EXHIBIT 10.6(A)


SEVERANCE AGREEMENT


This SEVERANCE AGREEMENT (the “Agreement”) is entered into this 9th day of February, 2007 (the “Execution
Date”), by and between American Wagering, Inc., a Nevada corporation (the “Company”)
and Timothy Lockinger, whose present residential address is 4770 South Arezzo
Ave, Pahrump, Nevada 89061 (“Lockinger”) (together the “Parties”).


In consideration of the covenants, representations
and warranties set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:


1.     Definitions and Interpretations


1.1.      Certain terms used herein shall have the
meanings attributed to such terms in Schedule 1.


1.2.      All of the defined terms as set forth in
Schedule 1, if defined in the singular, shall also retain such general meaning
if used in the plural, and if used in the plural, shall retain the general
meaning if used in the singular.


2.     Lockinger Representations,
Warrants and Covenants


Lockinger represents, warrants and covenants that all of the following
are true, accurate and complete:


2.1.      Lockinger’s relationship with the Company has
been on an employee basis as a Chief Financial Officer (“CFO”) and that Lockinger
commenced his status as CFO under that certain Executive Employment Agreement (“Employment
Agreement”) executed on June 28, 2002, and effective on July 1, 2002 (the “Start
Date”);


2.2.      All Contracts that directly or indirectly
were a result of any effort on the part of Lockinger whether before or after
the Start Date and entered into by: (a) the Company, (b) Lockinger within the
scope of Lockinger’s relationship with the Company or (c) Lockinger on behalf
of the Company (the “Company Contracts”) are the sole and exclusive property of
the Company, and Lockinger has no right to represent in any manner that Lockinger
is a beneficiary of any right, title or interest in and to the Company
Contracts;


2.3.      Lockinger has no right, title, interest or
license to any Company Property;


2.4.      The Company owes no sum, compensation,
payment or other amount to Lockinger other than the payment set forth in
Section 4 below; and


2.5.      The provisions of this Agreement are
reasonable in light of the legitimate business needs of the Company, and Lockinger
will be able to earn a living and will not be unduly burdened by the
restrictions on future employment imposed by this Agreement.



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3.     Employment Termination


Lockinger’s Employment Agreement and his relationship
with the Company is hereby terminated as of December 14, 2006, (the “Effective
Date”), including, without limitation, Lockinger’s status as employee.


4.     Severance


4.1.  Subject to Lockinger’s full and faithful
performance of Lockinger’s obligations pursuant to this Agreement and other
terms and conditions of this Agreement, Company shall pay to Lockinger a
monetary amount of Two Hundred Seventy Thousand Dollars and Zero Cents
($270,000), equal to twenty-one and six tenths (21.6) months of salary, less
all applicable taxes and withholdings paid by check and reported on Internal
Revenue Service (“IRS”) Form W-2.  The
monetary amount payable to the Employee shall be made in a lump sum within
seven (7) business days following Employee’s execution of this Agreement; and


4.2.  Employee understands and affirms that, except
as specifically set out in this Agreement, no other wages, vacation pay, sick
pay, paid time off, leave time, commissions, bonuses, benefits, or other
compensation is due to Employee.


5.     Further Assurances


5.1.      Lockinger shall execute, acknowledge and
deliver any and all Documents and shall perform any and all acts which shall be
reasonably required in order for the Company to record, register, perfect
and/or procure any Company Rights, and Lockinger shall execute any proper oath
or verify any proper Document in connection with carrying out this provision;
and


5.2.      Lockinger shall reasonably cooperate with the
Company to effect a smooth transition with respect to any activities Lockinger
engaged in on behalf of the Company, at the Company’s behest, and otherwise in
the conduct of Lockinger’s employee activities; including, without limitation,
providing the Company with (or directing the Company to the location of) all
Company Contracts, sourcing and customer contact information, purchase order information,
and other sales, marketing, promotional and related information in any Media
whatsoever.


6.     Release


6.1.      Unless the Company fails to complete and/or
timely perform its obligations pursuant to this Agreement, Lockinger forever
releases and discharges the Company and the Company’s past and present
subsidiary corporations, parent corporations, affiliates, partners, joint
venturers, successors, assigns, contractors, subcontractors, officers,
directors, shareholders, employees, agents, attorneys and insurers (in their
individual and representative capacities) (collectively, the “Company Released
Parties”), from any and all claims, demands, Losses, actions, causes of action,
suits, debts, promises, obligations, liens, indemnities, subrogations (contractual
or equitable) or duties, of any nature, character or description whatsoever,
whether known or unknown, fixed or contingent, accrued or not yet accrued,
matured or not yet matured, anticipated or unanticipated, asserted or
unasserted, with respect to, relating to, or arising out of, directly or
indirectly, any act or omission on the part of any or all of the Company
Released Parties in existence as of the Effective Date and/or arising out of
facts in existence as of the Effective Date; and



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6.2.      Unless Lockinger fails to complete and/or
timely perform his obligations pursuant to this Agreement, the Company forever
releases and discharges Lockinger from any and all claims, demands, Losses,
actions, causes of action, suits, debts, promises, obligations, liens,
indemnities, subrogations, (contractual or equitable) or duties, of any nature,
character or description whatsoever, whether known or unknown, fixed or
contingent, accrued or not yet accrued, matured or not yet matured, anticipated
or unanticipated, asserted or unasserted, with respect to, relating to, or
arising out of, directly or indirectly, any act or omission on the part of Lockinger
in existence as of the Effective Date and/or arising out of facts in existence
as of the Effective Date.


7.     Confidential Information


7.1.      In perpetuity, unless expressly authorized by
an Officer, Lockinger shall not Disclose any Confidential Information and/or
Company Trade Secrets to any Person or Use any Confidential Information and/or
Company Trade Secrets in any manner whatsoever.


7.2.      If Lockinger is requested or required (by
oral questions, interrogatories, requests for information or documents in legal
proceedings, subpoena, civil investigative demand or other similar process) to
disclose any of the Confidential Information, Lockinger shall provide an
Officer with prompt written notice of such request or requirement so that the
Company may seek protective orders or other appropriate remedies and/or waive
compliance with the provisions of this Agreement.  If, in the absence of a protective order or
other remedy or the receipt of a waiver by the Company, Lockinger nonetheless
is legally compelled to disclose Confidential Information to any court or
tribunal or else would stand liable for contempt or suffer other censure or
penalty, Lockinger may, without liability herein, disclose to such court or
tribunal only that portion of the Confidential Information which the court
requires Lockinger to disclose, provided that Lockinger exercises Lockinger’s
best efforts to preserve the confidentiality of the Confidential Information,
including, without limitation, by cooperating with the Company to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Confidential Information by such court or
tribunal.


7.3.      Notwithstanding any other provision of this
Agreement, Lockinger hereby acknowledges that the Company owns the exclusive
right, title and interest in and to the Confidential Information and the
Intellectual Property embodied in, relating to, based upon or arising from
Confidential Information.  Lockinger
hereby waives any claim of infringement of any right, title or interest of Lockinger
(whether based in any Intellectual Property right, title or interest, other
proprietary interest whatsoever or applicable fiduciary theory) in, to or
respecting any of the Confidential Information, and agrees that Lockinger shall
never challenge nor dispute the Company’s right, title and interest in and to
the Confidential Information.


7.4.      The Company does and shall own the exclusive
right, title and interest in and to all Company Inventions.  To the extent that Lockinger is deemed to
have or retain any right, title or interest or otherwise possess any right,
title or interest in and to any Company Inventions, Lockinger hereby assigns
all such right, title and/or interest to Company Inventions.  Lockinger hereby waives any claim of
infringement of any right, title or interest of Lockinger (whether based in any
Intellectual Property right, title or interest, other proprietary interest
whatsoever or applicable fiduciary theory) in, to or respecting any Company
Inventions, and agrees that



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Lockinger shall never challenge nor dispute Company’s right, title and
interest in and to the Company Inventions.


7.5.      Lockinger shall never Encumber Company
Inventions and shall use best efforts to not allow same to be Encumbered.


8.     Indemnification


Lockinger shall fully indemnify and defend the Company and hold the
Company harmless from and against all Losses with respect to, related to, or
arising out of Lockinger’s intentional, reckless or grossly negligent or
unauthorized Disclosure or Use of any Company Trade Secrets or Confidential
Information by Lockinger or infringement of Company Intellectual Property
incited or caused by Lockinger.


9.     Non-Solicitation


For a period commencing on the Effective Date and ending two (2) years
thereafter, Lockinger shall neither solicit, attempt to solicit, or assist
another Person to solicit any employee of the Company to work for Lockinger or
any other Person, nor incite, or attempt to incite, or assist another in
inciting any Person to terminate employment with the Company.


10.   Non-Competition


10.1.    For a period commencing on the Effective Date
and ending two (2) years thereafter, Lockinger shall not be employed by or
perform independent contract services in the State of Nevada for any entity engaged
in the race and sports business, including but not limited to, offering
financial services or project management services to an entity that desires to
exploit Lockinger’s knowledge of the race and sports business—gained as a
direct result of Lockinger’s employment with Company.  For example, Lockinger may take an employment
position with or perform consulting services for (i) a hotel/casino entity that
operates a race and sports book and/or (ii) vendors of race and sports book
hardware and/or software so long as Lockinger’s job description does not permit
Lockinger to use or exploit his knowledge of the race and sports book industry,
including but not limited to Confidential Information and/ Trade Secrets of the
Company or any of its Affiliates, in the performance of his duties.


10.2.    The parties agree that the restrictions and
limitations contained in this Agreement are reasonable as to scope and duration
and are necessary to protect Company’s interests and to preserve for Company
its competitive advantage.  In the event
that any of the restrictions and limitations contained in this Agreement are
deemed to exceed the time, geographic, or other limitations permitted by Nevada
law, the parties agree that a court of competent jurisdiction shall revise any
offending provisions of this Paragraph so as to bring it within the maximum
time, geographical, or other limitations permitted by Nevada law.



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11.   Return of Materials


Lockinger shall, within one (1) Business Day from
the Effective Date, return to the Company all Content, in whatever Media, owned
by the Company, including, without limitation, all Confidential Information,
papers, drawings, notes, memoranda, manuals, specifications, designs, devices,
code, e-mail, documents, diskettes, tapes and any other material.  Lockinger shall also return any keys, access
cards, credit cards, identification cards and other property and equipment
belonging to the Company.  All Content
stored on or transmitted using the Company owned or leased equipment is and
shall be the exclusive property of the Company. Notwithstanding the return or
destruction of the Confidential Information, Lockinger shall continue to be
bound by Lockinger’s obligations of confidentiality and security as otherwise
set forth in this Agreement in perpetuity with respect to Confidential
Information and Company Trade Secrets.


12.   Equitable Relief


Lockinger covenants, represents and warrants that
any violation of this Agreement by Lockinger shall cause irreparable injury to
the Company and shall entitle the Company to extraordinary and equitable relief
in court, including but not limited to temporary restraining orders and preliminary
and permanent injunctions, without the necessity of posting bond or security.


13.   Non-Waiver


Neither the failure nor any delay on the part of any
Party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver of that right, remedy, power or privilege.  No waiver or any right, remedy, power or
privilege with respect to any particular occurrence shall be construed as a
waiver of such right, remedy, power or privilege with respect to any other
occurrence.


14.   Non-Disparagement


During the five (5) years following the Effective
Date, the parties agree that neither shall make any remarks disparaging the
conduct or character of the other, including the Company’s past, present and
future officers, directors, shareholders, employees, agents, representatives,
subsidiaries, parent companies and affiliates or their heirs, successors and
assigns.


15.   Governing Law, Certain
Interpretations & Entire Agreement


15.1.        Time is of the essence of this Agreement and
all of its terms, provisions, conditions and covenants.


15.2.        If any term of this Agreement or the
application of any term of this Agreement should be held invalid, void or
unenforceable, all provisions, covenants and conditions of this Agreement, and
all of its applications, not held invalid, void or unenforceable, shall
continue in full force and effect and shall not be affected, impaired or
invalidated in any way.



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15.3.        This Agreement may be executed in any number
of counterparts, each of which when duly executed and delivered shall be an
original, but all such counterparts shall constitute one and the same
agreement.  Any signature page of this
Agreement may be detached from any counterpart without impairing the legal
effect of any signatures, and may be attached to another  counterpart, identical in form, but having
attached to it one or more additional signature pages.  This Agreement may be executed by signatures
provided by electronic facsimile transmission (also known as “Fax” copies),
which facsimile signatures shall be as binding and effective as original
signatures.


15.4.        This Agreement shall be binding upon and
shall inure to the benefit of the Parties hereto and each Party’s respective
successors and assigns.


15.5.        Except as otherwise required by law, Lockinger
shall not disclose the terms of this Agreement or the negotiations relating
thereto to any third Person.


15.6.        This Agreement can be modified only in
writing signed by each of the Parties.


15.7.        This Agreement shall be construed without
regard to any rule or presumption requiring construction against the Party that
drafted the documents or caused them to be drafted.


15.8.        Each Party represents, warrants and covenants
that each respective Party has read and understood this Agreement, that each
respective Party understands this Agreement’s content and meaning, that each
respective Party has executed this Agreement of each respective Party’s own
free will in accordance with each respective Party’s own judgment, and after
having the opportunity to obtain the advice of counsel.  Each Party further represents, warrants and
covenants that each respective Party has not been coerced, influenced, or
induced to execute this Agreement by any improper action.


15.9.        Any claims, actions, causes or other
juridical matter arising from or in any way related to the performance or
breach of this Agreement shall be brought in a court of competent jurisdiction
in the State of Nevada and that the law of the State of Nevada shall
apply.  Each Party also consents to
personal jurisdiction in any court in the State of Nevada for any such
litigation and shall not contest that venue is appropriate in any such court.


15.10.      This Agreement shall constitute the entire
agreement between the Parties with respect to the subject matter herein and supersede
all prior negotiations and agreements. 
Each Party acknowledges and agrees that, in executing this Agreement, it
is not relying on any representation or promise whatsoever that is not
contained in this Agreement and that any such representation or promise is
acknowledged to be immaterial.



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IN
WITNESS WHEREOF, each Party has executed this Agreement, or has caused this
Agreement to be executed by each respective Party’s duly authorized
representatives, as of the Effective Date.


 


	
  ATTEST: 

  	
   

  	
  American Wagering, Inc. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Robert Smith

  	
   

  	
  By: Victor Salerno 

  
	
   

  	
   

  	
  Its: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  ATTEST: 

  	
   

  	
  Timothy Lockinger

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Robert Smith

  	
   

  	
   

  



 



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Schedule 1 - Definitions


“Affiliate”
shall mean any subsidiary owned in whole or in part by the Company.


“Business
Day” shall mean each day Monday through Friday where federal banks are
generally open for business in Clark County, Nevada.


“Company Industry” shall mean the provision of Company Products and
Company Services.


“Company Intellectual Property” shall mean all Intellectual Property
owned, held, licensed, possessed or used by the Company.


“Company
Inventions” shall mean all Industry Inventions that Company or Lockinger solely
(or jointly with any third Person) Develop or any Invention that either:  (i) is Developed within the scope of employee
relationship; (ii) is of a subject matter related, to the nature and scope of Lockinger’s
duties as an employee of the Company (at any time during Lockinger’s
relationship with the Company); (iii) stems from or arises out of any
Confidential Information (whether or not Developed during or after Lockinger’s
relationship with the Company); (iv) was otherwise reasonably known to Lockinger
to be of a subject matter within the scope of the Company’s business,
operations, or strategic plans; (v) was Developed using, exploiting or
otherwise employing any equipment, supply, facility, or service owned,
licensed, leased or otherwise possessed by the Company (whether or not
Developed during or after Lockinger’s relationship with the Company), or (vi)
was otherwise Developed by another Person (including, without limitation, a
Company employee) at the behest of or under the control of (whether or not
directly or indirectly) the Company.


“Company Products” shall mean provision of wagering systems.


“Company
Property” shall mean all physical and intangible property owned, held,
licensed, possessed or used by the Company, including, without limitation,
offices, facilities, Confidential Information, Company Contracts and Company
Intellectual Property.


“Company
Rights” shall mean all right, title and interest owned, held, licensed,
possessed or used by Company in and to the Company Property.


“Company Services” shall mean services associated with Company
Products.


“Company
Trade Secrets” shall mean Trade Secrets owned, licensed, possessed or otherwise
held by Company.


“Confidential
Information” shall mean all the Content relating to, used in or arising out of
the Company’s business, finances or other operations and is held by, owned,
licensed, or otherwise possessed by the Company (whether held by, owned,
licensed, possessed or otherwise existing in, at or about the Company’s or Lockinger’s
offices, residence(s) or facilities and regardless of how such Content came into
being, as well as regardless of who created, generated or gathered the
Content), including, without limitation, all Content contained in, embodied in
(in any Media whatsoever) or relating to Company Inventions or the Company’s
ideas, creations, works of authorship, works of visual art, business documents,
Contracts, licenses, business and non-business relationships, correspondence,
operations, manuals, performance manuals, operating



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data,
projections, bulletins, supplier and customer lists and data, sales data, cost
data, profit data, strategic planning data, financial planning data, designs,
logos, motifs, proposed trademarks or service marks, test results, product or
service literature, product or service concepts, manufacturing or sales
techniques, process data, specification data, know how, show how, computer
software programs (including, without limitation, source code, object code and
any other program format), data bases, research and development information and
data; provided, however, that “Confidential
Information” shall not include information or data “generally publicly known”.  The phrase in the previous sentence “generally
publicly known” shall not be deemed to include the Content set forth in patents
despite the fact that patents have been published by the federal government,
unless such embodiment has otherwise been the subject of a public publication
(other than publication as a patent) or if that embodiment is otherwise
utilized in the United States of America in the Company Industry, to such an
extent that such utilization is generally publicly known.  All references to “Confidential Information”
in this Agreement shall be deemed to also refer to “Company Trade Secrets” as
well, but references to “Company Trade Secrets” shall not be deemed to
automatically refer to “Confidential Information.”


“Content”
shall mean all material, information, documents, matter, text, software
(whether in source code, object code, executable code, or other program or code
format whatsoever, whether now known or hereinafter developed), data, graphics,
computer-generated displays and interfaces, images, photographs and works of
whatsoever nature, including, without limitation, all compilations of the
foregoing and all results of the expression of the foregoing.


“Contract”
shall mean all agreements, contracts, understandings, undertakings,
obligations, and other documents or matters where there is or was an agreement
to be bound.


“Develop” shall mean develop, conceive, reduce to practice, create, or
otherwise arise out of a Person’s efforts in any manner whatsoever and through
any means whether now known or hereafter developed.


“Disclose” shall mean disclose, disseminate, transmit, publish,
distribute, make available or otherwise convey.


“Document” shall mean any form of tangible Media containing Content
capable of being reduced to electronic form and reconstituted in tangible form.


“Encumber” shall mean to impose a security interest, pledge,
hypothecation, lien, mortgage, or any other encumbrance of whatsoever nature.


“Exploit”
shall mean to use, make, sell, or otherwise exploit in any manner whatsoever
(through any means now known or hereafter Developed).


“Industry
Inventions” shall mean all that is reasonably the subject or capable of being
the subject of direct Exploitation by Persons within the Company Industry.


“Intellectual
Property” shall mean all foreign, federal, state and common law trademarks,
service marks, domain names, Internet path names and addresses of whatsoever
nature, trade dress, copyrights, know-how, show-how, patents, Inventions
(whether or not patentable), mask works, software, proprietary data, customer
lists, strategic plans, financial data, Trade Secrets, all other



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intangible
assets of whatsoever nature and all applications for registration and/or
issuance with respect to all the foregoing and whether or not any of the
foregoing is registerable or patentable, including, without limitation, with
respect to all of the foregoing:  (i) all
goodwill associated with any and all of the foregoing; (ii) all parents,
continuations, continuations in part, divisionals, reissues and extensions; and
(iii) all moral rights associated with any and all of the foregoing.


“Inventions” shall mean all developments, discoveries, creations,
improvements, copyrightable material, original Content, works of authorship,
works of visual art, and other inventions, whether or not patentable,
copyrightable, original, novel, obvious, or otherwise susceptible to protection
as any form of Intellectual Property.


“Losses” shall mean any and all costs, expenses, fees (including,
without limitation, attorneys’, accountants’, investigators’, witnesses’ and
professionals’ fees), charges, expenditures, liabilities, damages and other
losses of whatsoever nature.


“Media” shall mean print, document-based medium, television, facsimile,
telex, telephony, radio, satellite, cable, wire, computer-based network,
network, magnetic means, optical means, electronic means, Internet, intranet,
and any other method (now known or hereinafter Developed) for the publication,
retention, conveyance, possession or holding of Content, including without
limitation, computer software, compact and laser disc, digital video displays,
video cassettes, and multi-media.


“Officer” shall mean the president, secretary, treasurer or any
vice-president of the Company.


“Person” shall mean any natural person, corporation, limited liability
company, limited partnership, partnership trust, association, organization or
other entity of whatsoever nature.


“Schedule”
shall mean a document attached hereto denoted as a schedule which by reference
made herein shall be deemed incorporated herein by such reference.


“Section” shall mean an enumerated provision of this Agreement attached
hereto and incorporated herein by each reference in this Agreement.


“Start Date” shall have the meaning attributed to such term in Section 2.1.


“Trade Secrets” shall mean all methodologies (subject to same being the
subject of an issued patent), pricing strategies, marketing approaches and
other Confidential Information that the Company reasonably informed (whether
orally or in writing) Lockinger from time to time is a trade secret, as well as
other Confidential Information reasonably the subject of trade secret
protection under relevant and applicable state statutes (including, without
limitation, the Uniform Trade Secrets Act as enacted in Nevada).


“Use” shall mean to copy, duplicate, reproduce in any manner and
through any Media, Exploit, embody in any Content whatsoever or in any tangible
Media whatsoever, make a derivation of, or use in any other manner whatsoever.



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