Exhibit 10.2
SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT (the “Agreement”) is entered into as of the 27th day
of July, 2015 by and between Jesse Sutton (“Sutton”) and Majesco Entertainment
Company, a Delaware corporation (the “Company”).
 
WHEREAS, Sutton is employed as the Chief Executive Officer of the Company
pursuant to the Employment Agreement dated as of January 8, 2009, as amended
(the “Sutton Employment Agreement”); and
 
        WHEREAS, the Company and Sutton desire to enter into this Agreement
providing for (i) Sutton’s amicable resignation from the Company’s employment,
(ii) to provide for a payment to Sutton for continued services as a consultant
following termination in order to assure a smooth transition and (iii) to
provide for the transfer to Sutton of all of the membership interests in Zift
Interactive LLC a Nevada limited liability company (“Zift”) and wholly owned
subsidiary of the Company which on the closing date of such transaction will own
certain assets and have certain rights to distribute certain retail video games
previously developed or in development,  and will assume certain liabilities of
the Company relating to the Company’s retail sale of video games business and
indemnify the Company therefore (the “Retail Business”) which assets and
liabilities are set forth on Exhibits “A” and “B” attached hereto, as may be
amended with the mutual agreement of the Company and Sutton1 (the “Zift
Transaction”).

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereby agree as follows:
 
1.           Termination Date.  Sutton acknowledges that his last day of
employment with the Company will be July 27, 2015, or such other later date
mutually agreed upon between the Company and Sutton (the “Termination Date”).
Sutton hereby resigns as the Company’s Chief Executive Officer.  Sutton further
understands and agrees that, as of the Termination Date, he will be no longer
authorized to conduct any business on behalf of the Company as an executive or
to hold himself out as an officer of the Company or its subsidiaries (the
“Subsidiaries”), except as otherwise provided herein.  Any and all positions
and/or titles held by Sutton with the Company or any Subsidiaries of the Company
will be deemed to have been resigned as of the Termination Date, except as
otherwise provided herein.
 
2.           Severance Payment.  Provided that Sutton: continues to perform the
consulting services to the Company heretofore provided the Company shall pay or
provide to Sutton the following benefits:
 
(i)           Fifty (50%) percent of the Net Monthly Revenues generated by the
Company from the Download Business (as defined below), but in no event more than
$10,000  per month payable on or before the 15th day of the immediately
succeeding month which payment shall be accompanied by a statement of Net
Monthly Revenues for the prior month (the “Monthly Payment Amount”);
 
(ii)           The Company shall continue its contribution towards Sutton’s
health care benefits on the same basis as immediately prior to the Termination
Date, except as provided below, for twelve (12) months following the Termination
Date.  During the period the Company provides Sutton with this coverage, an
amount equal to the applicable COBRA premiums (or such other amounts as may be
required by law) will be included in Sutton’s income for tax purposes to the
extent required by applicable law and the Company may withhold taxes from
Sutton’s other payments.  Notwithstanding the foregoing, the Company shall not
be required to provide any health care benefit otherwise receivable by Sutton if
Sutton is eligible  to be covered by an equivalent benefit (at the same cost to
Sutton, if any) for another source. Any such benefit made available to Sutton
shall be reported to the Company; and

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 1  To be completed within five business days.
 
 
 

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(iii)           on the Termination Date, all restricted stock awards and/or
stock option grants held by Sutton on the Termination Date shall, other than
those grants made in December 2014 which shall remain subject to their
applicable vesting provisions within the period following the Termination Date
originally contemplated therein, as may be extended from time to time, vest in
full provided that such awards and grants shall be subject to the following
amendment: Sutton shall have a period of eighteen (18) months from the
Termination Date to exercise any previously issued such stock options, but such
eighteen (18) month period shall not extend the original expiration date of any
such options.
 
Net Monthly Revenues shall be determined in good faith by the management of the
Company but will be substantially calculated by subtracting monthly salaries of
management, employees and consultants who are dedicated to the Download
Business, operating expenses solely of the Download Business, including the
costs associated with testing game development, royalty payments payable to
third parties, cost of sales, rebates, returns and exchanges from gross monthly
revenues generated from the Download Business, and an allocable share determined
in the sole discretion of the chief accounting officer, of parent company
general and administrative costs, including, legal, accounting, insurance, and
public company costs.  In the event that Sutton disputes the calculation of Net
Monthly Revenues, the Company’s independent certified public accountants shall
make such calculation which shall be binding, absent manifest error.

  Sutton shall be responsible for the payment of all payroll taxes, Medicare and
other taxes, and shall indemnify the Company with respect to the payment of all
such amounts.  Except as otherwise set forth herein, Sutton will not be entitled
to payment of any bonus, vacation or other incentive compensation.  Any tax,
penalties or interest as a result thereof shall be the sole responsibility of
Sutton who agrees to indemnify and hold harmless the Company with respect
thereto
 
3.           Consulting Services.   From the period beginning on the Termination
Date and ending twenty four (24) months thereafter (the “Term”), and as an
ongoing condition of payment of the Monthly Payment amounts and other
consideration provided for herein, Sutton agrees that he shall provide
consulting and support services with respect to and in connection with the
operation of the Company’s online and mobile downloadable digital games
business, including new and existing titles (the “Download Business”), as
reasonably requested by the Company (with no minimum time requirement to earn
the Monthly Payment Amount) including, if requested, the promotion and
management thereof and the introduction and launch of all new downloadable
titles in process or developed in the future, and provide general business and
consulting services to the Company to assist in all transitional needs and
activities of the Company upon the reasonable request of the Company in support
of management of the Company.
 
4.           Sutton’s Release.  In consideration for the payments and benefits
described above and for other good and valuable consideration, Sutton hereby
releases and forever discharges the Company and its Subsidiaries, as well as its
affiliates and all of their respective directors, officers, employees, members,
agents, and attorneys, of and from any and all manner of actions and causes of
action, suits, debts, claims, and demands whatsoever, in law or equity, known or
unknown, asserted or unasserted, which he ever had, now has, or hereafter may
have on account of his employment with the Company, the termination of his
employment with the Company, and/or any other fact, matter, incident, claim,
injury, event, circumstance, happening, occurrence, and/or thing of any kind or
nature which arose or occurred prior to the date when he executes this
Agreement, including, but not limited to, any and all claims for wrongful
termination; breach of any implied or express employment contract; unpaid
compensation of any kind;  breach of any fiduciary duty and/or duty of loyalty;
breach of any implied covenant of good faith and fair dealing; negligent or
intentional infliction of emotional distress; defamation; fraud; unlawful
discrimination, harassment; or retaliation based upon age, race, sex, gender,
sexual orientation, marital status, religion, national origin, medical
condition, disability, handicap, or otherwise; any and all claims arising under
arising under Title VII of the Civil Rights Act of 1964, as amended (“Title
VII”); the Equal Pay Act of 1963, as amended (“EPA”); the Age Discrimination in
Employment Act of 1967, as amended (“ADEA”); the Americans with Disabilities Act
of 1990, as amended (“ADA”); the Family and Medical Leave Act, as amended
(“FMLA”); the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); the Sarbanes-Oxley Act of 2002, as amended (“SOX”); the Worker
Adjustment and Retraining Notification Act of 1988, as amended (“WARN”); and/or
any other federal, state, or local law(s) or regulation(s); any and all claims
for damages of any nature, including compensatory, general, special, or
punitive; and any and all claims for costs, fees, or other expenses, including
attorneys' fees, incurred in any of these matters (the “Release”).  The Company
acknowledges, however, that Sutton does not release or waive any rights to
contribution or indemnity under this Agreement to which he may otherwise be
entitled.  The Company also acknowledges that Sutton does not release or waive
any claims, and that he retains any rights he may have, to any vested 401(k)
monies (if any) or benefits (if any), or any other benefit entitlement that is
vested as of the Termination Date pursuant to the terms of any Company-sponsored
benefit plan governed by ERISA.  Nothing contained herein shall release the
Company from its obligations set forth in this Agreement or the Company’s
obligation with respect to indemnification of Sutton as a former officer and/or
director of the Company or for the advancement of expenses related thereto under
applicable law.   Sutton hereby represents there are no known claims known or
threatened against the Company, other than have been previously disclosed to the
Company.

 
 

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5.           Company Release.  In exchange for the consideration provided for in
this Agreement, the Company, its subsidiaries and affiliates irrevocably and
unconditionally releases Sutton of and from all claims, demands, causes of
actions, suits, debts, fees and liabilities of any kind whatsoever, which it
had, now has or may have against Sutton, as of the date of this Agreement,  in
law or equity, known or unknown, asserted or unasserted by reason of any actual
or alleged act, omission, transaction, practice, conduct, statement, occurrence,
or any other matter.  The Company represents that, as of the date of this
Agreement, there are no known claims relating to Sutton.  The Company agrees to
indemnify Sutton against any future claims to the extent permitted under the
Company’s bylaws, certificate of incorporation and federal or state law.
 
6.           Confidential Information.  Sutton understands and acknowledges that
during the course of his employment by the Company and during the Term of this
Agreement, he had access to Confidential Information (as defined below) of the
Company.  Sutton agrees that, at no time during the Term or a period of two (2)
years immediately after the Term, will Sutton (a) use Confidential Information
for any purpose other than in connection with services provided under this
Agreement or in connection with the Retail Business or (b) disclose Confidential
Information to any person or entity other than to the Company or persons or
entities to whom disclosure has been authorized by the Company. As used herein,
"Confidential Information" means all information of a technical or business
nature relating to the Company or its affiliates, including, without limitation,
trade secrets, inventions, drawings, file data, documentation, diagrams,
specifications, know-how, processes, formulae, models, test results, marketing
techniques and materials, marketing and development plans, price lists, pricing
policies, business plans, information relating to customer or supplier
identities, characteristics and agreements, financial information and
projections, flow charts, software in various stages of development, source
codes, object codes, research and development procedures and employee files and
information; provided, however, that "Confidential Information" shall not
include any information that (i) has entered the public domain through no action
or failure to act of Sutton; (ii) was already lawfully in Sutton's possession
without any obligation of confidentiality; (iii) subsequent to disclosure
hereunder is obtained by Sutton on a non-confidential basis from a third party
who has the right to disclose such information to Sutton; or (iv) is ordered to
be or otherwise required to be disclosed by Sutton by a court of law or other
governmental body; provided, however, that the Company is notified of such order
or requirement and given a reasonable opportunity to intervene.
 
7.           Zift Transaction. Promptly upon the execution hereof the parties
shall negotiate in good faith the agreements related to the Zift Transaction and
the Zift Transaction shall be closed on or before July 31, 2015.  Sutton shall
not pay any additional consideration in connection with the Zift Transaction. In
connection with the Zift Transaction the Company shall grant to Zift an
exclusive worldwide right to distribute the retail video games for a term of at
least one year under all of the Company’s publishing licenses in exchange for a
fee of 5% of the net revenue of such retail sales by Zift.  The assets of Zift
shall include $800,000 in working capital in the form of cash of which $400,000
shall be on deposit with Zift on the closing date and the remaining $400,000
shall be funded by the Company to Zift in 12 equal consecutive monthly
installments of $33,333.33 each month on the first day of each month commencing
August 1, 2015 (the ‘Deferred Payments”).  The Company shall be indemnified
against any assumed liabilities (See Exhibit B) and the Company shall have the
full right and authority to withhold from the Deferred Payments, any and all
assumed liabilities set forth on Exhibit B asserted against the Company (or any
of its subsidiaries) at any time asserted against the Company, regardless of the
merit or enforceability thereof.  Any such withheld payment shall be paid to
Sutton if the claim is paid by Zift or the money is ultimately found not to be
owed.
 
8.           Applicable Law and Dispute Resolution. Except as to matters
preempted by ERISA or other laws of the United States of America, this Agreement
shall be interpreted solely pursuant to the laws of the State of New York,
exclusive of its conflicts of laws principles.  Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York, for the purposes of any suit, action, or other proceeding arising out
of this Agreement or any transaction contemplated hereby.  Any dispute arising
out of or relating to this contract, including the breach, termination or
validity thereof, shall be finally resolved by arbitration in accordance with
the International Institute for Conflict Prevention and Resolution (“CPR”) Rules
for Administered Arbitration (the “Administered Rules” or “Rules”) by three
arbitrators, of whom each party shall designate one, with the third arbitrator
to be appointed by CPR.  The arbitration shall be governed by the Federal
Arbitration Act, 9 U.S.C. §§ 1 et seq., and judgment upon the award rendered by
the arbitrator(s) may be entered by any court having jurisdiction thereof. The
place of the arbitration shall be New York, New York.
 
 
 

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9.           Non-Competition; Non-Solicitation; Non-Disparagement.
 
(i)           Non-Compete.  Sutton hereby covenants and agrees that Sutton will
not, without the prior written consent of the Company, directly or indirectly,
on her own behalf or in the service or on behalf of others, whether or not for
compensation, engage in any business activity, or have any interest in any
person, firm, corporation or business, through a subsidiary or parent entity or
other entity (whether as a shareholder, agent, joint venturer, security holder,
trustee, partner, consultant, creditor lending credit or money for the purpose
of establishing or operating any such business, partner or otherwise) with any
Competing Business in the Covered Area.  For the purpose of this Section 8 (i)
“Competing Business” means any mobile or digital downloadable gaming business
and (ii) “Covered Area” means all geographical areas of the United States
and  foreign jurisdictions where Company then has offices and/or sells its
products directly or indirectly through distributors and/or other sales
agents.  Notwithstanding the foregoing, Sutton may own shares of companies whose
securities are publicly traded, so long as ownership of such securities do not
constitute more than one percent (1%) of the outstanding securities of any such
company.
 
(ii)           Non-Solicitation and Non-Disparagement.  Sutton further agrees
that Sutton will not divert any business of the Competing Business of the
Company and/or its affiliates or any customers or suppliers of the Company
and/or the Company’s and/or its affiliates’ with respect to the Competing
Business to any other person, entity or competitor, or induce or attempt to
induce, directly or indirectly, any person to leave his or her employment with
the Company and/or its affiliates. Sutton and the Company each agree that he and
it shall not malign, defame, blame, or otherwise disparage the other, either
publicly or privately regarding the past or future business or personal affairs
of Sutton, the Company or any other officer, director or employee of the
Company.
 
10.           Voting of Securities.  During the Term, Sutton hereby agrees that
at every meeting of the shareholders of the Company called, and at every
adjournment or postponement thereof, Sutton shall, or shall cause the holder of
record on any applicable record date to, include all shares of the Company’s
common stock beneficially owned by Sutton in any computation for purposes of
establishing a quorum at any such meeting and vote such shares beneficially
owned by Sutton in favor of any matter submitted to the Company’s shareholders
for approval by the Company’s Board of Directors.
 
11.           Entire Agreement. This Agreement may not be changed or altered,
except by a writing signed by both parties. Until such time as this Agreement
has been executed and subscribed by both parties hereto: (i) its terms and
conditions and any discussions relating thereto, without any exception
whatsoever, shall not be binding nor enforceable for any purpose upon any party;
and (ii) no provision contained herein shall be construed as an inducement to
act or to withhold an action, or be relied upon as such.  This Agreement
constitutes an integrated, written contract, expressing the entire agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes any and all prior agreements and understandings, oral or written,
between the parties.
 
12.           Assignment.  Sutton and the Company has not assigned or
transferred any claim he or it is releasing, nor has he purported to do so.  If
any provision in this Agreement is found to be unenforceable, all other
provisions will remain fully enforceable. This Agreement binds each
parties  heirs, administrators, representatives, executors, successors, and
assigns, and will insure to the benefit of all Released Parties and Sutton and
their respective heirs, administrators, representatives, executors, successors,
and assigns.

 
 

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13.           Acknowledgement. Sutton acknowledges that he: (a) has carefully
read this Agreement in its entirety; (b) has been advised to consult and has
been provided with an opportunity to consult with legal counsel of his choosing
in connection with this Agreement; (c) fully understands the significance of all
of the terms and conditions of this Agreement and has discussed them with his
independent legal counsel or has been provided with a reasonable opportunity to
do so; (d) has had answered to his satisfaction any questions asked with regard
to the meaning and significance of any of the provisions of this Agreement; (e)
is signing this Agreement voluntarily and of his own free will and agrees to
abide by all the terms and conditions contained herein; and (f) following his
execution of this Agreement, he has seven (7) days in which to revoke his
release and that, if he chooses not to so revoke, this Agreement shall become
effective and enforceable on the eighth (8th) day following his execution of
this Agreement (the “Effective Date”).  To revoke the Release, Sutton
understands that he must give a written revocation to the Company, within the
seven (7)-day period following the date of execution of this Agreement.  If the
last day of the revocation period is a Saturday, Sunday, or legal holiday in the
State of New York, then the revocation period shall not expire until the next
following day which is not a Saturday, Sunday or legal holiday.  If Sutton
revokes the Release, this Agreement will not become effective or enforceable and
Sutton acknowledges and agrees that he will not be entitled to any benefits
hereunder, including in Section 2.
 
14.           Notices.                      For the purposes of this Agreement,
notices, demands and all other communications provided for in this Agreement
shall be in writing and shall be delivered (i) personally, (ii) by first class
mail, certified, return receipt requested, postage prepaid, (iii) by overnight
courier, with acknowledged receipt, or (iv) by facsimile transmission followed
by delivery by first class mail or by overnight courier, in the manner provided
for in this Section, and properly addressed as follows:
 
 
 

  If to the Company:
Majesco Entertainment Company
404I-T Hadley Road
S. Plainfield, NJ 07080
ATT: Trent Davis,
Chairman                                                                
Fax:
       
With a copy to:
 
Thomson Hine LLP
335 Madison Avenue
12th Floor
New York, NY 10017
Fax: 212-344-6101
       
If to Sutton: Mr. Jesse Sutton
[_____]        
With a copy to:
 
 
Wachtel Missry LLP
One Dag Hammarskjold Plaze
885 Second Avenue
New York, NY 10017
Att: Scott Lesser
Fax: 212-909-9465

15.           Counterparts.  This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties. In the event that any
signature is delivered by facsimile transmission or by an e-mail which contains
a portable document format (.pdf) file of an executed signature page, such
signature page shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such signature page were an original thereof.
 
13.           Counsel Representation.   The Parties hereto further agree that
this Agreement has been carefully read and fully understood by them.  Each Party
hereby represents, warrants, and agrees that he was represented by counsel in
connection with the Agreement, has had the opportunity to consult with counsel
about the Agreement, has carefully read and considered the terms of this
Agreement, and fully understands the same.  Sutton represents, warrants and
acknowledges that he has retained independent counsel and that counsel to the
Company does not represent Sutton.
 
 
 

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IN WITNESS HEREOF, the parties hereby enter into this Agreement and affix their
signatures as of the date first above written.
 
 

MAJESCO ENTERTAINMENT COMPANY   By: /s/ Mohit Bhansali   Name: Mohit Bhansali
Title: Director   /s/ Jesse
Sutton                                                                           
Jesse Sutton