Document:

Filed by Bowne Pure Compliance

Exhibit 10.6

Intellectual Property Security Agreement

This Intellectual Property Security Agreement (this “Agreement”) is made and entered into as
of December 3, 2008, by and among National City Bank, a national banking association (“Lender”),
Youbet.com, Inc., a Delaware corporation (“Youbet”), United Tote Company, a Montana corporation
(“United Tote”), and Youbet Services Corporation, a Delaware corporation (“Youbet Services”)
(Youbet, United Tote and Youbet Services are each individually a “Borrower” and collectively the
“Borrowers”).

W I T N E S S E T H:

WHEREAS, contemporaneously herewith, Lender is providing certain extensions of credit, loans
and other financial accommodations (the “Financial Accommodations”) to Borrowers pursuant to that
certain Loan and Security Agreement of even date herewith by and among Lender and Borrowers (as
amended or restated from time to time, the “Loan Agreement”) and the “Other Agreements” (as defined
in the Loan Agreement) (the Loan Agreement, together with the Other Agreements are collectively the
“Loan Documents”);

WHEREAS, pursuant to the Loan Documents, Borrowers granted to Lender a first position priority
security interest and lien in and to all of Borrowers’ assets, including, without limitation, all
Intellectual Property and all other intellectual or proprietary rights or interests of any kind,
nature or description whatsoever; and

WHEREAS, Lender is willing to provide the Financial Accommodations to Borrowers, provided,
among other things, Borrowers execute and deliver this Agreement to Lender.

NOW, THEREFORE, in consideration of the Financial Accommodations, the mutual promises and
understandings of Borrowers and Lender set forth herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Borrowers covenant unto and agree
with Lender as follows:

1. Incorporation of Loan Agreement; Conflicts. The Loan Documents and the terms and
provisions thereof are hereby incorporated herein in their entirety by this reference thereto. All
terms in this Agreement, including the Schedules, which have an initial capital letter where not
required by the rules of grammar, and which are not otherwise defined herein, are used herein as
defined in the Loan Agreement. In the event of any ambiguity or conflict between the terms and
conditions of this Agreement and the terms and conditions of the Loan Documents, the terms and
conditions of the Loan Agreement shall control.

2. Grant of Security Interest. To secure the full and timely payment and performance
of the Liabilities, each Borrower hereby grants and conveys to Lender a first position priority
security interest and lien in and to all of such Borrower’s right, title and interest in and to all
of its now owned or existing and hereafter acquired or arising Intellectual Property including,
without limitation, the following (collectively the “Intellectual Property Collateral”):

A. (i) domain names, trademarks, service marks, trademark and service mark registrations and
applications therefor, including, without limitation, the trademarks, trademark registrations and
applications listed on Schedule “A”, (ii) renewals thereof, (iii) all income, royalties, damages
and payments now or hereafter due or payable under or with respect thereto, including, without
limitation, damages and payments for past or future infringements thereof, (iv) the right to sue
for past, present and future infringements thereof, (v) all goodwill thereof, and (vi) all rights
corresponding thereto throughout the world (collectively the “Trademarks”);

 

 

 

B. (i) inventions (whether patented, patentable or unpatentable and whether or not reduced to
practice), discoveries, improvements, patents, and applications therefor, including, without
limitation, the inventions and improvements claimed in connection therewith, and the patents, and
the applications listed on Schedule “B”, (ii) renewals, reissues, divisions, continuations,
allowances, adjustments, extensions, revisions, reexaminations and continuations-in-part thereof,
(iii) all income, royalties, damages and payments now or hereafter due or payable under or with
respect thereto, including, without limitation, damages and payments for past or future
infringements thereof, (iv) the right to sue for past, present and future infringements thereof;
and (v) all rights corresponding thereto throughout the world (collectively the “Patents”);

C. (i) works of authorship (whether published or unpublished), software, copyrights and
applications for registration, including, without limitation, the copyright registrations and
applications for registration listed on Schedule “C”, (ii) renewals and extensions thereof, (iii)
all income, royalties, damages and payments now or hereafter due or payable under or with respect
thereto, including, without limitation, damages and payments for past or future infringements
thereof, (iv) the right to sue for past, present and future infringements thereof, and (v) all
rights corresponding thereto throughout the world (collectively the “Copyrights”); and

D. (i) license agreements to or for all or any portion of Intellectual Property Collateral,
whether such Borrower is a licensor or licensee under any such license agreement, (ii) renewals and
restatements thereof, (iii) the right to prepare for sale, sell and advertise for sale all
“Inventory” as defined in the Loan Agreement now or hereafter owned by such Borrower and now or
hereafter covered by such licenses, (iv) all income, royalties, damages and payments now or
hereafter due or payable under or with respect thereto, including, without limitation, damages and
payments for past or future breach or violations thereof, and (v) all rights corresponding thereto
throughout the world (collectively the “Licenses”). Set forth on Schedule “D” is a listing of all
Licenses, except for the following Licenses used in the ordinary course of such Borrower’s
business: (the “Non-Scheduled Licenses”) (a) commercially available off-the-shelf software license
agreements, (b) tote contracts for systems, equipment, software and services (including Enterprise
Wagering Solution® systems), and (c) agreements for the licensing of simulcasting or wagering
rights or data and handicapping products.

E. provided that the Intellectual Property Collateral shall not include Excluded Assets.

This Agreement is made for collateral purposes only. Borrowers acknowledge and agree that upon the
occurrence and continuance of an Event of Default, and upon written notice to Borrowers, the
Intellectual Property Collateral shall be promptly conveyed to Lender without any further action by
any party, and Lender shall have the power to use and/or sell the Intellectual Property Collateral
(subject to the terms of any Licenses). Borrowers covenant and agree to execute and deliver to
Lender all agreements, instruments, documents and other written matter that Lender may reasonably
request, in form and substance reasonably acceptable to Lender, to perfect and maintain perfected
Lender’s security interest and lien in and to the Intellectual Property Collateral (to the extent
one can perfect by such agreements, instruments, documents or other written materials) and to
consummate the transactions contemplated by this Paragraph 2.

 

2

 

3. Restrictions on Future Agreements.

A. Except as permitted by the Loan Documents, Borrowers agree that until the Liabilities shall
have been paid and satisfied in full (except for those Liabilities which survive termination of the
Loan Agreement) and the Loan Documents have been terminated, Borrowers will not, without Lender’s
prior written consent, not to be unreasonably withheld, enter into any document, instrument or
agreement which is inconsistent with Borrowers’ obligations under this Agreement, except as
permitted by the Loan Documents. Except as permitted by the Loan Documents and subject to each
Borrowers’ reasonable business judgment, Borrowers further agree that they will not take any
action, or permit any action to be taken by others subject to their control, including licensees,
or fail to take any action, which would affect the validity or enforcement of the security interest
granted to Lender under this Agreement.

B. Except with regard to the Non-Scheduled Licenses, each Borrower hereby represents and
warrants to the Lender that such Borrower has not granted any license to any Person in connection
with the Intellectual Property Collateral. Each Borrower hereby covenants unto Lender that until
the Liabilities shall have been paid and satisfied in full (except for those Liabilities which
survive termination of the Loan Agreement) and the Loan Documents have been terminated, except as
expressly permitted in the Loan Documents, such Borrower shall not grant any license to any third
party in connection with the Intellectual Property Collateral without Lender’s prior written
consent, not to be unreasonably withheld.

4. Trademarks, Patents, Copyrights and Licenses. Each Borrower represents and
warrants that the Trademarks, Patents, Copyrights and Licenses listed on Schedules “A”, “B”, “C”
and “D”, respectively, constitute all of the registered Trademarks, Patents and Copyrights owned
or used by such Borrower and the Licenses (excluding, however, the Non-Scheduled Licenses) each
such Borrower is a party, grantor or beneficiary. If, prior to payment of the Liabilities in full
(except for those Liabilities which survive termination of the Loan Agreement), such Borrower shall
(i) file for or register any Trademarks, Patents or Copyrights or become a party, grantor or
beneficiary to any Licenses (excluding, however, any Non-Scheduled License), or (ii) become
entitled to the benefit of any application for or registration of any Trademark, Patent, Copyright
or License (excluding, however, any Non-Scheduled License) renewal, the provisions of Paragraph 2
above shall automatically apply thereto and such Borrower shall provide Lender with prompt notice
thereof. Borrowers hereby authorize Lender to modify this Agreement by amending Schedules “A”,
“B”, “C” and “D” to include any future Trademarks, Patents, Copyrights and/or Licenses.

5. Royalties; Term. Each Borrower hereby agrees that the use by Lender of all
Intellectual Property Collateral after the occurrence and continuance of an Event of Default as
described above shall be without any liability for royalties or other related charges from Lender
to Borrowers. The term of the security interest granted herein shall extend until the payment to
Lender of the Liabilities in full (except for those Liabilities which survive termination of the
Loan Agreement) and the termination of the Loan Documents.

6. Lender’s Right to Inspect. Subject to the Loan Documents, Lender shall have the
right to inspect Borrowers’ premises and to examine Borrowers’ books, records and operations,
including, without limitation, Borrowers’ quality control processes. Upon the occurrence and
continuance of an Event of Default, Borrowers agree that Lender shall have the right to establish
such additional product or services quality controls as Lender, in its reasonable discretion, may
deem necessary to assure maintenance of the quality of products or services provided by Borrowers
under the Intellectual Property Collateral. Except as expressly permitted in the Loan Documents,
each Borrower agrees (i) not to sell or assign its interest in, or grant any licenses under, the
Intellectual Property Collateral; (ii) to maintain the
quality of any and all products produced or services provided in connection with the
Intellectual Property Collateral consistent with the quality of said products as of the date
hereof, in Borrowers’ reasonable business judgment; and (iii) not to adversely change or alter the
quality of said products or services in any way without Lender’s prior written consent, not to be
unreasonably withheld.

 

3

 

7. Nature and Termination of Lender’s Security Interest. This Agreement is made for
collateral purposes only. Except as otherwise provided in Paragraphs 3, 6 and 13 hereof, nothing
contained herein shall be deemed to limit in any way Borrowers’ right to use the Intellectual
Property Collateral or to grant to Lender any right to use the Intellectual Property Collateral
prior to the occurrence and continuance of an Event of Default. Upon payment in full in cash of
the Liabilities in accordance with the provisions of the Loan Agreement (except for those
Liabilities which survive termination of the Loan Agreement) and the termination of the Loan
Documents, the security interest granted hereby shall automatically terminate and all rights to the
Intellectual Property Collateral shall revert to Borrowers and Lender agrees to promptly take all
actions reasonably requested by the Borrowers to evidence such release. At such time, Lender shall
authorize the filing of appropriate releases to release such security interests in the Intellectual
Property Collateral.

8. Duties of Borrowers. Borrowers shall have the duty, in its reasonable business
judgment, (i) to prosecute diligently any Trademark, Patent and Copyright registration pending as
of the date hereof or at any time hereafter, until the Liabilities shall have been paid in full
(except for those Liabilities which survive termination of the Loan Agreement), (ii) to make
applications for registration for Trademarks, Patents and Copyrights, as appropriate, and (iii) to
preserve and maintain all Intellectual Property Collateral. Any expenses incurred in connection
with such applications shall be borne by Borrowers. Subject to each Borrower’s reasonable business
judgment, Borrowers shall not abandon any material Intellectual Property Collateral (other than
patents expiring at the end of their statutory terms), without the consent of Lender.

9. Lender’s Right to Sue. Upon the occurrence and continuance of an Event of
Default, Lender shall have the right, but shall in no way be obligated, to bring suit in its own
name or in the name of a Borrower to enforce the Intellectual Property Collateral. If Lender shall
commence any such suit, Borrowers shall, at the request of Lender, do any and all acts and execute
any and all instruments, documents and agreements reasonably required by Lender to enforce such
Intellectual Property Collateral, and Borrowers shall, within thirty (30) days of receipt of a
detailed written statement setting forth such costs and expenses, reimburse and indemnify Lender
for all out-of-pocket costs, other costs and expenses incurred by Lender in the exercise of its
rights and remedies under this Paragraph 9.

10. Waivers. Lender’s failure at any time or times hereafter to require strict
performance by Borrowers of any provision of this Agreement shall not waive, affect or diminish any
right of Lender thereafter to demand strict compliance and performance therewith. Any suspension
or waiver by Lender of an Event of Default shall not suspend, waive or affect any other Event of
Default, whether same is prior or subsequent thereto and whether of the same or a different type.
None of the undertakings, agreements, warranties, covenants and representations of Borrowers
contained in this Agreement and no Event of Default by Borrowers shall be deemed to have been
suspended or waived by Lender unless such suspension or waiver is in writing signed by an officer
of Lender and directed to Borrowers specifying such suspension or waiver.

11. Severability. The provisions of this Agreement are severable, and if any clause
or provision shall be held invalid and unenforceable in whole or in part in any jurisdiction, then
such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Agreement in any jurisdiction.

 

4

 

12. Modification. This Agreement cannot be altered, amended or modified in any way,
except as specifically provided in Paragraph 4 hereof or by a writing signed by the parties hereto.

13. Cumulative Remedies; Power of Attorney; Effect on Loan Agreement. All of Lender’s
rights and remedies with respect to the Intellectual Property Collateral, whether established
hereby, by the Loan Documents, by any other agreements or by law shall be cumulative and may be
exercised singularly or concurrently. Each Borrower hereby authorizes Lender to make, constitute
and appoint any officer or agent of Lender as Lender may select, in its sole discretion, as such
Borrower’s true and lawful attorney-in-fact, with power, upon the occurrence and continuance of an
Event of Default and commencement by Lender of any of its rights and remedies whatsoever, whether
pursuant to this Agreement, the Loan Documents, at law, in equity or otherwise, to (a) endorse such
Borrower’s name on all applications, documents, papers and instruments necessary or desirable for
Lender in connection with selling the Intellectual Property Collateral, (b) take any other actions
with respect to the Intellectual Property Collateral as Lender determines, (c) assign, pledge,
sell, convey or otherwise transfer title in or dispose of the Intellectual Property Collateral to
any Person as Lender may determine, and (d) grant or issue any non-exclusive license under the
Intellectual Property Collateral, to any Person; provided that, with respect to rights to use any
Trademark with products or services, Lender shall ensure that quality of such products and services
shall be equal to or better than the quality prior to the Event of Default. This power of attorney
shall be irrevocable until the Liabilities shall have been paid in full (except for those
Liabilities which survive termination of the Loan Agreement) and all financing arrangements between
Borrowers and Lender have been terminated. Each Borrower shall defend, indemnify and hold Lender
harmless from and against any and all claims of infringement or violation of any Person’s
intellectual property or proprietary rights arising from or relating to Lender’s use or license of
the Intellectual Property Collateral, if consistent with Borrowers’ prior use of such Intellectual
Property Collateral.

Borrowers acknowledge and agree that this Agreement is not intended to limit or restrict in
any way the rights and remedies of Lender under the Loan Documents, at law or in equity, but rather
is in addition to and intended to facilitate the exercise of such rights and remedies.

14. Binding Effect; Benefits. This Agreement shall be binding upon the parties hereto
and their successors and assigns, and shall inure to the benefit of Lender, its nominees,
successors and assigns.

15. Notice. Any and all notices, exercises, demands, requests, consents,
designations, waivers and other communications required or desired hereunder shall be delivered to
the parties hereto at their addresses set forth in the Loan Agreement and shall be effective as set
forth in the Loan Agreement.

16. Governing Law. This Agreement shall be deemed to have been executed and delivered
in Chicago, Illinois, and shall be governed by and construed in accordance with the internal laws
(as opposed to conflicts of law provisions) of the State of Illinois.

17. Joint and Several. All references to “Borrowers” and “Borrower” shall mean
Youbet, United Tote and Youbet Services, both individually and collectively, and jointly and
severally, and all representations, warranties, duties, covenants, agreements and obligations of
Borrowers shall be the individual and collective representations, warranties, duties, covenants,
agreements and obligations of each of Youbet, United Tote and Youbet Services.

[signature page follows]

 

5

 

IN WITNESS WHEREOF, the duly authorized officers, members or managers, as applicable, of the
parties hereto have executed this Agreement as of the date first set forth above.

	 	 	 	 	 	 	 	 	 	 	 
	Youbet.com, Inc.,

a Delaware corporation	 	 	 	United Tote Company, 

a Montana corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ James Burk
 

	 	 
	 	By:
	 	/s/ James Burk

	 	 
	 

	 	 Name: James Burk
	 	 	 	 
	 	Name: James Burk	 	 
	 

	 	Title: Chief Financial Officer
	 	 	 	 
	 	 Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Youbet Services Corporation,

a Delaware corporation	 	 	 	National City Bank,

a national banking association	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Michael D. Nelson
	 	 	 	By:
	 	/s/ Brian F. Hewett	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name: Michael D. Nelson
	 	 	 	 
	 	Name: Brian F. Hewett	 	 
	 

	 	Title: Treasurer
	 	 	 	 
	 	Title: Senior Vice President	 	 

[Signature Page to Intellectual Property Security Agreement]

 

6

 

SCHEDULE A

TO

INTELLECTUAL PROPERTY SECURITY AGREEMENT

Trademarks and Trademark Registrations

Registrations:

United Tote Company

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Registration	 
	Trademark	 	Serial No.	 	 	Filing Date	 	 	Issue Date	 	 	Number	 
	STAMPEDE	 	 	003773512	 	 	 	04/16/04	 	 	 	4/16/2004	 	 	 	003773512	 
	ADD-A-BET	 	 	78/331,458	 	 	 	11/21/2003	 	 	 	4/5/2005	 	 	 	2938996	 
	ADD-A-BET	 	 	003773462	 	 	 	04/16/2004	 	 	 	4/16/2004	 	 	 	003773462	 
	FASTBET	 	 	78/608,008	 	 	 	4/13/2005	 	 	 	1/9/2007	 	 	 	3197535	 
	ENTERPRISE WAGERING SOLUTION	 	 	78/631,812	 	 	 	5/17/2005	 	 	 	10/07/06	 	 	 	3,167,726	 
	UNITED TOTE and Logo Design	 	 	77/090,430	 	 	 	1/24/2007	 	 	 	5/6/2008	 	 	 	3,421,362	 
	UNITED TOTE SYSTEM 1000	 	 	73/698,312	 	 	 	11/30/1987	 	 	 	4/25/1989	 	 	 	1,536,143	 
	TOUCH TOTE	 	 	73/698,311	 	 	 	11/30/1987	 	 	 	4/11/1989	 	 	 	1,533,999	 

 

 

 

Youbet.com, Inc.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Application	 	 	Application	 	 	Registration	 	 	Registration	 
	Country	 	Title	 	Date	 	 	Number	 	 	Date	 	 	Number	 
	 
	AR
	 	YOUBET.COM	 	10-Feb-2000	 	 	2267516	 	 	28-Aug-2001	 	 	1841862	 
	AR
	 	YOUBET.COM	 	10-Feb-2000	 	 	2267517	 	 	28-Aug-2001	 	 	1841863	 
	AU
	 	YOUBET.COM	 	09-Sep-1999	 	 	806605	 	 	25-Nov-2002	 	 	806605	 
	AU
	 	YOUBET.COM & RACING HORSE DEVICE	 	09-Sep-1999	 	 	806606	 	 	29-Aug-2002	 	 	806606	 
	AU
	 	YOUBET.COM	 	09-Feb-2000	 	 	822991	 	 	30-Sep-2002	 	 	822991	 
	BR
	 	YOUBET.COM	 	11-Feb-2000	 	 	822449161	 	 	13-Dec-2005	 	 	822449161	 
	BR
	 	YOUBET.COM	 	11-Feb-2000	 	 	822449170	 	 	13-Dec-2005	 	 	822449170	 
	CN
	 	YOUBET.COM	 	12-Feb-2000	 	 	1686427	 	 	21-Dec-2001	 	 	1686427	 
	CN
	 	YOUBET.COM	 	12-Feb-2000	 	 	2020037	 	 	21-Dec-2003	 	 	2020037	 
	EM
	 	YOUBET.COM	 	09-Feb-2000	 	 	1499185	 	 	11-Apr-2001	 	 	1499185	 
	JP
	 	YOUBET.COM	 	14-Feb-2000	 	 	2000-011534	 	 	14-Feb-2000	 	 	4622618	 
	MX
	 	YOUBET.COM	 	09-Feb-2000	 	 	409810	 	 	28-Mar-2000	 	 	648020	 
	MX
	 	YOUBET.COM	 	09-Feb-2000	 	 	409811	 	 	28-Mar-2000	 	 	648021	 
	SG
	 	YOUBET.COM	 	10-Feb-2000	 	 	T00/01945H	 	 	13-Aug-1999	 	 	T00/01954H	 
	SG
	 	YOUBET.COM	 	13-Aug-1999	 	 	T00/01946F	 	 	13-Aug-1999	 	 	T00/01946F	 
	SG
	 	YOUBET.COM	 	10-Feb-2000	 	 	T00/01947D	 	 	13-Aug-1999	 	 	T00/01974D	 
	VE
	 	YOUBET.COM	 	10-Feb-2000	 	 	2000-002055	 	 	19-Nov-2001	 	 	P-234412	 
	VE
	 	YOUBET.COM	 	10-Feb-2000	 	 	2000-002048	 	 	27-Aug-2001	 	 	S-017140	 
	US
	 	YOUBET.COM	 	13-Aug-1999	 	 	75/774968	 	 	21-May-2002	 	 	2570630	 
	US
	 	YOUBET.COM	 	13-Aug-1999	 	 	75/774690	 	 	02-Jul-2002	 	 	2587113	 
	US
	 	YOUBET.COM & LOGO	 	13-Aug-1999	 	 	75/774974	 	 	21-May-2002	 	 	2570631	 
	US
	 	YOUBET.COM & LOGO	 	13-Aug-1999	 	 	75/774243	 	 	28-May-2002	 	 	2572594	 
	US
	 	YOUBET.COM HARNESS	 	11-Mar-2004	 	 	78/382828	 	 	22-Mar-2005	 	 	2935037	 
	US
	 	YOUBET.COM HARNESS & HARNESS DESIGN	 	11-Mar-2004	 	 	78/382826	 	 	22-Mar-2005	 	 	2935036	 
	US
	 	YOUBET ANYWHERE	 	11-Mar-2004	 	 	78/382800	 	 	08-Nov-2005	 	 	3014081	 
	US
	 	INSIDETRACK	 	27-Jan-2000	 	 	75/904334	 	 	10-Dec-2002	 	 	2660075	 
	US
	 	TRACKVIEW	 	03-Sep-1999	 	 	75/792343	 	 	12-Sep-2000	 	 	2385449	 
	US
	 	PLAYERS TRUST	 	06-Nov-2002	 	 	76/464743	 	 	21-Sep-2004	 	 	2887919	 
	US
	 	YOUBET EXPRESS	 	26-Jan-2001	 	 	76/199644	 	 	22-Oct-2002	 	 	2640695	 
	US
	 	 YOUBET.COM TOTALACCESS	 	20-Aug-2001	 	 	76/301518	 	 	09-Sep-2004	 	 	2882222	 
	US
	 	YOUBET MOBILE	 	26-Feb-2001	 	 	76/215225	 	 	15-Mar-2005	 	 	2933504	 
	US
	 	KING CONTEST	 	07-Aug-2006	 	 	78/946592	 	 	22-Jul-08	 	 	3474063	 
	US
	 	THE DESK JOCKEY	 	23-Oct-2000	 	 	76/150,820	 	 	6-Aug-2002	 	 	2603831	 
	US
	 	INSIDETRACK	 	27-Jan-2000	 	 	75/903,719	 	 	1-Oct-2002	 	 	2,628,807	 
	US
	 	MAKE THE BET. FEEL THE RUSH. ALL ONLINE.	 	3-Sep-1999	 	 	75/792,809	 	 	15-Oct-2002	 	 	2,635,987	 
	US
	 	YOUBET.COM	 	13-Aug-1999	 	 	75/774,832	 	 	14-Nov-2000	 	 	2,570,629	 
	US
	 	YOUBET.COM	 	13-Aug-1999	 	 	75/774,242	 	 	28-May-2002	 	 	2,572,593	 
	US
	 	YOU BET	 	15-Feb-1996	 	 	75/058,267	 	 	12-May-1998	 	 	2,157,307	 
	US
	 	YOU BET	 	15-Feb-1996	 	 	75/058,259	 	 	19-Nov-2002	 	 	2,652,085	 

 

 

 

Applications:

United Tote Company

	 	 	 	 	 
	Trademark	 	Serial No.	 	Filing Date
	ENTERBET
	 	77/090,452	 	1/24/2007
	UNITED TOTE and Logo Design
	 	2,760,567 (9)	 	7/24/2007
	 
	 	2,760,568 (41)	 	 
	 
	 	2,760,569 (42)	 	 
	UNITED TOTE and Logo Design
	 	829249184 (41)
829249192 (42)
829249206 (9)	 	7/24/2007
	UNITED TOTE and Logo Design
	 	4-2007-007829	 	7/23/2007
	UNITED TOTE and Logo Design
	 	7/23/2007	 	7/23/2007

Youbet.com, Inc.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Application	 	 	Application	 	 	 	 
	Title	 	Date	 	 	Number	 	 	Status	 
	 
	YOU IN?
	 	30-Sep-2008	 	 	77/582761	 	 	Pending
	YOUBET ADVANTAGE
	 	31-May-2006	 	 	78/897492	 	 	Published
	IRACENOW
	 	27-May-2005	 	 	4683347	 	 	Pending

 

 

 

SCHEDULE B

TO

INTELLECTUAL PROPERTY SECURITY AGREEMENT

Patents and Patent Registrations

United Tote Company

	 	 	 	 	 
	Title	 	Serial. No.	 	Filing Date
	METHODS OF PARI-MUTUEL WAGERING BASED UPON FIXED ODDS AND/OR SHARE PURCHASE

	 	10/690,474
	 	10/21/2003
	METHODS OF PARI-MUTUEL WAGERING BASED UPON FIXED ODDS AND/OR SHARE PURCHASE

	 	2004283700

(based on

10/690,474)
	 	10/20/2004
	METHODS OF PARI-MUTUEL WAGERING BASED UPON FIXED ODDS AND/OR SHARE PURCHASE

	 	2,549,012

(based on

10/690,474)
	 	10/20/2004
	METHODS AND SYSTEMS FOR CONDUCTING PARI-MUTUEL WAGERS

	 	10/704,533
	 	11/7/2003
	METHODS AND SYSTEMS FOR PRESENTING PARI-MUTUEL BETTING OPTIONS AND CONSTRUCTING WAGERS

	 	10/727,154
	 	12/2/2003
	SYSTEMS AND METHODS FOR ACCESSING, MANIPULATING AND USING FUNDS ASSOCIATED WITH PARI-MUTUEL WAGERING

	 	10/731,701
	 	12/8/2003
	METHODS AND SYSTEMS FOR COMMUNICATING PARIMUTUEL WAGER DETAILS AND RESULTS

	 	10/987,953
	 	11/12/2004
	METHOD AND SYSTEM FOR VIEWING IMAGES OF A PARI-MUTUEL GAMING ACTIVITY

	 	10/923,193
	 	8/19/2004
	METHOD AND APPARATUS FOR ENHANCING A WAGERING EXPERIENCE USING A WAGERING TERMINAL ADAPTABLE TO A SELF-SERVICE
MODE

	 	11/005,810
	 	12/7/2004
	METHOD AND APPARATUS FOR ENHANCING A WAGERING EXPERIENCE USING A WAGERING TERMINAL ADAPTABLE TO A SELF-SERVICE MODE

	 	2,593,181

(based on

10/005,810)
	 	12/02/2005
	METHOD AND APPARATUS FOR ENHANCING A WAGERING EXPERIENCE USING A WAGERING TERMINAL ADAPTABLE TO A SELF-SERVICE MODE

	 	1-2007-501186

(based on

10/005,810)
	 	12/02/2005
	METHODS AND SYSTEMS FOR CONDUCTING PARI-MUTUEL WAGERS

	 	10/982,546
	 	11/5/2004
	METHODS AND SYSTEMS FOR CONDUCTING PARI-MUTUEL WAGERS

	 	2004290395

(based on

10/982,546)
	 	11/05/2004
	METHODS AND SYSTEMS FOR CONDUCTING PARI-MUTUEL WAGERS

	 	2,547,500

(based on

10/982,546)
	 	11/05/2004
	METHODS AND SYSTEMS FOR PRESENTING PARI-MUTUEL BETTING OPTIONS AND CONSTRUCTING WAGERS

	 	11/001,578
	 	12/1/2004
	METHODS AND SYSTEMS FOR PRESENTING PARI-MUTUEL BETTING OPTIONS AND CONSTRUCTING WAGERS

	 	2004297887

(based on

11/001,578)
	 	12/01/2004
	METHODS AND SYSTEMS FOR PRESENTING PARI-MUTUEL BETTING OPTIONS AND CONSTRUCTING WAGERS

	 	2,547,447

(based on

11/001,578)
	 	12/01/2004
	METHODS AND SYSTEMS FOR PRESENTING PARI-MUTUEL BETTING OPTIONS AND CONSTRUCTING WAGERS

	 	04812555.3

(based on
11/001,578)
	 	12/01/2004
	SYSTEMS AND METHODS FOR ACCESSING, MANIPULATING AND USING FUNDS ASSOCIATED WITH PARI-MUTUEL WAGERING

	 	11/083,792
	 	3/17/2005
	METHODS AND SYSTEMS FOR CONDUCTING A CONTEST WAGERING ACTIVITY

	 	11/079,923
	 	3/14/2005
	SYSTEMS AND METHODS FOR ACCESSING, MANIPULATING AND USING FUNDS ASSOCIATED WITH LOTTERY-TYPE GAMES

	 	11/223,217
	 	9/9/2005
	SYSTEMS AND METHODS FOR ACCESSING, MANIPULATING AND USING FUNDS ASSOCIATED WITH LOTTERY-TYPE GAMES

	 	2006302916

(based on

11/223,217)
	 	09/07/2006
	SYSTEMS AND METHODS FOR ACCESSING, MANIPULATING AND USING FUNDS ASSOCIATED WITH LOTTERY-TYPE GAMES

	 	2,621,193

(based on

11/223,217)
	 	09/07/2006
	SYSTEMS AND METHODS FOR ACCESSING, MANIPULATING AND USING FUNDS ASSOCIATED WITH LOTTERY-TYPE GAMES

	 	2008-7008526

(based on

11/223,217)
	 	09/07/2006
	METHODS AND SYSTEMS FOR PROVIDING ENHANCED VALUE OF LOTTERY-TYPE TICKETS

	 	11/267,012
	 	11/4/2005
	METHODS AND SYSTEMS FOR PROVIDING ENHANCED VALUE OF LOTTERY-TYPE TICKETS

	 	2006291279

(based on

11/267,012)
	 	09/07/2006
	METHODS AND SYSTEMS FOR PROVIDING ENHANCED VALUE OF LOTTERY-TYPE TICKETS

	 	2,621,954

(based on

11/267,012)
	 	09/07/2006
	METHODS AND SYSTEMS FOR PROVIDING ENHANCED VALUE OF LOTTERY-TYPE TICKETS

	 	2008-7008499

(based on

11/267,012)
	 	09/07/2006

 

 

Youbet.com, Inc.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Application	 	Application	 	 	 
	Country	 	Title	 	Date	 	Number	 	Status	 
	US
	 	MULTIPLE RACE TRACK ONLINE WAGERING WORKSPACE AND DATA PREPARATION AND DELIVERY METHOD	 	14-Sep-2004	 	10/940865	 	Published
	US
	 	SYSTEM AND METHODS OF CALCULATING GROWTH OF SUBSCRIBERS AND INCOME FROM SUBSCRIBERS	 	21-Mar-2006	 	11/277100	 	Published
	US
	 	METHOD FOR PERMITTING CANCELLATION OF A WAGER	 	14-Apr-2006	 	11/279834	 	Published
	US
	 	ONLINE WAGERING - PLAYER REWARDS MODEL	 	09-Mar-2007	 	11/684295	 	Published

 

 

 

SCHEDULE C

TO

INTELLECTUAL PROPERTY SECURITY AGREEMENT

Copyrights and Copyright Applications

None.

 

 

 

SCHEDULE D

TO

INTELLECTUAL PROPERTY SECURITY AGREEMENT

License Agreements

ODS Technologies, L.P., ODS Properties, Inc. and Youbet.com, Inc., dated May 18, 2001.exhibit_10-1.htm

    EXHIBIT
10.1

       

       

      SEPARATION AGREEMENT AND RELEASE
OF ALL CLAIMS

      
         

        This
Separation Agreement and Release of All Claims (the “Agreement”)
is between Michael J. McClane (“Employee”) and U.S. Auto Parts Network, Inc.,
its officers, directors, employees, foreign and domestic subsidiaries, benefit
plans and plan administrators, affiliates, agents, joint ventures, attorneys,
successors and/or assigns (collectively referred to as “Company”).

         

        RECITALS

         

        Employee
is employed by the Company as its Executive Vice President, Chief Financial
Officer, Secretary and Treasurer, as an officer of Company subsidiaries and
serves as a trustee for the Company 401(k) plan.  Employee has
resigned without Good Reason as defined in that employment agreement dated
January 17, 2007 (“Employment Agreement”) and his employment with the Company
shall terminate December 11, 2008   (“Termination
Date”).  Employee and the Company mutually desire to eliminate
any future disputes.  As a demonstration of that desire, the Company
has elected to offer Employee compensation and benefits to which he would not
otherwise be entitled.  The Company expressly disclaims any wrongdoing
or any liability to Employee.  This Agreement and compliance with it
shall not be construed as an admission by the Company of any liability or
violation to the rights of Employee or any other person or as a violation of any
order, law, statute duty or contract whatsoever as to Employee or any
person.

         

        AGREEMENTS

         

        Based
upon the foregoing, and in consideration of the mutual promises contained in
this Agreement, Employee and the Company agree, effective upon the date of
execution by Employee, as follows:

         

        1. Acknowledgment.  Employee
acknowledges that he has been paid all regular salary, expenses, commissions,
distributions, bonuses and Company benefits due and owing as of the Termination
Date, less appropriate withholdings and is not owed any monies allowed,
including but not limited to those required under the California Labor Code, as
of the Termination Date.  This sum is not consideration for this
Agreement.

         

        The Company will pay Employee
$37,106.66 (275.64 hours X $134.62) for vacation days and $3,230.88 (24 X
$134.62) for sick days.  This sum is likewise not consideration for
this Agreement.   Information regarding the transfer or
distribution of his USAP 401(k) Retirement Plan account will be provided to
Employee under separate cover by Principal Financial Group.  Company
confirms that employee will be 100% vested in all employer contributions made by
the Company for the benefit of the employee which would otherwise occur on
December 31, 2008.

         

        2. Consideration.  The
Parties recognize and affirm that, except as stated in Section 1 of this
Agreement, the Company is not obligated to provide Employee with any of the
benefits set forth herein.  The Company agrees to provide Employee the
following consideration (the “Payment”)
four (4) business days after the expiration of the seven (7) day revocation
period described in Paragraph 7 below (“Effective
Date”) which Effective Date, assuming Employee waives the 21-day
consideration period, would be December 19, 2008, provided Employee has not
revoked this Agreement as described in that Paragraph:

         

                 (a) Payment
of $280,000, which is equivalent to twelve (12) months of Employee’s current
base salary, less standard employee withholding taxes, payable ratably every two
(2) weeks or otherwise in accordance with the regular  payroll practices of
the Company.  Payments to commence on the Effective Date.

         

                 (b) Should
the Company’s Compensation Committee or Board of Directors offer the CEO a bonus
in cash, equity or a combination thereof, for services provided in 2008, then
such percentage of target bonus shall also be provided to Employee whether or
not the CEO accepts such bonus payment.  Payment to be made to
Employee at the time in 2009 that such bonus would ordinarily be
paid.

         

            (c) Employee
waives any claim for entitlement to any Company payment or reimbursement of
health insurance benefits under COBRA that he might have had under the
Employment Agreement.

         

        Employee
understands and acknowledges that he is not entitled to and would not receive
the aforementioned consideration, including the Payment, but for compliance with
the terms and conditions of this Agreement. Employee further acknowledges that
said consideration does not include any wages, accrued but unused vacation or
any other money or income to which the Employee is otherwise
entitled.

         

             3. Taxes.  Not
withstanding the tax deductions set forth in Paragraph 2 above, Employee shall
pay in full when due, and shall be solely responsible for, any and all federal,
state, or local income taxes that are or may be assessed against him relating to
the consideration provided including the Payment received pursuant to this
Agreement, as well as all interest or penalties that may be owed in connection
with such taxes.  Employee is not relying on any representations or
conduct of the Company with respect to the adequacy of the
withholdings.

         

            4. Non-Admission of
Liability. The Company hereby disclaims any wrongdoing against Employee.
Company expressly denies that it engaged in any unlawful conduct of any
kind.  Employee agrees that neither this Agreement, nor the furnishing
of the consideration for the release contained herein shall be deemed or
construed at any time for any purpose as an admission by Company of any
liability or unlawful conduct of any kind.

         

            5. Release.

         

        (a) Employee,
on behalf of himself, his fiancée  successors, heirs, and assigns,
hereby forever relieves, releases, and discharges the Company as well as its
past, present and future officers, directors, administrators, shareholders,
employees, agents, attorneys, insurers, divisions, successors, subsidiaries,
parents, assigns, representatives, brother/sister corporations, and all other
affiliated or related corporations, all benefit plans sponsored by the Company,
and entities, and each of their respective present and former agents, employees,
or representatives, insurers, partners, associates, successors, and assigns, and
any entity owned by or affiliated with any of the above, from any and all
claims, debts, liabilities, demands, obligations, liens, promises, acts,
agreements, costs and expenses  (including but not limited to
attorneys’ fees), damages, actions, and causes of action, of whatever kind or
nature, including but not limited to any statutory, civil, administrative, or
common law claims, whether known or unknown, suspected or unsuspected, fixed or
contingent, apparent or concealed, arising out of any act or omission occurring
before Employee’s execution of this Agreement, including but not limited to any
claims based on, arising out of, or related to Employee’s employment with, or
the ending of Employee’s employment with the Company, any claims arising from
rights under federal, state, and local laws relating to the regulation of
federal or state tax payments or accounting; federal, state or local laws that
prohibit harassment or discrimination on the basis of race, national origin,
religion, sex, gender, age, marital status, bankruptcy status, disability,
perceived disability, ancestry, sexual orientation, family and medical leave, or
any other form of harassment or discrimination or related cause of action
(including but not limited to failure to maintain an environment free from
harassment and retaliation, inappropriate comments or touching and/or “off-duty”
conduct of other Company employees); statutory or common law claims of any kind,
including but not limited to, any alleged violation of Title VII of the Civil
Rights Act of 1964, The Civil Rights Act of 1991, Sections 1981 through 1988 of
Title 42 of the United States Code, as amended; The Employee Retirement Income
Security Act of 1971, as amended, The Americans with Disability Act of 1990, as
amended, the Workers Adjustment and Retraining Notification Act, as amended; the
Occupational Safety and Health Act, as amended, the Sarbanes-Oxley Act of 2002,
the California Family Rights Act (Cal. Govt. Code § 12945.2 et. seq.), the California
Fair Employment and Housing Act (Cal. Govt. Code § 12900 et. seq.), statutory
provision regarding retaliation/discrimination for filing a workers’
compensation claim under Cal. Labor Code § 132a, California Unruh Civil
Rights Act, California Sexual Orientation Bias Law (Cal. Lab. Code § 1101
et. seq.), California
AIDS Testing and Confidentiality Law, California Confidentiality of Medical
Information (Cal. Civ. Code § 56 et. seq.), contract, tort,
and property rights, breach of contract, breach of implied-in-fact contract,
breach of the implied covenant of good faith and fair dealing, tortious
interference with contract or current or prospective economic advantage, fraud,
deceit, invasion of privacy, unfair competition, misrepresentation, defamation,
wrongful termination, tortious infliction of emotional distress (whether
intentional or negligent), breach of fiduciary duty, violation of public policy,
or any other common law claim of any kind whatsoever; any claims for severance
pay, sick leave, family leave, liability pay, overtime pay, vacation, life
insurance, health insurance, continuation of health benefits, disability or
medical insurance, or Employee’s unvested 401(k) rights or, except as stated in
Section 2, any other fringe benefit or compensation, including but not limited
to unvested stock options; any claim for damages or declaratory or injunctive
relief of any kind arising from the foregoing items.  The Parties
agree and acknowledge that the release contained in this Paragraph 4 does not
apply to any vested rights Employee may have under any 401(k) Savings Plan with
the Company or to any rights under any Indemnification Agreements into which
Employee and Company have entered.  Employee represents that at the
time of the execution of this Agreement; he suffers from no work-related
injuries and has no disability or medical condition as defined by the Family
Medical Leave Act.  Employee represents that he has no workers’
compensation claims that he intends to bring against the
Company.  Employee understands that nothing contained in this
Agreement, including, but not limited to, this Paragraph 5, will be interpreted
to prevent him from filing a charge with a governmental agency or participating
in or cooperating with an investigation conducted by a governmental agency,
including the Equal Employment Opportunity Commission.  However,
Employee agrees that he is waiving the right to monetary damages or other
individual legal or equitable relief awarded as a result of any such
proceeding.  Employee further acknowledges that this release also
releases the Company for all claims of unpaid wages, including unpaid overtime
wages, related to his employment with the Company and subject to the terms
specified in Paragraph 2 of this Agreement.

         

        (b) Company,
except as provided in paragraph 5(c) below, hereby forever relieves, releases,
and discharges Employee from any and all claims, debts, liabilities, demands,
obligations, liens, promises, acts, agreements, costs and
expenses  (including but not limited to attorneys’ fees), damages,
actions, and causes of action, of whatever kind or nature, including but not
limited to any statutory, civil, administrative, or common law claims, whether
known or unknown, suspected or unsuspected, fixed or contingent, apparent or
concealed, arising out of any act or omission occurring before Employee’s
execution of this Agreement, including but not limited to any claims based on,
arising out of, or related to Employee’s employment with, or the ending of
Employee’s employment with the Company and also include contract, tort, and
property rights, breach of contract, breach of implied-in-fact contract, breach
of the implied covenant of good faith and fair dealing, tortious interference
with contract or current or prospective economic advantage, fraud, deceit,
invasion of privacy, unfair competition, misrepresentation, defamation, tortious
infliction of emotional distress (whether intentional or negligent), breach of
fiduciary duty, violation of public policy, or any other common law claim of any
kind whatsoever.

         

        (c) Mistakes in Fact; Voluntary
Consent.  Each of the Parties expressly and knowingly
acknowledges that, after the execution of this Agreement, the Parties may
discover facts different from or in addition to those that they now know or
believe to be true with respect to the claims released in this
Agreement.  Nonetheless, this Agreement shall be and remain in full
force and effect in all respects, notwithstanding such different or additional
facts and Employee and Company intend to fully, finally, and forever settle and
release those claims released in this Agreement.  In furtherance of
such intention, the release given in this Agreement shall be and remain in
effect as a full and complete release of such claims, notwithstanding the
discovery and existence of any additional or different claims and the Parties
assume the risk of misrepresentations, concealments, or mistakes, and if any of
the Parties should subsequently discover that any fact relied upon in entering
into this Agreement was untrue, that any fact was concealed, or that his or its
understanding of the facts or law was incorrect, other than facts that would
give effect to paragraph 7(a) of the Employment Agreement, which would void any
future obligation for the Payment, and require the repayment of any of the
Payment already made, they shall not be entitled to set aside this Agreement or
the settlement reflected in this Agreement or be entitled to recover any damages
on that account.  Company and Employee each represents and warrants
that, as of the Termination Date, it has no knowledge of any act or
circumstances that would give effect to paragraph 7(a) of the Employment
Agreement

         

        (d) Section 1542 of the
California Civil Code.  Employee expressly waives any and all
rights and benefits conferred upon him by Section 1542 of the California Civil
Code, which states as follows:

         

        A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

         

        Accordingly,
Employee knowingly, voluntarily and expressly waives any rights and benefits
arising under Section 1542 of the California Civil Code and any other statute or
principle of similar effect.

         

        (e) Nothing
in this Agreement is intended or shall be a waiver of the indemnification
provided in that Indemnification Agreement dated September 19, 2005 or any
amendments or subsequent indemnification agreements entered into between Company
and Employee.

         

        (f) No
Lawsuits.  Employee and Company agree to take any and all steps
necessary to insure that no lawsuit arising out of any claim released herein
shall ever be prosecuted by Employee or Company or on his or its behalf in any
forum, and hereby warrants and covenants that no such action has been filed or
shall ever be filed or prosecuted.  Employee and Company also agrees
that if any claim is prosecuted in his or its name before any court or
administrative agency that party waives and agrees not to take any award or
other damages from such suit to the extent permissible under applicable
law.

         

        6. Confidentiality /
Non-disparagement.

         

        (a)           Employee
agrees to direct all requests for references to Tracey Virtue
310-735-0087.  The confidentiality obligations contained in this
paragraph shall be in addition to any other confidentiality agreements between
the Parties, which shall remain in full force and effect. Notwithstanding the
foregoing, nothing in
this Agreement shall be construed as precluding disclosure where such disclosure
is required and compelled by law.  In the event that Employee is
required and compelled by law to disclose any such matters, he will first give
fifteen (15) days advance written notice (or, in the event that it is not
possible to provide fifteen (15) days written notice, as much written notice as
is possible under the circumstances) to the Company so that the Company may
present and preserve any objections that it may have to such disclosure and/or
seek an appropriate protective order.  Employee acknowledges and
agrees that this paragraph is a material inducement to the Company’s entering
into this Agreement, and further acknowledges and agrees that any breach of this
paragraph shall be subject to a claim for damages or equitable relief (or both),
including but not limited to injunctive relief and Employee agrees to return any
of the Payment that had been made at the time of the breach. Additionally,
Employee agrees that he shall refrain from making any negative, disparaging or
derogatory comments about the Company, including but not limited to, any public
or private remarks or statements that would injure the business or reputation of
the Company, or its officers, managers, members, directors, partners, agents or
employees.   Nothing contained in this Paragraph shall preclude
Employee from revealing or describing his employment with the Company to his
prospective employers; provided however, such disclosure shall be limited to the
fact that he was employed by the company, the dates of his employment, his job
title and position with the Company, the fact that he voluntarily resigned from
the Company and the nature and depth of his duties and responsibilities with the
Company as well as the level of his accomplishments at the
Company.  The Company agrees that its officers or directors will not
make any negative, derogatory or disparaging statements or comments, or
statements that slander or libel Employee, to any third party about Employee,
his service time with the Company or his separation from the Company unless
otherwise required by law or subpoena, and Company shall respond accurately and
fully to any question, inquiry, or request for information required by legal or
employment verification process. Company confirms that Employee shall receive a
positive verbal reference from the Chief Executive Officer, the Chairman of the
Board and the Chairman of the Audit Committee. Company and Employee shall
mutually agree on language describing Employee’s employment, resignation and/or
consulting status with the Company should any press release be issued now or in
the future. If such disclosure is required of Company, then Company agrees to
provide notice to Employee as early as practicable.

         

        (b) Confidential and Proprietary
Information / Return of Company Property.  Employee
acknowledges that as a result of his employment with the Company, he has had
access to the Company’s confidential and proprietary business information,
including, but not limited to, product information, pricing strategies, vendor
and supplier information, business plans, research and development activities,
manufacturing and marketing techniques, technological and engineering data,
processes and inventions, legal matters affecting the Company and its business,
customer and prospective customers information, trade secrets, bid prices,
contractual terms and arrangements, prospective business transactions, and
financial and business forecasts (“Confidential
Information”).  Confidential Information also includes information,
knowledge or data of any third party doing business with the Company that the
third party has identified as being confidential.  Employee also
acknowledges and reaffirms his compliance and ongoing obligation to comply with
that Confidential Information and Invention Assignment Agreement that he
executed on 2/24/06 and that Confidentiality and Non-Disclosure Agreement that
he executed on 2/14/06.  Employee agrees not to use or to disclose to
anyone any Confidential Information at any time in the future without the prior
written authorization of the Company, unless ordered to do so by a court of
competent jurisdiction.  In the event of any such court order,
Employee agrees to promptly notify the Company and to afford the Company the
opportunity to take appropriate legal action prior to your disclosure of any
Confidential Information.

         

        Employee
understands and acknowledges that whether or not he signs this Agreement, he has
both a contractual and common law obligation to protect the confidentiality of
the Company’s trade secret information after the termination of his employment
for so long as the information remains confidential.  The parties
agree that Employee may retain his laptop computer, blackberry and cellular
telephones, but that all Company information, including documents and emails,
must be returned to the Company and deleted from the retained
equipment.  Notwithstanding the prior sentence, Employee further
agrees to immediately return any other Company property in his possession,
including but not limited to documents, all materials, photographs, handbooks,
manuals, electronic records, files, any backup device, keys and access cards, no
later than the end of the period that Employee provides Consulting Services
provided for in the Consulting Agreement.   

         

        7. Remedies.  Each
of Employee and Company understands and agrees that in the event either party
violates any provision of this Agreement, including the provisions set forth in
Paragraphs 5 or 6, then (a) the non-violating party shall have the right to
apply for and receive an injunction to restrain such violation of this
Agreement; (b) the Company shall have the right to immediately discontinue any
enhanced benefit provided under this Agreement.  “Enhanced Benefits”
are any benefit the Employee is receiving under this contract that the employee
would not otherwise be entitled to receive; (c) the non-prevailing party will be
obligated to reimburse the prevailing party its costs and expenses incurred in
prosecuting the lawsuit and enforcing this Agreement, including court costs and
reasonable attorneys fees; and (d) as an alternative to (c), at the Company’s
option, Employee shall be obligated upon demand to repay the Company the cost of
all but $500 of the enhanced benefits paid under this Agreement. Employee and
Company acknowledges and agrees that the covenants contained in this Paragraph 7
shall not affect the validity of this Agreement and the parties have mutually
negotiated and agreed upon the terms of this Paragraph 7.  The
remedies available to the Employee and Company pursuant to this Paragraph 7 are
in addition to, and not in lieu of, any remedies which may be available under
statutory and/or common law relating to trade secrets and the protection of the
Company’s or Employee’s business interest generally.

         

        8. Consideration and Revocation
Period.  Employee may revoke his release of claims, insofar as
it extends to potential claims under the Age Discrimination in Employment Act,
by informing the Company of his intent to revoke his release within seven (7)
calendar days following his execution of this Agreement.  Employee
understands that any such revocation must be in writing and delivered by hand or
by certified mail - return receipt requested - within the applicable period to
Vice President, Legal Affairs, 17150 South Margay Avenue, Carson, California
90746.  Employee understands that if Employee exercises his right to
revoke, then the Company will have no obligations under this Agreement to
Employee or to others whose rights derive from his.

         

        The Agreement shall not become
effective or enforceable, until the revocation period identified above has
expired.  The terms of this Agreement shall be open for acceptance by
Employee for a period of twenty-one (21) calendar days, Employee understands
that he should, and the Company hereby advises him to, consult with legal
counsel regarding the releases contained herein and to consider whether to
accept the Company’s offer and sign the Agreement. Employee acknowledges that it
has been his decision alone whether or not to consult with counsel regarding
this Agreement. Employee acknowledges that no proposal or actual change that he
or his counsel makes with respect to this Agreement will restart the 21-day
period.

         

        Employee
acknowledges that he was permitted to use as much of the 21-day consideration
period as he wished prior to signing, but by his signature below Employee
acknowledges that he has chosen to voluntarily execute this Agreement earlier
and to waive the remaining days of such 21-day period.

         

        9. Nonassignment.  Employee
represents and warrants that he has not assigned or transferred any portion of
any claim or rights he has or may have to any other person, firm, corporation or
any other entity, and that no other person, firm, corporation, or other entity
has any lien or interest in any such claim.

         

        10. Miscellaneous
Provisions

         

        (a) Integration.  This
Agreement, the Consulting Agreement, the Indemnification Agreement(s), the
Confidential Information and Invention Assignment Agreement, the Confidentiality
and Non-Disclosure Agreement and other agreements that are referenced therein
constitute the entire Agreement of the parties concerning the subject matter
referred to in this Agreement.  No covenants, agreements,
representations, or warranties of any kind whatsoever, whether express or
implied in law or fact, have been made by any party to this Agreement, except as
specifically set forth in this Agreement.  All prior and
contemporaneous discussions, negotiations, and agreements have been and are
merged and integrated into, and are superseded by, this Agreement.

         

        (b) Modifications.  No
modification, amendment, or waiver of any of the provisions contained in this
Agreement shall be binding upon any party to this Agreement unless made in
writing and signed by both parties.

         

        (c) Severability.  Whenever
possible, each provision of this Agreement shall be interpreted in such a manner
as to be effective and valid under applicable law and to carry out each
provision herein to the greatest extent possible, but if any provision of this
Agreement is held to be void, voidable, invalid, illegal or for any other reason
unenforceable, the validity, legality and enforceability of the other provisions
of this Agreement will not be affected or impaired thereby.

         

        (d) Non-Reliance on Other
Parties.  Except for statements expressly set forth in this
Agreement, no party has made any statement or representation to any other party
regarding a fact relied on by the other party in entering into this Agreement,
and no party has relied on any statement, representation, or promise of any
other party, or of any representative or attorney for any other party, in
executing this Agreement or in making the settlement provided for in this
Agreement.

         

        (e) Negotiated
Agreement.  The terms of this Agreement are contractual, not a
mere recital, and are the result of negotiations between the
parties.  Accordingly, no party shall be deemed to be the drafter of
this Agreement.

         

        (f) Successors and
Assigns.  This Agreement shall inure to the benefit of and
shall be binding upon the heirs, successors, and assigns of the parties hereto
and each of them.  In the case of the Company, this Agreement is
intended to release and inure to the benefit of any affiliated corporations,
parent corporations, brother-sister corporations, subsidiaries (whether or not
wholly owned), divisions, shareholders, officers, directors, agents,
representatives, principals, and  employees.

         

        (g) Applicable
Law.  This Agreement shall be construed in accordance with, and
governed by, the laws of the State of California without taking into account
conflict of law principles.  The Company and Employee agree to submit
to personal jurisdiction in the State of California and to venue in its
courts.

         

        (h) This
Agreement may be executed via facsimile and in one or more counterparts, each of
which shall be deemed an original, but all of which together constitute one and
the same instrument, binding on the parties.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

         

        EMPLOYEE
ACKNOWLEDGES AND AGREES THAT EMPLOYEE HAS CAREFULLY READ AND VOLUNTARILY SIGNED
THIS AGREEMENT, THAT EMPLOYEE HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY
OF EMPLOYEE’S CHOICE, THAT BY SIGNING THIS AGREEMENT, EMPLOYEE HAS UTILIZED OR
WAIVES THE 21-DAY CONSULTING PERIOD, AND THAT EMPLOYEE SIGNS THIS AGREEMENT WITH
THE INTENT OF RELEASING THE COMPANY AND ITS OFFICERS, DIRECTORS, EMPLOYEES AND
AGENTS FROM ANY AND ALL CLAIMS.

        

        ACCEPTED
AND AGREED TO:

        

        Employee:                                                                          USAP:

        

        /s/ MICHAEL J.
MCCLANE                                           /s/ SHANE EVANGELIST

        Signature                                                                           Signature

        

        December 9,
2008                                                     December 9, 2008

        Date                                                                                   Date

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