Services Agreement - Youbet.com Inc. and Conor Communications Co.
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (the "Agreement") is made as of February 1,
2002 (the "Effective Date"), by and between YOUBET.COM, INC., a Delaware
corporation, (the "Company"), and CONOR COMMUNICATIONS COMPANY, an Illinois
corporation, ("CCC").
W I T N E S S E T H:
THAT, WHEREAS, the Company desires to engage CCC to retain the services
of Lawrence Lucas ("Mr. Lucas") as the Chairman of the Board of Directors ("the
Board") of the Company and to provide other consulting services to the Company;
and
WHEREAS, CCC desires to make such services available;
NOW, THEREFORE, in consideration of the covenants and agreements
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which the parties hereby acknowledge, the parties
agree as follows:
1. ENGAGEMENT AND ACCEPTANCE. The Company hereby engages CCC for the
services of Mr. Lucas for a term commencing on the Effective Date and, unless
extended or sooner terminated as hereinafter provided, continuing until January
31, 2004 (the "Initial term"). The Initial term will renew automatically for
successive one (1) year terms (each a "Renewal term") unless a party delivers
written notice to the other party terminating the Initial term or a Renewal
term, as the case may be, at least ninety (90) days before the expiration of the
Initial term or a Renewal term, as the case may be. As used in this Agreement,
the word the "Term" shall mean the Initial term and any and all Renewal terms.
CCC hereby accepts such engagement.
2. SERVICES.
A. POSITION. During the Term, Mr. Lucas shall serve as the Chairman of
the Board of the Company (the "Board"), serve as Chairman of the Company's
Strategic Planning Committee (subject to Board approval), oversee international
relationships and development, strategic planning, and government relations for
the Company, and provide consulting services to the Board as mutually agreed.
During the Term, Mr. Lucas will, subject to the provisions contained herein,
devote a sufficient amount of his work time to fulfill his duties and
responsibilities as Chairman of the Board and a consultant and not engage in any
interactive gaming activities that are competitive with the business of the
Company.
B. REPORTING. Mr. Lucas shall report solely to the Board in his
capacity as Chairman of the Board and as Chairman of the Company's Strategic
Planning Committee. With respect to the other services that Mr. Lucas will
provide under this Agreement, Mr. Lucas shall report to the Company's Chief
Executive Officer.
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4. COMPENSATION.
A. FEES. Subject to upward adjustment as provided below, and except as
otherwise provided in Section 3.B. of this Agreement, the Company shall, during
the Term of this Agreement, pay to CCC, and CCC agrees to accept, in
consideration of making Mr. Lucas's services available to the Company, the sum
of (i) two hundred twenty thousand and no/100 dollars ($220,000) per each
twelve-month period during the Term, and (ii) the amount of payroll and other
taxes that the Company would be required to pay if Mr. Lucas were employed by
the Company at a salary equal to the amount payable under clause (i) of this
Section 3.A. (Section 3.A.(i) and (ii) being hereinafter collectively referred
to as the "Base Fee"). Except as otherwise provided in Section 3.B. of this
Agreement, the Base Fee shall be payable in equal semi-monthly or bi-weekly
installments. During the Term, the amount set forth in clause (i) of this
Section 3.A. may be increased on each anniversary of the Effective Date at the
discretion of the Board.
B. TIMING. To the extent that the Company has not paid CCC any Base Fee
payments due as of the date this Agreement is executed and delivered, the
Company shall pay CCC such payments within five (5) days of the execution and
delivery of this Agreement.
D. BONUSES. The Company reserves the right to recognize and reward the
Executive's performance and contributions the Executive may make to the Company
by awarding the Executive such additional bonus compensation, if any, as the
Board may, in its discretion, determine from time to time to be appropriate. Any
such bonus may be in cash or stock, as mutually agreed by the Company and CCC.
In the event that there is a Change of Control (as defined below), the Company
shall issue to CCC a special achievement bonus of three hundred thousand
(300,000) shares of common stock of the Company upon such Change of Control (the
"Change of Control Bonus").
D. STOCK OPTIONS. Subject to the availability of shares issuable
pursuant to the Company's Stock Option Plan, and subject to the applicable rules
governing the grant of options under the Company's 1998 Stock Option Plan CCC is
hereby granted one million (1,000,000) options for the Company's common stock
pursuant to the Company's 1998 Stock Option Plan. Said stock options will have
an exercise price equal to fair market value. As used in the foregoing sentence,
"fair market value" means the closing price per share of the common stock of the
Company on the Effective Date. Commencing with the Effective Date, CCC's stock
options shall vest equally, on a monthly basis, over two (2) years, at the rate
of one twenty-fourth (1/24th) per month. All unvested options of CCC shall
immediately vest upon a Change of Control defined below and all vested options
shall be exercisable for the later of two (2) years following (a) the date of a
Change of Control or (b) the period of exercisability provided for in the
Company's 1998 Stock Option Plan. Except as otherwise provided in this
Agreement, any unvested options shall terminate as provided in the Company's
1998 Stock Option Plan or as otherwise set forth herein. To the extent of any
conflict between this Agreement, on the one hand, and the Stock Option plan
and/or the 1998 Stock Option Plan Incentive Stock Option Agreement, on the other
hand, this Agreement shall control. In no event shall CCC have less than two (2)
years after the later of (i) May 15, 2004, or (ii) the end of its engagement
under this Agreement by which to exercise any vested options.
For purposes of this Agreement, the term "Change of Control" shall
mean, a merger, acquisition or other corporate transaction where either (i)
substantially all the Company's assets or fifty percent (50%) or more of the
outstanding common stock of the Company is sold or acquired, or (ii) upon the
consummation of any transaction involving over fifty percent (50%) of the assets
or outstanding stock of the Company, the Company's existing Board as of the date
immediately preceding the consummation of the transaction no longer constitute a
majority of the Board as of any date within the twelve (12) consecutive months
subsequent to consummation of the transaction, or (iii) TVG, Inc., or any of its
related-entities or affiliates, or in conjunction with any of the major U.S.
racetracks or their affiliates, owns or controls , directly or indirectly,
thirty-three percent (33%) or more of the outstanding common stock of the
Company.
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E. CONTINGENCY. The parties recognize that, as of the Effective Date,
the Company's option pool may not have options to satisfy the aforementioned
grant to CCC of one million (1,000,000) options for the Company's common stock.
In the event that the option pool does not fully satisfy the aforementioned
grant by May 15, 2004 or there is a Change of Control as defined above, then the
Company agrees that CCC shall have an immediate right to receive the value of
the options it would have otherwise been awarded. The value of that right shall
be calculated as follows: the difference between (i) the market value of one
share of common stock of the Company as of the date that CCC notifies the
Company it is exercising its right, and (ii) the option price CCC would have
paid for a share of common stock had the Company fully satisfied the
aforementioned grant, times the number of options that should have been granted
to CCC but which were not granted. CCC may exercise this right, in whole or in
part, from time to time and at any time during the five (5) year period
following the date it is determined that the Company cannot fully satisfy the
aforementioned grant.
4. BENEFITS.
A. STAFF. During the Term, the Company shall, at its cost and expense,
provide Mr. Lucas with such secretarial and other administrative support as he
may reasonably require in connection with the performance of his duties as
Chairman of the Board.
B. ADDITIONAL BENEFITS. During the Term, the Company shall, at its cost
and expense, provide Mr. Lucas, or reimburse CCC to the extent CCC provides Mr.
Lucas, with the following benefits:
(vii) reimbursement of all business-related operating expenses of
Mr. Lucas's automobile including registration, gas, oil,
maintenance, and repairs;
(viii) reimbursement of the expenses of an automobile liability
insurance policy on Mr. Lucas's automobile, with coverage
including Mr. Lucas in the minimum amount of one million and
no/dollars ($1,000,000) combined single limit;
(ix) all benefits and perquisites under any and all formal or
informal benefit plans (except health insurance and 401(k)
benefits), understandings, arrangements or programs, including
cash bonus and incentive plans, and stock or warrant plans
(collectively referred to herein as "Fringe Benefits");
(x) reimbursement of Mr. Lucas's cellular phone and long distance
phone expenses for calls related to the business of the
Company;
(xi) an annual paid vacation of twenty (20) days, which vacation
need not be taken in consecutive periods. If Mr. Lucas does
not take all such vacation time in any given calendar year,
such unused time shall carry forward into the next calendar
year and shall be paid upon the expiration or termination of
CCC's engagement; and
(xii) all paid holidays, sick days, and personal days provided by
the Company to its senior executive employees.
5. DEDUCTIONS. The Company shall not deduct from the Base Fee, or any
other amounts payable to CCC by the Company, any social security taxes, federal,
state or municipal taxes or any other charges and deductions which are required
to be made from wages of employees. CCC shall indemnify and hold the Company
harmless from and against any damages or penalties incurred by the Company by
reason of its not withholding such amounts from amounts payable to CCC
hereunder.
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6. REIMBURSEMENT OF CERTAIN EXPENSES. The Company shall promptly
reimburse CCC and Mr. Lucas for reasonable out-of-pocket expenses incurred in
connection with the Company's business, including travel expenses, food, lodging
while away from home, entertainment, telephone expenses, and automobile
expenses, subject to such policies as the Company may from time to time
reasonably establish. The Company shall reimburse CCC for the reasonable legal
fees it incurs in connection with the negotiation and preparation of this
Agreement.
7. CERTAIN OTHER PROVISIONS. Mr. Lucas will comply with all reasonable
and lawful policies, procedures and practices of the Company from time to time
in effect of which he is provided notice.
9. CERTAIN AGREEMENTS.
A. CONFIDENTIAL INFORMATION. CCC and Mr. Lucas shall not during the
Term or at any time thereafter (i) except during the Term for the benefit of the
Company, disclose to any person not employed by the Company or to any person,
firm or corporation not engaged to render services to the Company, or (ii) use
for the benefit of either of CCC or Mr. Lucas, or others, any confidential
information of the Company obtained by CCC or Mr. Lucas prior to the date
hereof, during the Term or any time thereafter, including "know-how," trade
secrets, details of supplier's, manufacturer's or distributor's contracts,
pricing policies, financial data, operational methods, marketing and sales
information or strategies, product development techniques or plans or any
strategies relating thereto, technical processes, designs and design projects,
and other proprietary information of the Company provided however, that this
provision shall not preclude CCC or Mr. Lucas from (a) upon advice of counsel
and after reasonable notice to the Company, making any disclosure required by
any applicable law, or (b) using or disclosing information known generally to
the public (other than information known generally to the public as a result of
any violation of this Section 8 by or on behalf of CCC or Mr. Lucas).
B. PROPERTY OF COMPANY. Any interest in trademarks, service-marks,
copyrights, copyright applications, patents, patent applications, slogans,
developments and processes which CCC or Mr. Lucas, during the Term, may develop
relating to the business of the Company in which the Company may then be engaged
and any memoranda, notes, lists, records and other documents (and all copies
thereof) made or compiled by CCC or Mr. Lucas or made available to CCC or Mr.
Lucas concerning the business of the Company shall belong to and remain in the
possession of the Company, and shall be delivered to the Company promptly upon
the termination of CCC's services with the Company or at any other time upon
request and reasonable notice.
C. NON-INTERFERENCE. CCC and Mr. Lucas will not, during the Term and
for a period of one (1) year after the expiration or termination of CCC's
engagement with the Company, induce any person who is an employee of the Company
to terminate his relationship with the Company.
D. NON-COMPETITION. Without the prior written consent of the Company,
neither Mr. Lucas nor any other employee of CCC shall be employed by the
Internet gaming divisions of Magna, Inc., TVG, Inc. or by any other Internet
gaming division of a direct competitor of the Company during, or for one (1)
year after the expiration or termination of, CCC's engagement with the Company.
9. OTHER PROVISIONS.
A. RIGHTS AND REMEDIES UPON BREACH. If CCC or Mr. Lucas breach, or
threaten to commit a breach of, any of the provisions of Section 8 hereof (the
"Restrictive Covenants"), the Company shall have the following rights and
remedies, each of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company at law or in equity.
B. SEVERABILITY OF COVENANTS. If any court determines that any of the
Restrictive Covenants, or ANY
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part thereof, is invalid or unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be given full effect, without
regard to the invalid portions.
C. BLUE-PENCILING. If any court construes any of the Restrictive
Covenants, or any part thereof, to be unenforceable because of the duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision and, in its reduced form, such provision
shall then be enforceable.
D. ENFORCEABILITY IN JURISDICTIONS. The parties intend to and hereby
confer jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of such Restrictive Covenants. If the
courts of any one or more of such jurisdictions hold the Restrictive Covenants
unenforceable by reason of the breadth of such scope or otherwise, it is the
intention of the parties that such determination not bar or in any way affect
Company's right to the relief provided in this Section 9 in the courts of any
other jurisdiction within the geographical scope of such Restrictive Covenants,
as to breaches of such Restrictive Covenants in such other respective
jurisdictions, such Restrictive Covenants as they relate to each jurisdiction
being, for this purpose, severable into diverse and independent covenants.
E. INJUNCTIVE RELIEF. Executive agrees and understands that the remedy
at law for any breach by Executive of the provisions of Section 8 hereof may be
inadequate and that damages resulting from such breach may not be susceptible to
being measured in monetary terms. Accordingly, it is acknowledged that upon
Executive's breach of any provision of Section 8 hereof, the Company shall be
entitled to seek to obtain from any court of competent jurisdiction injunctive
relief to prevent the continuation of such breach. Nothing contained herein
shall be deemed to limit the Company's remedies at law or in equity for any
breach of the provisions of Section 8 hereof which may be available to the
Company.
10. TERMINATION:
A. TERMINATION UPON DEATH. If, during the Term, Mr. Lucas dies, CCC
shall be entitled to receive the Base Fee up until the date of Mr. Lucas's
death, any unpaid bonus for the prior year, payment for unused vacation or other
time off benefits, if any, and Fringe Benefits earned through the date of Mr.
Lucas's death. In addition, CCC shall receive all vested options, and all
unvested options of CCC shall vest during the periods described in Section 3.D.
of this Agreement. All such options shall be exercisable for up to the latest of
two (2) years from (i) the date of vesting, (ii) Mr. Lucas' death, or (iii) May
15, 2004.
B. TERMINATION UPON DISABILITY. If, during the Term, Mr. Lucas should
become so physically or mentally disabled, whether totally or partially, that
Mr. Lucas is unable to perform the duties, functions and responsibilities
required hereunder for (i) a period of at least six (6) consecutive months or
(ii) shorter periods aggregating at least twelve (12) months ("Disability"),
then in such event, the Company may, at any time thereafter, by written notice
to CCC and Mr. Lucas, terminate CCC's engagement. Mr. Lucas agrees to submit to
reasonable medical examinations upon the request of Company to determine whether
he has a Disability. The determination of whether or not Mr. Lucas is subject to
a Disability shall be made jointly by Mr. Lucas's doctor ("Mr. Lucas's Doctor")
and by a board certified doctor selected by Company of the appropriate
recognized field of medicine or psychiatric practice who has examined Mr. Lucas
(the "Company's Doctor"). If Mr. Lucas's Doctor and the Company's Doctor cannot
agree on such determination, then they shall select a mutually agreeable board
certified doctor or practitioner of the appropriate recognized field of medicine
or psychiatric practice (the "Third Doctor") to make the determination. After
the Third Doctor has examined Mr. Lucas and reviewed the findings of Mr. Lucas's
Doctor and the Company's Doctor, the Third Doctor shall determine whether Mr.
Lucas has a Disability, and his or her determination shall be final and binding.
The Company and Mr. Lucas shall pay for the cost and expense of their own
doctors, and the Company shall pay for the cost of the Third Doctor, should the
Third Doctor be required. If CCC's engagement is terminated, as aforesaid, CCC
shall be entitled to receive the Base Fee through the date of the termination of
CCC's engagement, any unpaid bonus for the prior year,
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payment for unused vacation, if any, payment for unused vacation or other time
off benefits, if any, and Fringe Benefits earned through the date of the
termination of CCC's engagement. In addition, CCC shall receive all vested
options, and all unvested options of CCC shall vest during the periods described
in Section 3.D. of this Agreement. All such options shall be exercisable for up
to the latest of two (2) years from (i) the date of vesting, (ii) the
termination of CCC's engagement by reason of Mr. Lucas's Disability, or (iii)
May 15, 2004.
C. TERMINATION FOR CAUSE. As used in this Agreement, the term "Cause"
means only any of the following:
(i) CCC's or Mr. Lucas's theft or embezzlement of the Company's
money, equipment, or securities;
(vii) CCC's or Mr. Lucas's conviction of a felony (other than a
traffic violation) which results in material injury to the
Company;
(viii) CCC's or Mr. Lucas's willful act of disloyalty that is
intended to and results in material injury to the Company;
(ix) Mr. Lucas's chronic alcoholism or addiction to non-medically
prescribed drugs (provided that such alcoholism or addiction
occurs during the Term);
(x) material breach by CCC or Mr. Lucas of Section 8 of this
Agreement with the Company, which breach shall not have been
cured within thirty (30) days after receipt by CCC of written
notice thereof from the Board, provided, however, that such
right of cure will exist only if the material breach has not
caused material damage to the Company or;
(xi) the Company is unable to obtain or renew a license in a
jurisdiction which is material to the Company as a result of
material actions or omissions on the part of Mr. Lucas,
provided, however, that actions or omissions which Mr. Lucas
reasonably believed were in the best interests of the Company,
or which were taken pursuant to the Articles of Incorporation
of the Company or Bylaws of the Company, pursuant to the
direction of the Board, or on the advice of legal counsel
shall not constitute "Cause."
The Board shall have the option to terminate the services of CCC if
there is Cause as defined above. If CCC's services are terminated as set forth
in this Section 10.C., CCC's services shall cease as of such effective date of
termination and all compensation shall cease as of such effective date. For
purposes of this Agreement, CCC's services shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to CCC and
Mr. Lucas a copy of a resolution, duly adopted by the affirmative vote of a
majority of the entire membership of the Board at a meeting called and held for
this purpose after reasonable notice to CCC and Mr. Lucas and an opportunity for
them, together with their counsel, to be heard by the Board, finding that, in
the good faith opinion of the Board, CCC or Mr. Lucas, as the case may be, is
guilty of misconduct of the type described in this Section 10.C. hereof and
specifying the particulars thereof in detail. Any act or omission of CCC or Mr.
Lucas based upon authority given pursuant to the Articles of Incorporation of
the Company or Bylaws of the Company or a resolution duly adopted by the
Company's Board or based upon the advice of counsel for the Company shall be
conclusively deemed to be done by CCC and Mr. Lucas in good faith and in the
best interests of the Company and shall not constitute "Cause."
D. TERMINATION WITH GOOD REASON OR WITHOUT CAUSE; CHANGE OF CONTROL. If
during the Term (i) Mr. Lucas resigns as Chairman of the Board for Good Reason
(defined below), or (ii) his or CCC's services are terminated without Cause (as
defined above), or (iii) there is a Change of Control (as defined above) and
CCC's or Mr. Lucas's services for the Company are terminated by reason of such
Change of Control as
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provided in subparagraph (b) below, then upon such event:
a. The Company shall (1) pay CCC the Base Fee through the last
day of CCC's services, (2) pay CCC any earned but unpaid annual bonus
compensation for the prior year of the Term, (3) pay CCC for any unused
vacation or other time-off benefits, and (4) pay Mr. Lucas his unpaid
reimbursable business expenses incurred by him through the last day of
his services.
b. The Company shall also pay CCC, in a lump sum, an amount
equal to the Base Fee CCC would have received had it remained engaged
by the Company for one (1) additional year, provided, however, that if
CCC's services are terminated by the Company in connection with a
Change of Control (as defined above) or CCC terminates its services in
connection with a Change of Control (as defined above) for Good Reason
(as defined above), then the Company shall instead pay CCC, in a lump
sum, an amount equal to two and 99/100 (2.99) times the average of the
Base Fee and bonuses (but not the Change of Control Bonus) that CCC
received from the Company during the previous three (3) years, but if
CCC has not received from the Company a Base Fee and bonuses for three
(3) years, then the Company shall instead pay CCC, in a lump sum, an
amount equal to two and 99/100 (2.99) times the average of the Base Fee
and bonuses (but not the Change of Control Bonus) that CCC received
from the Company during the previous two (2) years, otherwise, the
Company shall instead pay CCC, in a lump sum, an amount equal to two
and 99/100 (2.99) times the current Base Fee and most recent bonus (but
not the Change of Control Bonus) that CCC has received from the
Company.
c. All stock options of CCC shall immediately vest and be
exercisable for up to the later of two (2) years following (i) the date
of the termination of CCC's engagement or Mr. Lucas's services or (ii)
May 15, 2004.
d. The Company will provide Mr. Lucas with (1) a favorable
reference; and (2) an agreed-upon designated contact for references. In
addition, at Mr. Lucas's option, and taking into account the Company's
needs as a public company, an agreed upon statement will be issued to
employees and an agreed-upon press release will be issued to the media
concerning the departure of Mr. Lucas.
Mr. Lucas shall not be required to seek employment, and neither he nor CCC shall
be required to take other action, in order to mitigate their damages or to be
entitled to the benefits and payments above. There shall be no set off against
such benefits and payments due or any other amounts of money payable to CCC or
Mr. Lucas of any amounts they earn or could have earned from other sources.
F. GOOD REASON. AS USED HEREIN, "GOOD REASON" SHALL MEAN ONLY:
(i) withdrawal by the Company from Mr. Lucas of any substantial
part of his duties then being performed, or responsibility or
authority then being carried, by him, or a material change in
Mr. Lucas's reporting lines;
(ii) assignment by the Company to Mr. Lucas of substantial
additional duties or responsibilities which are inconsistent
with the duties or responsibilities then being carried by Mr.
Lucas;
(iii) material reduction in the level of Mr. Lucas's responsibility,
authority, autonomy, title, compensation, perquisites, or
benefits;
(iv) failure to keep Mr. Lucas in office as Chairman of the Board
and/or on the Board;
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(v) the Company's material breach of this Agreement (or any other
agreement between CCC and/or Mr. Lucas, on the one hand, and
the Company, on the other hand), and the failure of the
Company to cure such breach within thirty (30) days of notice
thereof;
(vi) material fraud on the part of the Company; or
(vii) discontinuance of the active operation of the business of the
Company, or insolvency of the Company, or the filing by or
against the Company of a petition in bankruptcy or for
reorganization or restructuring pursuant to applicable
insolvency or bankruptcy law.
F. SEVERANCE. In the event that the Company shall not renew this
Agreement pursuant to its terms (and provided that CCC is willing to do so), the
Company may, in its discretion, pay CCC an amount up to the Base Fee payable to
CCC in the twelve (12) months immediately preceding the expiration of the Term.
G. COOPERATION AFTER TERMINATION OF AGREEMENT. Following termination of
this Agreement, regardless of the reason for such termination, CCC and Mr. Lucas
shall reasonably cooperate with the Company in the prosecution of any claims,
controversies, suits, arbitrations or proceedings involving events occurring
prior to the termination of this Agreement. CCC and Mr. Lucas acknowledge that
Mr. Lucas may be required to give testimony at trial or deposition or give
declarations. If Mr. Lucas shall be required to spend a material amount of time,
the Company shall compensate CCC at a per diem rate equal to the per diem amount
of the Base Fee in effect at the time of the termination, provided, however,
that if during the period or periods of time CCC or Mr. Lucas is called upon to
cooperate with the Company the Company is paying CCC, then the Company need not
pay CCC a per diem rate during any such period. The Company shall use its best
efforts to provide Mr. Lucas with reasonable prior notice of any actions
required of him and to reasonably accommodate his schedule.
11. ASSIGNABILITY. This Agreement and the rights and obligations of the
parties hereunder may not be assigned by either party without the prior written
consent of the other party.
12. ARBITRATION. Except as otherwise provided in Section 9 of this
Agreement with regard to the Restrictive Covenants, any dispute, controversy or
claim arising out of or relating to this Agreement shall be settled by binding
and final arbitration in the County of Los Angeles, State of California, under
the commercial arbitration rules of the American Arbitration Association then
existing and judgment on the arbitration award may be entered in any court
having jurisdiction of the subject matter over the controversy.
13. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of California applicable to contracts
executed in and to be performed solely within the State of California.
14. ABILITY TO FULFILL OBLIGATIONS. Neither the Company, CCC nor Mr.
Lucas is a party to or bound by any agreement that would be violated by the
terms of this Agreement.
15. NOTICE. Any notice required or permitted to be given hereunder
shall be given in writing and may be given by telex, telegram, facsimile
transmission or similar method if confirmed by mail as herein provided and
addressed as follows:
To the Company: You Bet International, Inc.
5901 De Soto Avenue
Woodland Hills, California 91367
Attention: President
Fax: (818) 668-2101
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with a copy to
Loeb & Loeb LLP
10100 Santa Monica Blvd.
Suite 2200
Los Angeles, CA, 90067
Attention: David L. Ficksman, Esq.
Fax: (310) 282-2200
If to CCC: Conor Communications Company
1229 N. North Branch
Suite 103
Chicago, Illinois 60622
Attention: Mr. Lawrence Lucas
Fax: (310) 642-5321
with a copy to:
Funkhouser Vegosen Liebman & Dunn Ltd.
55 West Monroe Street - Suite 2410
Chicago, Illinois 60603
Attention: Jonathan Vegosen, Esq.
Fax: (312) 701-6801
by mail if sent postage prepaid by registered mail, return receipt requested; or
by hand delivery to any party at the address of the party first above set forth.
If notice, direction or instruction is given by telex, telegram or facsimile
transmission or similar method or by hand delivery, it shall be deemed to have
been given or made on the day on which it was given, and if mailed, shall be
deemed to have been given or made on the third (3) business day following the
day after which it was mailed. Any party may, from time to time, by like notice
give notice of any change of address and in such event, the address of such
party shall be deemed to be changed accordingly.
16. ENTIRE AGREEMENT. The Company and CCC recognize and agree that CCC
or Mr. Lucas may have previously granted options for shares of common stock of
the Company (the "Prior Agreement"). Except for any rights of CCC or Mr. Lucas
to such options and the obligation of the Company to grant them under the Prior
Agreement, which rights and obligations shall remain in full force and effect,
this Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes any and all prior or contemporaneous
oral and prior written agreements and understandings. Except for the rights of
CCC or Mr. Lucas and the foregoing obligation of the Company concerning stock
options under the Prior Agreement, there are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof or in effect among the
parties. No custom or trade usage, nor course of conduct among the parties,
shall be relied upon to vary the terms hereof. This Agreement may not be
amended, and no provision hereof shall be waived, except by a writing signed by
all of the parties to this Agreement which states that it is intended to amend
or waive a provision of this Agreement. Any waiver of any rights or failure to
act in a specific instance shall relate only to such instance and shall not be
construed as an agreement to waiver any rights or fail to act in any other
instance, whether or not similar.
17. SEVERABILITY. Should any provision of this Agreement be
unenforceable or prohibited by any applicable law, this Agreement shall be
considered divisible as to such provision which shall be inoperative, and
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the remainder of this Agreement shall be valid and binding as though such
provision were not included herein and shall be construed in such a manner to
maximize its validity and enforceability.
18. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original.
19. HEADINGS. All headings in this Agreement are for convenience only
and will not affect the meaning of any provision hereof. Whenever the term
"include," "including," or "included" is used in this Agreement, it shall mean
including without limiting the generality of the foregoing.
20. SURVIVAL OF CERTAIN PROVISIONS. The provisions of Sections 3, 4, 5,
6, 7, 8, 9, 10, 12, 13, 21, and 23 shall, to the extent applicable, continue in
full force and effect notwithstanding the expiration or earlier termination of
this Agreement or of Mr. Lucas's services hereunder in accordance with the terms
of this Agreement.
21. ATTORNEYS' FEES. Except as otherwise provided herein, in the event
of arbitration with respect to the subject matter of this Agreement, the
prevailing party shall be entitled to all of its costs and expenses, including
the reasonable attorneys' fees and costs, incurred in resolving or settling the
dispute. These costs and expenses shall be in addition to any other damages to
which the prevailing party may be entitled. Without limiting any other right or
remedy of CCC or Mr. Lucas, in the event that the Company fails to make any
payment due to CCC or Mr. Lucas under this Agreement and such failure continues
for five (5) days after written notice thereof to the Company from CCC or Mr.
Lucas, then the Company shall also pay CCC or Mr. Lucas, as the case may be,
interest on the unpaid amounts at the rate of two percent (2%) per month,
compounded, until all unpaid amounts, and all reasonable attorneys' fees and
costs associated with collecting such unpaid amounts, are paid in full.
22. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this
Agreement shall inure to the benefit of, and be binding upon, the Company and
any corporation with which the Company merges or consolidates, and upon CCC and
Mr. Lucas and his executors, administrators, heirs and legal representatives.
23. INDEMNIFICATION. The Company will indemnify, defend, and hold Mr.
Lucas and CCC, and each of them, harmless from and against any and all demands,
actions, claims, suits, liabilities, losses, damages, fees (including reasonable
attorneys' fees) and expenses relating to any acts or omissions to act in the
course or scope of his duties or services he performs on behalf of the Company
and/or while serving as an officer and/or director of the Company, and provide
them with indemnification and officers and directors liability insurance at
least to the same extent that it provides such indemnification and insurance to
the officers and directors of the Company. Mr. Lucas and CCC will have the
option to select their own counsel or be represented by counsel for the Company.
The Company shall pay for or reimburse Mr. Lucas and CCC for any fees and
expenses covered by this Section as and when incurred. The provisions herein
shall survive the termination of CCC's engagement and/or of Mr. Lucas's services
with the Company for any reason.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by duly their authorized officers as of the day and year first above
written.
YOUBET.COM, INC., a Delaware Corporation
By:
Name:
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Title:
CONOR COMMUNICATIONS COMPANY
By:
Lawrence R. Lucas, President
The undersigned hereby agrees to (i) provide CCC the services required of CCC
hereunder and (ii) comply with the provisions in the foregoing Services
Agreement which are applicable to me personally.
__________________________________
LAWRENCE R. LUCAS
AMENDMENT TO SERVICES AGREEMENT
This Amendment dated as of March 27, 2003 (the "Amendment") to the
Services Agreement dated as of February 1, 2002 (the "Agreement") between
Youbet.com, Inc. a Delaware corporation (the "Company"), and Conor
Communications Company, an Illinois corporation ("CCC") is made with reference
to the following:
A. Pursuant to Section 3D of the Agreement, CCC was granted options to
purchase 1,000,000 shares of the Company's common stock (the "Options"). The
parties acknowledge that the issuee of the Options should have been Lawrence
Lucas, individually, rather than CCC.
NOW THEREFORE, the Services Agreement is hereby amended as follows:
1. The Options are hereby granted to Lawrence Lucas, individually,
retroactive to the date of the grant. Additionally, notwithstanding anything in
the Agreement to the contrary, (a) all unvested Options as of the date hereof
shall immediately vest; and (b) the Options may be transferable to CCC, its
successors or assignees, or a corporation or other entity wholly owned by
Lawrence Lucas.
2. In all other respects, the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their duly authorized officers as of the date and year first above
written.