Exhibit 10.16





Exhibit 10.16




YOUBET.COM, INC.




DIRECTOR INDEMNIFICATION AGREEMENT





 


 









 







TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	1. Indemnity of Indemnitee
	 	 	2	 
	 
	 	 	 	 
	2. Contribution
	 	 	2	 
	 
	 	 	 	 
	3. Advancement of Expenses
	 	 	4	 
	 
	 	 	 	 
	4. Procedures and Presumptions for Determination of Entitlement to Indemnification
	 	 	4	 
	 
	 	 	 	 
	5. Remedies of Indemnitee
	 	 	7	 
	 
	 	 	 	 
	6. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation
	 	 	8	 
	 
	 	 	 	 
	7. Exception to Right of Indemnification
	 	 	9	 
	 
	 	 	 	 
	8. Duration of Agreement
	 	 	9	 
	 
	 	 	 	 
	9. Security
	 	 	9	 
	 
	 	 	 	 
	10. Enforcement
	 	 	10	 
	 
	 	 	 	 
	11. Definitions
	 	 	10	 
	 
	 	 	 	 
	12. Severability
	 	 	11	 
	 
	 	 	 	 
	13. Modification and Waiver
	 	 	11	 
	 
	 	 	 	 
	14. Notice By Indemnitee
	 	 	11	 
	 
	 	 	 	 
	15. Notices
	 	 	12	 
	 
	 	 	 	 
	16. Counterparts
	 	 	12	 
	 
	 	 	 	 
	17. Headings
	 	 	12	 
	 
	 	 	 	 
	18. Governing Law and Consent to Jurisdiction
	 	 	12	 
	 
	 	 	 	 







 


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INDEMNIFICATION AGREEMENT




THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into as of [DATE]
between Youbet.com, Inc., a Delaware corporation (the “Company”), and [NAME] (“Indemnitee”).



WHEREAS, highly competent persons have become more reluctant to serve corporations as
directors or in other capacities unless they are provided with adequate protection through
insurance or adequate indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the corporation;



WHEREAS, the Amended and Restated Bylaws of the Company (the “Bylaws”) require indemnification
of the directors and officers of the Company, and Indemnitee may also be entitled to
indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”);



WHEREAS, the Bylaws and the DGCL expressly provide that the indemnification provisions set
forth therein are not exclusive, and thereby contemplate that contracts may be entered into between
the Company and members of the Company’s board of directors (the “Board”), officers and other
persons with respect to indemnification;



WHEREAS, the Board has determined that, in order to attract and retain qualified individuals,
the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance
to protect persons serving the Company and its subsidiaries from certain liabilities;



WHEREAS, the uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons;



WHEREAS, the Board has determined that the increased difficulty in attracting and retaining
such persons is detrimental to the best interests of the Company’s stockholders and that the
Company should act to assure such persons that there will be increased certainty of such protection
in the future;



WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the extent permitted by
applicable law so that they will serve or continue to serve the Company free from undue concern
that they will not be so indemnified; and



WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws and Certificate of
Incorporation of the Company and any resolutions adopted pursuant thereto, and shall not be deemed
a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;


 


 









 





NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a director from and
after the date hereof, the parties hereto agree as follows:



1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify
Indemnitee to the fullest extent permitted by law, as such may be amended from
time to time. In furtherance of the foregoing indemnification, and without limiting the
generality thereof:



(a) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification provided in this Section l(a) if, by
reason of his Corporate Status (as defined in Section 11 of this Agreement), the Indemnitee is, or
is threatened to be made, a party to or participant in any Proceeding (as defined in Section
11 of this Agreement) other than a Proceeding by or in the right of the Company. Pursuant to
this Section 1(a), Indemnitee shall be indemnified against all Expenses (as defined in
Section 11 of this Agreement), judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or
any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the
Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and
with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s
conduct was unlawful.



(b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to
the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate
Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding
brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall
be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the
Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and
in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the
Company; provided, however, if applicable law so provides, no indemnification against such Expenses
shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee
shall have been adjudged to be liable to the Company unless and to the extent that the Court of
Chancery of the State of Delaware shall determine that such indemnification may be made.



(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason
of his Corporate Status, a party to and is successful, on the merits or otherwise, in any
Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended
from time to time, against all Expenses actually and reasonably incurred by him or on his behalf in
connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful,
on the merits or otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or on his behalf in connection with each successfully resolved claim, issue or
matter. For purposes of this Section 1(c) and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.




2. Contribution.



(a) Whether or not the indemnification provided in Section 1 hereof is available, in
respect of any threatened, pending or completed action, suit or proceeding in which the Company is
jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the
Company shall pay, in the first instance, the entire amount of any judgment or settlement of such
action, suit or proceeding without requiring Indemnitee to contribute to such
payment and the Company hereby waives and relinquishes any right of contribution it may have
against Indemnitee. The Company shall not enter into any settlement of any action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding) unless such settlement provides for a full and final release of all
claims asserted against Indemnitee.


 


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(b) Without diminishing or impairing the obligations of the Company set forth in the preceding
subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion
of any judgment or settlement in any threatened, pending or completed Proceeding in which the
Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company
shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative
benefits received by the Company and all directors, officers, employees and agents of the Company,
other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such
Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which
such Proceeding arose; provided, however, that the proportion determined on the basis of relative
benefit may, to the extent necessary to conform to law, be further adjusted by reference to the
relative fault of the Company and all directors, officers, employees and agents of the Company
other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such
Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that
resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable
considerations which the applicable law may require to be considered. The relative fault of the
Company and all directors, officers, employees and agents of the Company, other than Indemnitee,
who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand,
and Indemnitee, on the other hand, shall be determined by reference to, among other things, the
degree to which their actions were motivated by intent to gain personal profit or advantage, the
degree to which their liability is primary or secondary and the degree to which their conduct is
active or passive.



(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims
of contribution which may be brought by directors, officers, employees or agents of the Company,
other than Indemnitee, who may be jointly liable with Indemnitee.



(d) To the fullest extent permissible under applicable law, if the indemnification provided
for in this Agreement is determined by a court of competent jurisdiction to be unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall
contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise
taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim
relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and
reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the
relative benefits received by the Company and Indemnitee as a result of the event(s) and/or
transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and
its directors, officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s); provided, however, that such contribution shall not be required where such
determination by a court of competent jurisdiction is due to (i) the failure of Indemnitee to meet
the standard of conduct set forth in Section 1(a) of this Agreement, or (ii) any limitation on
indemnification set forth in Section 6 or Section 7 of this Agreement.


 


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3. Advancement of Expenses. Notwithstanding any other provision of this Agreement,
the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt
by the Company of a statement or statements from Indemnitee requesting such advance or advances
from time to time, whether prior to or after final disposition of such Proceeding. Such statement
or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be
indemnified against such Expenses. Any advances and undertakings to repay pursuant to this
Section 3 shall be unsecured and interest free.



4. Procedures and Presumptions for Determination of Entitlement to Indemnification.
It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as
favorable as may be permitted under the DGCL and public policy of the State of Delaware.
Accordingly, the parties agree that the following procedures and presumptions shall apply in the
event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:



(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a
written request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board in writing that Indemnitee has
requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide
such a request to the Company, or to provide such a request in a timely fashion, shall not relieve
the Company of any liability that it may have to Indemnitee unless, and to the extent that, such
failure actually and materially prejudices the interests of the Company.



(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 4(a) hereof, a determination with respect to Indemnitee’s entitlement thereto shall
be made in the specific case by one of the following four methods, which shall be at the election
of the Board: (1) by a majority vote of the Disinterested Directors, even though less than a
quorum, (2) by a committee of Disinterested Directors designated by a majority vote of the
Disinterested Directors, even though less than a quorum, (3) if there are no Disinterested
Directors or if the Disinterested Directors so direct, by Independent Counsel in a written opinion
to the Board, a copy of which shall be delivered to the Indemnitee, or (4) if so directed by the
Board, by the stockholders of the Company.



(c) If the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 4(b) hereof, the Independent Counsel shall be selected as
provided in this Section 4(c). The Independent Counsel shall be selected by the Board.
Indemnitee may, within 10 days after such written notice of selection shall have been given,
deliver to the Company a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so selected does not meet
the requirements of “Independent Counsel” as defined in Section 11 of this Agreement, and
the objection shall set forth with particularity the factual basis of such assertion. Absent a
proper and timely objection, the person so selected shall act as Independent Counsel. If a written
objection is made and substantiated, the


 


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Independent
Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit. If, within 20 days after submission by Indemnitee of a
written request for indemnification pursuant to Section 4(a) hereof, the Board does not
select a method other than a determination by Independent Counsel and no Independent Counsel shall
have been selected and not objected to, either the Company or Indemnitee may petition the Court of
Chancery of the State of Delaware for resolution of any objection which shall have been made by the
Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the court or by such other person as the court shall
designate, and the person with respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under Section 4(b) hereof. The Company shall
pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent
Counsel in connection with acting pursuant to Section 4(b) hereof, and the Company shall
pay all reasonable fees and expenses incident to the procedures of this Section 4(c),
regardless of the manner in which such Independent Counsel was selected or appointed.



(d) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure
of the Company (including by its directors or Independent Counsel) to have made a determination
prior to the commencement of any action pursuant to this Agreement that indemnification is proper
in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Company (including by the Disinterested Directors or Independent Counsel) that
Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that Indemnitee has not met the applicable standard of conduct.



(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on
the records or books of account of the Enterprise (as defined in Section 11 of this
Agreement), including financial statements, or on information supplied to Indemnitee by the
officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the
Enterprise or on information or records given or reports made to the Enterprise by an independent
certified public accountant or by an appraiser or other expert selected with reasonable care by the
Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director,
officer, employee or agent of the Enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement. Whether or not the foregoing
provisions of this Section 4(e) are satisfied, it shall in any event be presumed that
Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Company. Anyone seeking to overcome this presumption
shall have the burden of proof and the burden of persuasion by clear and convincing evidence.



(f) If the person, persons or entity empowered or selected under Section 4 to
determine whether Indemnitee is entitled to indemnification shall not have made a determination
within sixty (60) days after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a prohibition of such
indemnification under applicable law; provided, however, that such
60-day period may be extended


 


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for a reasonable time, not to exceed an additional thirty (30) days, if the person,
persons or entity making such determination with respect to entitlement to indemnification in good
faith requires such additional time to obtain or evaluate documentation and/or information relating
thereto; and provided, further, that the foregoing provisions of this Section 4(f) shall
not apply if the determination of entitlement to indemnification is to be made by the stockholders
pursuant to Section 4(b) of this Agreement and if (A) within fifteen (15) days after
receipt by the Company of the request for such determination, the Board or the Disinterested
Directors, if appropriate, resolve to submit such determination to the stockholders for their
consideration at an annual meeting thereof to be held within seventy-five (75) days after such
receipt and such determination is made thereat, or (B) a special meeting of stockholders is called
within fifteen (15) days after such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after having been so called and such
determination is made thereat.



(g) Indemnitee shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such person,
persons or entity upon reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee
and reasonably necessary to such determination. Any Independent Counsel, member of the Board or
stockholder of the Company shall act reasonably and in good faith in making a determination
regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or
expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination shall be borne by the Company
(irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.



(h) The Company acknowledges that a settlement or other disposition short of final judgment
may be successful if it permits a party to avoid expense, delay, distraction, disruption and
uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any
manner other than by adverse judgment against Indemnitee (including, without limitation, settlement
of such Proceeding with or without payment of money or other consideration) it shall be presumed
that Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking
to overcome this presumption shall have the burden of proof and the burden of persuasion by clear
and convincing evidence.



(i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and
in a manner which he reasonably believed to be in or not opposed to the best interests of the
Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that his conduct was unlawful.


 


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5.
Remedies of Indemnitee.



(a) In the event that (i) a determination is made pursuant to Section 4 of this
Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement
of Expenses is not timely made pursuant to Section 3 of this Agreement, (iii) no
determination of entitlement to indemnification is made pursuant to Section 4(b) of
this Agreement within 90 days after receipt by the Company of the request for indemnification, (iv)
payment of indemnification is not made pursuant to this Agreement within ten (10) days after
receipt by the Company of a written request therefor or (v) payment of indemnification is not made
within ten (10) days after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to Section 4 of
this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the
State of Delaware of Indemnitee’s entitlement to such indemnification. Indemnitee shall commence
such proceeding seeking an adjudication within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 5(a). The Company
shall not oppose Indemnitee’s right to seek any such adjudication.



(b) In the event that a determination shall have been made pursuant to Section 4(b) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding
commenced pursuant to this Section 5 shall be conducted in all respects as a de novo trial
on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under
Section 4(b).



(c) If a determination shall have been made pursuant to Section 4(b) of this Agreement
that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in
any judicial proceeding commenced pursuant to this Section 5 absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
misstatement not materially misleading in connection with the application for indemnification, or
(ii) a prohibition of such indemnification under applicable law.



(d) In the event that Indemnitee, pursuant to this Section 5, seeks a judicial
adjudication of his rights under, or to recover damages for breach of, this Agreement, or to
recover under any directors’ and officers’ liability insurance policies maintained by the Company,
the Company shall pay on his behalf, in advance, any and all Expenses actually and reasonably
incurred by him in such judicial adjudication provided that the Company receives a written
undertaking by or on behalf of Indemnitee to repay any Expenses so advanced if it shall ultimately
be determined that Indemnitee is not entitled to such indemnification, advancement of Expenses or
insurance recovery, as the case may be.



(e) The Company shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 5 that the procedures and presumptions of this Agreement are not
valid, binding and enforceable and shall stipulate in any such court that the Company is bound by
all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all
Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company
of a written request therefor) advance, to the extent not prohibited by law, such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee
for indemnification or advance of Expenses from the Company under this Agreement or under any
directors’ and officers’ liability insurance policies maintained by the Company provided that the
Company receives a written undertaking by or on behalf of Indemnitee to repay any Expenses so
advanced if it shall ultimately be determined that Indemnitee is not entitled to such
indemnification, advancement of Expenses or insurance recovery, as the case may be.



(f) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding.


 


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6. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification;
Subrogation.



(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under applicable law, the
Company’s Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders, a
resolution of directors of the Company or otherwise. No amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status
prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by
statute or judicial decision, permits greater indemnification than would be afforded currently
under the Company’s Certificate of Incorporation, the Bylaws and this Agreement, it is the intent
of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change. No right or remedy herein conferred is intended to be exclusive of any
other right or remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other right or remedy.



(b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, managers, employees, agents or fiduciaries of the
Company or of any other corporation, partnership, limited liability company, joint venture, trust,
employee benefit plan or other enterprise that such person serves at the request of the Company,
Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the
maximum extent of the coverage available for any director, officer, manager, employee, agent or
fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim
pursuant to the terms hereof, the Company has director and officer liability insurance in effect,
the Company shall give prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee,
all amounts payable as a result of such proceeding in accordance with the terms of such policies.



(c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.



(d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or otherwise.



(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is
or was serving at the request of the Company as a director, officer, manager, employee or agent of
any other corporation, partnership, limited liability company, joint venture, trust, employee
benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of expenses from such other corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other enterprise.


 


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7. Exception to Right of Indemnification. Notwithstanding any provision in this
Agreement, the Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:



(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision; or



(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common
law; or



(c) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee,
including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the
Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized
the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides
the indemnification, in its sole discretion, pursuant to the powers vested in the Company under
applicable law.



8. Duration of Agreement. All agreements and obligations of the Company contained
herein shall continue during the period Indemnitee is a director or officer of the Company (or is
or was serving at the request of the Company as a director, officer, manager, employee or agent of
another corporation, partnership, joint venture, limited liability company, trust or other
enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding
(or any proceeding commenced under Section 5 hereof) by reason of his Corporate Status,
whether or not he is acting or serving in any such capacity at the time any liability or expense is
incurred for which indemnification can be provided under this Agreement. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties hereto and their
respective successors (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company),
assigns, spouses, heirs, executors and personal and legal representatives.



9. Security. To the extent requested by Indemnitee and approved by the Board, the
Company may at any time and from time to time provide security to Indemnitee for the Company’s
obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral.
Any such security, once provided to Indemnitee, may not be revoked or released without the prior
written consent of the Indemnitee.


 


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10. Enforcement.



(a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as a director
or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as a director or officer of the Company.



(b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof.




11. Definitions. For purposes of this Agreement:



(a) “Corporate Status” describes the status of a person who is or was a director, officer,
manager, employee, agent or fiduciary of the Company or of any other corporation, partnership,
limited liability company, joint venture, trust, employee benefit plan or other Enterprise that
such person is or was serving at the express written request of the Company.



(b) “Disinterested Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification is sought by Indemnitee.



(c) “Enterprise” shall mean the Company and any other corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other enterprise that Indemnitee
is or was serving at the express written request of the Company as a director, officer, manager,
employee, agent or fiduciary.



(d) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, participating, or being or preparing to be a witness in a
Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding.
Expenses also shall include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and other costs relating to any
cost bond, supersedeas bond, or other appeal bond or its equivalent. Expenses, however, shall not
include amounts paid in settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.



(e) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years has been, retained
to represent: (i) the Company or Indemnitee in any matter material to either such party (other
than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees
under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to
a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel
shall not include any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine Indemnitee’s rights
under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel
referred to above and to fully indemnify such counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its engagement pursuant
hereto.


 


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(f) “Proceeding” includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other
actual, threatened or completed proceeding, whether brought by or in the right of the Company or
otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is
or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a
director or officer of the Company, by reason of any action taken by him or of any inaction on his
part while acting as a director or officer of the Company, or by reason of the fact that he is or
was serving at the request of the Company as a director, officer, manager, employee, agent or
fiduciary of another corporation, partnership, limited liability company, joint venture, trust,
employee benefit plan or other Enterprise; in each case whether or not he is acting or serving in
any such capacity at the time any liability or expense is incurred for which indemnification can be
provided under this Agreement, including one pending on or before the date of this Agreement, but
excluding one initiated by an Indemnitee pursuant to Section 5 of this Agreement to enforce
his rights under this Agreement.



12. Severability. The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision. Without limiting the
generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification
rights to the fullest extent permitted by applicable laws. In the event any provision hereof
conflicts with any applicable law, such provision shall be deemed modified, consistent with the
aforementioned intent, to the extent necessary to resolve such conflict.



13. Modification and Waiver. No supplement, modification, termination or amendment of
this Agreement shall be binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.



14. Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing
upon being served with or otherwise receiving any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter which may be subject
to indemnification covered hereunder. The failure to so notify the Company shall not relieve the
Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless
and only to the extent that such failure or delay materially prejudices the Company.


 


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15. Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent:




(a) To Indemnitee at the address set forth below Indemnitee signature hereto.




(b) To the Company at:




Youbet.com, Inc.

5901 Desoto Avenue

Woodland Hills, CA 91367

Attention: General Counsel



or to such other address as may have been furnished to Indemnitee by the Company or to the Company
by Indemnitee, as the case may be.



16. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or
more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.



17. Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.



18. Governing Law and Consent to Jurisdiction. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of Delaware, without regard to
its conflict of laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i)
agree that any action or proceeding arising out of or in connection with this Agreement shall be
brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any
other state or federal court in the United States of America or any court in any other country,
(ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any
action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection
to the laying of venue of any such action or proceeding in the Delaware Court, and (iv) waive, and
agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware
Court has been brought in an improper or inconvenient forum.



SIGNATURE PAGE TO FOLLOW



 


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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and
year first above written.



	 	 	 	 	 	 	 	 	 
	 	 	YOUBET.COM, INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	INDEMNITEE
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 

	 	  
	 
	 	 	 	 	 	 	 	 
	 	 	Address: