Employment Agreement - You Bet International Inc. and Phillip Hermann
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into effective May 1,
1998 by and between You Bet International, Inc. a California corporation ("the
Company") and Phillip Hermann ("Executive"), in connection with the Company's
engagement of Executive for personal services.
1. EMPLOYMENT; DUTIES AND ACCEPTANCE:
(a) EMPLOYMENT BY COMPANY.
The Company hereby engages Executive, and Executive hereby agrees to
service as Chief Financial Officer of the Company on the terms and conditions
of this Agreement. Throughout the Term of this Agreement Executive shall,
subject to the provisions contained herein, devote substantially all of his
work time to the employment described hereunder.
(b) LOCATION OF EMPLOYMENT:
Executive shall render his services at the Company's offices at
1950 Sawtelle Blvd, Los Angeles, CA 90025; provided, however, that Executive
agrees to render his services at such other locations from time-to-time as the
proper performance of Executive's duties may reasonably require. Notwithstanding
the foregoing, the Company's principal offices shall remain in Southern
California, and Executive need not relocate to render his duties hereunder.
2. TERM
The term of Executive's employment hereunder shall be for a period of
one (1) year commencing as of May 1, 1998 and ending on April 30, 1999 (the
"Term") unless sooner terminated pursuant to Section 7 hereof.
3. COMPENSATION AND BENEFITS:
(a) SALARY:
During the first year of the Term, Executive shall receive a salary (the
"Annual Salary") at the rate of $130,000 per annum. However, upon the Company
raising an additional $5,000,000 in direct funding, the Executive's Annual
Salary shall increase thereafter to $150,000. All Salary shall be less such
deductions as shall be required to be withheld by applicable law and
regulations and shall be pro-rated for any period that does not constitute a
full twelve (12) month period.
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(b) BONUS:
Executive shall participate in any formal Bonus plans instituted by the
Company for the benefit of Employees. Cash and or stock bonuses based on
performance may be offered from time to time at the discretion of the Board of
Directors of the Company.
(c STOCK OPTIONS:
Executive shall be granted 75,000 options pursuant to the Company's 1995
Stock Option Plan. The 75,000 options will have a strike price of $2.50. The
options will vest as follows:
May 1, 1999 - 18,750 options
May 1, 2000 - 18,750 options
May 1, 2001 - 18,750 options
May 1, 2002 - 18,750 options
Any unvested options shall terminate if the Executive ceases to be employed
by the company, or as provided in the Company's 1995 Stock Option Plan.
All unvested option will vest upon a "Change of Control" if the Executive
is employed with the Company at the time of Change of Control.
For purposes of this Agreement, the term "Change of Control" shall mean,
(i) the acquisition by a single entity or group of affiliated entities of more
than thirty-five percent of the outstanding capital stock of the Company and
which is accompanied or followed by a change either in a majority of the members
of the Board or of those members of the Board who are not full time employees of
the Company, or (ii) the consummation of any merger of the Company or any sale,
transfer or other disposition of all or substantially all of the Company's
assets, directly or indirectly, if the shareholders of the Company immediately
before the consummation of such a transaction own, immediately following the
consummation of such transaction on a fully diluted basis, equity securities
(other than options, warrants, or rights to acquire securities) possessing less
than sixty-five percent of the voting power of the surviving or acquiring
corporation (or any corporation in control of the surviving or acquiring
corporation whose equity securities are issued or transferred in such
transaction). Notwithstanding anything herein to the contrary, a change in
control shall not be deemed to have occurred as a result of the private
placement currently being conducted through Fell
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& Company, Inc.
4. PARTICIPATION IN EXECUTIVE BENEFIT PLANS
(a) FRINGE BENEFITS:
Executive shall be permitted during the Term to participate in any group
life, medical, hospitalization, dental, and disability plans, and any other
plans and benefits, generally maintained by Company for executives of the
stature and rank of Executive during the Term hereof, each in accordance with
the terms and conditions of such plans (collectively referred to herein as
"Fringe Benefits"); provided, however, that Company shall not be required to
establish or maintain any such Fringe Benefits.
(b) VACATION:
Executive shall accrue, in addition to sick days and days on which
Company is closed, paid vacation days at the rate of one and one-quarter
(1-1/4) days per month up to a maximum of fifteen (15) work days. Under no
circumstances can Executive accrue more vacation than twenty (20) work days
(the "Ceiling"). Thus, once the maximum amount of paid vacation time is
accrued or earned, no further vacation time is accrued or earned until after
vacation is taken and the amount of Executive's accrued vacation time goes
below the Ceiling as stated above. At that point, Executive will start to
accrue vacation time again until Executive reaches the Ceiling.
(c) EXPENSES:
Company will reimburse Executive for actual and necessary travel and
accommodation costs, entertainment and other business expenses incurred as a
necessary travel and accommodation costs, entertainment and other business
expenses incurred as a necessary part of discharging the Executive's duties
hereunder, subject to receipt of reasonable and appropriate documentation by
Company and in accordance with Company policy.
5. CERTAIN COVENANTS OF EXECUTIVE:
Without in any way limiting or waiving any right or remedy accorded to
Company or any limitation placed upon Executive by law, Executive agrees as
follow:
(a) CONFIDENTIAL INFORMATION:
Executive agrees that, neither during the Term nor at anytime thereafter
shall Executive (i) disclose to any person, firm, or corporation not employed
by the Company, You Bet!, Inc. or any affiliate of either (the "Protected
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Company") or not engaged to render services to any Protected Company or (ii) use
for the benefit of himself, or others, any confidential information of any
Protected Company obtained by the Executive prior to the execution of this
Agreement, during the Term or any time thereafter, including, without
limitation, "know-how," trade secrets, details of suppliers, 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 any Protected Company; PROVIDED, HOWEVER, that this provision
shall not preclude the Executive from (x) upon advice of counsel and 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 5(a).
(b) PROPERTY OF COMPANY:
Any interest in trademarks, service-marks, copyrights, copyright
applications, patents, patent applications, slogans, developments and
processes which the Executive, 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 the Executive or made available to the Executive
concerning the business of any Protected Company shall belong and remain in
the possession of any Protected Company, and shall be delivered to the
Company promptly upon the termination of the Executive's employment with
Company or at any other time on request.
(c) NON-INTERFERENCE:
Executive will not, during the Term hereof and for a period of two (2)
years after the Term induce any person who is an executive, officer or agent,
customer or supplier of the Company to terminate his relationship with the
Company.
6. OTHER PROVISIONS:
(a) RIGHTS AND REMEDIES UPON BREACH:
If the Executive breaches, or threatens to commit a breach of, any of
the provisions of Section 5 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.
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(b) ACCOUNTING:
The right and remedy to require the Executive to account for and pay
over to the Company all compensation, profits, monies, accruals, increments
or other benefits (collectively "Benefits") derived or received by the
Executive as a result of any transactions constituting a breach of any of the
Restrictive Covenants, and the Executive shall account for and pay over such
Benefits to the Company.
(c) SEVERABILITY OF COVENANTS:
If any court determines that any of the Restrictive Covenants, or any
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.
(d) BLUE PENCILLING:
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.
(e) 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 6 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.
(f) INJUNCTIVE RELIEF:
Executive agrees and understands that the remedy at law for any breach
by Executive of the provisions of Paragraph 5 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
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that upon Executive's breach of any provision of paragraph 5 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 Paragraph 5 hereof which may be available to the
Company.
7. TERMINATION:
(a) TERMINATION UPON DEATH OR DISABILITY:
If during the Term, Executive should (i) die or (ii) Executive becomes
so physically or mentally disabled whether totally or partially, that
Executive is unable to perform the duties, functions and responsibilities
required hereunder for (aa) a period of three (3) consecutive months or (bb)
shorter periods aggregating to four (4) months within any period of twelve
(12) months ("Disability"), then in such event, Company may, at any time
thereafter, by written notice to Executive, terminate Executive's employment
hereunder. Executive agrees to submit to reasonable medical examinations upon
the request of Company. The existence of Executive's disability for the
purposes of this Agreement shall be determined by a reputable physician
selected by Company who is experienced in the relevant field of medicine. If
Executive's services are terminated, as aforesaid, Executive or the
designated beneficiary of Executive, shall be entitled to receive Executive's
base salary, accrued share of the Bonus for that Fiscal Year and unused
vacation (hereinafter collectively referred to as "Fringe Benefits"), if any,
earned through the date of Executive's termination and continuing thereafter
for an additional period of six (6) months but not extending beyond the
expiration of the Term hereof.
(b) DESIGNATION OF BENEFICIARY:
The parties hereto agree that the Executive shall designate, by written
notice to the Company, a beneficiary to receive the payments described in
Section 7 in the event of his death and the designation of any such
beneficiary may be changed by the Executive from time to time by written
notice to the Company. In the event the Executive fails to designate a
beneficiary as herein provided, any payments which are to be made to the
Executive's designated beneficiary under Section 7 shall be made to the
Executive's widow, if any, during her lifetime. If the Executive has no
designees or widow, such payments shall be paid to the Executive's estate.
(c) TERMINATION FOR CAUSE:
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The Company shall have the option to terminate Executive upon of the
occurrence of any of the following:
(i) Executive shall have breached any of the terms of this
Agreement and shall have failed to cure such breach (if such breach is
curable) within 15 days of notice thereof by the Company;
(ii) Executive shall have been convicted of a crime involving
moral turpitude; or
(iii) Any of the representations and warranties of Executive
hereunder shall be breached in a material respect.
If Executive's services are terminated as set forth in
this subparagraph (c), Executive's services shall be terminated as of the
effective date of termination and all compensation shall cease as of such
effective date.
8. EXECUTIVE'S REPRESENTATIONS AND WARRANTIES:
(a) RIGHT TO ENTER INTO AGREEMENT:
Executive has the unfettered right to enter into this entire Agreement
on all of the terms, covenants and conditions hereof; and Executive has not
done or permitted to be done anything which may curtail or impair any of the
rights granted to Company herein.
(b) BREACH UNDER OTHER AGREEMENT OR ARRANGEMENT:
Neither the execution and delivery of this Agreement nor the performance
by Executive of any of his obligations hereunder will constitute a violation
or breach of, or a default under, any agreement, arrangement or
understanding, or any other restriction of any kind, to which Executive is a
party or by which Executive is bound.
(c) SERVICES RENDERED DEEMED SPECIAL, ETC:
Executive acknowledges and agrees that the services to be rendered by
him hereunder are of a special, unique, extraordinary and intellectual
character which gives them peculiar value, the loss of which cannot be
adequately compensated for in an action at law and that a breach of any term,
condition or covenant hereof will cause irreparable harm and injury to the
Company and in addition to any other available remedy the Company will be
entitled to seek injunctive relief.
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9. USE OF NAME:
The Company shall have the right during the Term hereof to use
Executive's name, biography and approved likenesses in connection with
Company's business, including advertising their products and services; and
the Company may grant such rights to others, but not for use as a direct
endorsement.
10. ARBITRATION:
Any dispute whatsoever arising out of or referable to this Agreement,
including, without limitation, any dispute as to the rights and entitlements
and performance of the parties under this Agreement or concerning the
termination of Executive's employment or of this Agreement or its
construction or its validity or enforcement, or as to the arbitrator's
jurisdiction, or as to the ability to arbitrate any such dispute, shall be
submitted to final and binding arbitration in Los Angeles, California by and
pursuant to the Labor Arbitration Rules of the American Arbitration
Association with discovery proceedings pursuant to Section 1283.05 of the
California Code of Civil Procedure. The arbitrator shall be entitled to award
any relief which might be available at law or in equity, including that of a
provisional, permanent or injunctive nature. The prevailing party in such
arbitration as determined by the arbitrator, or in any proceedings in respect
thereof as determined by the person presiding, shall be entitled to receive
its or his reasonable attorneys, fees incurred in connection therewith.
11. NOTICES:
(a) DELIVERY:
Any notice, consent or other communication under this Agreement shall be
in writing and shall be delivered personally, telexed, sent by facsimile
transmission or overnight courier (regularly providing proof of delivery) or
sent by registered, certified, or express mail and shall be deemed given when
so delivered personally, telexed, sent by facsimile transmission or overnight
courier, or if mailed two (2) days after the date of deposit in the United
States mail as follows: to the parties at the following addresses (or at such
other address as a party may specify by notice in accordance with the
provisions hereof to the other):
(i) If to Phillip Hermann, to his address at:
10809 Eton Avenue
Chatsworth, CA 91311
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(ii) If to Company, to its address at:
You Bet!, Inc.
1950 Sawtelle Blvd
Suite 180
Los Angeles, CA 90025
Copy to:
David L. Ficksman, Esq.
Loeb & Loeb LLP
1000 Wilshire Blvd., Suite 1800
Los Angeles, CA 90017
(b) CHANGE OF ADDRESS:
Either party may change its address for notice hereunder by notice to
the other party in accordance with this Section 11.
12. COMPLETE AGREEMENT; MODIFICATION AND TERMINATION:
This Agreement contains a complete statement of all the arrangements
between the parties with respect to the matters covered hereby and,
supersedes all existing agreements between the parties concerning such
matter. This Agreement may be amended, modified, superseded or canceled, and
the terms and conditions hereof may be waiver, by the party waiving
compliance. No delay on the part of any party in exercising any shall operate
as a waiver thereof, nor shall any waiver on the part of any party of any
such right or remedy, nor any single or partial exercise of any such right or
remedy preclude any other or further exercise thereof or the exercise of any
other right or remedy.
13. GOVERNING LAW:
This Agreement shall be governed by and construed in accordance with the
law of the State of California applicable to agreements entered into and
performed entirely within such State.
14. HEADINGS:
The headings in this Agreement are solely for the convenience of
reference and shall not affect its interpretation.
15. INDEMNIFICATION
The Company will indemnify, defend, and hold Executive harmless from any
costs, claims, causes of action, or liabilities (including reasonable
attorney's fees) arising out of: (i) any breach of the Company's covenants,
warranties, or representations; and (ii) any other matter
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relating to or arising out of Executive's employment hereunder which does not
arise from Executive's gross negligence, willful misconduct, or a breach of
Executive's covenants, warranties, or representations hereunder.
WHEREFORE, the parties hereto have executed this Agreement as of the day
and year first above written.
By: /s/ Phillip Hermann
--------------------------
Phillip Hermann
Agreed to and Accepted:
You Bet International, Inc., a
Delaware Corporation
By /s/ ILLEGIBLE
--------------------------
Its: CHAIRMAN
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EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into effective as
of February 23, 1999 by and between Youbet.com, Inc., a Delaware corporation
formerly known as You Bet International, Inc. ("the Company") and Phillip
Hermann ("Executive"), in connection with the Company's engagement of Executive
for personal services, and supersedes the prior employment agreement between the
Company and Executive.
1. EMPLOYMENT; DUTIES AND ACCEPTANCE:
(a) EMPLOYMENT BY COMPANY.
The Company hereby engages Executive, and Executive hereby
agrees to service as Executive Vice President and Chief Financial Officer of the
Company on the terms and conditions of this Agreement. Throughout the Term of
this Agreement Executive shall, subject to the provisions contained herein,
devote substantially all of his work time to the employment described hereunder.
(b) LOCATION OF EMPLOYMENT.
Executive shall render his services at the Company's offices
at 1950 Sawtelle Blvd., Los Angeles, CA 90025; provided, however, that Executive
agrees to render his services at such other locations from time-to-time as the
proper performance of Executive's duties may reasonably require. Notwithstanding
the foregoing, the Company's principal offices shall remain in Southern
California, and Executive need not relocate to render his duties hereunder.
2. TERM:
(a) The term of Executive's employment hereunder shall commence
on the date hereof and end on April 30, 2000 (the "Term") unless sooner
terminated pursuant to Section 7 hereof.
3. COMPENSATION AND BENEFITS:
(a) SALARY.
During the Term, Executive shall receive a salary (the
"Annual Salary") at the rate of $150,000 per annum. All Salary shall be less
such deductions as shall be required to
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be withheld by applicable law and regulations and shall be pro-rated for any
period that does not constitute a full twelve (12) month period.
(b) BONUS.
Executive shall participate in any formal Bonus plans
instituted by the Company for the benefit of Employees. Cash and or stock
bonuses based on performance may be offered from time to time at the discretion
of the Board of Directors of the Company.
(c) STOCK OPTIONS.
Executive shall be granted 50,000 options pursuant to the
Company's 1998 Stock Option Plan. The 50,000 options will have an exercise
price of $10.50 per share and expire on February 22, 2009. The options will
vest as follows:
February 22, 2000 - 12,500 options
February 22, 2001 - 12,500 options
February 22, 2002 - 12,500 options
February 22, 2003 - 12,500 options
Any unvested options shall-terminate if the Executive ceases
to be employed by the Company, or as provided in the Company's 1998 Stock Option
Plan.
All unvested option will vest upon a "Change of Control" if
the Executive is employed with the Company at the time of Change of Control.
For purposes of this Agreement, the term "Change of Control"
shall mean, (i) the acquisition by a single entity or group of affiliated
entities of more than thirty-five percent (35%) of the outstanding capital stock
of the Company and which is accompanied or followed by a change either in a
majority of the members of the Board or of those members of the Board who are
not full time employees of the Company, or (ii) the consummation of any merger
of the Company or any sale, transfer or other disposition of all or
substantially all of the Company's assets, directly or indirectly, if the
shareholders of the Company immediately before the consummation of such a
transaction own, immediately following the consummation of such transaction on a
fully-diluted basis, equity securities (other than options, warrants, or rights
to acquire securities) possessing less than sixty-five percent (65%) of the
voting power of the surviving or acquiring corporation (or any corporation in
control of the surviving or acquiring corporation whose equity securities are
issued or transferred in such transaction).
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4. PARTICIPATION IN EXECUTIVE BENEFIT PLANS:
(a) FRINGE BENEFITS.
Executive shall be permitted during the Term to participate
in any group life, medical, hospitalization, dental, health and accident and
disability plans, supplemental health care plans and plans providing for life
insurance coverage, and any other plans and benefits, generally maintained by
Company for executives of the stature and rank of Executive during the Term
hereof, each in accordance with the terms and conditions of such plans
(collectively referred to herein as "Fringe Benefits"); provided, however, that
Company shall not be required to establish or maintain any such Fringe Benefits.
(b) VACATION.
Executive shall accrue, in addition to sick days and days on
which Company is closed, paid vacation days at the rate of one and one-quarter
(1-1/4) days per month up to a maximum of fifteen (15) work days. Under no
circumstances can Executive accrue more vacation than twenty (20) work days,
including vacation time accrued prior to the commencement of the Term (the
"Ceiling"). Thus, once the maximum amount of paid vacation time is accrued or
earned, no further vacation time is accrued or earned until after vacation is
taken and the amount of Executive's accrued vacation time goes below the Ceiling
as stated above. At that point, Executive will start to accrue vacation time
again until Executive reaches the Ceiling.
(c) EXPENSES.
Company will reimburse Executive for actual and necessary
travel and accommodation costs, entertainment and other business expenses
incurred as a necessary travel and accommodation costs, entertainment and other
business expenses incurred as a necessary part of discharging the Executive's
duties hereunder, subject to receipt of reasonable and appropriate documentation
by Company and in accordance with Company policy. Company will also reimburse
Executive $750 per month for all business related operating expenses of
Executive's automobile.
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5. CERTAIN COVENANTS OF EXECUTIVE:
Without in any way limiting or waiving any right or remedy
accorded to Company or any limitation placed upon Executive by law, Executive
agrees as follows:
(a) CONFIDENTIAL INFORMATION:
Executive agrees that, neither during the Term nor at
anytime thereafter shall Executive (i) disclose to any person, firm or
corporation not employed by the Company, You Bet!, Inc. or any affiliate of
either (the "Protected Company") or not engaged to render services to any
Protected Company or (ii) use for the benefit of himself, or others, any
confidential information of any Protected Company obtained by the Executive
prior to the execution of this Agreement, during the Term or any time
thereafter, including, without limitation, "know-how," trade secrets, details of
suppliers, 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 any Protected Company; PROVIDED, HOWEVER,
that this provision shall not preclude the Executive from (x) upon advice of
counsel and 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 5(a)).
(b) PROPERTY OF COMPANY.
Any interest in trademarks, service-marks, copyrights,
copyright applications, patents, patent applications, slogans, developments and
processes which the Executive, 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 the Executive or made available to the Executive concerning
the business of any Protected Company shall belong and remain in the possession
of any Protected Company, and shall be delivered to the Company promptly upon
the termination of the Executive's employment with Company or at any other time
on request.
(c) NON-INTERFERENCE.
Executive will not, during the Term hereof and for a period
of two (2) years after the Term induce any person who is an executive, officer
or agent, customer or supplier of the Company to terminate his relationship with
the Company.
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6. OTHER PROVISIONS:
(a) RIGHTS AND REMEDIES UPON BREACH.
If the Executive breaches, or threatens to commit a breach
of, any of the provisions of Section 5 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) ACCOUNTING.
The right and remedy to require the Executive to account for
and pay over to the Company all compensation, profits, monies, accruals,
increments or other benefits (collectively "Benefits") derived or received by
the Executive as a result of any transactions constituting a breach of any of
the Restrictive Covenants, and the Executive shall account for and pay over such
Benefits to the Company.
(c) SEVERABILITY OF COVENANTS.
If any court determines that any of the Restrictive
Covenants, or any 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.
(d) 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.
(e) 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 6 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.
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(f) INJUNCTIVE RELIEF.
Executive agrees and understands that the remedy at law for
any breach by Executive of the provisions of Section 5 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 5 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 5 hereof which may be available to the
Company.
7. TERMINATION:
(a) TERMINATION UPON DEATH OR DISABILITY.
If during the Term, Executive should (i) die or (ii)
become so physically or mentally disabled whether totally or partially, that
Executive is unable to perform the duties, functions and responsibilities
required hereunder for (aa) a period of three (3) consecutive months or (bb)
shorter periods aggregating to four (4) months within any period of twelve
(12) months ("Disability"), then in such event, Company may, at any time
thereafter, by written notice to Executive, terminate Executive's employment
hereunder. Executive agrees to submit to reasonable medical examinations upon
the request of Company. The determination of whether a Disability exists
shall be made by a reputable physician selected by Company who is experienced
in the relevant field of medicine. If Executive's services are terminated,
as aforesaid, Executive or the designated beneficiary of Executive, shall be
entitled to receive Executive's Annual Salary, accrued share of the Bonus for
that Fiscal Year and unused vacation, if any, and Fringe Benefits earned
through the date of Executive's termination and continuing thereafter for an
additional period of six (6) months but not extending beyond the expiration
of the Term hereof.
(b) DESIGNATION OF BENEFICIARY.
The parties hereto agree that the Executive shall designate,
by written notice to the Company, a beneficiary to receive the payments
described in Section 7 in the event of his death and the designation of any such
beneficiary may be changed by the Executive from time to time by written notice
to the Company. In the event the Executive fails to designate a beneficiary as
herein provided, any payments which are to be made to the Executive's designated
beneficiary under Section 7 shall be made to the Executive's widow, if any,
during her lifetime. If the Executive has no designees or widow, such payments
shall be paid to the Executive's estate.
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(c) TERMINATION FOR CAUSE.
The Company shall have the option to terminate Executive
upon the occurrence of any of the following:
(i) Executive shall have breached any of the terms of this
Agreement and shall have failed to cure such breach (if such breach is
curable) within 15 days of notice thereof by the Company;
(ii) Executive shall have been convicted of a crime
involving moral turpitude; or
(iii) Any of the representations and warranties of Executive
hereunder shall be breached in a material respect.
If Executive's services are terminated as set forth in this
subsection (c), Executive's services shall be terminated as of the effective
date of termination and all compensation shall cease as of such effective date.
8. EXECUTIVE'S REPRESENTATIONS AND WARRANTIES:
(a) RIGHT TO ENTER INTO AGREEMENT.
Executive has the unfettered right to enter into this entire
Agreement on all of the terms, covenants and conditions hereof; and Executive
has not done or permitted to be done anything which may curtail or impair any of
the rights granted to Company herein.
(b) BREACH UNDER OTHER AGREEMENT OR ARRANGEMENT.
Neither the execution and delivery of this Agreement nor the
performance by Executive of any of his obligations hereunder will constitute a
violation or breach of, or a default under, any agreement, arrangement or
understanding, or any other restriction of any kind, to which Executive is a
party or by which Executive is bound.
(c) SERVICES RENDERED DEEMED SPECIAL, ETC.
Executive acknowledges and agrees that the services to be
rendered by him hereunder are of a special, unique, extraordinary and
intellectual character which gives them peculiar value, the loss of which cannot
be adequately compensated for in an action at law and that a breach of any term,
condition or covenant hereof will cause irreparable harm and injury to the
Company and in addition to any other available remedy the Company will be
entitled to seek injunctive relief.
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9. USE OF NAME:
The Company shall have the right during the Term hereof to use
Executive's name, biography and approved likenesses in connection with Company's
business, including advertising their products and services; and the Company may
grant such rights to others, but not for use as a direct endorsement.
10. ARBITRATION:
Any dispute whatsoever arising out of or referable to this
Agreement, including, without limitation, any dispute as to the rights and
entitlements and performance of the parties under this Agreement or concerning
the termination of Executive's employment or of this Agreement or its
construction or its validity or enforcement, or as to the arbitrator's
jurisdiction, or as to the ability to arbitrate any such dispute, shall be
submitted to final and binding arbitration in Los Angeles, California by and
pursuant to the Labor Arbitration Rules of the American Arbitration Association
with discovery proceedings pursuant to Section 1283.05 of the California Code of
Civil Procedure. The arbitrator shall be entitled to award any relief which
might be available at law or in equity, including that of a provisional,
permanent or injunctive nature. The prevailing party in such arbitration as
determined by the arbitrator, or in any proceedings in respect thereof as
determined by the person presiding, shall be entitled to receive its or his
reasonable attorneys' fees incurred in connection therewith.
11. NOTICES:
(a) DELIVERY.
Any notice, consent or other communication under this
Agreement shall be in writing and shall be delivered personally, telexed, sent
by facsimile transmission or overnight courier (regularly providing proof of
delivery) or sent by registered, certified, or express mail and shall be deemed
given when so delivered personally, telexed, sent by facsimile transmission or
overnight courier, or if mailed two (2) days after the date of deposit in the
United States mail as follows: to the parties at the following addresses (or at
such other address as a party may specify by notice in accordance with the
provisions hereof to the other):
(i) If to Phillip Hermann, to his address at:
10809 Eton Avenue
Chatsworth, CA 91311
Fax (818) ___________
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(ii) If to Company, to its address at:
Youbet.com, Inc.
1950 Sawtelle Blvd.
Suite 180
Los Angeles, CA 90025
Attention: Chief Executive Officer
Fax (310) 444-3390
Copy to:
Christensen, Miller, Fink, Jacobs
Glaser, Weil & Shapiro, LLP
2121 Avenue of the Stars, 18th Floor
Los Angeles, CA, 90067
Attention: Gary N. Jacobs
Fax (310) 556-2920
(b) CHANGE OF ADDRESS.
Either party may change its address for notice hereunder by
notice to the other party in accordance with this Section 11.
12. COMPLETE AGREEMENT; MODIFICATION AND TERMINATION:
This Agreement contains a complete statement of all the
arrangements between the parties with respect to the matters covered hereby and,
supersedes all existing agreements between the parties concerning the subject
matter hereof, including that certain Employment Agreement dated as of May 1,
1998 between the Company and Executive. This Agreement may be amended,
modified, superseded or canceled, and the terms and conditions hereof may be
waiver, by the party waiving compliance. No delay on the part of any party in
exercising any shall operate as a waiver thereof, nor shall any waiver on the
part of any party of any such right or remedy, nor any single or partial
exercise of any such right or remedy preclude any other or further exercise
thereof or the exercise of any other right or remedy.
13. GOVERNING LAW:
This Agreement shall be governed by and construed in accordance
with the laws of the State of California applicable to agreements entered into
and performed entirely within such State.
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14. HEADINGS:
The headings in this Agreement are solely for the convenience of
reference and shall not affect its interpretation.
15. INDEMNIFICATION:
The Company will indemnify, defend, and hold Executive harmless
from any costs, claims, causes of action, or liabilities (including reasonable
attorney's fees) arising out of: (i) any breach of the Company's covenants,
warranties, or representations; and (ii) any other matter relating to or arising
out of Executive's employment hereunder which does not arise from Executive's
gross negligence, willful misconduct, or a breach of Executive's covenants,
warranties, or representations hereunder.
WHEREFORE, the parties hereto have executed this Agreement as of
the day and year first above written.
By: /s/ Phillip Hermann
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Phillip Hermann
Agreed to and Accepted:
Youbet.com, Inc., a
Delaware corporation
By: [ILLEGIBLE]
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Its:
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