, Xxx Xxxxx,
Xxxxxxxxxx 00000, a partial Satisfaction of Judgment stating that the amount of
any installments received pursuant to Section 8 has been received in partial
satisfaction of the judgment.
C. In the event Tenant or Workstream has satisfied the
obligations under Section 8, Escrow Agent shall immediately return the original
Confession Documents, and any copies thereof, to Xxxxxx Xxxxx, Esquire of Cozen
X'Xxxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 on or before
October 5, 2003.
D. In the event that Landlord or Escrow Agent breaches the
terms of this Section 9 or files the Confession Documents without the right to
do so under this Agreement, Landlord and Escrow Agent shall be liable to Tenant
and Workstream for all damages and expenses incurred by the parties, including
the amount confessed under the Confession Documents, as a result of such breach.
10. XXXX OF SALE. Simultaneously with the execution hereof, Tenant
shall execute and deliver to Landlord the xxxx of sale ("Xxxx of Sale"),
attached hereto as Exhibit D.
11. ISSUANCE OF COMMON SHARES. On or before Xxxxx 00, 0000, Xxxxxxxxxx
will issue to Landlord Two Hundred Seventy-Five Thousand (275,000) common shares
of Workstream (the "Shares") and Workstream shall deliver to Landlord one or
more share certificates evidencing the issuance of the Shares. If Workstream
proposes to register any of its Shares or other equity securities under the
Securities Act of 1933 (the "Act") in connection with the public offering of
such securities solely for cash (other than a registration on Forms F-4 or S-8
or any successor forms), Workstream will, at such time, give Landlord at least
thirty (30) days prior written notice before filing such registration statement
with respect to such registration and will afford Landlord an opportunity to
include in such registration statement all or any part of the Shares then held
by Landlord. Upon the written request of Landlord, given within twenty (20) days
after the receipt of such notice by Workstream, Workstream will cause a
registration statement covering all of the Shares that Landlord has requested to
be registered to become effective under the Act. Workstream is under no
obligation to complete any offering of its securities it proposes to make and
will incur no liability to Landlord for its failure to do so.
12. REPRESENTATIONS AND WARRANTIES.
A. Tenant and Workstream, as applicable, hereby represent and
warrant to Landlord the following:
(i) Tenant has not made any assignment, sublease, transfer,
conveyance or other disposition of the Lease or Tenant's leasehold estate with
respect to the Premises.
(ii) The person or entity executing this Agreement on behalf
of Tenant has the full right and authority to execute this Agreement on behalf
of said party.
(iii) Tenant and Workstream have the requisite corporate power
and authority to execute and deliver this Agreement.
(iv) The Shares, when issued, will have been duly authorized
and validly issued by Workstream and will be fully paid and non-assessable. Upon
transfer and delivery of the Shares, Tenant shall obtain full and legal title to
the Shares, free and clear of any lien, charge or other encumbrance of any
nature.
(v) Tenant has good and valid title to the personal property
referred to in the Xxxx of Sale under Section 10 above. Further, Tenant shall
remove any UCC-1 filings affecting such personal property within 60 days of the
execution of this Agreement, if any.
B. Landlord hereby represents and warrants to Tenant and
Workstream as follows:
(i) This Agreement has been duly executed and delivered by
Landlord and constitutes the legal, valid and binding obligation of Landlord,
enforceable against it in accordance with its terms.
(ii) The Shares are being acquired for Landlord's own account
for investment and not with a view to resale and/or distribution to others. The
Purchaser understands that, subject to Section 11 above, the Shares have not
been registered under the Act or the securities laws of any state, and, as a
result, are subject to substantial restrictions on transfer. Unless the Shares
are registered in accordance with Section 11, Landlord agrees and understands
that it may not sell or otherwise transfer any Shares or any interest in the
Shares unless it provides Workstream with an opinion of counsel which is
satisfactory to Workstream that the Shares may be transferred in reliance on an
applicable exemption from the registration requirements of the Act and any other
applicable securities laws.
(iii) Landlord understands that an investment in the Shares
involves a high degree of risk, including loss of the total investment, lack of
liquidity and restrictions on transfer of the Shares.
(iv) Landlord acknowledges that it has access to all of the
financial and other information contained in Workstream's public securities
filings.
(v) Landlord is an "accredited investor" as such term is
defined in Rule 501 of the Act.
(vi) Landlord acknowledges that until the Shares are properly
registered under the Act, any certificate evidencing the Shares delivered
pursuant to this Agreement shall bear such legends as Workstream in its sole
discretion shall determine appropriate.
13. Indemnification.
A. Except for Landlord's obligations under this Agreement, as
of the Termination Date, Tenant hereby remises, releases and forever discharges
Landlord and Landlord's officers, directors, shareholders, affiliates,
successors and assigns from all claims, demands, actions, causes of action, and
from any and all damage, liabilities, loss, cost or expense (including
reasonable attorney's fees and costs) arising out of or in any way connected
with the Lease or Tenant's use and occupancy of the Premises.
B. Except for Tenant's obligations under this Agreement, as of
the Termination Date, Landlord hereby remises, releases and forever discharges
Tenant and Tenant's officers, directors, shareholders, affiliates, successors
and assigns from all claims, demands, actions, causes of action, and from any
and all damage, liabilities, loss, cost or expense (including reasonable
attorney's fees and costs) arising out of or in any way connected with the Lease
or Tenant's use and occupancy of the Premises, except for any indemnity
obligations set forth in the Lease which shall expressly survive this
termination of Lease.
14. GENERAL PROVISIONS:
A. Time is of the essence in the performance of the parties'
respective obligations set forth in this Agreement.
B. Notices shall be deemed given when received or when receipt
is refused. Notices shall be sent by facsimile, U.S. mail, registered or
certified, return receipt requested, postage prepaid or by overnight delivery
service showing receipt of delivery. If to Tenant, notices shall be sent to:
Workstream, Inc., 000 X.X. 00xx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000,
Attn.: Xx. Xxxx Xxxxxxx, and if to Landlord: to Sequoia M&M LLC., Attn.: Eire
Xxxxxxx, 00 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000 , facsimile number
1-408-998-2404If at any time either party should change its address, telephone
or facsimile number, such party shall deliver written notice thereof to the
other party together with the designation of the new information.
C. This Agreement constitutes the entire understanding of the
parties and all prior agreements, representations, and understandings between
the parties, whether oral or written, are deemed null, all of the foregoing
having been merged into this Agreement. The parties acknowledge that each party
and/or its counsel have reviewed and revised this Agreement and that no rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall be employed in the interpretation of this Agreement or any
amendments or exhibits to this Agreement or any document executed and delivered
by either party in connection with this Agreement.
D. Tenant may not assign its rights, obligations and interest
in this Agreement to any other person or entity, without Landlord's written
consent thereto. Any attempted assignment shall be null and void. This Agreement
shall inure to the benefit of and be binding upon the parties to this Agreement
and their respective successors and assigns.
E. If for any reason, any provision of this Agreement shall be
held to be unenforceable, it shall not affect the validity or enforceability of
any other provision of this Agreement.
F. This Agreement shall be governed by and construed under the
laws of the State of California.
G. Any and all addenda attached hereto and either signed or
initialed by the parties shall be deemed a part hereof. This Agreement,
including addenda, if any, expresses the entire agreement of the parties and
supersedes any and all previous agreements between the parties with regard to
the Premises and the Lease. There are no other understandings, oral or written,
which in any way alter or enlarge its terms, and there are no warranties or
representations of any nature whatsoever, either expressed or implied, except as
may be set forth herein. Any and all future modifications of this Agreement will
be effective only if they are in writing and signed by the parties hereto.
H. This Agreement may be executed in counterparts. All
executed counterparts shall constitute one agreement, and each counterpart shall
be deemed an original. This Agreement may be delivered by facsimile. The receipt
of a signed counterpart by facsimile shall be deemed to be the receipt of an
original signed document.
I. In the event any dispute between the parties results in
litigation or other proceeding, the prevailing party shall be reimbursed by the
nonprevailing party for all reasonable costs and expenses, including, without
limitation, reasonable attorneys' and experts' fees and costs incurred by the
prevailing party in connection with such litigation or other proceeding and any
appeal thereof. Such costs, expenses and fees shall be included in and made a
part of the judgment recovered by the prevailing party, if any.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first written above in this Agreement.
TENANT:
Icarian Inc., a Delaware corporation,
By: /s/ Xxxx Xxxxxxx
-------------------------------------------------------------
Title: Chief Financial Officer
-------------------------------------------------------------
Date: 3/6/03
-------------------------------------------------------------
LANDLORD:
Sequoia M&M LLC, a California limited liability company
By: /s/ XXXX X XXXXXXXX
-------------------------------------------------------------
Title: VICE PRESIDENT, X X XXXXXXXX COS. INC., MANAGER
-------------------------------------------------------------
Date: 3/6/03
------------------------------------------------------------
ESCROW AGENT:
Mount & Stoelker
By: /s/ Xxxxxx Mount
------------------------------------------------------------
Name: Xxxxxx Mount, Esquire
ACKNOWLEDGED AND AGREED WITH RESPECT TO SECTIONS 7, 8, 9, 11 AND 12 ONLY:
WORKSTREAM INC.
By: /s/ Xxxx Xxxxxxx
----------------------------------------------------------------
Name: Xxxx Xxxxxxx
Title: Chief Financial Officer
EXHIBIT "A"
ATTORNEY'S CERTIFICATE OF EXAMINATION
EXHIBIT "B"
STATEMENT AUTHORIZING JUDGMENT OF CONFESSION
EXHIBIT "C"
JUDGMENT OF CONFESSION
EXHIBIT "D"
XXXX OF SALE
