ex42to8k307554_11112009.htm


    Exhibit 4.2

     

    
      


       

      AMENDMENT
TO RIGHTS AGREEMENT

       

      This
Amendment to Rights Agreement dated as of November 11, 2009 (this “Amendment”), is
between Youbet.com, Inc., a Delaware corporation (the “Company”), and
American Stock Transfer & Trust Company LLC, a New York limited liability
trust company (the “Rights
Agent”).

       

      WITNESSETH:

       

      WHEREAS,
the Company and the Rights Agent constitute all of the parties to that certain
Rights Agreement, dated as of March 31, 2009 (the “Rights Agreement”),
and desire to amend the Rights Agreement as set forth herein; and

       

      WHEREAS,
on November 11, 2009, the Company entered into that certain Agreement and Plan
of Merger (the “Merger
Agreement”) with Churchill Downs Incorporated, a Kentucky corporation,
Tomahawk Merger Corp., a Delaware corporation and Tomahawk Merger LLC, a
Delaware limited liability company.

       

      NOW,
THEREFORE, in consideration of the promises and of the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, and
pursuant to the Rights Agreement and in accordance with Section 26 thereof, the
parties hereto do hereby agree as follows (capitalized terms used but not
defined herein have the meanings ascribed to such terms in the Rights
Agreement):

       

      1.           Amendments to the Rights
Agreement.  The Rights Agreement shall be amended as
follows:

       

      (a)           Section
1 of the Rights Agreement is hereby amended to replace the definition of “Exempt
Person” with the following:

       

      “(t)
“Exempt Person” shall
mean (i) a Person whose Beneficial Ownership (together with all Affiliates and
Associates of such Person) of 4.9% or more of the then-outstanding Common Stock
would not, as determined by the Board in its sole discretion, jeopardize or
endanger the availability to the Company of its NOLs, (ii) any Person that
beneficially owns, as of the Rights Dividend Declaration Date, 4.9% or more of
the outstanding shares of Common Stock and (iii) Churchill and its Affiliates
and Associates; provided, however, that, with respect
to clause (iii) of this paragraph, any such Person shall only be deemed to be an
Exempt Person in connection with the Merger, the announcement of entry into the
Merger Agreement and the other transactions contemplated by the Merger
Agreement, and shall cease to be an Exempt Person upon the termination of the
Merger Agreement for any reason; provided, further, that, with respect
to clause (ii) of this paragraph, any such Person shall only be deemed to be an
Exempt Person for so long as it beneficially owns no more than the amount of
Common Stock it owned on the Rights Dividend Declaration Date; and provided, further, that, with respect
to clauses (i) and (ii) of this paragraph, any Person shall cease to be an
Exempt Person as of the date that such Person ceases to beneficially own 4.9% or
more of the shares of the then outstanding Common Stock. Additionally, a Person
shall cease to be an Exempt Person if the Board, in its sole discretion, makes a
contrary determination with respect to the effect of such Person’s Beneficial
Ownership (together with all Affiliates and Associates of such Person) with
respect to the availability to the Company of its NOLs.”

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (b)           Section
1 of the Rights Agreement is hereby amended to replace the definition of “Exempt
Transaction” with the following:

       

      “(u)
“Exempt Transaction”
shall mean (i) the announcement, commencement or consummation of the Merger and
the other transactions contemplated by the Merger Agreement or (ii) any
transaction that the Board determines, in its sole discretion, is exempt, which
determination shall be irrevocable.”

       

      (c)           The
following definitions shall be added to Section 1 of the Rights Agreement in the
appropriate locations and the remaining sections shall be renumbered
accordingly:

       

      ““Churchill” shall mean
Churchill Downs Incorporated, a Kentucky corporation, or any of its
Subsidiaries, including Tomahawk Merger Corp., a Delaware corporation, and
Tomahawk Merger LLC, a Delaware limited liability company.

       

      “Merger” shall have the
meaning assigned to such term in the Merger Agreement.

       

      “Merger Agreement” shall mean
the Agreement and Plan of Merger, dated as of November 11, 2009, among the
Company, Churchill Downs Incorporated, Tomahawk Merger Corp. and Tomahawk Merger
LLC.””

       

      2.           Termination of Rights
Agreement. Effective as of the Effective Time (as defined in the Merger
Agreement), the Rights Agreement shall be terminated and be of no further force
and effect.

       

      3.           Miscellaneous.

       

      (a)           The
laws of the State of Delaware shall govern the validity, interpretation,
construction, performance, and enforcement of this Amendment, excluding the
choice of laws provisions of the State of Delaware.

       

      (b)           Except
as modified herein, all other terms and provisions of the Rights Agreement
(including the Exhibits thereto) are unchanged and remain in full force and
effect.

       

      (c)           This
Amendment may be executed in counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.  This Amendment shall become effective when each party to
this Amendment shall have received a counterpart hereof signed by the other
party to this Amendment.

       

      
        
           

        

        
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      (d)           This
Amendment shall be deemed effective (retroactive to the occurrence of any Exempt
Transaction) as of, and immediately prior to, the execution and delivery of the
Merger Agreement.

       

      (e)           This
Amendment shall be binding upon any permitted assignee, transferee, successor or
assign to any of the parties hereto.

       

      (f)           If
any term, provision, covenant or restriction of this Amendment is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment, and the Rights Agreement, shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated.

       

      (g)           The
officer of the Company executing this Amendment on behalf of the Company hereby
certifies on behalf of the Company that this Amendment complies with Section 26
of the Rights Agreement.

       

      (h)           In
all respects not inconsistent with the terms and provisions of this Amendment,
the Rights Agreement is hereby ratified, adopted, approved and
confirmed.  In executing and delivering this Amendment, the Rights
Agent shall be entitled to all the privileges and immunities afforded to the
Rights Agent under the terms and conditions of the Rights
Agreement.

       

      
        
           

        

        
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      IN
WITNESS WHEREOF, the parties have caused this Amendment to be duly executed by
their duly authorized representatives as of the date first written
above.

       

      
        	 
      	
                YOUBET.COM,
      INC.

              
	 
      	 
      
	 
      	
                By:

              	
                
                  /s/
      David Goldberg

                

              
	 
      	 
      	
                Name:

              	
                David
      Goldberg

              
	 
      	 
      	
                Title:

              	
                President
      & Chief Executive Officer

              


      

      


      


      
        	 
      	
                AMERICAN
      STOCK TRANSFER & TRUST COMPANY LLC

              
	 
      	 
      
	 
      	
                By:

              	
                
                  /s/
      Herbert J. Lemmer

                

              
	 
      	 
      	
                Name:

              	
                /s/
      Herbert J. Lemmer

              
	 
      	 
      	
                Title:

              	
                Vice
      President

              


      

      


      
        
           

        

        
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