CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit
99.1
CONFIDENTIAL
SEPARATION AGREEMENT AND GENERAL RELEASE
This
CONFIDENTIAL
SEPARATION AGREEMENT AND GENERAL RELEASE
(the
"Agreement")
is
dated and rendered effective as of June 8, 2007 (the “Effective Date”) between
Xxxxxxx X. Xxxxxxxx ("Frichner"),
on
the one hand, and Left Behind Games, Inc., a Delaware corporation (the
"Company"),
and
Left Behind Games Inc., a Washington corporation and Company’s parent
("Parent"
and,
together with the Company, the "Company
Parties"),
on
the other hand.
WHEREAS,
Frichner and the Company entered into an Employment Agreement dated as of
February 1, 2005 (the "Employment
Agreement")
whereby Frichner was employed and appointed as the President of the Company
and,
in addition, was appointed as the President of the Parent; and
WHEREAS,
Frichner desires, for personal reasons, to resign from his positions as
President of the Company and as the President of the Parent; and
WHEREAS,
the
Company and the Parent and willing to accept Frichner’s resignation of the
afore-mentioned executive positions and desire to enter into this Agreement
in
order to amicably address and resolve all matters between Frichner and the
Company Parties concerning Frichner's employment and services provided to
or for
the benefit of the Company Parties up through and including the Effective
Date
of this Agreement (the "Relationship"),
and
the termination of the Relationship; and
WHEREAS,
each the Company, on the one hand, and Frichner, on the other hand, derive
significant benefit from their reputations in the financial and/or video
game
industry and the financial markets; and
WHEREAS,
each the Company, on the one hand, and Frichner, on the other hand, have
worked
together for a period of years and the result of that work is a common interest
in preserving the integrity and image of the Company, on theone hand, and
Frichner on the other hand; and
WHEREAS,
the Company and Frichner have an important and common interest in ensuring
that
their respective reputations remain intact following the resignation of the
Executive effective May 30, 2007.
NOW,
THEREFORE, in consideration of the premises, representations, warranties
and
covenants herein contained, and other good and valuable consideration, the
sufficiency of which is hereby acknowledge, the parties hereto agree as
follows:
1
1.
Resignation
of Officerships.
Frichner
hereby voluntarily and irrevocably resigns his position as President of the
Company, his position as President of the Parent, and any and all other
position(s) he currently holds or may ever be deemed to have held in either
or
both of the Company Parties. Notwithstanding the foregoing, the parties
acknowledge and agree that Frichner shall retain his current positions as
a
member of the Board of Directors of the Company and as a member of the Board
of
Directors of the Parent, each in accordance with and subject to the governing
documents of the Company and the Parent, respectively. Each of the parties
hereby acknowledges and agrees that the Employment Agreement which Frichner
executed with the Company on or about February 2, 2007 as amended, is hereby
terminated, effective as of the Effective Date of this Agreement.
2.
Compensation
and Stock Sales.
Company
and Frichner agree that Frichner will receive the equivalent of three months
salary of the $150,000 annual salary payable under the Employment Agreement
or a
total of ($37,500), to be paid monthly at the rate of ($12,500) on June 30,
2007, July 31, 2007 and August 31, 2007 with the other payroll expenses of
the
company as a severance arrangement. The checks will be delivered to Frichner.
Frichner hereby expressly waives any other severance components of the
Employment Agreement.
It
is
acknowledged that Frichner owns approximately 4.3 million shares of the
Company's common stock. Frichner agrees that he will not transfer title to
or
sell during any 90 day period more than one percent of the outstanding shares
of
the Company's common stock. Frichner also agrees not to transfer title to
or sell in any one month of that 90 day period more than one-third of the
1%
share threshold. Frichner agrees to comply with all SEC rules and
regulations relating to the sale of both of his shares.
Additionally,
the Company shall have 7 business days (the “7 Day Arrangement”) to purchase or
broker the purchase of shares that Frichner desires to sell prior to Frichner
selling such shares to any other party. Accordingly, Frichner shall provide
Company written notice to Company's Chief Financial Officer, signature required,
of his intent to sell 7 business days prior to his desire to sell. During
this
period of time, should the Company either purchase or broker the purchase
of
Frichner's shares, Frichner shall cooperate with Company's Chief Financial
Officer regarding such sale. The Company must achieve a price of 65% of the
then market, or Frichner may sell the shares directly after the close of
business at the conclusion of the 7 Day Arrangement. The Company and
Frichner agree to communicate during each 7 Day Arrangement.
3.
Mutual
Non-Disparagement. (a) From
this point forward Frichner agrees to refrain from making any public statements
(or authorizing any statements to be reported as being attributed to Frichner)
that are critical, derogatory or which may tend to injure the reputation
or
business of the Company.
(b) From this point forward the Company will refrain from making, and agrees
to
use their best efforts to cause the officers, directors and spokespersons
of the
Company to refrain from making, any public statements (or authorizing any
statements to be reported as being attributed to the Companies), that are
critical, derogatory or which may tend to injure the reputation or business
of
Frichner, and the Company shall instruct such officers, directors and
spokespersons to refrain from making such statements. The Company will continue
to represent Frichner as a Co-Founder of the Company.
(c) It is understood and agreed that the Company on the one hand, and Frichner
on the other hand, if and to the extent they are a non-breaching party under
the
Agreement, may respond to any detrimental, disparaging or generally negative
statement by the other, or by officers, directors and spokespersons of the
Companies and their Affiliates, by publicly providing accurate information,
and
any such response will not be deemed to be a breach of his
agreement.
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(d) Each party hereto acknowledges and agrees that each other party hereto
will
be irreparably harmed and that there may be no adequate remedy at law for
a
violation of any of the covenants set forth in this Section 2
4.
Repayment
of Loans and Expense Reimbursement.
The
Company acknowledges and agrees that simultaneously with the signing of this
agreement that it will repay Frichner in full all monetary sums that Frichner
previously loaned to the Company as well as any unpaid expense reimbursements
previously submitted for payment by Frichner.
5.
Continuation
of Health Care Benefits.
The
Company acknowledges and agrees that it shall be responsible for the costs
that
are required to be provided in order for Frichner to obtain continued health
care coverage (in accordance with the Company’s current health care plans and
coverage limitations) under Cobra for a period of six (6) months from the
Effective Date. Frichner acknowledges that the Company is revising its health
care plan and that the Company’s payments for dependent coverage will likely be
reduced.
6.
General
Release.
In
consideration of the terms and conditions of this Agreement, Frichner, on
behalf
of himself and his heirs, representatives and assigns, shall and hereby does
forever relieve, release, and discharge the Company Parties and
their
past and present parent, subsidiary, sister and affiliated corporations and
all
other related entities, and
the
respective directors, officers, employees, agents, attorneys, representatives,
successors and assigns of each of the foregoing, past or present, from
any
and all claims, debts, liabilities, demands, obligations, liens, promises,
acts,
agreements, costs, expenses, damages, actions, and causes of action arising
out
of facts known or unknown, suspected or unsuspected, anticipated or not
anticipated, occurring on or existing at any time up to and including the
date
of execution of this Agreement by Frichner, including, without limitation,
any
statutory, civil, or administrative claims arising from federal, state or
local
laws, including, but not limited to, those that prohibit discrimination of
any
form, any common law claims of any kind, any claims for termination of
employment, wages or accrued benefits such as unpaid vacation, or any other
fringe benefit or compensation.
In
consideration of the terms and conditions of this Agreement, the Company
and the
Parent, each on behalf of itself and its affiliates, successors and assigns,
shall and hereby does forever relieve, release, and discharge Frichner
and
his
heirs, legal representatives and assigns, past and present, from
any
and all claims, debts, liabilities, demands, obligations, liens, promises,
acts,
agreements, costs, expenses, damages, actions, and causes of action arising
out
of facts known or unknown, suspected or unsuspected, anticipated or not
anticipated, occurring on or existing at any time up to and including the
date
of execution of this Agreement by Company, including, without limitation,
any
statutory, civil, or administrative claims arising from federal, state or
local
laws. This agreement does not require the Company to defend or pay any claim
regarding any litigation alleging any criminal act(s) by Frichner.
7.
Section
1542 of the Civil Code.
Frichner acknowledges that it is his intention fully and finally to resolve
and
to release any and all claims, known or unknown, that may exist against the
Company Parties and recognizes that he may later discover facts in addition
to
or different from those that he now knows to exist or believes to be true.
In
furtherance of this intention finally to resolve all matters between himself
and
the Company Parties, Frichner agrees to waive and to relinquish any and all
rights and benefits afforded by Section 1542 of the Civil Code of the State
of
California, or any similar or analogous provision of the laws of any other
jurisdiction.
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The
Company and the Parent each, respectively, (i) acknowledges that it is its
intention fully and finally to resolve all matters between the Company Parties
and Frichner with respect to the Relationship, and to release Frichner from
any
and all claims, known or unknown, that may exist with respect to the
Relationship, and (ii) recognizes that it may later discover facts in addition
to or different from those that it now knows to exist or believes to be true.
In
furtherance of this intention finally to resolve all matters between the
Company
Parties and Frichner with respect to the Relationship, each of the Company
Parties, respectively, agrees to waive and to relinquish any and all rights
and
benefits afforded by Section 1542 of the Civil Code of the State of California,
or any similar or analogous provision of the laws of any other
jurisdiction.
Section
1542 of the Civil Code of the State of California provides as
follows:
A
GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.
8.
Non-Admission
of Liability or Wrongdoing.
This
Agreement shall not in any way be construed as an admission that Frichner
and
the Company Parties or
its
past and present parent, subsidiary, sister and affiliated corporations or
other
related entities, or
the
respective directors, officers, employees, agents, attorneys, representatives,
affiliates, heirs, predecessors, successors or assigns of each of the foregoing,
past or present, have
any
liability to or have acted wrongfully in any way with respect to the the
Parties
or any other person. Frichner and the Company Parties specifically deny that
they have any liability to or have done any wrongful acts against the other
or
any other person on the part of themselves or their directors, officers,
employees, agents, attorneys or representatives.
9.
Confidentiality.
Expect
as required by SEC rules and regulations, Frichner and the Company agrees
to
keep the existence and terms of this Agreement absolutely confidential and
not
to disclose such information to anyone without the Company Parties' or
Frichner’s written consent. This Section shall survive the termination of this
Agreement or any arrangements contained in this Agreement. Additionally,
Frichner and the Company Parties each, respectively, represents and warrants
that it shall not communicate directly or indirectly to any third party (other
than their respective legal and financial advisers and the Directors of the
Company) any information of or concerning the provisions of this Agreement,
or
which otherwise relates to any matters which gave rise to this Agreement
or
concerning the discussions between the parties relating to this Agreement,
and
Frichner and the Company Parties, respectively, further agree not to disparage
or discredit the name, reputation, goodwill, qualifications or capabilities
of
the other party.
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10.
Proprietary
Information.
During
the course of the Relationship, Frichner has occupied a position of trust
with
respect to business information
of a
secret or confidential nature. Frichner agrees not to misappropriate, disclose
or make available to anyone outside of the Company Parties at any time any
confidential information or trade secrets of the Company Parties including,
without limitation, all of the following materials and information (whether
or
not reduced to writing and whether or not patentable or protected by copyright):
trade secrets, inventions, processes, formulae, programs, technical data,
financial information, identities or lists of customers, prospects, suppliers,
investors or vendors, and any other confidential or proprietary information
relating to the Company Parties (collectively, “Proprietary
Information”)
without the prior written consent of the Company Parties, except as may be
required by law. The Company Parties' consent may be withheld for any reason
or
no reason at all. The undertakings set forth in this Section shall survive
the
termination of this Agreement or any arrangements contained in this Agreement.
Frichner
agrees to return any and all files, electronic or otherwise, regarding
information regarding Company’s investors, including but not limited to home,
business and mobile phone numbers, addresses, social security numbers and
all
information deemed to be subject to State of California or Federal Privacy
Laws
or Rules of the Securities and Exchange Commission.
Frichner
and the Company Parties intend that this proprietary information provision
be
construed as broadly as possible, in a manner consistent with its terms,
in
order to provide maximum protection of Proprietary Information. Frichner
shall
consult the Company Parties' counsel regarding any uncertainties Frichner
may
have about whether the information Frichner might disclose is Proprietary
Information within the meaning of this provision.
Notwithstanding
the foregoing, the parties acknowledge and agree that the obligations to
safeguard the Proprietary Information set forth in this Section 6 shall not
apply to any information which Frichner can demonstrate: (i) was known by
Frichner prior to the disclosure thereof by the Company Parties; or (ii)
is or
becomes publicly known through no wrongful act of Frichner, and/or (iii)
is
rightfully received from a third party without breach of any separate
confidentiality agreement and without restriction on subsequent
disclosure.
Additionally,
the Company Parties each, acknowledge and agree, respectively, that,
notwithstanding the foregoing, Frichner shall be entitled to retain any and
all
personal and professional relationships that he established during the term
of
his employment with the Company. Frichner agrees to conduct business in
connection with any such prospective business opportunity in a manner consistent
with his ongoing duties and obligations to the Company and/or the Parent
(e.g.,
as a member of the Board of Directors of the Company). He will not solicit
such
relationships while he is a director nor will he accept or consummate business
transactions with such relationships unless he receives (and provides to
Company) a waiver that they understand that business transaction have nothing
to
do with the Company.
The
Company Parties and Frichner each, respectively, acknowledges and agrees
that
the limitations as to time set forth hereinabove are reasonably necessary
to,
and no greater than that required to, protect the goodwill and business
interests of the Frichner and the Company Parties. It is the intent of the
parties that the provisions of this Section will be enforced to the fullest
extent permissible under applicable law. If any particular provision or portion
of this Section is adjudicated to be invalid or unenforceable, this Agreement
will be deemed amended to revise that provision or portion to the minimum
extent
necessary to render it enforceable. Such amendment will apply only with respect
to the operation of this paragraph in the particular jurisdiction in which
such
adjudication was made. Frichner and the Company Parties each acknowledges
that
any breach of the covenants of this Section will result in immediate and
irreparable injury to the other and, accordingly, consents to the application
of
injunctive relief and such other equitable remedies for the benefit of the
injured party as may be appropriate in the event such a breach occurs or
is
threatened. The foregoing remedies will be in addition to all other legal
remedies to which Frichner or the Company Parties may be entitled hereunder,
including, without limitation, monetary damages.
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11.
Use of Company Email:
Frichner shall be entitled to receive e-mails addressed to him that are sent
to
his Company email address, which shall be maintained at the Company and by
the
Company and at Company expense including IT support for a period of not less
than one (1) year from the date of this agreement and/or not less than one
(1)
year from the termination of Frichner’s service as a Director of the Company.
12.
Return
of Materials.
Frichner and the Company Parties agree that all Proprietary Information and
all
copies, summaries, extracts and/or written descriptions thereof, whether
in
electronic form or otherwise, are and shall remain confidential and may only
be
used by Frichner in the execution of his duties as Director. The Company
acknowledges and agrees that Frichner shall be entitled to retain all personal
business equipment such as computers, electronic equipment, software that
was
furnished to Frichner by the Company prior to the Effective Date, and,
accordingly, the Company hereby assigns, transfers and conveys to Frichner,
all
of the Company’s rights, title and interests in and to the personal business
equipment referenced in Schedule 1, attached hereto (collectively, the
“Transferred Equipment”). Frichner acknowledges and agrees that neither the
Company nor the Parent shall have any obligations or liability to Frichner
with
respect to the Transferred Equipment as of the Effective Date of this Agreement,
including, without limitation, any obligations with respect to any software
installed therein, any ongoing subscription service plans or subscription
services, any Internet fees or charges, and/or any hardware or software
maintenance or technical support services. Any and all fees, charges, taxes,
assessments, costs or expenses that arise or are incurred on or after the
Effective Date of this Agreement shall be borne solely and exclusively by
Frichner.
13.
Press
Release.
The
parties acknowledge and agree that they shall cooperate with and assist one
another in connection with the preparation and issuance of a mutually acceptable
press release and/or Form 8-K disclosing the matters summarized in Section
1 of
this Agreement. Frichner, upon request, shall provide a quote for such press
release and the Company shall provide Frichner with a copy of the completed
text
for the desired press release for Frichner’s review and approval (which shall
not be unreasonably withheld) prior to its release.
14.
Integration.
This
Agreement constitutes a single, integrated written contract expressing the
entire agreement of the parties. No covenants, agreements, representations,
or
warranties of any kind whatsoever, whether express or implied, have been
made by
any party to this Agreement, except as specifically set forth in this
Agreement.
15.
Modifications.
No
modification or amendment of this Agreement shall be binding upon any party
to
this Agreement unless made in writing and signed by all parties to this
Agreement.
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16.
Severability.
In the
event that any provision of this Agreement should be held to be void, voidable,
unlawful, or for any reason unenforceable, the remaining provisions or portions
of this Agreement shall remain in full force and effect.
17.
Non-Assignment
of Claims.
Frichner represents that he has not assigned or transferred, or attempted
to
assign or to transfer, to any person or entity, any of the claims he is
releasing in this Agreement.
18.
No
Future Lawsuits.
Each
party acknowledges and agrees that it has not filed and will not file at
any
time in the future any statutory, civil, or administrative claim, grievance,
complaint, or charge of any kind whatsoever with any state or federal court,
administrative agency, or tribunal of any kind whatsoever concerning any
matter,
claim or activity up to the date of the execution of this
Agreement.
19.
Captions.
The captions of the Sections of this Agreement are solely for the convenience
of
the parties hereto, are not part of this Agreement, and shall not be used
to
interpret or determine the validity of this Agreement or any of its
provisions.
20.
Miscellaneous
Terms and Conditions.
Frichner and the Company Parties each, respectively, further acknowledges
and
agrees as follows:
A. Knowing
and Voluntary Consent.
Each of
the parties has read this Agreement carefully, knows and understands the
contents of this Agreement, and has made such investigation of the facts
pertaining to this Agreement as he or it deems necessary or desirable. Frichner
is not required to enter into this Agreement, and entering into this Agreement
is in no way a condition to Frichner's receiving any compensation to which
Frichner is otherwise entitled, all of which have been paid in
full.
B.
Negotiated
Agreement.
The
provisions of this Agreement are the result of negotiations between the parties,
and no ambiguities shall be construed against either party by reason of the
drafting of this Agreement.
C.
Governing
Law; Jurisdiction.
This
Agreement shall be governed by and construed under the laws of the State
of
California, excluding that body of law related to choice of laws, and of
the
United States of America. Any action or proceeding brought to enforce the
terms
of this Agreement or adjudicate any dispute arising out of this Agreement
shall
be brought in the County of San Francisco or the County of San Diego, State
of
California (if under State law) or the Southern District of California (if
under
Federal law). Each of the parties hereby submits itself to the exclusive
jurisdiction and venue of such courts for purposes of any such action or
proceeding.
21.
Non-Solicitation.
Frichner agrees that for a period of 3 years not to, directly or indirectly,
solicit or otherwise encourage the employees, agents, representatives, or
associates to leave their employment with the Company. Furthermore, Frichner
agrees not to, directly or indirectly, hire any employees, agents,
representatives, or associates who leave their employment with the Company
for a
period of one year. This one year period limit on associates who leave the
Company's employment is waivable by the Company.
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22.
Execution
in Counterparts.
This
Agreement may be executed and delivered in any number of counterparts or
copies
by the parties and by facsimile signature. When each party has signed and
delivered at least one counterpart to the other party, each counterpart shall
be
deemed an original and, taken together, shall constitute one and the same
Agreement, which shall then be binding and effective as to the parties to
this
Agreement.
[Signature
Page Follows]
8
The
parties hereto have approved and executed this Agreement on the dates specified
below:
|
Dated:
June 8, 2007
|
XXXXXXX
X. XXXXXXXX
|
| /s/
Xxxxxxx X. Xxxxxxxx
|
|
|
Dated:
June 8, 2007
|
LEFT
BEHIND GAMES INC.,
|
|
a
Delaware corporation
|
|
|
By:
/s/
Xxxxx Xxxxxx
|
|
|
Xxxxx
Xxxxxx
|
|
|
Chief
Financial Officer
|
|
|
Dated:
June 8, 2007
|
LEFT
BEHIND GAMES INC.,
|
|
a
Washington corporation
|
|
|
By:
/s/
Xxxxx Xxxxxx
|
|
|
Xxxxx
Xxxxxx
|
|
|
Chief
Financial Officer
|
9
SCHEDULE
1
LIST
OF
BUSINESS EQUIPMENT
Sony
Vaio
Model VGN-UX-180P
Sony
Vaio
Model - PGC-4G1L
Dell
Desktop Model - GX620
Fry’s
Desktop
Viewsonic
19” Monitor VA912b
Hp
Laserjet 1000 Printer
HP
OfficeJet G85 Printer/Fax
Cingular
8125 Cell Phone
Cingular
Motorota Cell Phone
Cingular
Treo 650
Cingular
Treo 650
Logitech
Headphones
Shure
Headphones
Samsonite
Computer Bag
Bose
computer speakers
AT&T
two line desk top phone
10
