Services Agreement - You Bet International Inc. and Fell & Co. Inc.
SERVICES AGREEMENT
This SERVICES AGREEMENT ("Agreement") is made as of June 29, 1998 by and
between YOU BET INTERNATIONAL, INC., a Delaware corporation (the "Company"), and
FELL & COMPANY, INC., a California corporation ("FCI").
WHEREAS, the Company desires to retain the services of Robert M. Fell
("Fell") and FCI desires to make such services available.
In consideration of the mutual covenants and agreements herein set forth,
the parties hereto agree as follows:
1. ENGAGEMENT AND ACCEPTANCE; TERM. FCI hereby agrees to make available
to the Company the services of Fell for a term commencing on the date hereof and
continuing for a period of three (3) years (the "Term").
2. DUTIES.
A. SERVICES. During the Term, Fell shall serve as Chairman of the
Board of the Company and shall, subject to the provisions of this Agreement,
perform such duties and responsibilities as shall be assigned to Fell by the
Board of Directors. In addition, subject to Section 2.C hereof, until such time
as the Company shall employ a Chief Executive Officer, Fell shall also serve as
interim Chief Executive Officer.
B. TIME COMMITMENT. Fell shall devote approximately 70% of his
business time, labor, skill and energy to the business and affairs of the
Company and to the duties and responsibilities set forth herein. The parties
acknowledge that Fell's services will be provided on a non-exclusive basis,
PROVIDED THAT Fell shall not engage in any activities which are competitive with
the business of the Company. In addition, for so long as Fell shall serve as
Chief Executive Officer, Fell shall not engage in any new projects. SCHEDULE
2.B. hereto sets forth a list of Fell's current activities. SCHEDULE 2.B. may
be supplemented by Fell from time to time with the approval of the Company.
C. SELECTION OF CHIEF EXECUTIVE OFFICER; OFFICE OF THE CHIEF
EXECUTIVE. At any time after the date hereof, Fell may, or at the request of
the Board of Directors Fell shall, select a person to become Chief Executive
Officer. Any such selection shall be subject to the approval of (i) either
David Marshall and Russell Fine (such approval not to be unreasonably withheld),
and (ii) the Board of Directors; PROVIDED THAT if neither Marshall nor Fine
approve of Fell's first two selections of a person to serve as Chief Executive
Officer, then neither Marshall nor Fine shall have any further right to approve
or disapprove persons selected to be Chief Executive Officer with respect to the
then open position (other than in their capacity as directors). In the event
that the Company does not enter into an employment agreement with a new Chief
Executive Officer
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within six months of the date hereof or new aChief Executive Officer does not
commence employment within eight months from the date hereof, then until such
new Chief Executive Officer commences employment, the position of Chief
Executive Officer shall become the Office of the Chief Executive, which shall be
staffed by Fell, Marshall and Fine.
3. COMPENSATION.
A. FEES. The Company shall, during the continuance of this
Agreement, pay to FCI, and FCI agrees to accept, in consideration of making
Fell's services available to the Company the sum of (i) $150,000 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 Fell were employed by the
Company at a salary equal to the amount payable under clause (i) of this Section
3.A. (the "Base Fee"). The Base Fee shall be payable in semi-monthly
installments. The amount set forth in clause (i) of this Section 3.A. shall be
adjusted upward (but not downward) annually on each anniversary of the date
hereof for changes in the Consumer Price Index ("CPI") governing the statistical
area in which Los Angeles, California is located for purposes of calculating the
CPI.
B. INCENTIVE COMPENSATION. FCI and Fell shall be entitled to
receive annual bonuses or other incentive compensation at the discretion of the
Board based upon the contributions made by FCI and Fell to the development of
the Company. Any Common Stock of the Company delivered to FCI or Fell as a
bonus or incentive compensation shall be registered on Form S-8 if the Company
shall be eligible to use such form.
C. STAFF. The Company shall provide Fell with such secretarial and
other administrative support as he may reasonably require in connection with the
performance of the duties to be performed by him.
D. ADDITIONAL BENEFITS. During the Term, the Company shall provide
Fell (or reimburse FCI to the extent it provides Fell) the following benefits:
(i) a monthly automobile allowance in the amount of $750;
(ii) reimbursement of all business-related operating expenses of
Fell's automobile, including without limitation, registration, gas, oil and
repairs;
(iii) reimbursement of the expenses of an automobile liability
insurance policy on Fell's automobile, with coverage including Fell in the
minimum amount of $1,000,000 combined single limit;
(iv) all benefits and perquisites under any and all formal or
informal benefit plans, understandings, arrangements or programs including, but
not limited to, cash bonus and incentive plans, pension and profit sharing
plans, stock or warrant plans, group insurance,
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hospitalization, medical, dental, health and accident and disability plans,
supplemental health care plans and plans providing for life insurance coverage
(inclusive of insurance related to accidental death or dismemberment) which are
available to the Company's senior executive officers;
(v) reimbursement of Fell's cellular phone and long distance
phone expenses for calls related to the business of the Company;
(vi) an annual vacation of twenty (20) days, which need not be
taken in consecutive periods. If Fell does not take all such vacation time in
any given calendar year, such unused time shall carry forward into the next
calender year; and
(vii) all paid holidays provided by the Company to its senior
executive employees.
E. DEDUCTIONS. The Company shall not deduct from the Base Fee or
any other amounts payable to FCI 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. FCI 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
FCI hereunder.
4. REIMBURSEMENT OF CERTAIN EXPENSES. The Company shall promptly
reimburse FCI and Fell for reasonable out-of-pocket expenses incurred in
connection with the Company's business, including, without limitation, travel
expenses, food, lodging while away form home, telephone expenses, and automobile
expenses, subject to such policies as the Company may from time to time
reasonably establish.
5. CERTAIN OTHER PROVISIONS. Fell shall comply with all policies,
procedures and practices of the Company from time to time in effect.
6. CONFIDENTIAL INFORMATION. FCI and Fell shall not during the Term or
at any time thereafter (i) disclose to any person not employed by the Company or
person, firm or corporation engaged to render services to the Company except
during the Term for the benefit of the Company, or (ii) use for the benefit of
either of them, or others, any confidential information of the Company obtained
by FCI or Fell prior to the date hereof, during the Term or any time thereafter,
including, without limitation, "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 FCI or Fell
from (x) upon advice of counsel and after reasonable notice to the Company,
making any disclosure required by any applicable law, or (y) using or disclosing
information known generally
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to the public (other than information known generally to the public as a result
of any violation of this Section 6 by or on behalf of FCI or Fell).
7. TERMINATION.
A. TERMINATION EVENTS. This Agreement may be terminated prior to
the expiration of the Term in accordance with the following:
(a) DEATH. This Agreement shall terminate upon Fell's death.
(b) DISABILITY. If, as a result of Fell's incapacity due to
physical or mental illness, Fell shall have been unable to perform the duties,
functions and responsibilities required hereunder for ninety (90) consecutive
days or shorter periods aggregating to one hundred twenty (120) days in any
twelve (12) months, the Company may terminate this Agreement. During any period
that Fell fails to perform his duties hereunder as a result of incapacity or due
to physical or mental illness, he shall continue to receive full compensation
and other benefits called for hereunder until such time as this Agreement is
terminated pursuant to this Section 7.A.(b) hereof.
(c) CAUSE. This Agreement shall be subject to termination by the
Board of Directors of the Company (the "Board") for cause, which for purposes of
this Agreement shall mean a termination on the grounds of (i) a breach by FCI or
Fell of any material term of this Agreement, which breach shall not have been
cured within thirty (30) days after receipt by FCI of written notice thereof
from the Board, (ii) the reasonable belief by the Board, after conducting an
appropriate investigation, of the commission by FCI or Fell of any act of fraud,
theft or criminal dishonesty or (iii) the conviction of FCI or Fell of any
felony. For purposes of this Agreement, this Agreement shall not be deemed to
have been terminated for cause unless and until there shall have been delivered
to FCI 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 FCI and an opportunity for it, together
with its counsel, to be heard by the Board, finding that, in the good faith
opinion f the Board, FCI or Fell is guilty of misconduct of the type described
in this Section 7.A.(c) hereof and specifying the particulars thereof in detail.
B. COMPENSATION AND BENEFITS PAYABLE BY COMPANY UPON TERMINATION.
Compensation and benefits shall be payable by Company upon a termination of this
Agreement in accordance with the following:
(a) In the event of termination of this Agreement under Section
7.A.(a) hereof, FCI shall continue to receive the compensation and benefits
specified in Sections 3.A. and 3.D. hereof, to the extent applicable, for a
period of twelve (12) months, notwithstanding such termination.
(b) In the event of a termination of this Agreement under
Section 7.A.(b), Fell or his duly appointed personal representatives, shall
continue to receive the compensation and
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benefits specified in Sections 3.A. and 3.B. herein, to the extent applicable,
for a period of twelve (12) months, notwithstanding such termination; PROVIDED
THAT such amounts shall be reduced by any disability insurance payments received
by FCI or Fell from insurance purchased by the Company.
C. COOPERATION AFTER TERMINATION OF AGREEMENT. Following
termination of this Agreement, regardless of the reason for such termination,
FCI and Fell shall 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. FCI and Fell acknowledge that Fell
may be required to give testimony at trial or deposition or give declarations.
If Fell shall be required to spend a material amount of time, the Company shall
compensate FCI at a per diem rate equal to the per diem amount of the Base Fee
in effect at the time of the termination. The Company shall use its best
efforts to provide Fell with reasonable prior notice of any actions required of
him.
8. SEVERANCE. In the event that upon the expiration of the Term the
Company shall not renew this Agreement (and provided that FCI is willing to do
so), the Company shall, within ten days of the expiration of the Term, pay FCI
an amount equal to the Base Fee payable to FCI in the 12 months immediately
preceding the expiration of the Term.
9. NON COMPETE.
A. The Company, FCI and Fell acknowledge that this Services
Agreement is being entered into in furtherance of the transactions contemplated
by that certain Stock Purchase Agreement dated June 29, 1998, among the Company
and the other parties thereto. FCI and Fell, during the Term and for a period
of twenty-four (24) months thereafter, shall not solicit or entice any employee
of the Company to leave the Company to work for anyone in competition with the
Company. During the Term and for a period of twenty-four (24) months
thereafter, within any county or similar political subdivision of the United
States or any other country in which the Company, or any divisions, subdivisions
or affiliated companies of the Company, has conducted business during the past
two (2) years or conducts business during the Term, FCI and Fell shall not,
directly or indirectly, whether as a partner, owner, employee, creditor,
shareholder, or otherwise, promote, participate, or engage, directly or
indirectly, in the development and sale of proprietary, interactive software
which will provide individual computer users with race handicapping or other
sports oddsmaking information or, the ability to place bets on horse racing and
other sports contests, as well as recreational games and contests related to
such information. FCI and Fell shall not be prohibited from investing in any
competitive company, so long as (i) the stock of such company is publicly
traded, (ii) the aggregate ownership by FCI and Fell is less than two percent
(2%) of the outstanding stock of such company, (iii) such stock is held for
investment purposes, and (iv) FCI and Fell do not participate or engage,
directly or indirectly, in the business of such competitor, as an employee,
consultant, spokesperson or otherwise.
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10. 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.
11. ARBITRATION. 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.
12. 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.
13. ABILITY TO FULFILL OBLIGATIONS. Neither the Company, FCI nor the Fell
is a party to or bound by any agreement which would be violated by the terms of
this Agreement.
14. 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.
1950 Sawtelle Boulevard
Suite 180
Los Angeles, California 90025
Attention: David Marshall
Fax: (310) 444-3310
If to FCI: Fell & Company, Inc.
10550 Wilshire Boulevard
Suite 1105
Los Angeles, California
Attention: Robert M. Fell
Fax: (310) 475-3480
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 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.
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15. ENTIRE AGREEMENT. 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, including that certain Memorandum of Understanding dated as of
April 1, 1998 between the Company and FCI. 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.
16. 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 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.
17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original.
18. HEADINGS. All headings in this Agreement are for convenience only and
will not affect the meaning of any provision hereof.
19. SURVIVAL OF CERTAIN PROVISIONS. The provisions of Sections 3, 4, 6,
7, 8, 9, 11, 12 and 20 shall, to the extent applicable, continue in full force
and effect notwithstanding the expiration or earlier termination of this
Agreement or of Fell's services hereunder in accordance with the terms of this
Agreement.
20. ATTORNEYS' FEES. Except as otherwise provided herein, in the event of
arbitration with respect to the subject mater 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.
21. 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 FCI and
the Executive and his executors, administrators, heirs and legal
representatives.
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IN WITNESS WHEREOF, the Executive has executed this Agreement and the
Company has caused this Agreement to be executed by a duly authorized officer as
of the day and year first above written.
YOU BET INTERNATIONAL, INC., a Delaware
Corporation
By: [ILLEGIBLE]
-----------------------------------------------
Name:
---------------------------------------------
Title:
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FELL & COMPANY, INC.
By: /s/ Robert M. Fell
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Name: Robert M. Fell
Title: President
The undersigned hereby agrees to (i) provide FCI the services required of
FCI hereunder, and (ii) comply with the provisions in the foregoing Services
Agreement which are applicable to me personally.
/s/ Robert M. Fell
--------------------------------------------------
Robert M. Fell
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SCHEDULE 2.B.
PERMITTED FELL ACTIVITIES
1. Fell & Company, Inc.
2. Fell & Nicholson Technology Resources
3. Brad Marks International
4. Silicon Gaming, Inc.
5. Colony Capital/Colony Advisors
6. Lucky Brands, Inc.
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AMENDED AND RESTATED SERVICES AGREEMENT
This RESTATED AND AMENDED SERVICES AGREEMENT ("Agreement") is made
effective as of March 1, 1999 by and between YOUBET.COM, INC., a Delaware
corporation formerly known as You Bet International, Inc. (the "Company"), and
FELL & COMPANY, INC., a California corporation ("FCI").
WHEREAS, the Company and FCI entered into a Services Agreement dated as of
June 29, 1998 (the "Services Agreement") pursuant to which, among other things,
the Company retained the services of Robert M. Fell ("Fell").
WHEREAS, the Company and Fell desire to amend and restate the Services
Agreement.
In consideration of the mutual covenants and agreements set forth herein
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. ENGAGEMENT AND ACCEPTANCE; TERM. FCI hereby agrees to make available
to the Company the services of Fell for a term commencing on June 29, 1998 and
continuing through and including June 30, 2001 (the "Term").
2. DUTIES.
A. SERVICES. During the Term, Fell shall serve as Chairman of the
Board of the Company and shall, subject to the provisions of this Agreement,
perform such duties and responsibilities as shall be assigned to Fell by the
Board of Directors. In addition, subject to Section 2C hereof, until such time
as the Company shall employ a Chief Executive Officer other than Fell, Fell
shall also serve as Chief Executive Officer.
B. TIME COMMITMENT. During such time as Fell is serving as Chief
Executive Officer, Fell shall devote 100% of his business time, labor, skill and
energy to the business and affairs of the Company and to the duties and
responsibilities set forth herein. At all other such times Fell shall devote
approximately 70% of his business time, labor, skill and energy to the business
and affairs of the Company and to the duties and responsibilities set forth
herein. The parties acknowledge that except during the time Fell is serving as
Chief Executive Officer, Fell's services will be provided on a non-exclusive
basis, PROVIDED THAT Fell shall not engage in any activities which are
competitive with the business of the Company. In addition, as long as Fell
shall serve as Chief Executive Officer, Fell shall not engage in any new
projects. SCHEDULE 2.B. hereto sets forth a list of Fell's current activities.
SCHEDULE 2.B. may be supplemented by Fell from time to time with the approval of
the Company.
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C. SELECTION OF CHIEF EXECUTIVE OFFICER. At any time after the date
hereof, Fell may, or at the request of the Board of Directors, Fell shall select
a person to become Chief Executive Officer. Any such selection shall be subject
to the approval of (i) either David Marshall and Russell Fine (such approval not
to be unreasonably withheld), and (ii) the Board of Directors; PROVIDED THAT if
neither Marshall nor Fine approve of Fell's first two selections of a person to
serve as Chief Executive Officer, then neither Marshall nor Fine shall have any
further right to approve or disapprove persons selected to be Chief Executive
Officer with respect to the then open position (other than in their capacity as
directors). In the event that the Company enters into an employment agreement
with a new Chief Executive Officer Fell shall continue his services for the
remainder of the Term as Chairman of the Board.
3. COMPENSATION.
A. FEES. The Company shall, during the continuance of this
Agreement, pay to FCI, and FCI agrees to accept, in consideration of making
Fell's services available to the Company the compensation determined at the rate
of (i) $225,000 per annum during the Term and (ii) the amount of payroll and
other taxes that the Company would be required to pay if Fell were employed by
the Company at a salary equal to the amount payable under clause (i) of this
Section 3.A. (the "Base Fee"); provided that the rate of compensation set forth
in clause (i) of this Section 3.A shall be reduced to $150,000 per annum at such
time as Fell shall cease to serve as Chief Executive Officer and shall, for the
period from June 29, 1998 through February 28, 1999, inclusive be at the rate of
$150,000 per annum. The Base Fee shall be payable in semi-monthly installments.
The amount set forth in clause (i) of this Section 3.A. shall be adjusted
upward (but not downward) annually on each June 30, for changes during the prior
twelve months in the Consumer Price Index ("CPI") governing the statistical area
in which Los Angeles, California is located for purposes of calculating the CPI.
B. INCENTIVE COMPENSATION. FCI and Fell shall be entitled to
receive annual bonuses or other incentive compensation at the discretion of the
Board based upon the contributions made by FCI and Fell to the development of
the Company. Any Common Stock of the Company delivered to FCI or Fell as a
bonus or incentive compensation shall be registered on Form S-8 if the Company
shall be eligible to use such form.
C. STAFF. The Company shall provide Fell with such secretarial and
other administrative support as he may reasonably require in connection with the
performance of the duties to be performed by him.
D. ADDITIONAL BENEFITS. During the Term, the Company shall provide
Fell (or reimburse FCI to the extent it provides Fell) the following benefits:
(i) a monthly automobile allowance in the amount of $750;
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(ii) reimbursement of all business-related operating expenses of
Fell's automobile, including without limitation, registration, gas, oil and
repairs;
(iii) reimbursement of the expenses of an automobile liability
insurance policy on Fell's automobile, with coverage including Fell in the
minimum amount of $1,000,000 combined single limit;
(iv) all benefits and perquisites under any and all formal or
informal benefit plans, understandings, arrangements or programs including, but
not limited to, cash bonus and incentive plans, pension and profit sharing
plans, stock or warrant plans, group insurance, hospitalization, medical,
dental, health and accident and disability plans, supplemental health care plans
and plans providing for life insurance coverage (inclusive of insurance related
to accidental death or dismemberment) which are available to the Company's
senior executive officers;
(v) reimbursement of Fell's cellular phone and long distance
phone expenses for calls related to the business of the Company;
(vi) an annual vacation of twenty (20) days, which need not be
taken in consecutive periods. If Fell does not take all such vacation time in
any given calendar year, such unused time shall carry forward into the next
calender year; and
(vii) all paid holidays provided by the Company to its senior
executive employees.
E. DEDUCTIONS. The Company shall not deduct from the Base Fee or
any other amounts payable to FCI 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. FCI shall indemnify and hold the
Company and its officers, directors, employees and agents harmless from and
against any damages or penalties incurred by the Company by reason of its not
withholding such amounts from amounts payable to FCI hereunder.
4. REIMBURSEMENT OF CERTAIN EXPENSES. The Company shall promptly
reimburse FCI and Fell for reasonable out-of-pocket expenses incurred in
connection with the Company's business, including, without limitation, travel
expenses, food, lodging while away from home, telephone expenses, and automobile
expenses, subject to such policies as the Company may from time to time
reasonably establish.
5. CERTAIN OTHER PROVISIONS. Fell shall comply with all policies,
procedures and practices of the Company from time to time in effect.
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6. CONFIDENTIAL INFORMATION. FCI and Fell shall not during the Term or
at any time thereafter (i) disclose to any person not employed by the Company or
person, firm or corporation engaged to render services to the Company except
during the Term for the benefit of the Company, or (ii) use for the benefit of
either of them, or others, any confidential information of the Company obtained
by FCI or Fell prior to the date hereof, during the Term or any time thereafter,
including, without limitation, "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 FCI or Fell
from (x) upon advice of counsel and after reasonable notice to the Company,
making any disclosure required by any applicable law, or (y) 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 6 by or on
behalf of FCI or Fell).
7. TERMINATION.
A. TERMINATION EVENTS. This Agreement may be terminated prior to
the expiration of the Term in accordance with the following:
(a) DEATH. This Agreement shall terminate upon Fell's death.
(b) DISABILITY. If, as a result of Fell's incapacity due to
physical or mental illness, Fell shall have been unable to perform the duties,
functions and responsibilities required hereunder for ninety (90) consecutive
days or shorter periods aggregating to one hundred twenty (120) days in any
twelve (12) months, the Company may terminate this Agreement. During any period
that Fell fails to perform his duties hereunder as a result of incapacity or due
to physical or mental illness, he shall continue to receive full compensation
and other benefits called for hereunder until such time as this Agreement is
terminated pursuant to this Section 7.A.(b) hereof.
(c) CAUSE. This Agreement shall be subject to termination by the
Board of Directors of the Company (the "Board") for cause, which for purposes of
this Agreement shall mean a termination on the grounds of (i) a breach by FCI or
Fell of any material term of this Agreement, which breach shall not have been
cured within thirty (30) days after receipt by FCI of written notice thereof
from the Board, (ii) the reasonable belief by the Board, after conducting an
appropriate investigation, of the commission by FCI or Fell of any act of fraud,
theft or criminal dishonesty or (iii) the conviction of FCI or Fell of any
felony. For purposes of this Agreement, this Agreement shall not be deemed to
have been terminated for cause unless and until there shall have been delivered
to FCI 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 FCI and an opportunity for it, together
with its counsel, to be heard by the Board, finding that, in the good faith
opinion of the Board, FCI or Fell is
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guilty of misconduct of the type described in this Section 7.A.(c) hereof and
specifying the particulars thereof in detail.
B. COMPENSATION AND BENEFITS PAYABLE BY COMPANY UPON TERMINATION.
Compensation and benefits shall be payable by Company upon a termination of this
Agreement in accordance with the following:
(a) In the event of termination of this Agreement under Section
7.A.(a) hereof, FCI shall continue to receive the compensation and benefits
specified in Sections 3.A. and 3.D. hereof, to the extent applicable, for a
period of twelve (12) months, notwithstanding such termination.
(b) In the event of a termination of this Agreement under
Section 7.A.(b), Fell or his duly appointed personal representatives, shall
continue to receive the compensation and benefits specified in Sections 3.A. and
3.B. herein, to the extent applicable, for a period of twelve (12) months,
notwithstanding such termination; PROVIDED THAT such amounts shall be reduced by
any disability insurance payments received by FCI or Fell from insurance
purchased by the Company.
(c) In the event of a termination of this Agreement under
Section 7.A.(C) hereof, FCI shall receive all compensation and benefits
specified in Section 3.A. and 3.D. hereof through the date of termination.
C. COOPERATION AFTER TERMINATION OF AGREEMENT. Following
termination of this Agreement, regardless of the reason for such termination,
FCI and Fell shall 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. FCI and Fell acknowledge that Fell
may be required to give testimony at trial or deposition or give declarations.
If Fell shall be required to spend a material amount of time, the Company shall
compensate FCI at a per diem rate equal to the per diem amount of the Base Fee
in effect at the time of the termination. The Company shall use its best
efforts to provide Fell with reasonable prior notice of any actions required of
him.
8. SEVERANCE. In the event that upon the expiration of the Term the
Company shall not renew this Agreement (and provided that FCI is willing to do
so), the Company shall, within ten days of the expiration of the Term, pay FCI
an amount equal to the Base Fee payable to FCI in the 12 months immediately
preceding the expiration of the Term.
9. NON COMPETE.
a. The Company, FCI and Fell acknowledge that this Services
Agreement is being entered into in furtherance of the transactions contemplated
by that certain Stock Purchase
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Agreement dated June 29, 1998, among the Company and the other parties thereto.
FCI and Fell, during the Term and for a period of twenty-four (24) months
thereafter, shall not solicit or entice any employee of the Company to leave the
Company to work for anyone in competition with the Company. During the Term and
for a period of twenty-four (24) months thereafter, within any county or similar
political subdivision of the United States or any other country in which the
Company, or any divisions, subdivisions or affiliated companies of the Company,
has conducted business during the past two (2) years or conducts business during
the Term, FCI and Fell shall not, directly or indirectly, whether as a partner,
owner, employee, creditor, shareholder, or otherwise, promote, participate, or
engage, directly or indirectly, in the development and sale of proprietary,
interactive software which will provide individual computer users with race
handicapping or other sports oddsmaking information or, the ability to place
bets on horse racing and other sports contests, as well as recreational games
and contests related to such information. FCI and Fell shall not be prohibited
from investing in any competitive company, so long as (i) the stock of such
company is publicly traded, (ii) the aggregate ownership by FCI and Fell is less
than two percent (2%) of the outstanding stock of such company, (iii) such stock
is held for investment purposes, and (iv) FCI and Fell do not participate or
engage, directly or indirectly, in the business of such competitor, as an
employee, consultant, spokesperson or otherwise.
10. 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.
11. ARBITRATION. 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.
12. 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.
13. ABILITY TO FULFILL OBLIGATIONS. Neither the Company, FCI nor the Fell
is a party to or bound by any agreement which would be violated by the terms of
this Agreement.
14. 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:
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To the Company: Youbet.com, Inc.
1950 Sawtelle Boulevard
Suite 180
Los Angeles, California 90025
Attention: David Marshall
Fax: (310) 444-3310
If to FCI: Fell & Company, Inc.
10550 Wilshire Boulevard
Suite 1105
Los Angeles, California
Attention: Robert M. Fell
Fax: (310) 475-3480
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 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.
15. ENTIRE AGREEMENT. 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, including that certain Memorandum of Understanding dated as of
April 1, 1998 between the Company and FCI and, effective as of the date hereof,
that certain Services Agreement dated as of June 29, 1998 between the Company
and FCI. 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.
16. 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 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.
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17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original.
18. HEADINGS. All headings in this Agreement are for convenience only and
will not affect the meaning of any provision hereof.
19. SURVIVAL OF CERTAIN PROVISIONS. The provisions of Sections 3, 4, 6,
7, 8, 9, 11, 12 and 20 shall, to the extent applicable, continue in full force
and effect notwithstanding the expiration or earlier termination of this
Agreement or of Fell's services hereunder in accordance with the terms of this
Agreement.
20. ATTORNEYS' FEES. Except as otherwise provided herein, in the event of
arbitration with respect to the subject mater 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.
21. 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 FCI and
the Executive and his executors, administrators, heirs and legal
representatives.
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<PAGE>
IN WITNESS WHEREOF, the Executive has executed this Agreement and the
Company has caused this Agreement to be executed by a duly authorized officer as
of the day and year first above written.
YOUBET.COM, INC., a Delaware Corporation
By:
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Name:
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Title:
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FELL & COMPANY, INC.
By:/s/ Robert M. Fell
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Name: Robert M. Fell
Title: President
The undersigned hereby agrees to (i) provide FCI the services required of
FCI hereunder, and (ii) comply with the provisions in the foregoing Services
Agreement which are applicable to me personally.
/s/ Robert. M. Fell
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Robert M. Fell
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