Document:

exv10w2

 

Exhibit 10.2

SOLOMON EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) dated as of July 20, 2004 is by and between
Youbet.com, Inc., a Delaware corporation (“the Company”), and Scott A. Solomon (“Executive”), in
connection with the Company’s engagement of Executive for personal services.

1. EMPLOYMENT; DUTIES AND ACCEPTANCE:

Employment by Company.

The Company hereby engages Executive, and Executive hereby agrees to serve as General Counsel
of the Company on the terms and conditions of this Agreement. Throughout the Term of this
Agreement, Executive shall, subject to the provisions contained herein, devote substantially all of
his work time to the employment described hereunder. Executive shall report solely to the
President and Chief Executive Officer.

Location of Employment.

Other than in connection with occasional business travel, the Executive shall render his
services at the Company’s offices at 5901 De Soto Avenue, Woodland Hills, California.

Duties.

Executive shall have the following duties:

(a) Responsible for Corporate compliance program, liaison with gaming regulators,
interpretation, change, and enforcement of new legislature and gaming regulations.

(b) Direct all legal activities of the Company.

(c) Support the Chief Executive Officer in the management of compliance of gaming rules and
regulations both domestically and internationally.

(d) Participate and advise in mergers and acquisition projects and due diligence, and drive
the integration of newly acquired operations.

(e) Manage and ensure SEC compliance and filings.

(f) Manage the legal department budget and staff.

(g) If selected, act as the Secretary of the Company.

(h) Advise the Board as requested from time to time.

(i) Perform such other Executive duties, consistent with the duties of a General Counsel, as
the President and Chief Executive Officer may reasonably require.

2. TERM:

The term of Executive’s employment hereunder shall commence as of August 2, 2004 (the
“Effective Time”) and end on July 31, 2006 (the “Term”) unless sooner terminated pursuant to
Section 7 hereof. Unless either party shall have given the other at least 60 days prior notice
that the Term shall not be extended, the term shall be automatically extended for successive
one-year periods until either party
shall have given the other party not less than 60 days notice that any such additional term
shall not be extended.

 

 

 

3. COMPENSATION AND BENEFITS:

(a) Salary.

During the first year of the Term, the Executive shall receive a salary (the “Annual Salary”)
at the rate of $225,000 per annum. During the second year of the Term, Executive shall receive an
Annual Salary of $250,000 per annum. All salary shall be less such deductions as shall be required
to be withheld by applicable law and regulations and shall be pro-rated for any period that does
not constitute a full twelve (12) month period. Based on the Executive and the Company’s
performance, the annual salary may be increased at the discretion of the Chief Executive Officer.

(b) Bonuses.

Executive shall be entitled to participate in the Company Bonus Plan at the Executive level,
not less than 35%, subject to offset for the minimum bonus payments made during such period.
Executive shall receive a minimum bonus of 17.5% of his then annual salary, paid quarterly on a pro
rata basis.

(i) For each year of the Term, the Executive level bonus shall be based on mutually agreed
upon business objectives.

(ii) The business objectives for years one and two of the Term shall be determined before the
start of each year of the Term. For purposes of determining profitability, the applicable period
shall be August 1 to July 31 and shall be based on EBITDA, excluding any extraordinary items, as
reflected in the Company’s securities filings.

(c) Stock Options.

Executive is hereby granted 150,000 stock options pursuant to the Company’s 1998 Stock Option
Plan. The 150,000 stock options will have an exercise price equal to the closing price of the
Company’s Common Stock on date of employment. The stock options are five (5) year options and
shall vest ratably over four (4) years.

Any unvested options shall terminate as provided in the Company’s 1998 Stock Option Plan or as
otherwise set forth herein.

All unvested options shall automatically become vested Options upon a “Change of Control”.

In the event the Company is unable to issue stock options, or all of them, to Executive as
described in this Agreement, the Company and Executive agree to restructure this agreement with
respect to those affected stock options with a non-stock option structure that is substantially,
equivalently, and effectively the same to Executive from a financial perspective.

(d) Severance.

Upon “Change of Control” the Company has the option to terminate the Executive’s employment.
If Executive’s employment with the Company is terminated upon or within 18 months after a Change of
Control, (1) Executive shall be entitled to receive through the date of Executive’s termination
Executive’s Annual Salary, any earned and unpaid bonus, accrued and unused vacation, if any, and
Fringe Benefits, and (2) in addition, the Company shall provide the Executive with the following
severance benefits (the
“Severance Benefits”): severance pay, in a lump sum, equal to one (1) year of his then Annual
Salary, minimum bonus and the continuation of his Fringe Benefits for that period of time.

 

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For purposes of this Agreement, the term “Change of Control” shall mean, a merger, acquisition
or other corporate transaction where (1) substantially all the Company’s assets or thirty-one
percent (31%) or more of the outstanding common stock of the Company is sold or acquired, or (2)
upon the consummation of any transaction involving over thirty-one percent (31%) of the assets or
outstanding stock of the Company, the Company’s existing Board as of the date immediately preceding
the consummation of the transaction no longer constitute a majority of the Board as of any date
within the twelve (12) consecutive months subsequent to consummation of the transaction.

4. PARTICIPATION IN EXECUTIVE BENEFIT PLANS:

(a) Fringe Benefits. Executive shall be permitted during the Term to participate in
any group life, medical, hospitalization, dental, health and accident and disability plans,
supplemental health care plans and plans providing for life insurance coverage, and any other plans
and benefits, generally maintained by Company for Executives of the stature and rank of Executive
during the Term hereof, each in accordance with the terms and conditions of such plans
(collectively referred to herein as “Fringe Benefits”); provided, however, that Company shall not
be required to establish or maintain any such Fringe Benefits.

(b) Vacation. Executive shall accrue, in addition to personal days and days on which
Company is closed, paid vacation days at the rate of 6.16 hours per pay period or up to four (4)
weeks per year.

(c) Expenses. The Company will reimburse Executive for actual and necessary travel
and accommodation costs, Bar Association dues and continuing legal education fees, entertainment
and other business expenses incurred as a necessary part of discharging the Executive’s duties
hereunder, subject to receipt of reasonable and appropriate documentation by the Company and in
accordance with Company policy. The Company will also reimburse Executive $600 per month for all
business related operating expenses of Executive’s automobile. Executive will receive or be
reimbursed for a cellular phone.

5. CERTAIN COVENANTS OF EXECUTIVE:

Without in any way limiting or waiving any right or remedy accorded to Company or any
limitation placed upon Executive by law, Executive agrees as follows:

(a) Confidential Information: Executive agrees that, neither during the Term
nor at anytime thereafter shall Executive (i) disclose to any person, firm or corporation not
employed by the Company or any affiliate of either (the “Protected Company”) or not engaged to
render services to any Protected Company or (ii) use for the benefit of himself, or others, any
confidential information of any Protected Company obtained by the Executive prior to the execution
of this Agreement, during the Term or any time thereafter, including, without limitation,
“know-how,” trade secrets, details of suppliers, pricing policies, financial data, operational
methods, marketing and sales information or strategies, product development techniques or plans or
any strategies relating thereto, technical processes, designs and design projects, and other
proprietary information of any Protected Company; provided, however, that this provision shall not
preclude the Executive from (x) upon advice of counsel and notice to the Company, making any
disclosure required by any applicable law or (y) using or disclosing information known generally to
the public (other than information known generally to the public as a result of any violation of
this Section 5(a)).

 

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(b) Property of Company. Any interest in trademarks, service-marks, copyrights,
copyright applications, patents, patent applications, slogans, developments and processes which the
Executive, during the Term, may develop relating to the business of the Company in which the
Company may then be engaged and any memoranda, notes, lists, records and other documents (and all
copies thereof) made or compiled by the Executive or made available to the Executive concerning the
business of any Protected Company shall belong and remain in the possession of any Protected
Company, and shall be delivered to the Company promptly upon the termination of the Executive’s
employment with Company or at any other time on request.

(c) Non-Interference. Executive will not, during the Term hereof and for a period of
one (1) year after the Term induce any person who is an employee of the Company to terminate his
relationship with the Company.

(d) Non-Competition. Without the prior written consent of the Company, Employee shall
not be employed by the Internet gaming divisions of Magna, Inc., TVG, Inc. or by any other Internet
gaming division of a direct competitor of the Company during, or for one year after the termination
of, his employment with the Company. The parties agree that, as of the date this Agreement is
being executed, the only existing competitors of the Company are the Internet gaming divisions of
Magna, Inc. and TVG, Inc.

6. OTHER PROVISIONS:

(a) Rights and Remedies Upon Breach. If the Executive breaches, or threatens to
commit a breach of, any of the provisions of Section 5 hereof (the “Restrictive Covenants”), the
Company shall have the following rights and remedies, each of which rights and remedies shall be
independent of the other and severally enforceable, and all of which rights and remedies shall be
in addition to, and not in lieu of, any other rights and remedies available to the Company at law
or in equity.

(b) Accounting. The right and remedy to require the Executive to account for and pay
over to the Company all compensation, profits, monies, accruals, increments or other benefits
(collectively “Benefits”) derived or received by the Executive as a result of any transactions
constituting a breach of any of the Restrictive Covenants, and the Executive shall account for and
pay over such Benefits to the Company.

(c) Severability of Covenants. If any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable, the remainder of the
Restrictive Covenants shall not thereby be affected and shall be given full effect, without regard
to the invalid portions.

(d) Blue-Penciling. If any court construes any of the Restrictive Covenants, or any
part thereof, to be unenforceable because of the duration or geographic scope of such provision,
such court shall have the power to reduce the duration or scope of such provision and, in its
reduced form, such provision shall then be enforceable.

(e) Enforceability in Jurisdictions. The parties intend to and hereby confer
jurisdiction to enforce the Restrictive Covenants upon the courts of any jurisdiction within the
geographical scope of such Restrictive Covenants. If the courts of any one or more of such
jurisdictions hold the Restrictive Covenants unenforceable by reason of the breadth of such scope
or otherwise, it is the intention of the parties that such determination not bar or in any way
affect Company’s right to the relief provided in this Section 6 in the courts of any other
jurisdiction within the geographical scope of such Restrictive Covenants, as to breaches of such
Restrictive Covenants in such other respective jurisdictions, such Restrictive Covenants as they
relate to each jurisdiction being, for this purpose, severable into diverse and independent
covenants.

 

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(f) Injunctive Relief. Executive agrees and understands that the remedy at law for
any breach by Executive of the provisions of Section 5 hereof may be inadequate and that damages
resulting from such breach may not be susceptible to being measured in monetary terms.
Accordingly, it is acknowledged that upon Executive’s breach of any provision of Section 5 hereof,
the Company shall be entitled to seek to obtain from any court of competent jurisdiction injunctive
relief to prevent the continuation of such breach. Nothing contained herein shall be deemed to
limit the Company’s remedies at law or in equity for any breach of the provisions of Section 5
hereof which may be available to the Company.

(g) Company is a publicly traded corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was organized, and has all requisite power
and authority to own, lease or operate its properties and to carry on its business as it is
presently being operated and in the place where such properties are owned, leased or operated and
such business is conducted. Company, to the best of its knowledge, is presently in compliance with
all state and federal securities laws and regulations and there are no pending or threatened
investigations or actions thereunder. Company is, to the best of its knowledge, in compliance with
all local, state and federal laws and regulations, including, but not limited to those pertaining
to pari-mutuel wagering and account wagering and there is no threatened or pending litigation by
any Party or investigations by regulatory bodies other than those suits, actions or other matters
previously disclosed to Executive.

(h) Company represents and warrants that the execution, delivery and performance of this
Agreement and the consummation by it of the transactions contemplated hereby and thereby, have been
duly authorized by all requisite action, including, but not limited to, authorizing resolutions and
consents, and no further action or approval is required to permit Company to consummate the
transactions contemplated hereby and thereby. This Agreement when executed and delivered in
accordance with the terms thereof, will constitute, the legal, valid and binding obligations of
Company, enforceable in accordance with its terms. Company and the officer signing on behalf of
Company, has full power, authority and legal right to enter into this Agreement and to consummate
the transactions contemplated hereby. The making and performance of this Agreement and the
consummation of the transactions contemplated hereby in accordance with the terms hereof and
thereof will not (a) conflict with the articles of incorporation or the bylaws of Company, (b)
result in any breach or termination of, or constitute a default under, or constitute an event that
with notice or lapse of time, or both, would become a default under, or create any rights of
termination, cancellation or acceleration in any person under, any contract, or violate any order,
writ, injunction or decree, to which Company is a party, by which any of the business or operations
of Company or rights of Executive may be affected.

7. TERMINATION:

(a) Termination for Cause. The Company shall have the option to terminate Executive
upon the occurrence of any of the following:

(i) the Executive’s theft or embezzlement of the Company’s money, equipment, or securities;

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

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

(iv) the failure of the Executive to be licensable under the California Bar Association in his
capacity as General Counsel of the Company;

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

 

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(vi) breach by the Executive of his confidentiality, no solicitation, and non-competition
covenants contained in his employment agreement with the Company.

Any act or omission of the Executive based upon authority given pursuant to the Articles of
Incorporation of the Company or Bylaws of the Company or a resolution duly adopted by the Company’s
Board of Directors or based upon the advice of counsel for the Company shall be conclusively deemed
to be done by Executive in good faith and in the best interests of the Company.

If Executive’s services are terminated for cause as set forth in this subsection, Executive’s
services shall cease as of such effective date of termination and all compensation shall cease as
of such effective date.

(b) Termination With Good Reason or Without Cause. If during the Term, or any
additional term, the Executive resigns for Good Reason or is terminated by the Company without
Cause:

As used herein, Good Reason shall mean only:

(i) withdrawal by the Company from Executive of any substantial part of his duties then being
performed, or responsibility or authority then being carried, by Executive, or a material change in
the Executive’s reporting lines;

(ii) assignment by the Company to Executive of substantial additional duties or
responsibilities which are inconsistent with the duties or responsibilities then being carried by
Executive;

(iii) material reduction in the level of Executive’s responsibility, authority, autonomy,
title, or compensation;

(iv) the Company’s material breach of Executive employment agreement (or any other agreement
between Executive and the Company); and the failure of the Company to cure such breach within
thirty (30) days of notice thereof;

(v) material fraud on the part of the Company; or

(vi) discontinuance of the active operation of business of the Company, or insolvency of the
Company, or the filing by or against the Company of a petition in bankruptcy or for reorganization
or restructuring pursuant to applicable insolvency or bankruptcy law.

The Company will pay Executive (a) his salary and unused vacation pay through the last day of
his employment with the Company, (b) his unpaid reimbursable business expenses incurred by him
through the last day of his employment with the Company and (c) his then Annual Salary and minimum
bonus, in a lump sum, and continue his benefits for a period of one year.

8. EXECUTIVE’S REPRESENTATIONS AND WARRANTIES:

(a) Right to Enter Into Agreement. Executive has the unfettered right to enter into
this entire Agreement on all of the terms, covenants and conditions hereof; and Executive has not
done or permitted to be done anything, which may curtail or impair any of the rights granted to
Company herein.

(b) Breach Under Other Agreement or Arrangement. Neither the execution and delivery
of this Agreement nor the performance by Executive of any of his obligations hereunder will
constitute a violation or breach of, or a default under, any agreement, arrangement or
understanding, or any other restriction of any kind, to which Executive is a party or by which
Executive is bound.

(c) Services Rendered Deemed Special, Etc. Executive acknowledges and agrees that the
services to be rendered by him hereunder are of a special, unique, extraordinary and intellectual
character which gives them peculiar value, the loss of which cannot be adequately compensated for
in an action at law and that a breach of any term, condition or covenant hereof will cause
irreparable harm and
injury to the Company and in addition to any other available remedy the Company will be
entitled to seek injunctive relief.

 

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9. USE OF NAME:

The Company shall have the right during the Term hereof to use Executive’s name, biography and
approved likenesses in connection with Company’s business, including advertising their products and
services; and the Company may grant such rights to others, but not for use as a direct endorsement.

10. ARBITRATION:

Any dispute whatsoever arising out of or referable to this Agreement, including, without
limitation, any dispute as to the rights and entitlements and performance of the parties under this
Agreement or concerning the termination of Executive’s employment or of this Agreement or its
construction or its validity or enforcement, or as to the arbitrator’s jurisdiction, or as to the
ability to arbitrate any such dispute, shall be submitted to final and binding arbitration in Los
Angeles, California by and pursuant to the Labor Arbitration Rules of the American Arbitration
Association with discovery proceedings pursuant to Section 1283.05 of the California Code of Civil
Procedure. The arbitrator shall be entitled to award any relief, which might be available at law
or in equity, including that of a provisional, permanent or injunctive nature. The prevailing
party in such arbitration as determined by the arbitrator, or in any proceedings in respect thereof
as determined by the person presiding, shall be entitled to receive its or his reasonable
attorneys’ fees incurred in connection therewith.

11. NOTICES:

(a) Delivery. Any notice, consent or other communication under this Agreement shall
be in writing and shall be delivered personally, telexed, sent by facsimile transmission or
overnight courier (regularly providing proof of delivery) or sent by registered, certified, or
express mail and shall be deemed given when so delivered personally, telexed, sent by facsimile
transmission or overnight courier, or if mailed two (2) days after the date of deposit in the
United States mail as follows: to the parties at the following addresses (or at such other address
as a party may specify by notice in accordance with the provisions hereof to the other):

If to Executive, to his address at:

22243 Via Leonardo

Calabasas, CA 91302

If to Company, to its address at:

Youbet.com, Inc.

5901 Desoto Avenue

Woodland Hills, CA 91367

Attention: Chief Executive Officer

Fax (818) 668-2121

(b) Change of Address. Either party may change its address for notice hereunder by
notice to the other party in accordance with this Section 11.

 

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12. COMPLETE AGREEMENT; MODIFICATION AND TERMINATION:

This Agreement contains a complete statement of all the arrangements between the parties with
respect to the matters covered hereby and, supersedes all existing agreements between the parties
concerning the subject matter hereof. This Agreement may be amended, modified, superseded or
canceled, and the terms and conditions hereof may be waiver, by the party waiving compliance. No
delay on the part of any party in exercising any shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any such right or remedy, nor any single or partial exercise of
any such right or remedy preclude any other or further exercise thereof or the exercise of any
other right or remedy.

13. HEADINGS:

The headings in this Agreement are solely for the convenience of reference and shall not
affect its interpretation.

14. INDEMNIFICATION:

The Company will indemnify, defend, and hold Executive harmless from and against any and all
demands, actions, claims, suits, liabilities, losses, damages, fees (including reasonable
attorneys’ fees) and expenses relating to any acts or omissions to act in the course or scope of
his duties he performs on behalf of the Company while employed by it and/or while serving as an
Executive and/or director of the Company, and to provide indemnification and Executives and
directors liability insurance to him at least to the same extent that it provides such
indemnification and insurance to the Executives and directors of the Company. Executive will have
the option to select his own counsel or be represented by counsel for the Company. The provisions
herein shall survive the termination of Executive’s employment with the Company for any reason.

15. ATTORNEYS’ FEES:

If either the Company or the Executive brings an action to enforce the Executive’s employment
agreement, the prevailing party will be entitled to recover its/his reasonable attorneys’ fees.

WHEREFORE, the parties hereto have executed this Agreement as of the day and year first above
written.

	 	 	 	 	 
	 	 	 
	 	     /s/ Scott A. Solomon
 	 
	 	Scott A. Solomon 	 
	 	 	 
	 

Agreed to and Accepted:

Youbet.com, Inc., a

Delaware Corporation

	 	 	 	 	 
	By:

	 	/s/ Charles F. Champion
 

	 	 
	 
	 	 	 	 
	Its:

	 	President and Chief Executive Officer	 	 
	 

	 	 	 	 

 

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FIRST AMENDMENT TO

SOLOMON EMPLOYMENT AGREEMENT

This is a FIRST AMENDMENT (“First Amendment”), effective as of this 1st day of August, 2005,
to that certain employment agreement dated the 20th day of July, 2004 (the “Employment Agreement”),
by and between SCOTT A. SOLOMON (the “Executive”), and YOUBET.COM, INC., a Delaware corporation,
(the “Company”) (collectively, the “Parties”).

WHEREAS, the Company and the Executive desire to amend the provisions of the Employment
Agreement.

NOW THEREFORE, in consideration of the covenants and agreements herein contained, the Company
and the Executive hereby agree to amend the Employment Agreement as follows:

	 	1.	 	Term.

	 
	 	 	 	The first sentence of Section 2 shall be deemed amended to reflect that the Term
has been extended for an additional year, and shall therefore end on July 31, 2007.

	 
	 	2.	 	Compensation and Benefits.

	 
	 	 	 	The second sentence of Section 3 (a) shall be deemed amended as follows:

a) Salary. During the second and third year of the
Term, Executive shall receive an Annual Salary of $300,000 per annum.

	 
	 	 	 	The first paragraph of Section 3 (b) shall be deemed amended to conclude as follows
follows:

b) Bonuses.  Commencing with the second year of the Term, Executive shall
be entitled to participate in the Company Bonus plan at the Executive level, not
less than 40%, subject to offset for the minimum bonus payments made during such
period. Executive shall receive a minimum bonus of 20% of his then annual salary,
during the second and third years of the Term, paid quarterly on a pro rata basis.

	 
	 	3.	 	This First Amendment will be effective as of the date first written above.

	 
	 	4.	 	Except to the extent noted, and as may be necessary to give full force and
effect to the foregoing, the Employment Agreement shall continue unchanged, in full
force and effect.

IN WITNESS WHEREOF, each of the Parties hereunto has executed this First Amendment on the
date(s) indicated below.

	 	 	 	 	 
	YOUBET.COM, INC.

	 	 	 	SCOTT A. SOLOMON
	 
	 	 	 	 
	/s/ Charles F. Champion

	 	 	 	/s/ Scott A. Solomon
	 

	 	 	 	 
	 
	 	 	 	 
	Name: Charles F. Champion

	 	 	 	Date: August 19, 2005
	 
	 	 	 	 
	Title: President and Chief Executive Officer
	 	 	 	 
	 
	 	 	 	 
	Date: August 19, 2005
	 	 	 	 

 

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YOUBET.COM, INC.

SUPPLEMENTAL COMPENSATION AGREEMENT

WHEREAS, Youbet.com, Inc. (the “Corporation”) wishes to pay Scott Solomon (“Employee”)
additional compensation in consideration for the Employee’s performance of services for the
Corporation.

NOW THEREFORE, in consideration of the premises and of the mutual promises contained herein,
the parties hereto agree as follows:

1. Effective Date. This Agreement shall be effective as of January 25, 2006 (the
“Effective Date”).

2. Supplemental Payments. On or before the last day of each of the twelve calendar
months beginning with January 2006 and continuing until December 2006, the Corporation shall pay to
the Employee an amount equal to $38,167.00 per month, provided, however, that such payments shall
cease only in the event that Employee’s employment with the Corporation is terminated for “Cause”,
as defined in the Corporation’s Equity Incentive Plan. In the event the Employee’s employment with
the Corporation shall terminate as a result of his death, any payments which remain unpaid on the
date of his death shall continue to be made to the Employee’s surviving spouse (or if no surviving
spouse, to his estate).

3. Unfunded Promise to Pay. This Agreement constitutes an unfunded promise of the
Corporation to make benefit payments in the future. Neither the Employee nor anyone on behalf of
or through the Employee shall have any right in or claim to any asset of the Corporation under this
Agreement other than as a general, unsecured creditor of the Corporation. The Corporation intends
that the Agreement be unfunded for federal income tax purposes.

4. Termination. This Agreement shall terminate as of December 31, 2006, provided that
all of the payments described in paragraph 2 have been paid.

5. Release. In consideration for this Agreement and the Corporation’s award to the
Employee of an option to purchase 150,000 shares of the Corporation’s common stock, effective as of
December 14, 2005, Employee, on behalf of himself, his heirs, executors, administrators and
assigns, irrevocably and unconditionally hereby releases the Corporation, as well as its affiliates
and their respective directors, officers, employees, agents, representatives, successors and
assigns and all persons acting by, through or in concert with any of them (collectively, the
“Releasees”) from the obligation in paragraph 3(c) of that certain Employment Agreement by and
between the Employee and the Corporation dated July 20, 2004, as amended August 1, 2005 (the
“Employment Agreement”), to issue Employee 150,000 stock options pursuant to the Corporation’s 1998
Stock Option Plan (“Superseded Option Grant”). Employee agrees that he will not file, or permit to
be filed in his name or on his behalf, any lawsuit, claim or other legal action against any
Releasee with respect to such Superseded Option Grant. The foregoing release shall not affect any
other obligation of the Company under the Employment Agreement.

6. Confidentiality. The Employee agrees to keep the existence, terms and amount of
this Agreement completely confidential except that such information may be revealed: (i) to the
Employee’s tax advisors and legal and accounting representatives, provided they agree not to reveal
such information further; (ii) to members of the Employee’s immediate family, provided they agree
not to reveal such information further; and (iii) as may be required by law.

 

 

 

7. Reliance. The Employee represents that in signing this Agreement he does not rely
and has not relied on any representation or statement not set forth in this Agreement made by any
representative of the Corporation or any affiliate with regard to this subject matter, basis or
effect of this agreement, or otherwise. This written Agreement supersedes any prior written or
verbal agreements or understandings regarding or relating to this subject matter and constitutes
the entire agreement between the Corporation and the Employee with respect to the subject matter
hereof.

8. Miscellaneous.

	 	(a)	 	Non-Alienation. Except as otherwise expressly set forth herein, no
benefits payable under the provisions of this Agreement shall be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge,
encumber, or charge shall be void.

	 
	 	(b)	 	Withholding. The Corporation shall withhold from amounts paid under
this Agreement any taxes or other amounts required to be withheld by law.

	 
	 	(c)	 	Amendment or Modification of the Agreement. This Agreement may not be
amended, altered or modified, except by a written instrument signed by the Employee, or
his respective successors or assigns, and the Corporation and any successors thereto.
Any waiver of any provision of this Agreement must be in writing and signed by the
party granting the waiver.

	 
	 	(d)	 	Binding Effect. This Agreement (and all rights, options, privileges
and obligations hereby granted and/or imposed) shall be binding upon and inure to the
benefit of the Employee and the Corporation and their successors and assigns.

	 
	 	(e)	 	Notice. Any notice, consent or demand required or permitted to be
given under the provisions of this Agreement shall be in writing, and shall be signed
by the party giving or making the same. If such notice, consent or demand is mailed to
a party hereto, it shall be sent by United States certified mail, first class postage
prepaid, addressed to such party’s last known address provided to the Corporation. The
date of such mailing shall be deemed the date of notice, consent, or demand. Any
notice, consent, or demand delivered in any other manner shall be deemed to have been
delivered upon actual receipt of the party.

	 
	 	(f)	 	Governing Law. This Agreement, and the rights of the parties
hereunder, shall be governed by and construed in accordance with the laws of the State
of California, without regard to the choice of laws rules thereof.

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date
first written above.

	 	 	 	 	 
	 

	 	YOUBET.COM, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Charles F. Champion
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:
	 	President and Chief Executive Officer

ATTEST:

	 	 	 
	/s/ Arcelia Padilla
 

	 	 

Title: Vice President, Human Resources and Administration

	 	 	 
	 

	 	EMPLOYEE
	 
	 	 
	 

	 	/s/ Scott Solomon
	 

	 	 
	 

	 	Scott SolomonNotice of termination of Cleburne, Alabama property mineral property lease
      agreement

    Exhibit
      10.12

    Notice
      of termination of  Cleburne,
      Alabama property mineral property lease agreement 

     

    

      Thorium
        Power, Ltd.

      

      
        www.ThoriumPower.com                                                                                                                         
                         
Seth
          Grae

                                                                                                                                                                                     President
          & CEO

      

      

    

    

      November
        8, 2006

      

      

      VIA
        FAX
        AND FEDEX

      

      Mr.
        Charles Merchant

      CM
        Properties

      3189
        County Road 10

      Heflin,
        AL 36264

      

      
        	 	
                Re:

              	
                Notice
                  of Termination - Assignment of Minerals
                  Lease

              

      

      

      Dear
        Mr.
        Merchant, 

      

      Reference
        is made to the Assignment of Minerals Lease Agreement, dated as of December
        31,
        2005, between your sole proprietorship, CM Properties and Thorium Power,
        Ltd.
        (formerly, Novastar Resources Ltd.) (the “Company’), as amended by Amendment No.
        1 to Assignment of Minerals Lease, dated March 5, 2006, between such parties
        (the “Mineral Lease”).

      

      Section
        1
        of the amendment referred to above provides that notwithstanding any other
        provision of the Mineral Lease, the sole remedy available to you for a breach
        of
        the Agreement by the Company is the termination of the Agreement and that
        no
        further relief or recourse, whether at law, in equity, or otherwise, will
        be
        available to you. 

      

      The
        Company has determined, based on independent core drilling sample test results
        regarding the mineral content of the Cleburne County District of Alabama
        properties that are the subject of the Mineral Lease (the “Properties”), that it
        is not economically feasible for us to mine the Properties and provide a
        satisfactory rate of return on investment to our stockholders. Accordingly,
        the
        Company intends to cease performance of its obligations under the Mineral
        Lease
        and to forfeit any rights that it has to the Properties and re-vest in you
        those
        rights. The Company will pay the outstanding invoice in the amount of $6,671.00
        that you submitted that covers payroll for your two employees for the period
        from October 30 through December 1, 2006 and fuel charges from October 4
        through
        October 24, 2006. The Company, however, will make no further payments to
        you in
        cash or equity and it is the Company’s position that if you believe any amounts
        in cash or equity are due to you, your sole recourse for the Company’s failure
        to pay such amounts would be termination of the Mineral Lease as per the
        provision in Section 1 of the amendment to the Mineral Lease described above.
        

      

        
The
        Company will take any reasonable action that you deem necessary to re-vest
        in
        you any interest in the Properties that the Company holds as a result of
        the
        Mineral Lease. 

       

      
                       
          Please note that this termination is specific to the Properties covered
          by the
          Mineral Lease and in no way affects the thorium/monazite mineral properties
          located in Clay County, Alabama that were assigned to the Company by American
          Graphite Holdings pursuant to that certain Assignment of Specific Mineral
          Rights
          Agreement dated September 14, 2005, as amended March 5, 2006.

         

         

         

        
          Very
            truly yours,

          Thorium
            Power, Ltd.

           

          
 

          
            /s/
              Seth
              Grae

             By:  

            Seth
              Grae

            Chief
              Executive Officer, 

            President
              and Director

          

        

         

      

      
        
          
            Thorium
              Power, Ltd., 8300 Greensboro Drive, Suite 800, McLean, VA 22102 USA
              

            Tel
              703-918-4918 Fax 202-318-2502 E-Mail sgrae@ThoriumPower.com

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