Exhibit
10.1

    SEPARATION
AGREEMENT

    


    This
Separation Agreement ("Agreement") is made and entered into as of this 23rd day
of December (the "Execution Date") by and among Workstream Incorporated., a
Canadian corporation (the "Company") and Jay Markell ("Executive"). (The Company
and Executive are hereinafter sometimes referred to individually as a "Party"
and collectively as the "Parties").

    


    WHEREAS,
pursuant to the Employment Agreement, executed February 15, 2008 and effective
February 15, 2008, by and between the Company and Executive (the "Employment
Agreement"), Executive has served as Chief Financial Officer of the
Company;

    


    WHEREAS,
Executive desires to resign from his position, and the Company desires to accept
Executive's resignation, on the terms and conditions set forth
herein;

    


    NOW,
THEREFORE, for and in consideration of the promises and covenants made between
the Parties and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as
follows:

    


    1.
Termination of Employment.  In as much as Executive has decided not to
continue his position as an active employee, such resignation effective as of
January 16, 2009 (the "Effective Date") and the Company hereby accepts such
resignation effective as of the Effective Date. From the Execution Date through
the Effective Date, Executive agrees to continue to perform his duties as set
forth in the Employment Agreement and the Company agrees to continue to pay
Executive his current Base Salary (as defined in the Employment Agreement) in
accordance with the Company's payroll practices. Except as otherwise expressly
provided herein, the Parties' rights and obligations under the Employment
Agreement shall be terminated and the Employment Agreement shall be of no
further force and effect.

    


    2.
Separation Payment. The Company agrees to pay Executive three months Base Salary
which shall be payable from January 17, 2009 through March 31, 2009, in equal
installments over such period in accordance with the Company's regular payroll
practices, and which shall be subject to all customary federal, state and local
deductions. Executive shall continue to participate in the Company's medical and
dental insurance plans on terms available to senior executive officers of the
Company through March 31, 2009.  Executive will forfeit any claim to
RSU’s and stock options whether they have vested or not.

    


    3.
Commitments listed in Appendix A will be monitored by the Chairman of the Board.
Vacation schedule of Executive will be required and Executive will reasonably
provide assistance under such circumstances.  Further, all conditions
in Appendix A are subject to the executive‘s ability to maintain professionalism
throughout the remainder of this agreement.  If in the Chairman of the
Board, President/CEO or Audit committee, observes behavior that is deemed
detrimental to the Company or not acceptable with the professionalism required
of an Executive, the terms of this agreement will cease.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    4.
Company Records and Equipment.  With the exception of the company
laptop issued to the Executive, on the Effective Date, Executive agrees to
return to the Company any and all Company equipment, property, products,
services, processes, technology, inventions, patents, business strategies,
pricing information, current and prospective customer lists, marketing plans and
any and all other materials relating to the Company or its business in
Executive's possession in whatever form or medium whether written, electronic,
recorded or otherwise.  The company laptop will be transferred to the
Executive as his wholly owned personal property.   The Company
hereby agrees that the Company's outside corporate counsel shall keep true and
accurate copies of all board of director and board committee minutes that were
taken during Executive's employment with the Company. Prior to the Effective
Date, Executive agrees to take all actions necessary to remove him as a
signatory on the Company's bank accounts as of the Effective Date.

    


    5.
Non-Solicitation and Non-Competition. Executive acknowledges and agrees that the
Restrictive Covenants of Section 8 of the Employment Agreement shall remain in
full force and effect for the time periods set forth therein and reaffirms his
obligations to abide by such Restrictive Covenants and provided, further, that
Executive covenants and agrees that he shall not, directly or indirectly,
solicit, pursue, or interfere with the Company's negotiations with respect to,
any potential software development which the Company is investigating or
pursuing, for a period of six months from the Effective Date.

    


    6.
Non-disparagement. Each Party agrees not to, directly or indirectly, slander,
libel or otherwise disparage or make any false statements or take any action
which is, or is intended to, or could reasonably be expected to, be detrimental
to the other Party, its business or reputation.

    


    7.
General Release of All Claims.  Employee knowingly and voluntarily
releases and forever discharges Employer, its parent corporation, affiliates,
subsidiaries, divisions, predecessors, insurers, successors and assigns, and
their current and former employees, attorneys, officers, directors and agents
thereof, both individually and in their business capacities, and their employee
benefit plans and programs and their administrators and fiduciaries
(collectively referred to throughout the remainder of this Agreement as
“Releases”), of and from any and all claims, known and unknown, asserted or
unasserted, which the Employee has or may have against Releases as of the date
of execution of this Agreement and General Release, including, but not limited
to, any alleged violation of:

    Title VII
of the Civil Rights Act of 1964;

    Sections
1981 through 1988 of Title 42 of the United States Code;

    The
Employee Retirement Income Security Act of 1974 ("ERISA") (except for any vested
benefits under any tax qualified benefit plan);

    The
Immigration Reform and Control Act;

    The
Americans with Disabilities Act of 1990;


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    The Age
Discrimination in Employment Act of 1967 (“ADEA”);

    The
Workers Adjustment and Retraining Notification Act;

    The Fair
Credit Reporting Act;

    The
Florida Civil Rights Act – Fla. Stat. § 760.01, et seq.;

    Florida’s
Private-Sector Whistle-blower’s Act – Fla. Stat. § 448.101, et
seq.;

    Florida’s
Public-Sector Whistle-blower’s Act – Fla. Stat. § 112.3187, et
seq.;

    Florida’s
Statutory Provision Regarding Retaliation/Discrimination for Filing a Workers
Compensation Claim – Fla. Stat. § 440.205;

    Florida’s
Statutory Provision Regarding Wage Rate Discrimination Based on Sex – Fla. Stat.
§ 448.07;

    The
Florida Equal Pay Act – Fla. Stat. § 725.07;

    The
Florida Omnibus AIDS Act – Fla. Stat. § 760.50;

    Florida’s
Statutory Provisions Regarding Employment Discrimination on the Basis of and
Mandatory Screening or Testing for Sickle-Cell Trait – Fla. Stat. §§ 448.075,
448.076;

    Florida’s
Wage Payment Laws, Fla. Stat. §§ 448.01, 448.08;

    Florida’s
General Labor Regulations, Fla. Stat. ch. 448;

    any other
federal, state or local law, rule, regulation, or ordinance;

    any
public policy, contract, tort, or common law; or

    any basis
for recovering costs, fees, or other expenses including attorneys' fees incurred
in these matters.

    8.  Acknowledgments
and Affirmations.

    Employee
affirms that Employee has not filed, caused to be filed, or presently is a party
to any claim against Employer.

    Employee
also affirms that Employee has been paid and/or has received all compensation,
wages, bonuses, commissions, and/or benefits to which Employee may be
entitled.  Employee affirms that Employee has been granted any leave
to which Employee was entitled under the Family and Medical Leave Act or related
state or local leave or disability accommodation laws and has not been subjected
to retaliation for taking such leave.

    Employee
further affirms that Employee has no known workplace injuries or occupational
diseases.

    Employee
also affirms that Employee has not divulged any proprietary or confidential
information of Employer and will continue to maintain the confidentiality of
such information consistent with Employer’s policies and Employee’s agreement(s)
with Employer and/or common law.

    Employee further affirms that Employee
has not been retaliated against for reporting any allegations of wrongdoing by
Employer or its officers, including any allegations of corporate
fraud.   Both Parties acknowledge that this Agreement does not
limit either party’s right, where applicable, to file or participate in an
investigative proceeding of any federal, state or local governmental
agency.  To the extent permitted by law, Employee agrees that if such
an administrative claim is made, Employee shall not be entitled to recover any
individual monetary relief or other individual remedies.

     

    9.  Confidentiality
and Return of Property.  Employee agrees not to disclose any
information regarding the underlying facts leading up to or the existence or
substance of this Agreement and General Release, except to Employee’s spouse,
tax advisor, and/or an attorney with whom Employee chooses to consult regarding
Employee’s consideration of this Agreement and General Release.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Employee
affirms that Employee has returned all of Employer's property, documents, and/or
any confidential information in Employee’s possession or
control.  Employee also affirms that Employee is in possession of all
of Employee’s property that Employee had at Employer's premises and that
Employer is not in possession of any of Employee’s property.

    10.  Governing
Law and Interpretation.  This Agreement and General Release shall be
governed and conformed in accordance with the laws of the state in which
Employee worked at the time of Employee’s last day of employment without regard
to its conflict of laws provision.  In the event of a breach of any
provision of this Agreement and General Release, either party may institute an
action specifically to enforce any term or terms of this Agreement and General
Release and/or seek any damages for breach.  Should any provision of
this Agreement and General Release be declared illegal or unenforceable by any
court of competent jurisdiction and cannot be modified to be enforceable,
excluding the general release language, such provision shall immediately become
null and void, leaving the remainder of this Agreement and General Release in
full force and effect.

    11.  Non-admission
of Wrongdoing.  The Parties agree that neither this Agreement and
General Release nor the furnishing of the consideration for this Agreement and
General Release shall be deemed or construed at any time for any purpose as an
admission by Releases of wrongdoing or evidence of any liability or unlawful
conduct of any kind.

    12.           Amendment.  This
Agreement and General Release may not be modified, altered or changed except in
writing and signed by both Parties wherein specific reference is made to this
Agreement and General Release.

    13.           Entire
Agreement.  This Agreement and General Release sets forth the entire
agreement between the Parties hereto, and fully supersedes any prior agreements
or understandings between the Parties, except Appendix A, which is incorporated
herein by reference. Employee acknowledges that Employee has not relied on any
representations, promises, or agreements of any kind made to Employee in
connection with Employee’s decision to accept this Agreement and General
Release, except for those set forth in this Agreement and General
Release.

    EMPLOYEE
IS ADVISED THAT EMPLOYEE HAS UP TO FOURTY FIVE CALENDAR DAYS TO CONSIDER THIS
AGREEMENT AND GENERAL RELEASE.  EMPLOYEE ALSO IS ADVISED TO CONSULT
WITH AN ATTORNEY PRIOR TO EMPLOYEE’S SIGNING OF THIS AGREEMENT AND GENERAL
RELEASE.

    EMPLOYEE
MAY REVOKE THIS AGREEMENT AND GENERAL RELEASE FOR A PERIOD OF SEVEN (7) CALENDAR
DAYS FOLLOWING THE DAY EMPLOYEE SIGNS THIS AGREEMENT AND GENERAL
RELEASE.  ANY REVOCATION WITHIN THIS PERIOD MUST BE SUBMITTED, IN
WRITING, TO GINGER SIMPSON, Director of Human Resources, Workstream, Inc., 2600
Lake Lucien Drive #410, Maitland, FL 32751, AND STATE, “I HEREBY REVOKE MY
ACCEPTANCE OF OUR AGREEMENT AND GENERAL RELEASE.”  THE REVOCATION MUST
BE PERSONALLY DELIVERED TO GINGER SIMPSON OR MAILED TO GINGER SIMPSON AT THE
ADDRESS LISTED ABOVE AND POSTMARKED WITHIN SEVEN (7) CALENDAR DAYS AFTER
EMPLOYEE SIGNS THIS AGREEMENT AND GENERAL RELEASE.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    EMPLOYEE
AGREES THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT AND
GENERAL RELEASE, DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL UP TO
FORTY-FIVE (45) CALENDAR DAY CONSIDERATION PERIOD.

    EMPLOYEE
FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT
AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS EMPLOYEE
HAS OR MIGHT HAVE AGAINST RELEASEES.

    The
Parties knowingly and voluntarily sign this Agreement and General Release as of
the date(s) set forth below:

    WORKSTREAM,
INC.


    
      


      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 
      	 
      	 
      	By:_____________________________________
	By:_____________________________________ 
      	 
      	 
      	
                                      Steve
      Purello

                                    
	
                                      Jay
      Markell

                                    	 
      	President/Chief
      Executive Officer
	 
      	 
      	 
      	 
      	 
      
	
                                      Date:_____________________________________

                                    	 
      	 
      	 
      
	 
      	
                                      Date:_____________________________________