SEPARATION AND RELEASE AGREEMENT
THIS
SEPARATION AND RELEASE AGREEMENT
(the
“Agreement”) is effective as of August 15, 2005 by and between Xxxxxxx X.
Xxxxxxx (the “Employee”) and Infinium Labs, Inc., a Delaware corporation (the
“Company”).
WITNESSETH:
WHEREAS,
the
Employee is employed as the Company’s Chief Executive Officer; and
WHEREAS,
the
Company and the Employee have mutually decided that the Employee will resign
and
receive compensation pursuant to the terms and conditions contained
herein;
NOW,
THEREFORE,
the
Employee and the Company, intending to be legally bound hereby and in
consideration of the promises contained herein, do hereby agree as
follows:
1. Resignation.
The
Employee agrees to resign as the Company’s Chief Executive Officer effective as
of the end of the day on August 15, 2005 (the “Resignation Date”). The Employee
acknowledges and agrees that after the Resignation Date, he will not have
the
authority to represent or bind the Company or its subsidiaries as an officer
or
employee.
2. Termination
of Employment and Options.
2.1 The
Employee acknowledges and agrees that this Agreement shall serve to terminate
his employment and that this Agreement sets forth all the compensation that
is
payable to him, effective as of the Resignation Date. The Employee will continue
to receive regular salary pursuant to the Company’s normal payroll practices
through the Resignation Date.
2.2 The
Employee agrees that he will have until August 15, 2015 (“Expiration Date”), to
exercise any vested options (“Vested Options”) that have been granted to him by
the Company during the term of his employment with the Company. In addition,
the
Company will accelerate the vesting of ten million (10,000,000) options,
with an
exercise price of $0.07, granted to the Employee pursuant to his employment
agreement. The Employee acknowledges and agrees that the only Vested Options
that he owns as of the date of this Agreement are the above-mentioned options
to
purchase ten million (10,000,000) shares of the Company’s common stock at an
exercise price of $0.07 per share. Such option may be exercised on a
cashless-basis after 1 year if there is not an effective registration statement
covering such options.
3. Severance
Payments.
3.1 Severance
Payment.
In
consideration of the covenants set forth herein, the Company agrees to pay
the
Employee a cash severance payment equal to $250,000 in twelve (12) equal
monthly
installments, commencing September 1, 2005. In addition, the Company will
(i)
grant, upon execution of the Agreement, the Employee an additional ten million
(10,000,000) shares of its restricted common stock (par value $0.0001); (ii)
maintain the Employee’s current company email address so long as the Employee
remains a member of the Company’s Board of Directors; and (iii) grant the
Employee piggy-back registration rights for any Company securities he may
hold.
3.2 Benefits.
The
Company will pay for twelve (12) months of benefits coverage at Employee’s
current level of participation in accordance with Consolidated Omnibus Budget
Reconciliation Act (COBRA) regulations. The Company will also provide the
Employee with information regarding any benefits which may be converted to
individual coverage and/or coverage which includes his spouse in accordance
with
COBRA regulations. Employee acknowledges and agrees that he will not be entitled
to any perquisites, benefits or other compensation whatsoever after the
Resignation Date, except as described in this Agreement.
3.3 Amounts
Stated Before Taxes.
All
amounts stated in this Agreement are prior to any deduction for applicable
withholding taxes and other amounts that are required to be withheld or deducted
by federal and Florida law
4. Waiver
and Release.
For good
and valuable consideration, the receipt and sufficiency of which is acknowledged
by the Employee, including the payments to the Employee as described in Section
3 hereof, Employee hereby agrees that regardless of who assumes his duties,
his
separation of employment from the Company was not due in any way to age or
any
other type of discrimination or any wrongful act of the Company, and Employee
and his Releasors do hereby voluntarily and fully release and forever discharge
the Company from any and all claims, demands, causes of action, claims for
relief, and damages, of whatever kind or nature, known or unknown, developed
or
undeveloped, which Employee had, now has or may hereinafter have from the
beginning of the world to the date of this Agreement, including, without
limitation, all claims and all rights which the Employee may have under Title
VII of the Civil Rights Act of 1964; the Equal Employment Opportunity Act
of
1972; the Civil Rights Act of 1991; the Age Discrimination and Employment
Act of
1967; the Employee Retirement Security Act 42 U.S.C. § 1981; the Older Workers’
Benefit Protection Act; the Americans with Disabilities Act; the Family Medical
Leave Act of 1993; the Equal Pay Act; the Fair Labor Standards Act; the Sarasota
County Equal Opportunity Ordinance, any federal or state whistleblower acts
and
any and all other federal, state and local laws and statutes which regulate
employment; and the laws of contracts, tort and other subjects. (The Employee
agrees that the forgoing enumeration of claims released is illustrative,
and the
claims hereby released are in no way limited by the above recitation of specific
claims, it being the intent of the Employee to fully and completely release
all
claims whatsoever in any way relating to the Employee’s employment with the
Company and to the termination of such employment.)
5. No
Admission of Liability.
For
purposes of paragraph 4, “Releasors” shall mean, collectively, the spouse of the
Employee and the Employee’s dependents, heirs, executors administrators and
assigns, past and present and each of them and their trustees, directors,
officers, agents, attorneys, insurers, employees, stockholders, representatives,
successors, assigns and all persons acting by, through, under or in connection
with them, past and present. Execution of this Agreement and payment of the
payments specified in Section 3 of this Agreement does not constitute an
admission by the Company of any violation of any civil rights or other
employment discrimination statute, or any other legal statute, provision,
regulation, ordinance, order or action under common law. Rather, this Agreement
expresses the intention of the parties to resolve all issues and other claims
related to or arising out of Employee’s employment by the Company without the
time and expense of litigation.
6. Attorneys
Fees.
In the
event either party files any action or suit regarding any of the terms of
this
Agreement or in relation to, or involving, Employee’s employment by Company,
then the prevailing party shall be entitled to recover upon final judgment
on
the merits its or his reasonable attorney’s fees and court costs (including,
without limitation, appellate attorney’s fees and court costs) incurred in
bringing such action and all costs or expenses, including, without limitation,
attorney’s fees and court costs, incurred in collecting any
judgment.
7. Indemnification
and Hold Harmless Provision.
Company
hereby agrees to indemnify Employee, his heirs, successors, and assigns and
hold
Employee harmless from any and all liabilities, obligations, collateralizations,
personal guarantees, expenses, fees, and costs (including attorney’s and
professional fees) of every kind, nature, and description, which now exist
or
may exist now or hereafter with respect to Employee’s activities, duties, or
responsibilities as Chief Executive Officer of Company, or any subsequent
position, or in relation to any of Company’s subsidiaries, affiliates, or
related entities. Such indemnification and hold harmless benefits shall be
payable by Company whenever incurred by Employee so long as such costs or
expenses relate to or arise from such activities, duties, and responsibilities
of Employee and shall not be in any way be dependent upon Employee’s employment
with Company. Furthermore, any indemnification agreements already entered
into
between and among Company and Employee shall remain in force.
In
the
event Employee is made a party to a lawsuit or is involved in a legal proceeding
in any manner (including by subpoena or as a witness), which relates directly
or
indirectly to Company or the Employee’s performance of his duties under this
Agreement, in which Employee in his sole discretion believes that it is in
his
best interest to retain independent legal and other professional counsel,
Company shall be obligated to pay all professional fees, costs, and expenses
so
incurred within 30 days of a notice provided by Employee advising of his
selection of counsel.
8. No
Complaints or Litigation.
The
Employee represents and warrants that he has not filed against the Company
or
any of its subsidiaries or affiliates any complaints, charges or law suits
arising out of his employment by the Company, or any other matter arising
on or
prior to the date hereof. The Employee covenants and agrees that he has
completely and fully released the Company from any and all liability, as
set
forth in Section 4 of this Agreement.
9. Governing
Law.
The law
of the State of Florida shall govern the validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties
of the
parties. This Agreement constitutes the entire agreement and understanding
between the Employee and the Company regarding the Employee’s resignation from
employment with the Company. Any agreement to amend or modify the terms and
conditions of this Agreement must be in writing and executed by the parties
hereto. This Agreement may be specifically enforced in judicial proceedings
and
may be used as evidence in a subsequent proceeding in which a breach is alleged.
Headings are for convenience only and should not be used in interpreting
this
Agreement.
10. Non
Disparaging Remarks.
The
Employee agrees that he will not directly or indirectly, individually or
in
concert with others, (i) disparage, interfere with or attempt to interfere
with,
the Company’s reputation, goodwill, services, business and/or the Company’s
stockholders, directors, officers, employees, agents, representatives and
any
affiliates or (ii) engage in any conduct, take any actions or make any
statements (oral or written) to the public, future employers, customers,
vendors, the investment community, the media, current, former or future Company
employees, or any other third party whatsoever that is calculated to have,
or
reasonably likely or possibly having, the effect of undermining, disparaging
or
otherwise reflecting negatively or could reasonably be considered to undermine,
disparage or reflect negatively, on the Company, its reputation, goodwill,
services, business and/or stockholders, directors, officers, employees, agents,
representatives and its affiliates.
11. Omitted
12. Future
Cooperation.
The
Employee agrees to cooperate fully with the Company in connection with any
matter or event relating to his employment or events that occurred during
his
employment, including, without limitation, in the defense or prosecution
of any
claims or actions not in existence or which may be brought or threatened
in the
future against the Company, including, but not limited to any claims or actions
against its officers, directors and employees. The Employee’s cooperation in
connection with such matters, actions and claims shall include, without
limitation, being available, after reasonable notice to meet with the Company
regarding matters in which the Employee was involved; to prepare for any
proceeding (including without limitation, depositions, consultations, discover
or trial); to provide affidavits; to assist with any audits or reviews of
the
Company’s financial statements; to assist with any legal proceeding or other
inquiry and to act as a witness in connection with any litigation or other
legal
proceeding affecting the Company. The Employee shall be reimbursed for any
reasonable out-of-pocket expenses incurred in connection with providing such
cooperation under this Section 10. Hotel room and airfare costs shall be
born by
the company in advance of any such travel. The Employee further agrees that
should he be contacted (directly or indirectly) by any person or entity adverse
to the Company, the Employee shall promptly notify an executive officer of
the
Company in writing.
13. Effect
of Settlement, Interpretation and Schedules.
The
Company and Employee intend this Agreement to be legally binding upon and
inure
to the benefit of each of them and their respective heirs, administrators,
executors, successors and assigns. The language of this Agreement shall be
construed as a whole, according to its fair meaning and intent and not strictly
for or against any party hereto, regardless of who drafted or was principally
responsible for drafting this Agreement. The recitals contained at the beginning
of this Agreement are expressly made a part of this Agreement. All Schedules
identified in this Agreement (Schedule 2.3, Schedule 3.1 and Schedule 6)
are
incorporated herein by reference and made a part hereof.
14. Enforcement.
14.1 The
Employee agrees that the Company, its subsidiaries and affiliated parties,
would
be damaged irreparably in the event that any provision of this Agreement
were
not performed in accordance with its terms or were otherwise breached and
that
money damages would be an inadequate remedy for any such nonperformance or
breach. Accordingly, the Company and its successors and permitted assigns
shall
be entitled, in addition to other rights and remedies existing in their favor,
to an injunction or injunctions to prevent any breach or threatened breach
of
any of such provisions and to enforce such provisions specifically (without
posting a bond or other security). The Employee agrees that he will submit
himself to the personal jurisdiction of the courts of the State of Florida
in
Sarasota County or any other applicable court in any action by the
Company.
14.2 The
Employee acknowledges and agrees that in the event that he breaches any of
the
provisions of this Agreement or has made any false representations to the
Company, the Company will be entitled to apply for and receive an injunction
to
restrain any violation of this Agreement and the foregoing shall not affect
the
validity of this Agreement and such relief does not constitute in any way
a
penalty or forfeiture.
15. Severability.
Should
any provision of this Agreement be declared illegal or unenforceable by any
court of competent jurisdiction and cannot be modified to be enforceable,
including the general release language, such provision shall immediately
become
null and void, leaving the remainder of the Agreement in full force and
effect.
[Signatures
on following page]
IN
WITNESS WHEREOF,
the
aforesaid parties have hereunto set their hands and seals as of the day below
written.
/s/
Xxxxxxx X. Xxxxxxx
Xxxxxxx
X. Xxxxxxx
Chief
Executive Officer
Executed
on August 15, 2005
Infinium
Labs, Inc.
/s/
Xxxxxxx Xxxxxxxxx
Xxxxxxx
Xxxxxxxxx
Director
Executed
on August 15, 2005