EXHIBIT 10.1
SETTLEMENT AGREEMENT
This SETTLEMENT AGREEMENT (this "AGREEMENT"), dated as of
February 19, 2004, by and between Xxxxxx.xxx, Inc., a Delaware corporation
("YOUBET") and ODS Technologies, L.P. d/b/a TVG Network, a Delaware limited
partnership ("TVG") and, solely for the purposes of Section 2.2(a), Xxxxxxx X.
Xxxxxxxx ("CHAMPION").
WITNESSETH:
WHEREAS, on September 5, 2003, TVG commenced the Chancery
Action by filing a Verified Complaint for Injunctive Relief seeking injunctive
relief and damages in connection with Youbet's attempt to obtain stockholder
approval for the Proposed Amendments.
WHEREAS, on September 8, 2003 TVG commenced the Arbitration
Proceeding by filing a Demand for Arbitration seeking, among other things,
injunctive relief, declaratory relief and damages on the grounds that (i)
Youbet's actions in proceeding with the Proposed Amendments breached certain
provisions of the Warrant Issuance Agreement and the TVG Warrant, and (ii)
Youbet's failure to adjust the Exercise Price of the TVG Warrant as a result of
the Xxxx-Xxxxxxx Transaction breached the terms of the TVG Warrant.
WHEREAS, the parties hereto desire to settle the claims and
disputes between them relating to the Chancery Action and the Arbitration
Proceeding.
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
AGREEMENTS CONCERNING THE TVG WARRANT; SETTLEMENT PAYMENT
SECTION 1.1 ADJUSTMENT TO THE EXERCISE PRICE. TVG and Youbet
acknowledge and agree that as a result of the Xxxx-Xxxxxxx Transaction and the
Other Shares, and in accordance with Section 7 of the TVG Warrant, the Exercise
Price of the TVG Warrant shall be reduced to $36,500,000. TVG and Youbet further
acknowledge and agree that such reduction in the Exercise Price of the TVG
Warrant as a result of the Xxxx-Xxxxxxx Transaction and the Other Shares shall
not limit in any manner the application of Section 7 of the TVG Warrant to any
other issuance of securities or other transactions to which Section 7 would
otherwise apply, including any issuance or transaction occurring prior to, on,
or after the date hereof.
SECTION 1.2 EARLY TERMINATION SHARE ISSUANCE. If at any time prior to
5:00 p.m. (Pacific Time) on April 1, 2004 TVG provides notice (the "WARRANT
TERMINATION NOTICE") to Youbet in accordance with Section 5.7 that it does not
intend to exercise the TVG Warrant, then (i) effective upon receipt of the
Warrant Termination Notice and tender of the original TVG Warrant to Youbet, the
TVG Warrant shall terminate and shall no longer be exercisable, and (ii) Youbet
shall issue to TVG 1,000,000 shares of Youbet Common Stock (the "TERMINATION
SHARES"). Not later than the third Business Day following the date Youbet
receives the Warrant Termination Notice, Youbet shall deliver (or cause Youbet's
transfer agent to deliver) a certificate to TVG evidencing the Termination
Shares, registered in the name of TVG. The Termination Shares, upon issuance to
TVG, shall be deemed "Registrable Securities" under Section 4.06 of the Warrant
Issuance Agreement, and the Warrant Issuance Agreement shall be deemed amended
hereby, MUTATIS MUTANDIS, to provide that the provisions of such Section 4.06
shall thereafter apply in all respects to the Termination Shares.
SECTION 1.3 SETTLEMENT PAYMENT. Youbet shall pay to TVG an amount equal
to $725,000 (the "SETTLEMENT AMOUNT") as reimbursement for legal fees and
expenses incurred by TVG in connection with the Chancery Action and the
Arbitration Proceeding. The Settlement Payment shall be paid as follows:
(i) Not later than three (3) Business Days following the date
of this Agreement, Youbet shall issue (or cause its transfer agent to issue) to
TVG a certificate, registered in the name of TVG, evidencing 124,144 shares of
Youbet Common Stock (the "INITIAL SETTLEMENT PAYMENT").
(ii) Promptly after the date of this Agreement, Youbet shall
file a claim (the "D&O CLAIM"), and use its best efforts to secure recovery,
under its existing Directors' and Officers' liability insurance policy, for an
amount equal to 50% of the Settlement Amount (the "REMAINING SETTLEMENT
AMOUNT"). All proceeds recovered by Youbet in respect of such claim prior to
July 1, 2004 shall be paid to TVG in cash within five (5) days of Youbet's
receipt of such proceeds and shall be credited against Youbet's payment
obligation to TVG in respect of the Settlement Amount. To the extent that TVG
has not received the full amount of the Remaining Settlement Amount from Youbet
by July 1, 2004, Youbet shall pay to TVG an amount equal to the difference
between (A) the Remaining Settlement Amount, and (B) the aggregate amount of
proceeds recovered by Youbet in respect of the D&O Claim and actually paid to
TVG prior to July 1, 2004 (such difference being referred herein to as the
"REMAINING SETTLEMENT PAYMENT"). The Remaining Settlement Payment, if any, shall
be paid by Youbet to TVG on July 2, 2004 in cash, or, at the option of Youbet,
in a number of shares of Youbet Common Stock equal to the quotient obtained by
dividing (x) the Remaining Settlement Payment, by (y) the average closing sale
price of a share of Youbet Common Stock on the Nasdaq SmallCap Market during the
twenty trading days ending on July 1, 2004. All of the shares of Youbet Common
Stock issued to TVG in respect of the Initial Settlement Payment, and any shares
that may be issued to TVG in respect of the Remaining Settlement Payment, shall,
upon issuance, be deemed "Registrable Securities" under Section 4.06 of the
Warrant Issuance Agreement, and such Warrant Issuance Agreement shall be deemed
amended hereby, MUTATIS MUTANDIS, to provide that the provisions of such Section
4.06 shall apply in all respects to such shares of Youbet Common Stock.
(iii) The Exercise Price of the TVG Warrant shall not be
adjusted as a result of any payment of all or a portion of the Settlement Amount
through the issuance of shares of Youbet Common Stock.
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SECTION 1.4 STANDSTILL. TVG covenants and agrees that during the period
from the date of this Agreement to April 1, 2004, (i) it will not exercise the
TVG Warrant, or transfer the TVG Warrant to any Person (as hereinafter defined),
including any "Permitted Transferee" (as defined in the TVG Warrant), and (ii)
that it will discuss in good faith with Youbet a possible arrangement or
transaction involving their respective advance deposit wagering operations;
PROVIDED, HOWEVER, nothing contained in this Section 1.4 shall require TVG to
enter into any such arrangement or transaction, or restrict or otherwise limit
the ability of TVG to at any time enter into a transaction with any other Person
relating to its advance deposit wagering operations.
SECTION 1.5 SHARE NUMBERS; RECAPITALIZATION, EXCHANGES, ETC. The share
numbers, per share amounts and other amounts set forth in this Agreement shall
be appropriately adjusted to reflect any stock splits, reverse splits, stock
dividends and other similar events affecting the Youbet Common Stock. The
provisions of this Agreement shall apply to the full extent set forth herein,
and shall be revised as necessary in a manner designed to effect the intentions
of this Agreement, with respect to (a) the Termination Shares and any shares of
Youbet Common Stock issued in respect of the Settlement Amount, (b) any and all
securities into which such Termination Shares or shares of Youbet Common Stock
issued in respect of the Settlement Amount are converted, exchanged or
substituted in any recapitalization or other capital reorganization by Youbet
and (c) any and all securities of Youbet or any successor or assign or acquiror
of Youbet (whether by merger, consolidation, sale of assets or otherwise) that
may be issued in respect of, in conversion of, in exchange for or in
substitution of, such securities of Youbet.
ARTICLE 2
COVENANTS
SECTION 2.1 CERTAIN RESTRICTIONS. (a) Until the earliest to occur of
(i) the expiration of the TVG Warrant, (ii) the earlier termination of the TVG
Warrant in accordance with Section 1.2 hereof, and (iii) if the TVG Warrant is
exercised, the date Youbet issues to the Holder (as defined in the TVG Warrant)
of the TVG Warrant the Warrant Shares (as defined in the TVG Warrant), Youbet
covenants and agrees that it will not:
(A) make or permit any change or amendments to the Youbet
Charter or Youbet Bylaws, or initiate, propose or otherwise solicit Youbet's
stockholders for the approval of any change to the Youbet Charter or Youbet
Bylaws, other than the changes incorporated into the form of Bylaws attached
hereto as Exhibit A;
(B) provide, or enter into any contract, agreement or
arrangement that provides, or amend, modify or change any existing contract,
agreement or arrangement to provide, that the existence or occurrence of a
Change of Control (as hereinafter defined) with respect to Youbet or any of its
subsidiaries would (with or without due notice or lapse of time or both) give
rise to any right of prepayment or repayment or to increased payments under, or
give rise to or accelerate any material obligation under, any contract,
agreement or arrangement to which Youbet or any of its subsidiaries or any of
their respective assets, are or become subject or bound; and
(C) except as specifically contemplated by this Agreement,
enter into any new agreement or amend any existing agreement with any officer or
director of Youbet (or, any Affiliate or Associate of any officer or director of
Youbet), that would substantially change the economic terms or the duration of
any agreement with such officer or director existing on the date hereof; or;
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(D) take any action that in any way could adversely affect
TVG's interest in the TVG Warrant or the shares of Youbet Common Stock issuable
upon exercise thereof, including without limitation, any action that imposes or
may impose any limitation on the ability of TVG to appoint a majority of the
members of Youbet's board of directors immediately after the exercise of the TVG
Warrant by TVG.
(b) Youbet covenants and agrees to immediately withdraw the Proposed
Amendments and the Revised Proxy Statement.
SECTION 2.2 SEVERANCE AGREEMENTS. (a) Youbet and Champion agree that
effective upon the execution and delivery of this Agreement, that certain
Supplement to Employment Agreement, dated as of August 27, 2003, between TVG and
Champion, shall terminate in each and every respect, with no further liability
or obligation (including any contingent obligation) thereunder on the part of
either party . Each of Youbet and Champion represents and warrants to TVG that
no other Contract exists which provides that the existence of a Change of
Control with respect to Youbet or any of its subsidiaries would (with or without
due notice or lapse of time or both) give rise to or accelerate any severance,
retention, retirement, bonus or other payment or benefit to Champion other than
the issuance to Champion of options to purchase 750,000 shares of Youbet Common
Stock at a per share exercise price equal to the fair market value of a share of
Youbet Common Stock on the date of grant (which will be within 10 days of the
date of a Change of Control).
(b) Youbet represents and warrants to TVG that (i) Exhibits B, C, and D
contain true and complete copies each Amended Supplement, (ii) Exhibits E and F
contain true and complete copies of each Amended Severance Agreement, and (iii)
each Amended Supplement and Amended Severance Agreement (A) has been duly
authorized by all necessary corporate action on the part of Youbet, (B) has been
duly executed and delivered by Youbet, and (C) upon execution and delivery of
this Agreement, will be a valid and binding obligation of Youbet, enforceable
against Youbet (and, to the knowledge of Youbet, each Group 1 Executive) in
accordance with its terms. Youbet further represents and warrants to TVG that,
except for the Amended Supplements and Amended Severance Agreements, no other
Contract exists which provides that the existence of a Change of Control of
Youbet or any of its subsidiaries would (with or without due notice or lapse of
time or both) give rise to or accelerate any severance, retention, retirement,
bonus or other payment or benefit to any Group 1 Executive.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF YOUBET. Youbet represents
and warrants to TVG as follows:
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(a) Youbet is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
corporate power to carry on its business as now conducted and to own its assets.
Youbet has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby.
(b) The board of directors of Youbet has approved the
execution and delivery of this Agreement. This Agreement has been duly executed
and delivered by Youbet, and constitutes the legal, valid and binding obligation
of Youbet, enforceable against Youbet in accordance with its terms.
(c) The execution and delivery by Youbet of this Agreement
does not, and the performance by Youbet of its obligations hereunder and the
consummation of the transactions contemplated hereby will not:
(i) conflict with or violate the Youbet Charter or
Youbet Bylaws;
(ii) require any consent, approval, order or
authorization of or other action by any Governmental Agency or Authority (as
hereinafter defined) or any registration, qualification, declaration or filing
with or notice to any Governmental Agency or Authority in each case on the part
of or with respect to Youbet;
(iii) require, on the part of Youbet, any consent by
or approval (including any approval of the stockholders of Youbet) or
authorization of or notice to any other Person, whether under any license or
other Contract or otherwise, which has not been obtained;
(iv) conflict with or result in any violation or
breach of or default (with or without notice or lapse of time, or both) under,
or create any rights of termination, cancellation or acceleration in any Person
under any material Contract to which Youbet is a party (any such conflict,
violation, breach or default, a "VIOLATION"); or
(v) result in a Violation of, under or pursuant to
any Law or Judgment (each as defined below) applicable to Youbet or by which it,
or any of its material assets are bound or affected.
(d) Each of (i) the Termination Shares, (ii) the shares of
Youbet Common Stock issued pursuant to Section 1.3(i) in respect of the Initial
Settlement Payment, and (iii) the shares of Youbet Common Stock, if any, issued
pursuant to Section 1.3(ii) in respect of the Remaining Settlement Payment
shall, when issued in accordance with this Agreement, be duly and validly issued
and fully paid and non-assessable, and no stockholder of Youbet will have any
preemptive right of subscription or purchase in respect thereof, and will be
free and clear of any Liens or Restrictions whatsoever (other than restrictions
on transfer under federal or state securities laws).
(e) Since May 18, 2001, Youbet has not issued or sold any
shares of Youbet Common Stock or securities exchangeable or exercisable for, or
convertible into, shares of Youbet Common Stock for consideration of less than
$2.50 per share, other than (i) shares of Youbet Common Stock issued upon
exercise of options and warrants listed on Schedule 2.03 of the Warrant Issuance
Agreement, (ii) warrants to purchase an aggregate of 200,000 shares of Youbet
Common Stock issued on March 21, 2002 to corporations controlled by Xxxxx X.
Xxxxxxxx and Xxxxxxxx Xxxxx; (iii) warrants issued in connection with the
Xxxx-Xxxxxxx Transaction, (iv) stock options issued pursuant to the Youbet 1998
Stock Option Plan which remain outstanding and unexercised on the date hereof,
and (v) the securities listed on Schedule 1.1.
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SECTION 3.2 REPRESENTATIONS AND WARRANTIES OF TVG. TVG represents and
warrants to Youbet as follows:
(a) TVG is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the requisite power to carry on its business as now conducted and to own its
assets. TVG has all requisite power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
(b) The General Partner of TVG has approved the execution and
delivery of this Agreement. This Agreement has been duly executed and delivered
by TVG and constitutes the legal, valid and binding obligation of TVG,
enforceable against TVG in accordance with its terms.
(c) The execution and delivery by TVG of this Agreement does
not, and the performance by TVG of its obligations hereunder and the
consummation of the transactions contemplated hereby will not:
(i) conflict with or violate TVG's Certificate of
Limited Partnership or Agreement of Limited Partnership;
(ii) require any consent, approval, order or
authorization of or other action by any Governmental Agency or Authority or any
registration, qualification, declaration or filing with or notice to any
Governmental Agency or Authority in each case on the part of or with respect to
TVG;
(iii) require, on the part of TVG, any consent by or
approval (including any approval of the limited partners of TVG) or
authorization of or notice to any other Person, whether under any license or
other Contract or otherwise, which has not been obtained;
(iv) result in any Violation under any material
Contract to which TVG is a party; or
(v) result in a Violation of, under or pursuant to
any Law or Judgment applicable to TVG or by which it, or any of its material
assets are bound or affected. ARTICLE 4
TERMINATION OF LITIGATION AND RELATED MATTERS
SECTION 4.1 DISMISSAL OF LITIGATION. TVG and Youbet agree to
immediately take all actions necessary to seek the dismissal of the Chancery
Action and the Arbitration Proceeding with prejudice. In that connection, as
promptly as practicable, TVG shall cause to be delivered (i) to the Court of
Chancery of the State of Delaware a stipulation of dismissal concerning the
Chancery Action substantially in the form attached hereto as Exhibit G and (ii)
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to the American Arbitration Association a stipulation of dismissal concerning
the Arbitration Proceeding substantially in the form attached hereto as Exhibit
H. To the extent that any such dismissal may require entry of an order, the
parties hereto shall use their best efforts to secure that order.
SECTION 4.2 RELEASE OF CLAIMS. (a) TVG and its subsidiaries, parents,
affiliates, predecessors, successors, officers, directors, agents, attorneys,
employees and assigns (collectively, the "TVG PARTIES") hereby forever release,
waive, acquit and discharge Youbet and its subsidiaries, affiliates,
predecessors, successors, officers, directors, agents, attorneys, employees and
assigns (collectively, the "YOUBET PARTIES") of and from all liabilities,
claims, actions, causes of actions, suits, demands and damages arising from or
related to (i) the actions taken by the Youbet Parties prior to the date of this
Agreement to implement or adopt the Classified Board Provision or the
Supermajority Voting Provision, and (ii) the adjustment to the Exercise Price of
the TVG Warrant as a result of the Xxxx-Xxxxxxx Transaction and the Other
Shares; PROVIDED, HOWEVER, that nothing contained in this Section 4.2(a) shall
be construed to constitute a release or a covenant not to xxx on the part of the
TVG Parties with respect to any claims or causes of action any TVG Party may
have against any of the Youbet Parties (A) relating to or arising out of the
License and Content Agreement, dated May 18, 2001, between TVG and Youbet, (B)
seeking an adjustment to the Exercise Price of the TVG Warrant in connection
with any transaction or share issuance other than the Xxxx-Xxxxxxx Transaction
or the Other Shares, (C) relating to or arising out of any Contract between
Youbet and any of its officers or directors (including any Contract providing
for severance, retirement, termination or retention payments); and (D) with
respect to the enforcement or breach of this Agreement.
(b) Each of the Youbet Parties hereby forever releases, waives, acquits
and discharges each of the TVG Parties of and from all liabilities, claims,
actions, causes of action, suits, demands and damages arising from or related to
the Chancery Action, the Arbitration Proceeding or any of the matters alleged
therein.
ARTICLE 5
MISCELLANEOUS
SECTION 5.1 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, together with
all Schedules and Exhibits hereto, constitute the entire understanding of the
parties with respect to the transactions contemplated hereunder. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto.
SECTION 5.2 EXPENSES. Except as otherwise provided herein, TVG and
Youbet shall each pay its own expenses incident to the negotiation, preparation,
and carrying out of this Agreement, including all fees and expenses of its
counsel for all activities of such counsel.
SECTION 5.3 SURVIVAL. All representations, warranties and covenants
shall survive the consummation of the transactions contemplated hereby.
SECTION 5.4 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any manner the meaning or
interpretation of this Agreement.
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SECTION 5.5 SEVERABILITY. If any provision of this Agreement is held by
a court of competent jurisdiction to be unenforceable, the remaining provisions
shall remain in full force and effect.
SECTION 5.6 COUNTERPARTS. This Agreement may be executed by facsimile
and in multiple counterparts, all of which shall be considered one and the same
instrument and shall become effective when all counterparts have been signed by
each party hereto and delivered to the other parties hereto, it being understood
that all parties need not sign the same counterpart.
SECTION 5.7 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered by hand or by a
reputable national overnight delivery service, or mailed by registered or
certified mail, return receipt requested, or sent via facsimile, with
confirmation of receipt, to the parties at the following address or at such
other address for a party as shall be specified by notice hereunder:
if to Youbet, to:
Xxxxxx.xxx, Inc.
0000 XxXxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Howrey Xxxxx Xxxxxx & White, LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
if to TVG, to:
TVG Network
0000 Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
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with copies to:
Xxxxxxxx, Xxxxxx & Finger, P.A.
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000 Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
J. Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and to:
Xxxxx Xxxxx L.L.P.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
Any such notice shall be deemed to have been given (a) upon actual delivery, if
delivered by hand, (b) on the next Business Day following deposit of such
notice, properly addressed with carriage prepaid, with a reputable national
overnight delivery service, (c) on the third Business Day following deposit of
such notice, properly addressed with postage prepaid, with the United States
Postal Service if mailed by registered or certified mail, return receipt
requested, or (d) upon sending such notice, if sent via facsimile, with
confirmation of receipt.
SECTION 5.8 SUCCESSORS AND ASSIGNS. This Agreement may not be assigned
(either voluntarily or involuntarily) by any party hereto without the express
written consent of the other party. Any attempted assignment in violation of
this Section shall be void and ineffective for all purposes.
SECTION 5.9 GOVERNING LAW AND VENUE; CONSENT TO JURISDICTION. This
Agreement will be governed by and construed and enforced in accordance with the
internal laws of the State of Delaware, without giving effect to the conflict of
law principles thereof. The parties hereto agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought exclusively in the Court of Chancery of the State of
Delaware, so long as such court shall have subject matter jurisdiction over such
suit, action or proceedings, or alternatively in any state or federal court
located within the State of Delaware. The parties hereto irrevocably waive, to
the fullest extent permitted by law, any objection that the parties may now or
hereafter have to the personal jurisdiction of such court, the laying of the
venue of any such suit, action or proceeding in any such court or that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process of such party as provided in Section 5.7 shall be deemed
effective service of process on such party.
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SECTION 5.10 SPECIFIC ENFORCEMENT. The parties hereto agree that money
damages would not be a sufficient remedy for any breach of this Agreement
because of the difficulty of ascertaining the amount of damage that will be
suffered in connection therewith, that the non-breaching parties would be
irreparably damaged in the event any provision of this Agreement is not
performed in accordance with its specific terms or were otherwise breached and
that the non-breaching parties shall be entitled to equitable relief (including
injunction and specific performance) in any action instituted in any court of
the United States or any state thereof having subject matter jurisdiction, as a
remedy for any material breach or to prevent any material breach of this
Agreement. Such remedies shall not be deemed to be exclusive remedies for a
breach or anticipatory breach of this Agreement, but shall be in addition to all
other remedies available at law or equity.
SECTION 5.11 RULES OF CONSTRUCTION. The parties hereto acknowledge that
they have been represented by counsel during the negotiation, preparation and
execution of this Agreement and, therefore, waive the application of any Law,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
SECTION 5.12 PRESS RELEASE AND ANNOUNCEMENTS. No party shall issue any
press release or other public announcement relating to the subject matter of
this Agreement or the transactions contemplated hereunder without prior approval
of the other party, except that Youbet may issue the press release attached
hereto as Exhibit I.
ARTICLE 6
DEFINITIONS
SECTION 6.1 DEFINITIONS. For purposes of this Agreement, the following
terms shall have the meanings specified below unless the context otherwise
requires:
AFFILIATE: As defined in Rule 12b-2 of the Securities Exchange
Act of 1934.
AGREEMENT: This Settlement Agreement and the Schedules and
Exhibits attached hereto.
AMENDED SEVERANCE AGREEMENT: The Amendments, each dated as of
February 17, 2004, to the Severance Agreements, dated August 27, 2003, between
Youbet and each of Xxxxxxx Xxxxxxx and Xxxxxxx Xxxxx, in the forms set forth as
Exhibits E and F
AMENDED SUPPLEMENTS: The Amendments, each dated as of February
17, 2004, to the Supplement to Employment Agreements, each dated as of August
27, 2003, between Youbet and each of Xxxx Xxxxxxx, Xxxxxxx Xxxxxx and Xxxxxx
Xxxxx, in the form set forth as Exhibits B, C and D.
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ARBITRATION PROCEEDING: The proceeding filed with the American
Arbitration Association, captioned ODS TECHNOLOGIES, L.P. V. XXXXXX.XXX, INC.,
Case No. 14 168 01898 03. ----
ASSOCIATE: As defined in Rule 12b-2 of the Securities Exchange
Act of 1934.
BENEFICIALLY OWN AND BENEFICIAL OWNERSHIP: With respect to any
securities shall mean having beneficial ownership as determined pursuant to Rule
13d-3 under the Securities and Exchange Act of 1934 including pursuant to any
agreement, arrangement or understanding, whether or not in writing.
BUSINESS DAY: Any day other than Saturday, Sunday or a day in
which banks are required or permitted to close in New York, New York.
CHANCERY ACTION: The action in the Court of Chancery of the
State of Delaware captioned ODS TECHNOLOGIES, L.P. V. XXXXX X. XXXXXXXX, XXXXXXX
X. XXXXXXXX, XXXX XXXXXXX, XXX XXXXXXXXXX, XXXXX XXXXX, XXXXXX X. XXXXXXXX AND
XXXXXX.XXX, INC., Civil Action No. 20527.
CHANGE OF CONTROL: Any (i) change in the direct or indirect
record or beneficial ownership of any equity securities of Youbet, (ii) merger,
consolidation, statutory share exchange or other similar transaction involving
Youbet or any of its subsidiaries, or (iii) change in the composition of the
board of directors of Youbet or any of Youbet's subsidiaries.
CLASSIFIED BOARD PROVISION: The proposed amendments to the
Youbet Charter and Youbet Bylaws that would classify the Youbet Board.
CONTRACT: Any agreement, contract, license, indenture, lease,
mortgage, license, plan, arrangement, commitment or instrument (whether written
or oral).
D&O CLAIM: As defined in Section 1.3.
EXERCISE PRICE: As defined in the TVG Warrant.
GOVERNMENTAL AGENCY OR AUTHORITY: Any nation or government,
any state, or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government.
GROUP 1 EXECUTIVES: Each of Xxxx X. Xxxxxxx, Xxxxxxx X.
Xxxxxx, Xxxxxx Xxxxx, Xxxxxxx Xxxxx and Xxxxxx Xxxxxxx.
INITIAL SETTLEMENT PAYMENT: As defined in Section 1.3.
JUDGMENT: Any judgment, writ, order or decree of or by any
court, judge, justice or magistrate, including any bankruptcy court or judge,
and any order of or by any other Governmental Agency or Authority.
LAW: The common law and any statute, ordinance, code or other
law, rule, regulation, order, technical or other standard, requirement or
procedure enacted, adopted, applied or followed by any Governmental Agency or
Authority (including any court).
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LIEN: Any mortgage, pledge, lien, encumbrance, charge, adverse
claim or restriction of any kind affecting title or resulting in an encumbrance
against property, real or personal, tangible or intangible, or a security
interest of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any third party option or other
agreement to sell and any filing of or agreement to give, any financing
statement under the Uniform Commercial Code (or equivalent statute) of any
jurisdiction).
LICENSE AGREEMENT: As defined in Section 4.3.
OTHER SHARES: Those shares of Youbet common stock issued since
May 18, 2001 for consideration of less than $2.50 per share upon exercise of
certain stock options and warrants which are listed on Schedule 1.1 hereto,
representing 508,435 shares in the aggregate.
PARTY; PARTIES: As the context requires, either or both of TVG
or Youbet, collectively.
PERSON: Any individual, partnership, joint venture,
corporation, company, trust, incorporated organization, Governmental Agency or
Authority, business association or any other entity.
PROPOSED AMENDMENTS: The Classified Board Provision and the
Supermajority Voting Provision.
REMAINING SETTLEMENT AMOUNT: As defined in Section 1.3
REMAINING SETTLEMENT PAYMENT: As defined in Section 1.3.
RESTRICTIONS: With respect to any capital stock or other
security, any voting or other trust or agreement, option, warrant, escrow
arrangement, proxy, buy-sell agreement, power of attorney or other Contract,
arrangement or understanding, any Judgment or any Law (other than the Securities
Act of 1933 and customary securities or "blue sky" laws of any jurisdiction
restricting the transfer of securities) which, conditionally or unconditionally,
(i) grants to any Person the right to purchase or otherwise acquire, or
obligates any Person to sell or otherwise dispose of or issue, or otherwise
results or, whether upon the occurrence of any event or with notice or lapse of
time or both or otherwise, may result in any Person acquiring, (x) any of such
capital stock or other security; (y) any of the proceeds of, or any
distributions paid or which are or may become payable with respect to, any of
such capital stock or other security; or (z) any interest in such capital stock
or other security or any such proceeds or distributions; (ii) restricts or,
whether upon the occurrence of any event or with notice or lapse of time or both
or otherwise, may restrict the transfer or voting of, or the exercise of any
rights or the enjoyment of any benefits arising by reason of ownership of, any
such capital stock or other security or any such proceeds or distributions; or
(iii) creates or, whether upon the occurrence of any event or with notice or
lapse of time or both or otherwise, may create a Lien or purported Lien on such
capital stock or other security, proceeds or distributions.
REVISED PROXY STATEMENT: The Revised Proxy Statement on
Schedule 14A filed by Youbet with the SEC on November 17, 2003.
12
XXXX-XXXXXXX WARRANTS: Warrants to purchase an aggregate of
2,998,400 shares that Youbet repriced and extended in connection with the
Xxxx-Xxxxxxx Transaction.
XXXX-XXXXXXX TRANSACTION: The financing transaction effective
February 18, 2003, in which Youbet issued $2 million in short term notes to
investors.
SEC: The U.S. Securities and Exchange Commission.
SETTLEMENT AMOUNT: As defined in Section 1.3.
SUPERMAJORITY VOTING PROVISION: The proposed amendments to the
Youbet Charter and Youbet Bylaws that would eliminate the power of the Youbet
Board to amend the Youbet Bylaws and require the approval of 66 2/3% of Youbet's
outstanding common stock for any future amendments to the Youbet Charter or
Youbet Bylaws.
TERMINATION SHARES: As defined in Section 1.2.
TVG PARTIES: As defined in Section 4.3.
TVG WARRANT: The warrant dated September 20, 2001 issued by
Youbet to TVG pursuant to the Warrant Issuance Agreement.
VIOLATION: As defined in Section 3.1(c)(iv).
WARRANT ISSUANCE AGREEMENT: The Warrant Issuance Agreement,
dated as of May 18, 2001, between TVG and Youbet.
WARRANT TERMINATION NOTICE: As defined in Section 1.2.
YOUBET BOARD: The board of directors of Youbet.
YOUBET BYLAWS: The Bylaws of Youbet.
YOUBET CHARTER: The certificate of incorporation of Youbet.
YOUBET COMMON STOCK: The common stock, par value $.001 per
share, of Youbet.
YOUBET PARTIES: As defined in Section 4.3.
SECTION 6.2 TERMS GENERALLY. The definitions in SECTION 6.1 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The words "herein",
"hereof" and "hereunder" and words of similar import refer to this Agreement
(including the Exhibits and Schedules) in its entirety and not to any part
hereof unless the context shall otherwise require. All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
13
the context shall otherwise require. Unless the context shall otherwise require,
any references to any statute or regulation are to it as amended and
supplemented. Any reference in this Agreement to a "day" or number of "days"
(without the explicit qualification of "Business") shall be interpreted as a
reference to a calendar day or number of calendar days. If any action or notice
is to be taken or given on or by a particular calendar day, and such calendar
day is not a Business day, then such action or notice shall be deferred until,
or may be taken or given on, the next Business day.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first referred to above.
XXXXXX.XXX, INC.
By: /S/ XXXX XXXXXXX
--------------------------------------
Name: Xxxx Xxxxxxx
Title: Chief Financial Officer and
Secretary
ODS TECHNOLOGIES, L.P.
d/b/a TVG NETWORK
By: TVGuide, Inc., a General Partner
By: /S/ XXXX X'XXXX
--------------------------------
Name: Xxxx X'Xxxx
Title: Chief Operating Officer
For purposes of Section 2.2(a) only:
/S/ XXXXXXX X. XXXXXXXX
------------------------------------
XXXXXXX X. XXXXXXXX
14
The exhibits and schedules listed below have been omitted. A copy of
the omitted exhibits and schedules will be furnished to the
Securities and Exchange Commission upon their request.
EXHIBITS
--------
Exhibit A Amended and Restated Bylaws of Xxxxxx.xxx, Inc.
Exhibit B Amendment, dated as of February 19, 2004, to that certain
Supplement to Employment Agreement, dated as of August 27,
2003, by and between Xxxx Xxxxxxx and Xxxxxx.xxx, Inc.
Exhibit C Amendment, dated as of February 19, 2004, to that certain
Supplement to Employment Agreement, dated as of August 27,
2003, by and between Xxxxxxx Xxxxxx and Xxxxxx.xxx, Inc.
Exhibit D Amendment, dated as of February 19, 2004, to that certain
Supplement to Employment Agreement, dated as of August 27,
2003, by and between Xxxxxx Xxxxx and Xxxxxx.xxx, Inc.
Exhibit E Amendment, dated as of February 19, 2004, to that certain
Severance Agreement, dated as of August 27, 2003, by and
between Xxxxxxx Xxxxxxx and Xxxxxx.xxx, Inc.
Exhibit F Amendment, dated as of February 19, 2004, to that certain
Severance Agreement, dated as of August 27, 2003, by and
between Xxxxxxx Xxxxx and Xxxxxx.xxx, Inc.
Exhibit G Form of Stipulation of Dismissal to be filed with the Court of
Chancery of the State of Delaware
Exhibit H Form of Stipulation of Dismissal to be filed with the American
Arbitration Association
Exhibit I Form of Press Release
Schedule 1.1 Stock Options Granted and Exercised Since May 18, 2001 for
Consideration of Less than $2.50
