Exhibit 10.7
EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) effective as of March 1, 2008, is by and
between Youbet.com, Inc., a Delaware corporation (the “Company”), and Dan Perini
(“Officer”).
1. EMPLOYMENT; DUTIES AND ACCEPTANCE:
Employment by Company.
The Company hereby employs Officer, and Officer hereby agrees to serve as Vice
President of Business and Legal Affairs subject to the terms and conditions of
this Agreement. Officer shall report to the Chief Financial Officer (“CFO”) or
any officer appointed by the CFO to supervise Officer.
Dedicated Service.
During his employment, Officer shall devote such time, attention, energies,
interests, and abilities to the business of the Company as is necessary to
fulfill his responsibilities, shall well and faithfully serve the Company, and
shall use his best efforts to promote the interests of the Company. Officer
shall not engage in any business activity that would be adverse to the Company
or its business prospects, financial or otherwise. Without limiting the
generality of the foregoing, without the prior written consent of the Company,
Officer shall not be employed by or provide services to any competitor of the
Company in the Internet gaming industry during his employment with the Company.
Location of Employment.
Officer will be based at the Company headquarters, currently in Woodland Hills.
Notwithstanding the foregoing, Officer acknowledges that he will be responsible
to travel away from headquarters when required by the CFO or the Chief Executive
Officer (“CEO”).
Duties.
Officer shall report to the Chief Financial Officer and in furtherance of the
following duties:

  (a)  
Legal department: Responsible for overseeing and, at the direction of and in
consultation with the CEO or the CFO, coordinate all legal affairs for the
Company including engaging outside counsel as necessary as well as approve and
maintain all licensing agreements, contracts, trademarks, patents and
intellectual property, in accordance with applicable law.

  (b)  
Regulatory responsibilities: Monitor and report on legislation, regulations and
laws in the gaming industry that impact Company enterprises.

  (c)  
Corporate responsibilities: Facilitate, support and coordinate, where
appropriate, communications, review and planning efforts as directed by the
Chairman of the Board, the CEO or the CFO.

2. TERM:
The term of this Agreement shall commence as of March 1, 2008 (the “Effective
Time”) and end on February 28, 2009 (the “Term”) unless sooner terminated
pursuant to Section 7 hereof. Upon the expiration of the Term, all provisions
and obligations under this Agreement shall cease (with the sole exception of
Officer’s obligation under Paragraph 5 and the arbitration requirement under
Section 10 which shall survive fully and remain in effect during Officer’s
employment and thereafter, as specified therein) and any continued employment of
Officer shall be at will, and as such the Company may terminate Officer’s
employment for any reason, or no reason, with or without cause, upon 60 days
prior written notice to Officer.

 

 

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3. COMPENSATION AND BENEFITS:
(a) Salary. Officer shall receive a salary (the “Annual Salary”) at the rate of
$195,000 per annum. All salary shall be less such deductions as shall be
required to be withheld by applicable law and regulations, shall be paid twice
monthly in accordance with the Company’s normal payroll practice and shall be
pro-rated for any period that does not constitute a full twelve (12) month
period.
(b) Bonuses. Officer shall be entitled to participate in the Company Bonus Plan
at the Senior Management level as set forth in the Company Bonus Plan Policy;
said Bonus if any, will be based on the Annual Base Salary.
(c) Stock Options. Officer will be entitled to participate in the Company’s
Equity Incentive Plan. Any proposed grants under the plan are subject to
approval by the Compensation Committee. Any and all approved grants shall be
subject to the terms and conditions of Equity Incentive Plan.
(d) Service Requirement. Compensation payable under this Agreement is directly
linked to Officer’s service. If Officer is unable to perform his duties
hereunder for ten (10) or more consecutive days due to any medical condition or
other reason, Officer shall not earn compensation and benefits during such
period of non-performance unless required by applicable law or in accordance
with Company policy.
4. PARTICIPATION IN EXECUTIVE BENEFIT PLANS:
(a) Fringe Benefits. Officer 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 Officers of the stature and rank of Officer 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. Officer shall accrue paid vacation days at the rate of 6.16 hours
per pay period up to a maximum of four (4) weeks per year in accordance with the
terms and conditions of the Company Vacation Policy.
(c) Expenses. The Company will reimburse Officer for actual and necessary travel
and accommodation costs, entertainment and other business expenses incurred as a
necessary part of discharging the Officer’s duties hereunder, subject to receipt
of reasonable and appropriate documentation by the Company and such expenses
being in accordance with Company policy.

 

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5. CERTAIN COVENANTS OF EXECUTIVE:
Without in any way limiting or waiving any other right or remedy accorded to
Company or any limitation placed upon Officer by law, Officer agrees as follows:
(a) Confidential Information: Officer agrees that, neither during his employment
nor at any time thereafter shall Officer (i) disclose to any person, firm or
corporation not employed by the Company 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 Officer at any time, 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 Officer 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 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 Officer 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
Officer or made available to the Officer 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 Officer’s employment with Company or at any other time on request by the
Company.
(c) Non-Solicitation of Employees. While employed by the Company, and for one
(1) year immediately following the termination of employment, Officer shall not
interfere with the business of the Company by soliciting, attempting to solicit,
inducing, or otherwise causing any employee of the Company to terminate his or
her employment in order to become an owner, partner, employee, consultant or
independent contractor to or for any other company or business venture. During
his employment by the Company and after its termination, Officer shall not use,
reproduce, or disclose to any other person or company, proprietary information
belonging to the Company that would enable or assist such person or company to
solicit, attempt to solicit, induce, or otherwise cause any employee to
terminate his or her employment with the Company.
6. OTHER PROVISIONS:
(a) Rights and Remedies Upon Breach. If the Officer breaches, or threatens to
commit a breach of, any of the provisions of Section 5 hereof (the “Restrictive
Covenants”) and, if susceptible to cure, fails to cure such breach or threatened
breach within fifteen (15) days of written notice from the Company, then 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 Officer 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 Officer
as a result of any transactions constituting a breach of any of the Restrictive
Covenants, and the Officer shall account for and pay over such Benefits to the
Company.
(c) Severability of Covenants. If any arbitrator or 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 arbitrator or 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 arbitrator or 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.

 

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(e) Injunctive Relief. Officer agrees and understands that the remedy at law for
any breach by Officer 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 Officer’s
breach (or threatened or imminent breach) of any provision of Section 5 hereof,
the Company shall be entitled to seek to obtain from any arbitrator or 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 for Cause. The Company shall have the option to terminate this
Agreement and Officer’s employment during the Term upon the occurrence of any of
the following:

  (i)  
the Officer’s gross dishonesty, fraud, misappropriation, embezzlement, or other
act of material misconduct against the Company;

  (ii)  
the Officer’s conviction of a felony (other than a traffic violation) which
results in material injury to the Company;

  (iii)  
Officer’s willful and knowing violation of any rules or regulations of any
governmental or regulatory body which violation is materially harmful to the
Company;

  (iv)  
Violation of policies, rules or regulations of the Company which violation is
materially harmful to the Company;

  (v)  
the Officer’s willful act of disloyalty that is intended to and/or results in
material injury to the Company;

  (vi)  
the Officer’s chronic alcoholism or addiction to non-medically prescribed drugs;

; or

  (viii)  
breach (and, where applicable, failure to cure) by the Officer of his material
obligations contained in this Agreement.

Any act or omission of the Officer based upon authority given pursuant to the
Articles of Incorporation of the Company or Bylaws of the Company or a
resolution duly adopted by the Company’s Board of Directors or based upon the
advice of counsel for the Company shall be conclusively deemed to be done by
Officer in good faith and in the best interests of the Company.
If Officer’s services are terminated as set forth in this subsection, Officer’s
services shall cease as of such effective date of termination and all provisions
and obligations under this Agreement shall cease immediately (with the sole
exception of Officer’s obligations under Paragraph 5 and the arbitration
requirement under Section 10 which survive fully and remain in effect in
accordance with their terms). In such event, the Company will pay Officer
(a) his salary, unused vacation and PTO pay, automobile allowance, and Fringe
Benefits earned through and concluding on the last day of his employment with
the Company; (b) his unpaid reimbursable business expenses incurred by him
through the last day of his employment with the Company; and (c) any earned and
unpaid bonus pursuant to the Company Bonus Plan Policy.

 

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(b) Termination with Good Reason or Without Cause. If during the Term the
Officer resigns for Good Reason or is terminated without Cause:
(i) the Company will pay Officer (a) his salary, unused vacation and PTO pay,
automobile allowance, and Fringe Benefits earned through and concluding on the
last day of his employment with the Company, (b) his unpaid reimbursable
business expenses incurred by him through the last day of his employment with
the Company; (c) any earned and unpaid bonus pursuant to the Company Bonus Plan
Policy, and (d) any unpaid base salary amount from the termination date to
February 28, 2009, plus three additional months of his base salary (“Severance
pay”). Severance pay shall be less applicable withholding and paid to Officer
within 30 days following the effective date of termination. All other provisions
and obligations under this Agreement shall cease immediately upon the effective
date of termination (with the sole exception of Officer’s obligations under
Paragraph 5(a), (b) and (c) and the arbitration requirement under Section 10
which survive fully and remain in effect in accordance with their terms.)
As used herein, Good Reason shall mean only:
(i) withdrawal by the Company from Officer of a substantial part of his duties
then being performed, or responsibility or authority then being carried, by
Officer, or permanent and substantial relocation of Officer’s location of
employment without mutual consent of Officer;
(ii) assignment by the Company to Officer of substantial additional duties or
responsibilities which are inconsistent with the duties or responsibilities then
being carried by Officer;
(iii) material reduction in the level of Officer’s responsibility, authority,
autonomy, title, or compensation;
(iv) the Company’s material breach of Officer this Agreement (or any other
agreement between Officer and the Company); and the failure of the Company to
cure such breach within fifteen (15) days of notice thereof;
(v) material fraud on the part of the Company; or
(vi) discontinuance of the active operation of business of the Company, or
insolvency of the Company, or the filing by or against the Company of a petition
in bankruptcy or for reorganization or restructuring pursuant to applicable
insolvency or bankruptcy law.
(c) Resignation Without Good Reason, Disability or Death. If during the Term,
the Officer resigns without Good Reason, dies or becomes disabled (which cannot
be reasonably accommodated in accordance with applicable law) Officer’s services
shall cease as of such effective date of termination, disability or death and
all provisions and obligations under this Agreement shall cease immediately
(with the sole exception of Officer’s obligations under Paragraph 5 and the
arbitration requirement under Section 10 which survive fully and remain in
effect in accordance with their terms.) In such event, the Company will pay
Officer (a) his salary, unused vacation pay, automobile allowance, and Fringe
Benefits earned through and concluding on the last day of his employment with
the Company; (b) his unpaid reimbursable business expenses incurred by him
through the last day of his employment with the Company; and (c) any earned and
unpaid bonus pursuant to the Company Bonus Plan Policy.
8. EXECUTIVE’S REPRESENTATIONS AND WARRANTIES:
(a) Right to Enter Into Agreement. Officer has the unfettered right to enter
into this entire Agreement on all of the terms, covenants and conditions hereof;
and Officer 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 nor
delivery of this Agreement nor the performance by Officer 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 Officer is a party nor by which Officer bound.
(c) Services Rendered Deemed Special, Etc. Officer 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 Officer’s name,
biography and approved likenesses in connection with Company’s business,
including advertising their products and services, with the prior written
consent of Officer.
10. ARBITRATION:
To the fullest extent permitted by applicable law, any controversy or claim
past, present, or future, arising out of or relating to the hiring of Officer,
Officer’s employment, the termination of Officer’s employment, this Agreement
and/or the breach or termination of this Agreement that Company may have against
Officer or that Officer may have against Company or against its officers,
directors, employees or agents in their capacity as such or the breach hereon,
shall be settled by a single arbitrator in arbitration conducted in Los Angeles,
California, in accordance with the National Employment Arbitration Rules and
Mediation Procedures of the American Arbitration Association (“AAA”). These
rules are posted on the AAA’s website, www.adr.org. The arbitrators shall
prepare a written award and judgment upon the award may be entered in any court
having jurisdiction thereof. The arbitrator’s decision shall be final and
binding. The arbitrator shall have the authority to settle such controversy or
claim by finding that a party should be enjoined from certain actions or be
compelled to undertake certain actions as found by the arbitrator. Company shall
pay the arbitrator’s fees.
The claims covered by this Arbitration provision include, but are not limited
to, claims arising out of contract law, tort law, common law, defamation law,
fraud law (including, without limitation, fraud in the inducement of contract),
wrongful discharge law, privacy rights, statutory protections, constitutional
protections, wage and hour law, California Labor Code protections, the
California Fair Employment and Housing Act, any similar state discrimination
law, the Federal Civil Rights Act of 1964 and 1991, as amended, the Age
Discrimination in Employment Act, the Older Workers’ Benefit Protection Act, the
Americans With Disabilities Act; claims for benefits (except claims under an
employee benefit plan that either (1) specifies that its claims procedure shall
culminate in an arbitration procedure different from this one, or (2) is
underwritten by a commercial insurer which decides claims); and claims for
violation of any federal, state, or other governmental law, statute, regulation,
or ordinance, except claims excluded in the following section.
Notwithstanding the foregoing, the parties expressly agree that claims Officer
may have for workers’ compensation, state unemployment compensation benefits,
and state disability insurance are not covered by this Agreement. The parties
further expressly agree that this provision does not apply to any matter in
which the amount in controversy falls within the jurisdiction of the Small
Claims Division of the Municipal Courts of the State of California. Should such
matter fall within the jurisdiction of the Small Claims Division of the
Municipal Court of the State of California, then such matter shall be, and may
only be, submitted to a Small Claims Division of the Courts of the State of
California for Los Angeles County for determination.
Arbitration and related proceedings will be governed by California Code of Civil
Procedure Section 1280 et seq. If for any reason the AAA refuses to administer
the arbitration, the parties agree that the appointment of an arbitrator shall
be in accordance with California Code of Civil Procedure Section 1281.6. The
provisions of this Arbitration Section shall survive the termination of this
Agreement and termination of Officer’s employment.

 

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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):
If to Officer, to his address at:
Dan Perini
6627 Tamarind Street
Oak Park, CA 91377
If to Company, to its address at:
Youbet.com, Inc.
5901 Desoto Avenue
Woodland Hills, CA 91367
Attention: Chief Executive Officer & Legal Department
Fax (818) 668-2121
(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. AGREEMENT AND REASONABLENESS:
Officer declares that he has read the foregoing and agrees to the conditions and
obligations set forth. Employee also acknowledges that he has been given
reasonable time in which to consult with an attorney with respect to the
Agreement.
13. PARTIES BOUND:
The Agreement shall bind the each party’s heirs, personal representatives,
successors, spouses, purchasers, assigns, or any entities that acquire the
assets of such party, and benefit the other party and its successors, spouses,
purchasers, assignees, or any entities who acquire the assets of such party.
14. GOVERNING LAW:
This Agreement shall be deemed to have been entered into and shall be construed
and enforced in accordance with the laws of the State of California as applied
to contracts made and to be performed entirely with California. The Parties
consent to forum, venue and jurisdiction in Los Angeles County for the
arbitration of disputes, and in the State Courts of Los Angeles County and
Federal District Courts of Southern California for any matter not subject to
arbitration. The Parties represent and warrant that this forum and venue is
appropriate as agreed upon for the convenience of witnesses and because it is
the place the Agreement is entered into and the consideration is paid.
15. CONSTRUCTION:
The invalidity or unenforceability of any particular provision of this Agreement
shall not affect the other provisions hereof, all of which shall remain
enforceable in accordance with their terms. Should any of the obligations
hereunder be found illegal or unenforceable as being too broad with respect to
the duration, scope or subject matter thereof, such obligation shall be deemed
and construed to be reduced to the maximum duration, scope or subject matter
allowable by law.

 

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16. 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, other than
the Incentive Stock Option Agreement between the Company and Officer dated on or
about August 21, 2006. This Agreement may be amended, modified, superseded or
canceled, and the terms and conditions hereof may be waived only in a writing
signed by both parties. 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.
17. HEADINGS:
The headings in this Agreement are solely for the convenience of reference and
shall not affect its interpretation.
18. ATTORNEYS’ FEES:
If a party brings an action based upon this Agreement for breach of contract
against the other party, the prevailing party shall be entitled, in addition to
any other appropriate amounts, to recover its reasonable costs and expenses in
connection with such proceeding, including, but not limited to, reasonable
attorneys’ fees.
19. INDEMNIFICATION:
To the maximum extent permitted by applicable law, the Company will indemnify,
defend, and hold Officer harmless from and against any and all demands, actions,
claims, suits, liabilities, losses, damages, fees (including reasonable
attorneys’ fees) and expenses relating to any acts or omissions to act in the
course or scope of the duties he performs on behalf of the Company while
employed by it and/or while serving as an executive and/or director of the
Company, and to provide indemnification and officers and directors liability
insurance to him, at least to the same extent that it provides such
indemnification and insurance to the officers and directors of the Company.
Officer will have the option to select his own counsel at reasonable rates if
the Company’s counsel cannot represent him based upon a conflict of interest.
The provisions herein shall survive the termination of Officer’s employment with
the Company for any reason.

          Dated: March 13, 2008  By:   /S/ DAN PERINI         Dan Perini     
Agreed to and Accepted:
Youbet.com, Inc., a
Delaware Corporation
        Dated: March 13, 2008  By:   /S/ GARY SPROULE         Gary Sproule     
  Interim President and Chief Executive Officer     

 

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