Exhibit 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”), dated May 29, 2008, is by and
between Multimedia Games, Inc., a Texas corporation (the “Company”), and Gary
Loebig (“Executive”) (either party individually, a “Party”; collectively, the
“Parties”).

WHEREAS, Executive currently serves and has served as Executive Vice
President–Sales of the Company since December 1998 (the “Executive Vice
President Position”);

WHEREAS, on March 31, 2008, the Board of Directors of the Company (the “Board”)
appointed Executive as interim President and Chief Executive Officer of the
Company (the “Interim Position”); and

WHEREAS, the Parties desire to enter into this Agreement in connection with
Executive’s appointment to the Interim Position and to address certain matters
related to Executive’s continuing employment with the Company in the Executive
Vice President Position;

NOW, THEREFORE, in consideration of the foregoing and the mutual provisions
contained herein, and for other good and valuable consideration, the Parties
hereby agree as follows:

1. Executive Vice President Position; Interim Chief Executive Officer Position.

1.1. Executive Vice President Position. Executive is employed as Executive Vice
President–Sales and shall generally have the duties and responsibilities
consistent with that position and assigned to him by the Chief Executive Officer
or President of the Company (the “Board”).

(a) Duties. Executive shall perform faithfully and diligently all duties
assigned to Executive as are consistent with the position of Executive Vice
President–Sales and will report to the President and Chief Executive Officer of
the Company.

(b) Compensation for Service in Executive Vice President Position.

(i) Base Salary. As compensation for Executive’s performance of Executive’s
duties in the Executive Vice President Position, the Company shall pay to
Executive a salary of $185,000 per year (the “Base Salary”), payable in equal
bi-weekly installments and in accordance with the normal payroll practices of
the Company, less required deductions for state and federal withholding tax,
social security and all other employment taxes and authorized payroll
deductions, which amount may be increased from time to time by the Board.

(ii) Incentive Compensation. In connection with his service in the Executive
Vice President Position, Executive shall be entitled to receive incentive
compensation on an annual basis determined by the Compensation Committee of the
Board.

1.2. Interim Position. In addition to Executive’s duties and responsibilities in
the Executive Vice President Position, effective as of March 31, 2008, Executive
hereby agrees to serve in the Interim Position until the earliest of (such
earliest date, the “Interim Position Termination Date”) (i) his resignation from
the offices of Interim President and Chief Executive Officer of the Company,
(ii) his death or disability, (iii) his removal from such offices, and (iv) the
appointment of his successor to such office or to the offices of President and
Chief Executive Officer (without an interim qualification).

 

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(a) Duties. While serving in the Interim Position, Executive shall generally
have the duties and responsibilities consistent with the offices of President
and Chief Executive Officer and will faithfully and diligently perform all
duties assigned to Executive as are consistent with the position of President
and Chief Executive Officer and will report to the Board.

(b) Compensation. Effective as of March 31, 2008 and ending on the Interim
Position Termination Date, in addition to any Base Salary and bonus to which
Executive is entitled to or receives in the Executive Vice President Position,
the Company shall pay Executive a cash bonus of $25,000.00 per month (the “Cash
Bonus”). The Cash Bonus shall be payable on a bi-weekly basis (pro-rated with
respect to the last bi-weekly payment in the event the Interim Position
Termination Date falls between bi-weekly payroll payment dates) in accordance
with the normal payroll practices of the Company, less required deductions for
withholding tax, social security and all other applicable employment taxes. In
addition, the Board in good faith shall consider whether Executive should become
eligible to receive any performance or other bonus customary to the position of
President and Chief Executive Officer.

(c) Additional Compensation. If Executive is serving in the Interim Position on
July 29, 2008, then (i) the Company shall on such date make a lump sum cash
payment of $100,000, less required deductions for withholding tax, social
security and all other applicable employment taxes, to Executive and
(ii) Section 4.3 of this Agreement shall be automatically amended to delete the
reference to “one-half of” in the second sentence thereof.

2. Additional Terms of Employment in Executive Vice President Position and the
Interim Position. The following provisions shall apply during both Executive’s
employment in the Executive Vice President Position and the Interim Position:

2.1. Standard of Conduct/Full-time. During the term of this Agreement, Executive
will abide by all lawful policies and decisions made by the Board, as well as
all applicable federal, state and local laws, regulations or ordinances, in all
material respects. In this capacity as an employee of the Company, Executive
will act solely on behalf of the Company. Executive shall devote substantially
all of Executive’s full business time and efforts to the performance of
Executive’s assigned duties for the Company, unless Executive notifies the Board
in advance of Executive’s intent to engage in other paid work and receives the
Board’s express written consent to do so. Such consent will not be withheld
unreasonably. Moreover, Executive may receive compensation for services in
connection with passive investments.

2.2. No Conflict of Interest. Executive will not, at any time while serving as
an employee of the Company, accept any engagement for work, paid or unpaid, that
at the time such engagement is undertaken creates a conflict of interest with
the Company in the reasonable judgment of the Board.

2.3. Customary Fringe Benefits and Facilities. During the term of the
Executive’s employment with the Company pursuant to this Agreement, Executive
will be eligible for all customary and usual fringe benefits generally available
to executives of the Company subject to the terms and conditions of the
Company’s benefit plan documents. The Company reserves the right to change or
eliminate the fringe benefits on a prospective basis, at any time, effective
upon notice to Executive; provided, however, that during any period of
employment under this Agreement, Executive (and his spouse and eligible
dependents) shall be entitled to receive all benefits of employment generally
available to other members of the Company’s management and those benefits for
which key executives are or shall become eligible, when and as Executive becomes
eligible therefor, including, without limitation, group health, life and
disability insurance benefits and participation in the Company’s 401K plan. The
Company shall provide Executive with term-life insurance in a policy amount
equal to at least two times Executive’s Base Salary then in effect, with any
amount over $150,000 taxable to Executive.

 

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2.4. Business Expenses. Executive will be reimbursed for all reasonable,
out-of-pocket business expenses incurred in the performance of Executive’s
duties on behalf of the Company. To obtain reimbursement, expenses must be
submitted promptly with appropriate supporting documentation in accordance with
the Company’s policies.

2.5. Committee Membership. Executive shall serve on the Company’s Executive
Committee, when, and if, the Company has such a committee.

2.6. Diamond Games Litigation. If Executive is named as a party to the Diamond
Games litigation, the Company agrees to in good faith consider an increase in
salary and benefits for Executive to compensate Executive for such risk.

3. Term. This Agreement will commence on the date of this Agreement (the
“Effective Date”) and will automatically renew for subsequent one-year terms
unless either Party provides ninety (90) days’ advance written notice to the
other that such Party does not wish to renew the Agreement for a subsequent
one-year term. In the event either Party gives notice of nonrenewal pursuant to
this Section 3, this Agreement will expire at the end of the then-current term
(subject to the provisions of Section 10.6).

4. Severance.

4.1. Termination for Cause by the Company. The Company may terminate Executive’s
employment immediately at any time for Cause. For purposes of this Agreement,
“Cause” is defined as: (i) theft, material dishonesty, or intentional
falsification of any employment or the Company records; (ii) improper and
intentional disclosure of the Company’s confidential or proprietary information
that materially harms the Company; (iii) any action which has a materially
detrimental effect on the Company’s reputation or business; (iv) Executive’s
failure or inability to perform his duties (other than for reasons of physical
or mental incapacity), after written notice from the Company and a reasonable
opportunity to cure, in accordance with the policies and decisions of the Board;
(v) Executive’s conviction (including any plea of guilty or nolo contendere) for
any criminal act that materially impairs his ability to perform his duties for
the Company; or (vi) a material breach of this Agreement by Executive which is
not cured within thirty (30) days of receipt by Executive of reasonably detailed
written notice from the Company.

(a) Consequences of Termination for Cause. In the event Executive’s employment
is terminated for Cause, Executive shall be entitled to receive only unpaid Base
Salary and Cash Bonus then in effect, prorated to the date of termination,
together with any amounts to which Executive is entitled pursuant to
Sections 1.2(c)(i), 2.3 and 2.4 of this Agreement. All other Company obligations
to Executive pursuant to this Agreement will become automatically terminated and
completely extinguished. Executive will not be entitled to receive any other
payments or continued benefits described in Sections 4.2 or 4.3.

4.2. Termination Without Cause by Company. The Company may terminate Executive’s
employment under this Agreement without Cause at any time on thirty (30) days’
advance written notice to Executive.

(a) Consequences of Termination Without Cause. In the event Executive’s
employment is terminated without Cause, Executive will receive: (i) unpaid Base
Salary then in effect, prorated to the date of termination, together with any
amounts to which Executive is entitled pursuant to

 

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Sections 1.2(b), 1.2(c), 2.3 and 2.4 of this Agreement; and (ii) ratably, in
equal monthly installments in accordance with the Company’s standard payroll
practice, his annual Base Salary then in effect for two (2) years from the
termination date, plus continuation of Executive’s then current benefits for a
period of two (2) years from the termination date, less required deductions on
all amounts described in (i) and (ii) for withholding tax, social security and
all other applicable employment taxes; provided that Executive executes a full
general release, releasing all claims, known or unknown, that Executive may have
against the Company arising out of or any way related to Executive’s employment
or termination of employment with the Company, in substantially the form
attached hereto as Exhibit A, or in another form that is acceptable to the
Company and Executive, provided that such release shall exclude amounts due or
to become due to Executive as contemplated by this Agreement, any other written
agreement between Executive and the Company then in effect, and any rights to
indemnification of Executive under the Company’s articles of incorporation and
bylaws. All other Company obligations to Executive will be automatically
terminated and completely extinguished upon termination of employment.

4.3. Termination by Executive for Any Reason. Executive may terminate his
employment with the Company for any reason at any time on five (5) days’ advance
written notice to the Company. Subject to Section 1.2(c), if Executive
terminates his employment with the Company for any reason, then, (i) on the date
that is six (6) months after the date of such termination, the Company shall pay
Executive an amount in cash equal to one-half of the amount of Executive’s
annual Base Salary in effect at the time of such termination; (ii) Executive
will promptly receive unpaid Base Salary then in effect, prorated to the date of
termination, together with any amounts to which Executive is entitled pursuant
to Sections 1.2(b), 1.2(c), 2.3 and 2.4 of this Agreement; and (iii) for a
period of two (2) years after the date of such termination, the Company shall
pay and provide Executive his then current benefits; provided that Executive
executes a full general release, releasing all claims, known or unknown, that
Executive may have against the Company arising out of or any way related to
Executive’s employment or termination of employment with the Company, in
substantially the form attached hereto as Exhibit A, or in another form that is
acceptable to the Company and Executive, provided that such release shall
exclude amounts due or to become due to Executive as contemplated by this
Agreement, any other written agreement between Executive and the Company then in
effect, and any rights to indemnification of Executive under the Company’s
articles of incorporation and bylaws. All other Company obligations to Executive
will be automatically terminated and completely extinguished upon termination of
employment.

4.4. 409A.

(a) Notwithstanding any other provisions of this Agreement to the contrary, in
the event that a termination of Executive’s employment does not constitute a
“separation from service” from the Company within the meaning of Treasury
Regulation §1.409-1(h), the payment provided for in Sections 4.2 and 4.3 shall
not begin until such time Executive has otherwise experienced such a separation
from service, and the date of such separation from service shall be deemed to be
his date of termination for purposes of Sections 4.2 and 4.3.

(b) Notwithstanding any other provisions of this Agreement to the contrary, to
the extent that the provision of benefits provided in Sections 4.2(a)(ii) (in
respect of Executive’s then current benefits) and Section 4.3(ii) above
constitutes deferred compensation subject to Internal Revenue Code section 409A,
all reimbursements and in-kind benefits provided pursuant to Sections 4.2(a)(ii)
(in respect of Executive’s then current benefits) and Section 4.3(ii) above
shall be made in accordance with Treasury Regulation §1.409A-3(i)(1)(iv).
Accordingly, (i) the amount of expenses eligible for reimbursement or in-kind
benefits provided during the Executive’s taxable year may not affect the
expenses eligible for reimbursement or in-kind benefits provided in any other
taxable year (except as permitted with respect to medical reimbursement
arrangements); (ii) the reimbursement of an eligible

 

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expense shall be made on or before the last day of the Executive’s taxable year
following the taxable year in which the expense was incurred; and (iii) the
right to reimbursement or an in-kind benefit is not subject to liquidation or
exchange for another benefit.

5. Non-Competition.

(a) Consideration For Promise To Refrain From Competing. Executive agrees that
Executive’s services are special and unique, that the Company’s disclosure of
confidential, proprietary information and specialized training and knowledge to
Executive, and that Executive’s level of compensation and benefits, including
the amount of severance as set forth in Section 4 hereof, are partly in
consideration of Executive not competing with the Company following the
termination of his employment. Also, the Company promises to provide Executive,
in his new role in the Interim Position, with additional proprietary and
confidential information to which Executive would not have had access as a
result of his Executive Vice President Position (including without limitation
information developed and presented in Board of Director meetings). Executive
acknowledges that such consideration (including without limitation the Company’s
promise to provide Executive access to additional proprietary and confidential
information made in this section) is adequate for Executive’s promises contained
within this Section 5.

(b) Promise To Refrain From Competing. Executive understands the Company’s need
for Executive’s promise not to compete with the Company is based on the
following: (i) the Company has expended, and will continue to expend,
substantial time, money and effort in developing its proprietary information;
(ii) Executive will in the course of Executive’s employment develop, be
personally entrusted with and exposed to the Company’s proprietary information;
(iii) the Company is engaged in the highly insular and competitive gaming
technology industry; (iv) the Company provides products and services nationally
and internationally; and (v) the Company will suffer great loss and irreparable
harm if Executive were to enter into competition with the Company. Therefore, in
exchange for the consideration described in Section 5(a) above, Executive agrees
that during Executive’s employment with the Company, and for six (6) months
following the effective date of the termination of Executive’s employment with
the Company for any reason (such six (6) month period to be increased to one
(1) year in the event Executive becomes entitled to a full year’s base salary as
severance payment pursuant to this Agreement or otherwise) (the “Covenant
Period”), Executive will not either directly or indirectly, whether as an owner,
director, officer, manager, consultant, agent or employee: (i) work for or
provide services or assistance to a competitor of the Company as of the date of
termination of employment, which is defined to include those entities or persons
in the business of developing, marketing, selling and supporting technology to
or for gaming businesses in which, as of the date of termination of employment,
the Company engages or in which the Company has an actual intention, as
evidenced by the Company’s written business plans to engage, in any country in
which the Company does business as of the date of termination of employment (the
“Restricted Business”); or (ii) make or hold any investment in any Restricted
Business, whether such investment be by way of loan, purchase of stock or
otherwise, provided that there shall be excluded from the foregoing the
ownership of not more than 1% of the listed or traded stock of any publicly held
corporation. For purposes of this Section 5, the term “Company” shall mean and
include the Company, any subsidiary or affiliate of the Company, and any
successor to the business of the Company (by merger, consolidation, sale of
assets or stock or otherwise).

(c) Reasonableness of Restrictions. Executive represents and agrees that the
restrictions on competition, as to time, geographic area, and scope of activity,
required by this Section 5 are reasonable, do not impose a greater restraint
than is necessary to protect the goodwill and business interests of the Company,
and are not unduly burdensome to Executive. Executive expressly acknowledges
that the Company competes on an international basis and that the geographical
scope of these limitations is reasonable and necessary for the protection of the
Company’s trade secrets and other

 

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confidential and proprietary information. Executive further agrees that these
restrictions allow Executive an adequate number and variety of employment
alternatives, based on Executive’s varied skills and abilities. Executive
represents that Executive is willing and able to compete in other employment not
prohibited by this Agreement.

(d) Reformation if Necessary. In the event a court of competent jurisdiction
determines that the geographic area, duration, or scope of activity of any
restriction under this Section 3 and its subsections is unenforceable, the
restrictions under this section and its subsections shall not be terminated but
shall be reformed and modified to the extent required to render them valid and
enforceable.

6. Nonsolicitation.

(a) Nonsolicitation of Customers or Prospects. Executive acknowledges that
information about the Company’s customers is confidential and constitutes trade
secrets. Accordingly, Executive agrees that during Executive’s employment with
the Company, and for two (2) years from the date of Executive’s termination from
all positions held at the Company, Executive will not, either directly or
indirectly, separately or in association with others, interfere with, impair,
disrupt or damage the Company’s relationship with any of its customers or
customer prospects (as established by the Company based upon existing written
books and records) as of the date of termination of employment, by soliciting or
encouraging others to solicit any of them for the purpose of diverting or taking
away business from the Company.

(b) Nonsolicitation of the Company’s Employees. Executive agrees that during
Executive’s employment with the Company, and for two (2) years from the date of
Executive’s termination, Executive will not, either directly or indirectly,
solicit or encourage any of the Company’s employees or cause others to solicit
or encourage any of the Company’s employees to discontinue their employment with
the Company.

7. Confidentiality and Proprietary Rights. Executive agrees to read, sign and
abide by the Company’s Employee Innovations and Proprietary Rights Assignment
Agreement, attached hereto as Exhibit B.

8. Injunctive Relief. Executive acknowledges that Executive’s breach of the
covenants contained in Sections 5-7 (collectively “Covenants”) would cause
irreparable injury to the Company and agrees that in the event of any such
breach, the Company shall be entitled to seek temporary, preliminary and
permanent injunctive relief.

9. Agreement to Arbitrate. To the fullest extent permitted by law, and pursuant
to the American Arbitration Association’s Rules for the Resolution of Employment
Disputes, Executive and the Company agree to arbitrate any controversy, claim or
dispute between them arising out of or in any way related to this Agreement, the
employment relationship between the Company and Executive and any disputes upon
termination of employment, including but not limited to breach of contract,
tort, discrimination, harassment, wrongful termination, demotion, discipline,
failure to accommodate, family and medical leave, compensation or benefits
claims, constitutional claims; and any claims for violation of any local, state
or federal law, statute, regulation or ordinance or common law. Claims for
breach of the Company’s Employee Innovations and Proprietary Rights Agreement,
claims relating to physical torts, the right to workers’ compensation, and
unemployment insurance benefits and the Company’s right to obtain injunctive
relief pursuant to Section 8, above are excluded, and claims for enforcement of
the Parties’ rights under the Covenants, are excluded. For the purpose of this
Agreement to arbitrate, references to “Company” include all parent, subsidiary
or related entities and their employees,

 

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supervisors, officers, directors, agents, pension or benefit plans, pension or
benefit plan sponsors, fiduciaries, administrators, affiliates and all
successors and assigns of any of them, and this Agreement shall apply to them to
the extent Executive’s claims arise out of or relate to their actions on behalf
of the Company.

10. General Provisions.

10.1. Successors and Assigns. Neither Party shall assign any of its or his
rights or obligations under this Agreement without the prior written consent of
the other Party.

10.2. Waiver. Either Party’s failure to enforce any provision of this Agreement
shall not, unless confirmed in writing by the Party against whom waiver is
urged, in any way be construed as a waiver of any such provision in any other
circumstance, or prevent that Party thereafter from enforcing each and every
other provision of this Agreement.

10.3. Severability. In the event any provision of this Agreement is found to be
unenforceable by an arbitrator or court of competent jurisdiction, such
provision shall be deemed modified to the extent necessary to allow
enforceability of the provision as so limited, it being intended that the
Parties shall receive the benefit contemplated herein to the fullest extent
permitted by law. If a deemed modification is not satisfactory in the judgment
of such arbitrator or court, the unenforceable provision shall be deemed
deleted, and the validity and enforceability of the remaining provisions shall
not be affected thereby.

10.4. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Texas. Each Party consents to the
jurisdiction and venue of the state or federal courts in Travis County, Texas,
if applicable, in any action, suit, or proceeding arising out of or relating to
this Agreement.

10.5. Notices. Any notice required or permitted by this Agreement shall be in
writing and shall be delivered as follows with notice deemed given as indicated:
(i) by personal delivery when delivered personally; (ii) by overnight courier
upon written verification of receipt; (iii) by telecopy or facsimile
transmission upon acknowledgment of receipt of electronic transmission; or
(iv) by certified or registered mail, return receipt requested, upon
verification of receipt. Notice shall be sent to the addresses set forth below,
or such other address as either Party may specify in writing.

10.6. Survival. Executive’s right to receive payments and other benefits under
Sections 1.7 and 2.3 hereunder shall survive any termination of the Interim
Position. Executive’s right to receive payments contemplated by this Agreement
to continue beyond his employment, shall survive termination of this Agreement
and termination of Executive’s employment except to the extent expressly
provided otherwise. To the extent expressly contemplated hereunder or reasonably
contemplated to continue beyond the termination of Executive’s employment, the
following provisions shall also survive: Section 5 (“Non-Competition”),
6 (“Nonsolicitation”), 7 (“Confidentiality and Proprietary Rights”),
8 (“Injunctive Relief”), 9 (“Agreement to Arbitrate”), 10 (“General Provisions”)
and 11 (“Entire Agreement”).

10.7. Expenses. The Company shall pay for or reimburse Executive for all
reasonable legal fees and costs incurred by Executive in connection with the
drafting, negotiation of this Agreement not to exceed $10,000.00 in the
aggregate.

11. Entire Agreement. This Agreement, including the Company Employee Innovations
and Proprietary Rights Assignment Agreement, constitutes the entire agreement
between the Parties relating

 

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to this subject matter and supersedes all prior or simultaneous representations,
discussions, negotiations, and agreements, whether written or oral, including
the email correspondence between the Company and the Executive, dated on or
about December 5, 1998, and any agreement, commitment or objection of the
Company described therein or based thereon, but excluding any equity award
agreements and the indemnification agreement entered contemporaneously with this
Agreement. This Agreement may be amended or modified only with the written
consent of Executive and the Company. No oral waiver, amendment or modification
will be effective under any circumstances whatsoever.

[The remainder of this page is intentionally left blank.]

 

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THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY
UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES
HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.

 

    EXECUTIVE Dated: May 29, 2008   By:  

/s/ Gary Loebig

  Name:   Gary Loebig   COMPANY Dated: May 29, 2008   By:  

/s/ Randy Cieslewicz

  Name:  

Randy Cieslewicz

  Title:  

Chief Financial Officer

Signature Page to Employment Agreement

 

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EXHIBIT A

General Release

Executive for himself and on behalf of his attorneys, heirs, assigns,
successors, executors, and administrators IRREVOCABLY AND UNCONDITIONALLY
RELEASES, ACQUITS AND FOREVER DISCHARGES Company and any current and former
parent, subsidiary, affiliated and related corporations, firms, associations,
partnerships, and entities, and their successors and assigns, of and from all
claims and causes of action whatsoever, whether known or unknown or whether
connected with Employee’s employment by Company or not, which may have arisen,
or which may arise, prior to, or at the time of, the execution of this
Agreement, including, but not limited to, any claim or cause of action arising
under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities
Act, the Texas Commission on Human Rights Act, the Age Discrimination in
Employment Act, the Texas Labor Code, the Texas Payday Act, or any other
municipal, local, state, or federal law, common or statutory. Notwithstanding
the foregoing, Executive reserves all rights (A) to indemnification that he may
currently or hereafter possess as an officer, director or agent or former
officer, director or agent of Company (or its affiliates) under applicable
corporate statutes or the organic corporate documents of Company (and the scope
of any indemnification existing as of this date shall not be reduced as to
Executive by future action of Company); (B) under any employee insurance
policies or benefit programs that by their terms continue to apply to Executive;
and (C) under any other provision of this Agreement and any other written
agreement between the Company and Executive in effect on the date of this
Release. Company hereby represents that, without investigation or undertaking
any duty of inquiry, its Board of Directors and executive officers are unaware
of any claims Company may have against Executive as of the date of this
Agreement.

 

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EXHIBIT B

Employee Innovations and Proprietary Rights Assignment Agreement