Youbet.com Inc. Contracts
Sample Business Contracts
Services Agreement - You Bet International Inc. and David Marshall Inc.
Services Forms
SERVICES AGREEMENT
This SERVICES AGREEMENT ("Agreement") is made as of January 1, 1999 by and
between YOU BET INTERNATIONAL, INC., a Delaware corporation (the "Company"), and
DAVID MARSHALL, INC., a California corporation ("DMI").
WHEREAS, the Company desires to retain the services of David Marshall
("Marshall") and DMI 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. DMI hereby agrees to make available
to the Company the services of Marshall for a term commencing on the date hereof
and terminating on June 24, 2003 (the "Term").
2. DUTIES.
A. SERVICES. During the Term, Marshall shall serve as Vice Chairman
of the Board, President and Chief Operating Officer and shall have
responsibilities normally commensurate with such positions. In addition, until
the company retains a Chief Executive Officer, Marshall shall serve with Robert
Fell and Russell Fine in staffing the Office of the Chief Executive. Marshall
shall report to the Chairman of the Board of Company. With respect to matters
under the purview of the Chief Executive Officer of Company, Marshall shall
report to the Chief Executive Officer, or, if applicable, coordinate all efforts
with the other two individuals with whom Marshall will serve in staffing the
Office of Chief Executive.
3. COMPENSATION.
A. FEES. The Company shall, during the continuance of this
Agreement, pay to DMI, and DMI agrees to accept, in consideration of making
Marshall's services available to the Company the sum of (i) $150,000 per each
twelve-month period during the Term (the "Base Fee") and (ii) the amount of
payroll and other taxes that the Company would be required to pay if Marshall
were employed by the Company at a salary equal to the Base Fee. The Base Fee
shall be payable in semi-monthly installments. If the base salary of any
employee of Company, other than the base salary of the Chief Executive Officer
of Company (not including the base salary of Robert M. Fell while he is the
Chief Executive Officer of the Company), ever exceeds the Base Fee, the Base Fee
shall automatically increase to the rate of such higher salary.
B. BASE FEE ADJUSTMENT. The Base Fee shall be reviewed annually by
the Board of Directors (the "Board"), and the Board in its sole discretion may
increase (but not decrease) the Base Fee; provided, the Base Fee shall be
adjusted upward (but not downward) annually on
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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.
C. INCENTIVE COMPENSATION. DMI and Marshall shall be entitled to
receive annual bonuses or other incentive compensation at the discretion of the
Board. If any employee of Company, other than the Chief Executive Officer of
Company, receives a bonus (not including a bonus granted for extraordinary
contributions, not associated with a day-to-day services as determined by the
Board with the approval of Robert Fell, Russell Fine and Marshall), DMI or
Marshall shall immediately be given a bonus no less favorable. Any Common Stock
of the Company delivered to DMI or Marshall as a bonus or incentive compensation
shall be registered on Form S-8 if the Company shall be eligible to use such
form.
D. ADDITIONAL BENEFITS. During the Term, the Company shall provide
Marshall (or reimburse DMI to the extent it provides Marshall) the following
benefits:
(i) a monthly automobile allowance in the amount of $750;
(ii) reimbursement of all business-related operating expenses of
Marshall's automobile, including without limitation, registration, gas, oil and
repairs;
(iii) reimbursement of the expenses of an automobile liability
insurance policy on Marshall's automobile, with coverage including Marshall 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 Marshall'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 Marshall 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.
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At no time during the term of this Agreement shall Marshall receive benefits
less than those received by any employee of Company, including the Chairman of
the Board of Company (other than the benefits of employment received by the
Chief Executive Officer of Company, not including the benefits received by
Robert M. Fell while he is the Chief Executive Officer of the Company).
Marshall acknowledges that Robert Fell will only devote approximately 70% of his
time to Company. Such time commitment shall not be a benefit for purposes of
this Section. If at any time Marshall receives such lesser benefits of
employment, Marshall's benefits shall automatically increase to the rate of such
higher benefits and/or include such additional benefits.
E. DEDUCTIONS. The Company shall not deduct from the Base Fee or
any other amounts payable to DMI 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. DMI 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
DMI hereunder.
4. REIMBURSEMENT OF CERTAIN EXPENSES. The Company shall promptly
reimburse DMI and Marshall 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. Marshall shall comply with all policies,
procedures and practices of the Company from time to time in effect.
6. COMPANY LOCATION. During the term of this Agreement, Company shall
provide Marshall with an office located in the Los Angeles metropolitan area
within ten (10) miles of Marshall's principal residence, and Marshall shall be
entitled to perform duties hereunder from Marshall's home to the extent
appropriate; provided, however, Marshall agrees to undertake reasonable travel
which is necessary in order for Marshal to perform Marshall's duties hereunder.
7. DIRECTORS AND OFFICERS LIABILITY INSURANCE COVERAGE. During the term
of this Agreement, and for twenty-four (24) months thereafter, Company shall, to
the extent commercially reasonably available, maintain in effect a directors and
officers liability insurance policy with a minimum coverage amount of Five
Million dollars ($5,000,000) or, if after exercising its best efforts Company
cannot obtain such minimum coverage amount of Five Million dollars ($5,000,000),
whatever maximum coverage is commercially reasonably available.
8. REGISTRATION RIGHTS. DMI and Marshall shall be entitled to
registration rights in accordance with the terms of that certain Registration
Rights Agreement between Marshall and Company dated as of June 29, 1998. In
addition, any trusts or other entities formed by Marshall for estate planning
purposes shall be entitled to similar registration rights.
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9. CONFIDENTIAL INFORMATION. DMI and Marshall 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 DMI or Marshall 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 DMI or Marshall 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 9 by or on behalf of DMI or Marshall).
10. 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 Marshall's
death.
(b) DISABILITY. If, as a result of Marshall's incapacity due to
physical or mental illness, Marshall 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 Marshall 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 10.A.(b) hereof.
(c) CAUSE. This Agreement shall be subject to termination by the
Board for cause, which for purposes of this Agreement shall mean a termination
on the grounds of (i) a breach by DMI or Marshall of any material term of this
Agreement, which breach shall not have been cured within thirty (30) days after
receipt by DMI of written notice thereof from the Board, (ii) the reasonable
belief by the Board, after conducting an appropriate investigation, of the
commission by DMI or Marshall of any act of fraud, theft or criminal dishonesty
or (iii) the conviction of DMI or Marshall 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 DMI 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 DMI and an opportunity for it, together with its counsel, to be heard by the
Board,
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finding that, in the good faith opinion f the Board, DMI or Marshall is guilty
of misconduct of the type described in this Section 10.A.(c) hereof and
specifying the particulars thereof in detail.
(d) NOTICE BY MARSHALL. This Agreement may be terminated by
Marshall and/or DMI upon thirty (30) days written notice.
(e) NOTICE BY COMPANY. This Agreement may be terminated at any
time by Company upon thirty (30) days written notice; provided, however, that
during a period of physical or mental illness as described in Section 10.A.(c)
hereof, Company shall not utilize this Section 10.A. (e) to terminate Marshall.
(f) CONSTRUCTIVE TERMINATION. This Agreement may be terminated by
Marshall and/or DMI immediately upon written notice to Company if Marshall has
been "constructively terminated" by Company. For the purposes of this Agreement,
"constructively terminated" shall mean any action by Company which results in a
material diminution in Marshall's then position (including status, titles and
reporting requirements), authority, duties or responsibilities, but excluding,
for this purpose, an isolated, insubstantially and inadvertent action not taken
in bad faith and which is remedied by Company promptly after receipt of notice
from Marshall.
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
10.A.(a) hereof, DMI shall continue to receive the compensation and benefits
specified in Section 3 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
10.A.(b), Marshall or his duly appointed personal representatives, shall
continue to receive the compensation and benefits specified in Section 3 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 DMI or Marshall from insurance purchased by the
Company.
(c) In the event of a termination of this Agreement under Section
10.A.(c), Company's obligation to provide the compensation and benefits
specified in Section 3 herein shall terminate as of the effective date of such
termination.
(d) In the event of a termination of this Agreement under Section
10.A(d):
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(i) prior to December 31, 1999, Company's obligation to
provide the compensation and benefits specified in Section 3 shall end on
the effective date of such termination; or
(ii) on or after December 31, 1999, Company's obligation
to provide the compensation and benefits specified in Section 3 shall
continue for the lesser of (x) two (2) years from the effective date of
such termination, or (y) the balance of the then remaining term of this
Agreement, but in no event for less than one (1) year.
(e) In the event of a termination of this Agreement under
Section 10.A(e) or (f), Company's obligation to provide the compensation and
benefits specified in Section 3 for the then remaining term of this Agreement
shall be paid to DMI in semi-monthly installments commencing within fifteen (15)
days following the effective date of such termination; provided, however, that
in no event shall such compensation and benefits be for less than one (1) year.
C. NO DUTY TO MITIGATE. In the event Marshall's services to Company are
terminated for any reason, neither DMI nor Marshall shall have any duty, either
express or implied, to mitigate any damages hereunder and Company shall remain
liable for all compensation (whether fees, bonus or other benefits) provided for
under the terms of this Agreement. Any compensation earned by Marshall in any
capacity after the date of such termination shall not reduce or mitigate the
amounts payable by Company hereunder.
D. DUTIES OF MARSHALL AFTER ANY TERMINATION OF THE EMPLOYMENT. Following
any termination of the Employment, DMI and Marshall shall fully cooperate with
Company in all matters relating to the winding up of the Marshall's work on
behalf of Company and the orderly transfer of any such pending work and of
Marshall' duties and responsibilities for Company to such other person or
persons as may be designated by Company in its sole discretion.
E. COOPERATION AFTER TERMINATION OF AGREEMENT. Following termination of
this Agreement, regardless of the reason for such termination, DMI and Marshall
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. DMI and Marshall acknowledge that
Marshall may be required to give testimony at trial or deposition or give
declarations. If Marshall shall be required to spend a material amount of time,
the Company shall compensate DMI 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 Marshall with reasonable prior notice of any actions
required of him.
11. INDEMNIFICATION. Company shall indemnify and hold Marshall and DMI
harmless from any liability due to the negligence, error, or omission in the
transaction of any general business by an executive, officer, or director of
Company other than Marshall. Company shall keep that certain Indemnification
Agreement between Marshall and Company dated as of January 1, 1998 in effect.
The Company shall provide DMI with substantially similar indemnification.
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12. COPYRIGHTS AND INVENTIONS. Marshall and DMI acknowledge that Marshall
is obligated under that certain Employee Confidential Information and
Inventions Agreement dated May 26, 1996, which agreement shall be incorporated
herein by reference.
13. NON COMPETE. DMI and Marshall, 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, DMI and Marshall 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. DMI and Marshall 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 DMI and Marshall is less than two
percent (2%) of the outstanding stock of such company, (iii) such stock is held
for investment purposes, and (iv) DMI and Marshall do not participate or engage,
directly or indirectly, in the business of such competitor, as an employee,
consultant, spokesperson or otherwise.
14. 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.
15. 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.
16. 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.
17. ABILITY TO FULFILL OBLIGATIONS. Neither the Company, DMI nor Marshall
is a party to or bound by any agreement which would be violated by the terms of
this Agreement.
18. 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: You Bet International, Inc.
1950 Sawtelle Boulevard
Suite 180
Los Angeles, California 90025
Attention: Robert M. Fell
Fax: (310) 444-3310
If to DMI: David Marshall, Inc.
c/o You Bet International, Inc.
1950 Sawtelle Boulevard
Suite 180
Los Angeles, California 90025
Attention: David Marshall
Fax: (310) 444-3310
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.
19. 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 Employment Agreement dated June 24, 1998
between the Company and Marshall. 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.
20. 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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21. EMPLOYMENT/INDEPENDENT CONTRACTORS RELATIONSHIP. Any reference in
this Agreement to the employment by the Company shall also be deemed to include
any independent contractor relationship which may exist.
22. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original.
23. HEADINGS. All headings in this Agreement are for convenience only and
will not affect the meaning of any provision hereof.
24. SURVIVAL OF CERTAIN PROVISIONS. The provisions of Sections 3, 4, 8,
9, 10, 11, 12, 13, 15, 16 and 25 shall, to the extent applicable, continue in
full force and effect notwithstanding the expiration or earlier termination of
this Agreement or of Marshall's services hereunder in accordance with the terms
of this Agreement.
25. 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.
26. 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 DMI and
the Marshall and his executors, administrators, heirs and legal representatives.
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IN WITNESS WHEREOF, Marshall on behalf of DMI 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: /s/ [ILLEGIBLE]
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Name:
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Title:
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DAVID MARSHALL, INC., a California corporation
By: /s/ David Marshall
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Name: David Marshall
Title: President
The undersigned hereby agrees to (i) provide DMI the services required of
DMI hereunder, and (ii) comply with the provisions in the foregoing Services
Agreement which are applicable to me personally.
/s/ David Marshall
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David Marshall
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