Document:

EXHIBIT 10.5

                               SECURITY AGREEMENT

      THIS  SECURITY  AGREEMENT  ("Security  Agreement")  is made as of April 1,
2009,  by  American  Church  Mortgage  Company,  a  Minnesota  corporation  (the
"Company"),  in favor of Herring Bank, a state banking  institution,  as trustee
under the Indenture described below (the "Trustee").

      WHEREAS,  the  Company  has  entered  into an  Indenture  dated  as of the
approximate date hereof with the Trustee (the "Indenture"),  whereby the Trustee
has agreed to act as the indenture trustee under the Trust Indenture Act of 1939
for the  benefit  of the  holders  of those  certain  Series C Secured  Investor
Certificates issued by the Company (the "Securities"); and

      WHEREAS, under the terms of the Indenture the Company has agreed to pledge
certain  collateral as security for the payment of principal and interest on the
Securities.

      NOW, THEREFORE, the Company agrees with Trustee as follows:

      1.    Security Interest.  The Company hereby pledges to, and grants to the
Trustee a security  interest  (herein  called the "Security  Interest")  in, the
Collateral  (as  described  in  Section  2 below)  to  secure  the  payment  and
performance of the following  debts,  liabilities and obligations of the Company
(such debts,  liabilities and obligations being herein collectively  referred to
as the "Obligations"):

            (a)   the payment of principal  and interest on the  Securities,  as
      required under the terms and conditions of the Securities;

            (b)   the  Company's  obligations  under  the  Indenture,  and  this
      Security Agreement; and

            (c)   all  amounts  owed  under  any   modifications,   renewals  or
      extensions of any of the foregoing Obligations.

      2.    Collateral.   As  used  herein,  the  term  "Collateral"  means  the
following property:

            (a)   the promissory  notes,  church bonds, and investment  property
      described in Schedule A;

            (b)   such  Additional  Notes that are  designated by the Company as
      Collateral pursuant to Section 3 below;

            (c)   any  Substituted  Notes that are  substituted  by Company  for
      existing Collateral pursuant to Section 4 below;

            (d)   supporting obligations of the Notes described in (a), (b), and
      (c) above; and

            (e)   proceeds of any and all of the foregoing.

<PAGE>

      Each  of the items  described  in (a),  (b),  and (c) above is referred to
herein as a "Note" and the all of such items are collectively referred to herein
as the "Notes."

      The   Company shall within five (5) business days of the date hereof,  and
in any event  prior to the sale of any  Securities,  deliver to the  Trustee the
Notes  described in Schedule A,  together  with  endorsements  by the Company in
blank for such Notes.

      3.    Additional  Collateral.  Subject to the terms of Section  4.9 of the
Indenture,  the Company may at any time designate additional promissory notes or
similar  instruments or investment property  ("Additional  Notes") as Collateral
for the Obligations. The Company may make such designation by delivering (a) the
original  Additional  Notes and (b) an  endorsement  in blank for the Additional
Notes to the Trustee and upon the Trustee's receipt,  the Additional Notes shall
be deemed to be Collateral.

      4.    Substitution of Collateral.

            (a)   Provided  that  no  Event  of  Default  has  occurred  and  is
      continuing,  the Company shall have the right (and, under the terms of the
      Indenture,   in  certain   circumstances  the  obligation)  to  substitute
      promissory notes or other similar  instruments or investment property that
      meet  the  terms  and   conditions   of  Section  4.9  of  the   Indenture
      ("Substituted   Notes")  for  Notes   previously   pledged  as  Collateral
      ("Released Notes").

            (b)   The Company may make such a substitution  by delivering to the
      Trustee:

                  (i)   a written  notice to the Trustee  executed by an officer
            of the Company which contains (A) a description  of the  Substituted
            Note(s), (B) a statement that such Substituted Note has been pledged
            by the Company as Collateral  under this Security  Agreement,  (C) a
            certification by the Company that the representations and warranties
            regarding  Collateral  contained  in  Section  6 below are true with
            respect to the  Substituted  Note, (D) a description of the Notes to
            be released from the Security  Interest  (i.e., a description of the
            Released Note(s)),  and (E) a certification by the Company that upon
            the release of the Released  Notes from the Security  Interest,  the
            value of the  Collateral  shall be at  least  100% of the  aggregate
            principal  amount of the Securities then  outstanding  (the "Minimum
            Value");

                  (ii)  the original Substituted Note(s); and

                  (iii) an endorsement in blank for the Substituted Notes.

            (c)   So long as the  aggregate  value of the  Collateral  after the
      release of the Released Notes is at least the Minimum Value,  the value of
      the Substituted  Note(s) being substituted for the Released Note(s) may be
      less than the value of the Released Note(s).

            (d)   Upon the  Trustee's  receipt  of the  documents  described  in
      Section 4(b), the Substituted Note(s) shall be deemed to be Collateral and
      the  Released  Note(s)  shall be deemed to be released  from the  Security
      Interest  and  shall no longer be  subject  to the terms of this  Security
      Agreement.  The Trustee  shall  promptly  thereafter  return the

                                       -2-

<PAGE>

      Released Note(s) to the Company,  together  with any  endorsement  of such
      Released Note(s) made by the Company.

            (e)   In the event that the  Trustee  has filed (or has caused to be
      filed) a financing  statement in order to perfect the Security Interest in
      a Note that has become a Released Note, the Trustee shall prepare and file
      a financing  statement amendment which releases the Released Note from the
      Security Interest and the Security Agreement (the "Release").  The Trustee
      hereby  authorizes  the  Company  to  file a copy  of the  Release  in the
      appropriate  filing office if the Trustee has not filed the Release within
      ten (10) business days of the Trustee's receipt of the documents described
      in Section 4(b). This  authorization  is intended to comply with the terms
      of Minn.  Stat.  Section  336.9-509 and no further  writing is required as
      evidence of the  Trustee's  grant of  authority to the Company to file the
      Release.

      5.    Representations,  Warranties and Agreements. The Company represents,
warrants and agrees that:

            (a)   The Company is a corporation  organized  under the laws of the
      state of Minnesota;

            (b)   The  Company's  exact  legal name is as set forth in the first
      paragraph of this Security Agreement;

            (c)   This  Agreement  has been duly and validly  authorized  by all
      necessary  corporate  action and the person  executing  this  Agreement on
      behalf of the Company has the requisite authority to act for the Company.

            (d)   Until the Obligations are paid in full, the Company will:

                  (i)   preserve  its  corporate   existence  and  not,  in  one
            transaction  or a series  of  related  transactions,  merge  into or
            consolidate with any other entity,  or sell all or substantially all
            of its assets;

                  (ii)  not change its name, its type of organization, the state
            of  its  incorporation  or  organization,   or  its   organizational
            identification number; and

                  (iii) not change its  corporate  name  without  providing  the
            Trustee with thirty (30) days' prior written notice.

      6.    Representations,   Warranties   and   Agreements   With  Respect  to
Collateral. The Company represents, warrants and agrees that:

            (a)   The Company has (or will have at the time the Company acquires
      rights in Collateral  hereafter  arising)  absolute  title to each item of
      Collateral  free  and  clear of all  claims,  security  interests,  liens,
      encumbrances,  and  restrictions on transfer or pledge except the Security
      Interest and will defend the  Collateral  against all claims or demands of
      all persons other than the Trustee.  Except as provided in the  Indenture,
      the Trustee

                                       -3-

<PAGE>

      does not  authorize,  and the Company  agrees not to (i) make any sales of
      any of the  Collateral;  or (ii) grant any other security  interest in the
      Collateral.

            (b)   Each right to payment and each instrument,  document,  chattel
      paper and other  agreement  constituting  or evidencing  Collateral is (or
      will be when arising or issued) the valid genuine and legally  enforceable
      obligation,  subject to no defense,  set-off or  counterclaim  (other than
      those arising in the ordinary course of business) of the account debtor or
      other obligor named therein or in the Company's records pertaining thereto
      as being obligated to pay such obligation.  The Company will neither agree
      to any material modification or amendment nor agree to any cancellation of
      any such obligation without the Trustee's prior written consent,  and will
      not  subordinate any such right to payment to claims of other creditors of
      such account debtor or other obligor.

            (c)   The Company covenants that it will:

                  (i)   promptly  pay all taxes and other  governmental  charges
            levied or assessed upon or against any Collateral or upon or against
            the creation, perfection or continuance of the Security Interest;

                  (ii)  keep  all  Collateral  free and  clear  of all  security
            interests, liens and encumbrances except the Security Interest;

                  (iii) at all  reasonable  times,  permit  the  Trustee  or its
            representatives  to  examine  or inspect  any  Collateral,  wherever
            located,  and to examine,  inspect and copy the Company's  books and
            records  pertaining to the Collateral and its business and financial
            condition  and to send and discuss  with  account  debtors and other
            obligors requests for verifications of amounts owed to the Company;

                  (iv)  upon the request of the Trustee,  provide photocopies of
            any of the Collateral (or, to the extent that such Collateral is not
            of a tangible nature,  photocopies of  documentation  evidencing the
            Collateral);

                  (v)   promptly  notify the  Trustee of any loss of or material
            damage to any  Collateral  or of any  adverse  change,  known to the
            Company,  in the prospect of payment of any sums due on or under any
            instrument, chattel paper, or account constituting Collateral;

                  (vi)  not use or keep any Collateral,  or permit it to be used
            or kept,  for any  unlawful  purpose or in violation of any federal,
            state or local law, statute or ordinance; and

      If the  Company at any time fails to  perform  or  observe  any  agreement
contained in this Section 6(c),  and if such failure shall continue for a period
of ten (10)  calendar days after the Trustee  gives the Company  written  notice
thereof,  the Trustee may (but need not)  perform or observe  such  agreement on
behalf and in the name,  place and stead of the Company  (or,  at the  Trustee's
option, in the Trustee's own name) and may (but need not) take any and all other
actions which the Trustee may reasonably  deem necessary to cure or correct such
failure (including,  without limitation,  the payment of taxes, the satisfaction
of security interests, liens, or

                                       -4-

<PAGE>

encumbrances,  the performance of obligations under contracts or agreements with
account debtors or other obligors, the procurement and maintenance of insurance,
and the procurement of repairs, transportation or insurance); and, except to the
extent  that  the  effect  of  such  payment  would  be to  render  any  loan or
forbearance of money usurious or otherwise illegal under any applicable law, the
Company shall thereupon pay the Trustee within fifteen (15) business days of the
Company's receipt of the Trustee's demand, the amount of all moneys expended and
all costs and expenses  (including  reasonable  attorneys'  fees for any purpose
relating  to  the  enforcement  of  the  Trustee's  rights  hereunder  including
consultation,   drafting   documents,   sending   notices  and/or   instituting,
prosecuting or defending  litigation or arbitration)  incurred by the Trustee in
connection  with or as a result of the Trustee's  performing  or observing  such
agreements or taking such actions,  together with interest thereon from the date
expended or incurred by the Trustee at the highest rate then  applicable  to any
of the Obligations.

      7.    Perfection of Security  Interests.  The Trustee shall have the right
to file,  from  time to time,  such  financing  statements  as the  Trustee  may
reasonably  require in order to perfect  the  Security  Interest.  To the extent
permitted by law, the Company hereby authorizes and empowers the Trustee to file
one or more financing  statements and any other  documents or instruments as are
necessary to perfect the Security  Interest,  all without the signature or prior
consent of the Company.

      8.    Events  of  Default.   Each  of  the  following   occurrences  shall
constitute an event of default  under this  Agreement  (herein  called "Event of
Default"):

            (a)   an "Event of Default" (as defined in the Indenture) shall have
      occurred and is continuing beyond any applicable grace or cure period;

            (b)   any  representation  or  warranty  by the Company set forth in
      this Agreement shall prove materially false or misleading; or

            (c)   the Trustee shall receive at any time after the date hereof an
      official  report from the  Secretary of State of the State of Minnesota or
      any other  state  where the  Collateral  is  located  indicating  that the
      Security  Interest is not prior to all other  security  interests or other
      interests reflected in the report.

      9.    Remedies upon Event of Default.  Upon the  occurrence of an Event of
Default under Section 8 and at any time thereafter, the Trustee may exercise any
one or more of the following rights and remedies:

            (a)   require the prompt delivery to the Trustee of an assignment of
      any  mortgage or other  supporting  obligation  in a form  sufficient  for
      recording of such assignment;

            (b)   notify any account debtor that the Company's  right to payment
      has been assigned or transferred to the Trustee and that all amounts shall
      be paid directly to the Trustee;

            (c)   exercise and enforce any or all rights and remedies  available
      upon  default  to a secured  party  under  the  Uniform  Commercial  Code,
      including but not limited to the

                                       -5-

<PAGE>

      right to take possession of any Collateral,  proceeding  without  judicial
      process  (without a prior  hearing or notice  thereof,  which the  Company
      hereby  expressly  waives),  and the  right  to sell,  lease or  otherwise
      dispose of any or all of the Collateral,  and in connection therewith, the
      Trustee may require the Company to make the  Collateral  available  to the
      Trustee at a place to be  designated  by the Trustee  which is  reasonably
      convenient to both  parties,  and if notice to the Company of any intended
      disposition of Collateral or any other intended  action is required by law
      in a  particular  instance,  such  notice  shall  be  deemed  commercially
      reasonable  if given at least ten (10)  calendar days prior to the date of
      intended disposition or other action; or

            (d)   exercise  or  enforce  any or all  other  rights  or  remedies
      available  to the  Trustee by law or  agreement  against  the  Collateral,
      against the Company or against any other person or property.

      Whether or not an Event of Default has  occurred,  the  Company  shall pay
when due or reimburse  the Trustee on demand for all costs of  collection of any
of the Obligations and all other out-of-pocket  expenses incurred by the Trustee
in connection with the creation, perfection,  satisfaction,  protection, defense
or  enforcement  of  the  Security   Interest  or  the  creation,   continuance,
protection,  defense or enforcement of this Security  Agreement or any or all of
the  Obligations,  including but not limited to: (i) filing fees;  (ii) costs of
foreclosure;  (iii)  costs of  obtaining  money  damages;  and  (iv)  reasonable
attorney's  fees for any purpose  relating to the  enforcement  of this Security
Agreement including  consultation,  drafting  documents,  sending notices and/or
instituting, prosecuting or defending litigation or arbitration.

      If during a sale of Collateral  following an Event of Default, the Trustee
sells any of the Collateral upon credit,  the Company will be credited only with
payments actually made by the purchaser,  received by the Trustee and applied to
the indebtedness of such purchaser.  In the event the purchaser fails to pay for
the  Collateral,  the Trustee may resell the Collateral and the Company shall be
credited with the proceeds of the Sale. To the extent permitted under applicable
law, the Trustee may disclaim any warranty of title or any other  warranty  with
respect to any Collateral sold by the Trustee following an Event of Default.

      10.   Notice.

            (a)   Any notice,  document or other communication from one party to
      the other is duly given if in writing and delivered in person or mailed by
      first-class  mail  (registered or certified,  return  receipt  requested),
      telex, telecopier or overnight air courier guaranteeing next day delivery,
      to the other's address:

            If to the Company:

                  AMERICAN CHURCH MORTGAGE COMPANY
                  10237 Yellow Circle Drive
                  Minnetonka, MN 55343
                  Attention: President
                  Fax: (952) 945-9433

                                       -6-

<PAGE>

            If to the Trustee:

                  HERRING BANK
                  1608 S. Polk St.
                  Amarillo, TX 79102
                  Attention: Corporate Trust Department
                  Fax:(806) 378-6655

            (b)   All  notices and  communications  shall be deemed to have been
      duly given: at the time delivered by hand, if personally  delivered;  five
      (5) business days after being deposited in the mail,  postage prepaid,  if
      mailed;  when answered  back, if telexed;  when receipt  acknowledged,  if
      telecopied;  and the  next  business  day  after  timely  delivery  to the
      courier, if sent by overnight air courier guaranteeing next day delivery.

            (c)   Each party, by notice to the other,  may designate  additional
      or different addresses for subsequent notices or communications.

      11.   Miscellaneous.

            (a)   This Agreement can be waived, modified, amended, terminated or
      discharged and the Security Interest can be released, only explicitly in a
      writing  signed by the Trustee.  A waiver  signed by the Trustee  shall be
      effective  only in the  specific  instance  and for the  specific  purpose
      given.  Mere delay or failure to act shall not  preclude  the  exercise or
      enforcement of any of the Trustee's rights or remedies.

            (b)   All rights and remedies of the Trustee shall be cumulative and
      may be exercised singularly or concurrently,  at the Trustee's option, and
      the exercise or  enforcement of any one such right or remedy shall neither
      be a condition to nor bar the exercise or enforcement of any other.

            (c)   This Agreement  shall be binding upon and inure to the benefit
      of  the   Company   and  the   Trustee   and   their   respective   heirs,
      representatives,  successors and assigns and shall take effect when signed
      by the Company and delivered to the Trustee, and the Company waives notice
      of the Trustee's acceptance hereof. The Trustee may execute this Agreement
      if appropriate  for the purpose of filing,  but the failure of the Trustee
      to execute  this  Agreement  shall not affect or impair  the  validity  or
      effectiveness  of  this  Agreement.  All  representations  and  warranties
      contained in this  Agreement  shall  survive the  execution,  delivery and
      performance  of  this  Agreement  and  the  creation  and  payment  of the
      Obligations.

            (d)   To facilitate execution,  this Agreement may be executed in as
      many separate  counterparts as may be convenient or required. It shall not
      be necessary  that the  signature of each party,  or that the signature of
      all persons required to bind any party,  appear on each counterpart.  Each
      counterpart  when so  executed  and  delivered  shall be  deemed  to be an
      original, and all counterparts taken together shall constitute but one and
      the same  instrument.  It shall not be  necessary  in making proof of this
      Agreement  to  produce  or  account  for more  than a  single  counterpart
      containing  the  respective  signatures  of, or on behalf of,  each of the
      parties, hereto. Signature pages from any

                                       -7-

<PAGE>

      counterpart  may be detached from the  counterpart and attached with other
      signature  pages to a single copy of the Agreement to physically  form one
      document.

            (e)   This  Agreement  shall be governed by the internal laws of the
      State of Minnesota.  If any provision or  application of this Agreement is
      held  unlawful  or  unenforceable  in  any  respect,  such  illegality  or
      unenforceability  shall not affect other provisions or applications  which
      can be given  effect  and this  Agreement  shall  be  construed  as if the
      unlawful  or  unenforceable   provision  or  application  had  never  been
      contained herein or prescribed  hereby.  Any term not defined herein shall
      have, to the extent applicable,  the definition set forth in Chapter 336.9
      of Minnesota Statutes.

                  [Remainder of page intentionally left blank.]

                                       -8-

<PAGE>

      IN WITNESS  WHEREOF,  the  Company  and the Trustee  hereby  execute  this
Security Agreement as of the date first written above.

                                        COMPANY:

                                        AMERICAN CHURCH MORTGAGE COMPANY

                                        By:   /s/ Philip J. Myers
                                           -----------------------------------
                                              Philip J. Myers, President

                                        TRUSTEE:

                                        HERRING BANK

                                        By:   /s/ Catana Gray
                                           -----------------------------------
                                              Catana Gray
                                              Vice President

                                       -9-

<PAGE>

                                   SCHEDULE A

                              (Initial Collateral)

<TABLE>
<CAPTION>
                                                                                                  Current Principal
Date of                                                           Original Principal             Balance Outstanding
 Note                    Loan Receipient                                 Value                      March 31, 2009
-------                  ---------------                          ------------------             -------------------
<S>           <C>                                                     <C>                            <C>
06/19/03      Bend Christian Center                                   $445,000.00                    $407,567.22
06/23/06      Calvary United Methodist Church of Holly                $395,000.00                    $386,876.82
05/20/99      Greater Hill Zion Baptist Church                        $500,000.00                    $366,214.80
09/16/04      Holy Tabernacle Church                                  $325,000.00                    $304,373.11
05/23/06      Living Water Seventh Day Adventist Church               $640,000.00                    $625,850.46
04/29/04      Shiloh Temple House of God                              $500,000.00                    $440,378.24

                                                                  ------------------             -------------------
                                                                    $2,805,000.00                  $2,531,260.65
</TABLE>ex41to8k07554_03312009.htm

    Exhibit 4.1

     

    
      RIGHTS
AGREEMENT

       

      dated
as of

       

      March
31, 2009

       

      between

       

      YOUBET.COM,
INC.

       

      and

       

      AMERICAN
STOCK TRANSFER & TRUST COMPANY LLC

       

      Rights
Agent

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              
                
                  
                    
                      
                        	 	 Table of Contents	 
	 	 	 
	 	 	Page
	 	 	 
	
                                1.

                              	
                                Certain
      Definitions

                              	
                                1

                              
	
                                2.

                              	
                                Appointment
      of Rights Agent

                              	
                                6

                              
	
                                3.

                              	
                                Issuance
      of Rights Certificates

                              	
                                7

                              
	
                                4.

                              	
                                Form
      of Rights Certificates

                              	
                                8

                              
	
                                5.

                              	
                                Countersignature
      and Registration

                              	
                                9

                              
	
                                6.

                              	
                                Transfer,
      Split-Up, Combination and Exchange of Rights Certificates; Mutilated,
      Destroyed, Lost or Stolen Rights Certificates

                              	
                                9

                              
	
                                7.

                              	
                                Exercise
      of Rights; Purchase Price; Expiration Date of Rights

                              	
                                10

                              
	
                                8.

                              	
                                Cancellation
      and Destruction of Rights Certificates

                              	
                                11

                              
	
                                9.

                              	
                                Company
      Covenants Concerning Securities and Rights

                              	
                                12

                              
	
                                10.

                              	
                                Record
      Date

                              	
                                13

                              
	
                                11.

                              	
                                Adjustment
      of Purchase Price, Number and Kind of Securities or Number of
      Rights

                              	
                                14

                              
	
                                12.

                              	
                                Certificate
      of Adjusted Purchase Price or Number of Shares

                              	
                                21

                              
	
                                13.

                              	
                                Fractional
      Rights and Fractional Shares

                              	
                                21

                              
	
                                14.

                              	
                                Rights
      of Action

                              	
                                22

                              
	
                                15.

                              	
                                Agreement
      of Rights Holders

                              	
                                23

                              
	
                                16.

                              	
                                Rights
      Certificate Holder Not Deemed a Stockholder

                              	
                                23

                              
	
                                17.

                              	
                                Concerning
      the Rights Agent

                              	
                                24

                              
	
                                18.

                              	
                                Merger,
      Consolidation or Change of Name of Rights Agent

                              	
                                24

                              
	
                                19.

                              	
                                Duties
      of Rights Agent

                              	
                                25

                              
	
                                20.

                              	
                                Change
      of Rights Agent

                              	
                                27

                              
	
                                21.

                              	
                                Issuance
      of New Rights Certificates

                              	
                                28

                              
	
                                22.

                              	
                                Redemption

                              	
                                29

                              

                      

                    

                  

                

              

            

          

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                	 Table of Contents	 
	 	
                   (continued)

                	 
	 	 	Page
	 	 	 

        

        
          	
                  23.

                	
                  Exchange

                	
                  29

                
	
                  24.

                	
                  Notice
      of Certain Events

                	
                  30

                
	
                  25.

                	
                  Notices

                	
                  30

                
	
                  26.

                	
                  Supplements
      and Amendments

                	
                  31

                
	
                  27.

                	
                  Successors

                	
                  32

                
	
                  28.

                	
                  Determinations
      and Actions by the Board

                	
                  32

                
	
                  29.

                	
                  Benefits
      of this Agreement

                	
                  32

                
	
                  30.

                	
                  Severability

                	
                  33

                
	
                  31.

                	
                  Governing
      Law

                	
                  33

                
	
                  32.

                	
                  Counterparts

                	
                  33

                
	
                  33.

                	
                  Descriptive
      Headings

                	
                  33

                

        

      

       

      EXHIBITS

       

      
        	
                Exhibit
      A:

              	
                Form
      of Certificate of Designation of Series B Junior Participating Preferred
      Stock

              

      

      
         

        
          	
                  Exhibit
      B:

                	
                  Form
      of Rights Certificate

                

        

        
           

          
            	
                    Exhibit
      C:

                  	
                    Summary
      of Rights

                  

          

           

                              

          
            
              
              

            

            
              ii

              
                

              

            

            
              
              

            

          

        

      

       

      RIGHTS
AGREEMENT

       

      RIGHTS
AGREEMENT, dated as of March 31, 2009 (the “Agreement”), 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”).

       

      W
I T N E S S E T H

       

      WHEREAS,
on March 31, 2009 (the “Rights
Dividend Declaration Date”), the Board of Directors of the Company (the
“Board”) authorized and
declared a dividend distribution of one right (a “Right”) for each share of
common stock, par value $0.001 per share, of the Company (the “Common Stock”) outstanding at
the Close of Business (as hereinafter defined) on April 10, 2009 (the “Record Date”), each Right
initially representing the right to purchase one one-thousandth of a share of
Preferred Stock (as hereinafter defined) of the Company, upon the terms and
subject to the conditions hereinafter set forth, and further authorized and
directed the issuance of one Right (subject to adjustment as provided herein)
with respect to each share of Common Stock issued or delivered by the Company
(whether originally issued or delivered from the Company’s treasury) after the
Record Date but prior to the earlier of the Distribution Date (as hereinafter
defined) and the Expiration Date (as hereinafter defined) or as provided in
Section 21.

       

      NOW,
THEREFORE, in consideration of the mutual agreements herein set forth, the
parties hereby agree as follows:

       

      
        	
                1.

              	
                Certain
      Definitions

              

      

       

      For
purposes of this Agreement, the following terms shall have the meanings
indicated:

       

      (a)           “Acquiring Person” shall mean
any Person (other than the Company, any Related Person or any Exempt Person)
that has become, in itself or, together with all Affiliates and Associates of
such Person, the Beneficial Owner of 4.9% or more of the shares of Common Stock
then-outstanding, provided, however, that any Person who
would otherwise qualify as an Acquiring Person as of the Close of Business on
the Rights Dividend Declaration Date will not be deemed to be an Acquiring
Person for any purpose of this Agreement on and after such date unless and until
such time as such stockholder acquires the beneficial ownership of one
additional share of Common Stock, and provided, further, that a Person will
not be deemed to have become an Acquiring Person solely as a result of (i) a
reduction in the number of shares of Common Stock outstanding, (ii) the grant or
exercise of any options, warrants, rights or similar interests (including
restricted stock) granted by the Company to its directors, officers and
employees, (iii) any unilateral grant of any security by the Company, or (iv) an
Exempt Transaction, unless and until such time as such stockholder acquires the
beneficial ownership of one additional share of Common Stock. The Board shall
not make any determination with respect to a potential Acquiring Person until
five (5) Business Days after the date on which all Board members first received
notice of the change of beneficial ownership at
issue.  Notwithstanding the foregoing, the Board may, in its sole
discretion, determine that any Person shall not be deemed to be an “Acquiring Person” for any
purposes of this Agreement.

       

      (b)           “Act” shall mean the
Securities Act of 1933, as amended.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      (c)           “Affiliate” and “Associate” shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement, and to the extent not included within the foregoing clause of this
Section 1(c), shall also include, with respect to any Person, any other Person
(whether or not a Related Person or an Exempt Person) whose shares of Common
Stock would be deemed constructively owned by such first Person, owned by a
single “entity” as defined in Section 1.382-3(a)(1) of the Treasury Regulations,
or otherwise aggregated with shares owned by such first Person pursuant to the
provisions of the Code, or any successor provision or replacement provision, and
the Treasury Regulations thereunder, provided, however, that a Person shall
not be deemed to be the Affiliate or Associate of another Person solely because
either or both Persons are or were executive officers or directors of the
Company.

       

      (d)           “Agreement” shall have the
meaning set forth in the preamble of this Agreement.

       

      (e)           “Authorized Officer” shall
mean the Chief Executive Officer, President, any Vice President, the Treasurer
or the Secretary of the Company.

       

      (f)           A
Person shall be deemed the “Beneficial Owner” of, and to
“beneficially own” any
securities:

       

      (i)           which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, warrants, options, or other rights (in each
case, other than upon exercise or exchange of the Rights); provided, however, that a Person shall
not be deemed the “Beneficial
Owner” of, or to “beneficially own” securities
(including rights, options or warrants) which are convertible or exchangeable
into Common Stock until such time as the convertible or exchangeable securities
are exercised and converted or exchanged into Common Stock except to the extent
the acquisition or transfer of such rights, options or warrants would be treated
as exercised on the date of its acquisition or transfer under Section 1.382-4(d)
of the Treasury Regulations; and, provided further, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own securities
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person’s Affiliates or Associates until such tendered securities are
accepted for purchase or exchange;

       

      (ii)           which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has or shares the right to vote or dispose of, or has “beneficial
ownership” of (as defined under Rule 13d-3 of the General Rules and Regulations
under the Exchange Act), including pursuant to any agreement, arrangement or
understanding (whether or not in writing), but only if the effect of such
agreement, arrangement or understanding is to treat such Persons as an “entity”
under Section 1.382-3(a)(1) of the Treasury Regulations, or

       

      (iii)           which
any other person is the Beneficial Owner, if such Person or any of such Person’s
Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) with such other Person (or any of such other
Person’s Affiliates or Associates) with respect to acquiring, holding, voting or
disposing of any securities of the Company, but only if the effect of such
agreement, arrangement or understanding is to treat such Persons as an “entity”
under Section 1.382-3(a)(1) of the Treasury Regulations;

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      provided, however, that a Person shall
not be deemed the “Beneficial Owner” of, or to “beneficially own” any security
(A) if such Person has the right to vote such security pursuant to an agreement,
arrangement or understanding (whether or not in writing) which (1) arises solely
from a revocable proxy given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report), or
(B) if such beneficial ownership arises solely as a result of such Person’s
status as a “clearing agency,” as defined in Section 3(a)(23) of the Exchange
Act; provided further,
however, that nothing
in this Section 1(f) shall cause a Person engaged in business as an underwriter
of securities or member of a selling to group to be the Beneficial Owner of, or
to “beneficially own,” any securities acquired through such Person’s
participation in good faith in an underwriting syndicate until the expiration of
40 calendar days after the date of such acquisition, or such later date as the
directors of the Company may determine in any specific case. Notwithstanding
anything herein to the contrary, to the extent not within the foregoing
provisions of this Section 1(f), a Person shall be deemed the “Beneficial Owner”
of and shall be deemed to “beneficially own” or have “beneficial ownership” of,
securities which such Person would be deemed to constructively own or which
otherwise would be aggregated with shares owned by such pursuant to Section 382
of the Code, or any successor provision or replacement provision and the
Treasury Regulations thereunder.

       

      (g)         “Board” shall mean the Board
of Directors of the Company.

       

      (h)         “Business Day” shall mean any
day other than a Saturday, Sunday or a day on which banking institutions in the
State of New York (or such other state in which the principal office of the
Rights Agent may be located) are authorized or obligated by law or executive
order to close.

       

      (i)           “Close of Business” on any
given date shall mean 5:00 P.M., New York City time, on such date; provided, however, that if such date is
not a Business Day, it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.

       

      (j)           “Code” shall mean the Internal
Revenue Code of 1986, as amended.

       

      (k)          “Common Stock” shall have the
meaning set forth in the preamble of this Agreement.

       

      (l)           “Company” shall have the
meaning set forth in the preamble of this Agreement.

       

      (m)         “Company’s Certificate of
Incorporation” shall mean the Certificate of Incorporation of the
Company, as amended.

       

      (n)          “Current Per Share Market
Price” shall have the meaning set forth in Section 11(d)(i) or Section
11(d)(ii) hereof, as applicable.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      (o)         “Current Value” shall have the
meaning set forth in Section 11(a)(iii) hereof.

       

      (p)         “Distribution Date” shall mean
the earliest of (i) the Close of Business on the tenth Business Day after the
Stock Acquisition Date or (ii) the Close of Business on the tenth Business Day
(or, unless the Distribution Date shall have previously occurred, such later
date as may be specified by the Board of Directors of the Company) after the
commencement of a tender or exchange offer by any Person (other than the
Company, any Related Person or any Exempt Person), if upon the consummation
thereof such Person would be the Beneficial Owner of 4.9% or more of the
then-outstanding Common Stock.

       

      (q)         “Equivalent Preferred Stock”
shall have the meaning set forth in Section 11(b) hereof.

       

      (r)          “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.

       

      (s)          “Exchange Ratio” shall have
the meaning set forth in Section 23(a) hereof

       

      (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 and (ii) any Person that beneficially
owns, as of the Rights Dividend Declaration Date, 4.9% or more of the
outstanding shares of Common Stock, provided, however, 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.

       

      (u)         “Exempt Transaction” shall
mean any transaction that the Board determines, in its sole discretion, is
exempt, which determination shall be irrevocable.

       

      (v)         “Expiration Date” shall mean
the earliest of (i) the Final Expiration Date, (ii) the time at which the Rights
are redeemed as provided in Section 22 hereof, (iii) the time at which the
Rights are exchanged as provided in Section 23 hereof, (iv) the repeal of
Section 382 of the Code or any successor statute if the Board determines that
this Agreement is no longer necessary for the preservation of Tax Benefits, (v)
the beginning of a taxable year of the Company to which the Board determines
that no Tax Benefits may be carried forward and (vi) March 31, 2010 if
Stockholder Approval has not been obtained.

       

      (w)        “Final Expiration Date” shall
be March 31, 2019.

       

      (x)          “NOLs” shall mean the
Company’s net operating loss carryforwards.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      (y)         “Person” shall mean any
individual, firm, corporation, partnership, limited liability company, limited
liability partnership, trust or other legal entity, group of persons making a
“coordinated acquisition” of shares or otherwise treated as an entity within the
meaning of Section 1.382-3(a)(1) of the Treasury Regulations or otherwise, and
includes any successor (by merger or otherwise) of such individual or
entity.

       

      (z)          “Preferred Stock” shall mean
shares of Series B Junior Participating Preferred Stock, par value $0.001 per
share, of the Company having the rights and preferences set forth in the form of
Certificate of Designation of Series B Junior Participating Preferred Stock
attached hereto as Exhibit A.

       

      (aa)       “Purchase Price” shall mean
initially $8.00 per one one-thousandth of a Preferred Stock, subject to
adjustment from time to time as provided in this Agreement.

       

      (bb)       “Record Date” shall have the
meaning set forth in the recitals to this Agreement.

       

      (cc)       “Redemption Price” shall mean
$0.001 per Right, subject to adjustment of the Company to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof.

       

      (dd)       “Related Person” shall mean
(i) any Subsidiary of the Company or (ii) any employee benefit or stock
ownership plan of the Company or of any Subsidiary of the Company or any entity
holding shares of Common Stock for or pursuant to the terms of any such
plan.

       

      (ee)       “Rights” shall have the
meaning set forth in the recitals to this Agreement.

       

      (ff)         “Rights Agent” shall have the
meaning set forth in the preamble of this Agreement.

       

      (gg)       “Rights Certificates” shall
mean certificates evidencing the Rights, in substantially the form attached
hereto as Exhibit B.

       

      (hh)       “Rights Dividend Declaration
Date” shall have the meaning set forth in the recitals to this
Agreement.

       

      (ii)          “Section 11(a)(ii) Trigger
Date” shall have the meaning set forth in Section 11(a)(iii)
hereof.

       

      (jj)         “Securities Act” shall mean
Securities Act of 1933, as amended.

       

      (kk)       
“Spread” shall have the
meaning set forth in Section 11(a)(iii) hereof.

       

      (ll)          “Stock Acquisition Date” shall
mean the first date of public announcement (which for purposes of this
definition shall include, without limitation, a report filed pursuant to Section
13(d) of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such or such earlier date as a majority of the Board
shall become aware of the existence of an Acquiring Person.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      (mm)     “Stockholder Approval” shall
mean the approval of this Agreement by the affirmative vote of the holders of a
majority of the voting power of the outstanding shares of Common Stock of the
Company entitled to vote, and voting together without regard to class, and that
are present, or represented by proxy, and are voted on the proposal to approve
this Agreement, at the meeting of stockholders of the Company duly held in
accordance with the Company’s certificate of incorporation (as amended) and
applicable law.

       

      (nn)       “Subsidiary” shall mean, with
reference to any Person, any corporation or other legal entity of which a
majority of the voting power of the voting equity securities or equity interests
is owned, directly or indirectly, by such Person, or otherwise controlled by
such Person.

       

      (oo)       “Substitution Period” shall
have the meaning set forth in Section 11(a)(iii) hereof.

       

      (pp)       “Summary of Rights” shall mean
a copy of a summary of the terms of the Rights, in substantially the form
attached hereto as Exhibit C.

       

      (qq)       “Tax Benefits” shall mean the
net operating loss carry-overs, capital loss carry-overs, general business
credit carry-overs, alternative minimum tax credit carry-overs and foreign tax
credit carry-overs, as well as any “net unrealized built-in loss” within the
meaning of Section 382, of the Company or any direct or indirect subsidiary
thereof.

       

      (rr)         “Trading Day” shall mean a day
on which the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the transaction of
business or, if the Common Shares are not listed or admitted to trading on any
national securities exchange, a Business Day.

       

      (ss)       “Treasury Regulations” shall
mean final, temporary and proposed income tax regulations promulgated under the
Code, including any amendments thereto.

       

      
        	
                2.

              	
                Appointment
      of Rights Agent.

              

      

       

      The
Company hereby appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment and hereby certifies that it complies with the
requirements of the New York Stock Exchange governing transfer agents and
registrars.  The Company may from time to time appoint such co-rights
agents as it may deem necessary or desirable.  The Rights Agent shall
have no duty to supervise, and shall in no event be liable for, the acts or
omission of any such co-rights agent.  Prior to the appointment of a
co-rights agent, the specific duties and obligations of each such co-rights
agents shall be set forth in writing and delivered to the Rights Agent and the
proposed co-rights agent.  Any actions which may be taken by the
Rights Agent pursuant to the terms of this Agreement may be taken by any such
co-rights agent.  To the extent that any co-rights agent takes any
action pursuant to this Agreement, such co-rights agent shall be entitled to all
of the rights and protections of, and subject to all of the applicable duties
and obligations imposed upon, the Rights Agent pursuant to the terms of this
Agreement.  The Rights Agent will have no duty to supervise, and in no
event will be liable for, the acts or omissions of any co-rights
agent.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
        	
                3.

              	
                Issuance
      of Rights Certificates.

              

      

       

      (a)           Until
the Distribution Date, (i) the Rights shall be evidenced (subject to Section
3(b)) by the certificates representing the shares of Common Stock, registered in
the names of the record holders thereof (which certificates representing such
shares of Common Stock shall also be deemed to be Rights Certificates), (ii) the
Rights shall be transferable only in connection with the transfer of the
underlying shares of Common Stock, and (iii) the surrender for transfer of any
certificates representing such shares of Common Stock in respect of which Rights
have been issued shall also constitute the transfer of the Rights associated
with the shares of Common Stock represented by such certificates.

       

      (b)           On
or as promptly as practicable after the Record Date, the Company shall send by
first class, postage prepaid mail, to each record holder of shares of Common
Stock as of the Close of Business on the Record Date, at the address of such
holder shown on the records of the Company as of such date, a copy of a Summary
of Rights to Purchase Preferred Stock in substantially the form attached as
Exhibit C.  With respect to certificates for Common Stock outstanding
as of the Record Date, until the Distribution Date, the Rights will be evidenced
by such certificates registered in the names of the holders thereof together
with the Summary of Rights.

       

      (c)           Rights
shall be issued by the Company in respect of all shares of Common Stock (other
than any shares of Common Stock that may be issued upon the exercise or exchange
of any Right) issued or delivered by the Company (whether originally issued or
delivered from the Company’s treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date, except as specially
provided in Section 21 hereof, after the Distribution Date. Certificates
representing such shares of Common Stock shall have stamped on, impressed on,
printed on, written on, or otherwise affixed to them a legend in substantially
the following form or such similar legend as the Company may deem appropriate
and is not inconsistent with the provisions of this Agreement and as do not
affect the rights, duties or responsibilities of the Rights Agent, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or
transaction reporting system on which the shares of Common Stock may from time
to time be listed or quoted:

       

      This
certificate also evidences and entitles the holder hereof to certain Rights as
set forth in the Rights Agreement between Youbet.com, Inc. and American Stock
Transfer & Trust Company LLC, dated as of March 31, 2009 and as amended from
time to time (the “Rights Agreement”), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the principal
executive offices of Youbet.com, Inc.  The Rights are not exercisable
prior to the occurrence of certain events specified in the Rights
Agreement.  Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may be exchanged, may expire, may be
amended, or may be evidenced by separate certificates and no longer be evidenced
by this certificate.  Youbet.com, Inc. shall mail to the holder of
this certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written request
therefor.  Under
certain circumstances as set forth in the Rights Agreement, Rights that are or
were beneficially owned by an Acquiring Person or any Affiliate or Associate of
an Acquiring Person (as such terms are defined in the Rights Agreement) may
become null and void.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      (d)           Any
Rights Certificate issued pursuant to this Section 3 or Section 21 hereof that
represents Rights beneficially owned by an Acquiring Person or any of its
Associates or Affiliates and any Rights Certificate issued at any time upon the
transfer of any Rights to an Acquiring Person or any of its Associates or
Affiliates or to any nominee of such Acquiring Person, Associate or Affiliate
and any Rights Certificate issued pursuant to Section 6 or 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall be subject to and contain a legend in
substantially the following form or such similar legend as the Company may deem
appropriate and is not inconsistent with the provisions of this Agreement or as
may be required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed:

       

      The
Rights represented by this Rights Certificate are or were beneficially owned by
a Person who was an Acquiring Person or an Affiliate or an Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement).  This Rights Certificate and the Rights represented hereby
may become null and void in the circumstances specified in Section 11(a)(ii) of
the Rights Agreement.

       

      (e)           As
promptly as practicable after the Distribution Date, the Company shall prepare
and execute, the Rights Agent shall countersign and the Company shall send or
cause to be sent (and the Rights Agent will, if requested, and if provided with
all necessary information, send), by first class, insured, postage prepaid mail,
to each record holder of shares of Common Stock, as of the Close of Business on
the Distribution Date (other than an Acquiring Person or any Associate or
Affiliate of an Acquiring Person), at the address of such holder shown on the
records of the Company, a Rights Certificate representing one Right for each
share of Common Stock so held, subject to adjustment as provided herein. As of
and after the Distribution Date, the Rights shall be represented solely by such
Rights Certificates.  The Company shall promptly notify the Rights
Agent in writing upon the occurrence of the Distribution Date and, if such
notification is given orally, the Company shall confirm same in writing on or
prior to the next Business Day.  Until such notice is received by the
Rights Agent, the Rights Agent may presume conclusively that the Distribution
Date has not occurred.

       

      (f)           In
the event that the Company purchases or otherwise acquires any shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
shares of Common Stock shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with the shares of
Common Stock so purchased or acquired.

       

      
        	
                4.

              	
                Form
      of Rights Certificates

              

      

       

      The
Rights Certificates (and the form of election to purchase and the form of
assignment to be printed on the reverse thereof) shall each be substantially in
the form attached hereto as Exhibit B with such
changes and marks of identification or designation, and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or transaction
reporting system on which the Rights may from time to time be listed or quoted,
or to conform to usage. Subject to the provisions of Section 21 hereof, the
Rights Certificates, whenever distributed shall entitle the holders thereof to
purchase such number of one one-thousandths of a share of Preferred Stock as is
set forth therein at the Purchase Price; provided, however, that the Purchase
Price, the number and kind of securities issuable upon exercise of each Right
and the number of Rights outstanding shall be subject to adjustments as provided
in this Agreement.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
        	
                5.

              	
                Countersignature
      and Registration

              

      

       

      (a)           The
Rights Certificates shall be executed on behalf of the Company by any Authorized
Officer, either manually or by facsimile signature, and shall have affixed
thereto the Company’s seal or a facsimile thereof which shall be attested by any
Authorized Officer, either manually or by facsimile signature.  The
Rights Certificates shall be countersigned by the Rights Agent, either manually
or by facsimile signature and shall not be valid for any purpose unless so
countersigned.  In case any officer of the Company who shall have
signed any of the Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Rights Certificates had not ceased
to be such officer of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Agreement any
such person was not such an officer.

       

      (b)           Following
the Distribution Date, upon receipt by the Rights Agent of written notice of the
occurrence of the Distribution Date pursuant to Section 3(e) hereof, a
stockholder list and all other relevant information referred to in Section 3(e)
or as reasonably requested by the Rights Agent, the Rights Agent shall keep,
books for registration and transfer of the Rights Certificates issued hereunder
or cause to be kept, at its office or offices designated for such purposes and
at such other offices as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange or any transaction reporting system on which the rights
may from time to time be listed or quoted. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each of the Rights Certificates and the date of
each of the Rights Certificates.

       

      
        	
                6.

              	
                Transfer,
      Split-Up, Combination and Exchange of Rights Certificates; Mutilated,
      Destroyed, Lost or Stolen Rights
Certificates

              

      

       

      (a)           Subject
to the provisions of Section 7(d) and Section 13 hereof, at any time after the
Close of Business on the Distribution Date, and prior to the Expiration Date,
any Rights Certificate(s) (other than Rights Certificates representing Rights
that may have been exchanged pursuant to Section 23 hereof) representing
exercisable Rights may be transferred, split up, combined or exchanged for
another Rights Certificate(s), entitling the registered holder to purchase a
like number of one one-thousandths of a share of Preferred Stock (or other
securities, as the case may be) as the Rights Certificate(s) surrendered then
entitled such holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
such Rights Certificate(s) must make such request in writing delivered to the
Rights Agent, and must surrender the Rights Certificate(s) to be transferred,
split up, combined or exchanged, with the forms of assignment and certificate
contained therein duly executed, at the office or offices of the Rights Agent
designated for such purpose.  The Rights Certificates
are transferable only on the registry books of the Rights
Agent.  Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have (i) completed and
signed the certificate contained in the form of assignment on the reverse side
of such Rights Certificate, (ii) provided such additional evidence of the
identity of the 

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      Beneficial
Owner (or former Beneficial Owner) and the Affiliates and Associates of such
Beneficial Owner (or former Beneficial Owner) as the Company or the Rights Agent
shall reasonably request and (iii) paid a sum sufficient to cover any tax or
charge that may be imposed in connection with any transfer, split up,
combination or exchange or Rights Certificates as required by Section 9(d)
hereof. Thereupon the Rights Agent shall countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested registered in such name or names as may be designated by the
surrendering registered holder.  The Rights Agent shall promptly
forward any such sum collected by it to the Company or to such Person or Persons
as the Company shall specify by written notice.  The Rights Agent
shall have no duty or obligation unless and until it is satisfied that all such
taxes and/or charges have been paid.

       

      (b)           Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Rights Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Rights Certificate, if mutilated, the Company
shall execute and deliver a new Rights Certificate of like tenor to the Rights
Agent and the Rights Agent will countersign and deliver such new Rights
Certificate to the registered holder in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.

       

      
        	
                7.

              	
                Exercise
      of Rights; Purchase Price; Expiration Date of
  Rights

              

      

       

      (a)           Except
as otherwise provided herein, the Rights shall become exercisable on the
Distribution Date and prior to the Expiration Date, and thereafter the
registered holder of any Right Certificate may, subject to Section 11(a)(ii) and
Section 23 hereof, exercise the Rights evidenced thereby in whole or in part
upon surrender of the Rights Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at the office or
agency of the Rights Agent designated for such purpose, together with payment of
the Purchase Price (including any applicable tax or charge required to be paid
by the holder of such Rights Certificate in accordance with the provisions of
Section 9(d)) hereof for each one one-thousandth of a share of Preferred Stock
(or other securities, cash or assets, as the case may be) as to which the Rights
are exercised.

       

      (b)           Upon
receipt of a Rights Certificate representing exercisable Rights with the form of
election to purchase and the certificate properly completed and duly executed,
accompanied by payment of the Purchase Price for the shares to be purchased and
an amount equal to any applicable tax or charge required to be paid under
Section 9(d) hereof by certified check, cashier’s check, bank draft or money
order payable to the order of the Company, the Rights Agent shall, thereupon
promptly (i) (A) requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer agent for such
shares) certificates representing the total number of one one-thousandths of a
share of Preferred Stock to be purchased (and the Company hereby irrevocably
authorizes and directs its transfer agent to comply with all such requests) or
(B) if the Company shall have elected to deposit any shares of Preferred Stock
issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-thousandths of a share of 

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      Preferred
Stock as are to be purchased (and the Company hereby irrevocably authorizes and
directs such depositary agent to comply with all such requests), (ii) after
receipt of such certificates (or depositary receipts, as the case may be) cause
the same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder, (iii) when appropriate, requisition from the Company or any
transfer agent therefor of certificates representing the number of equivalent
shares to be issued in lieu of the issuance of shares of Common Stock in
accordance with the provisions of Section 11(a)(iii), (iv) when appropriate,
after receipt of such certificates, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, (v) when appropriate,
requisition from the Company of the amount of cash to be paid in lieu of the
issuance of fractional shares in accordance with the provisions of Section 13
hereof, and (vi) when appropriate, after receipt, deliver such cash to the
registered holder of such Rights Certificate.

       

      (c)           In
case the registered holder of any Rights Certificate shall exercise less than
all the Rights evidenced thereby, the Rights Agent shall prepare, execute and
deliver a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised to the registered holder of such Rights Certificate or to
his duly authorized assigns, subject to the provisions of Section 13
hereof.

       

      (d)           Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to any purported
transfer, split up, combination or exchange of any Rights Certificate pursuant
to Section 6 or exercise or assignment of a Rights Certificate as set forth in
this Section 7 unless the registered holder of such Rights Certificate shall
have (i) duly and properly completed and signed the certificate following the
form of assignment or the form of election to purchase, as applicable, set forth
on the reverse side of the Rights Certificate surrendered for such transfer,
split up, combination, exchange, exercise or assignment and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) thereof and of the Rights evidenced thereby and Affiliates and
Associates thereof as the Company or the Rights Agent may reasonably
request.

       

      
        	
                8.

              	
                Cancellation
      and Destruction of Rights
Certificates

              

      

       

      All
Rights Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement.  The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof.  The Rights Agent
shall deliver all cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the
Company.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      
        	
                9.

              	
                Company
      Covenants Concerning Securities and
Rights

              

      

       

      (a)           The
Company covenants and agrees that it shall cause to be reserved, authorized for
issuance and kept available out of its authorized and unissued shares of
Preferred Stock, and/or other securities, or any shares of any such security of
the Company held in its treasury, a number of shares of Preferred Stock (or any
other security of the Company as may be applicable at the time of exercise) that
shall be sufficient to permit the exercise in full of all outstanding Rights in
accordance with Section 7.

       

      (b)           The
Company covenants and agrees so long as the shares of Preferred Stock (and,
following the occurrence of any Person becoming an Acquiring Person, shares of
Common Stock and/or other securities) issuable upon the exercise of the Rights
may be listed on any national securities exchange, it shall endeavor to cause,
from and after such time as the Rights become exercisable, all securities
reserved for issuance upon the exercise of Rights to be listed on such exchange
upon official notice of issuance upon such exercise.

       

      (c)           The
Company covenants and agrees it will take all such actions as may be necessary
to ensure that all shares of Preferred Stock (and, following the occurrence of
any Person becoming an acquiring Person shares of Common Stock and/or other
securities) delivered upon exercise of Rights, at the time of delivery of the
certificates for such securities, shall be (subject to payment of the Purchase
Price) duly authorized, validly issued, fully paid and nonassessable
securities.

       

      (d)           The
Company covenants and agrees it will pay when due and payable any and all
federal or state taxes and charges that may be payable in respect of the
issuance or delivery of the Rights Certificates and of any certificates
representing securities issued upon the exercise of Rights; provided, however, that the Company
shall not be required to pay any tax or charge which may be payable in respect
of any transfer or delivery of Rights Certificates to a person other than, or
the issuance or delivery of certificates or depositary receipts representing
securities issued upon the exercise of Rights in a name other than that of, the
registered holder of the Rights Certificate evidencing Rights surrendered for
exercise, or to issue or deliver any certificates or depositary receipts
representing securities issued upon the exercise of any Rights until any such
tax or charge has been paid (any such tax or charge being payable by the holder
of such Rights Certificate at the time of surrender) or until it has been
established to the Company’s reasonable satisfaction that no such tax or charge
is due.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (e)           If
the Company determines that registration under the Securities Act is required,
then the Company shall use commercially reasonable efforts (i) to file, as soon
as practicable after the Distribution Date, on an appropriate form, a
registration statement under the Securities Act with respect to the securities
issuable upon exercise of the Rights, (ii) to cause such registration statement
to become effective as soon as practicable after such filing and (iii) to cause
such registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities and
(B) the Expiration Date. The Company shall also take such action as may be
appropriate under, or to ensure compliance with, the securities or “blue sky”
laws of the various states in connection with the exercisability of the
Rights.  The Company may temporarily suspend, for a period of time not
exceed 90 days, the exercisability of the Rights in order to prepare and file
such registration statement and to permit it to become effective or to qualify
the rights, the exercise thereof or the issuance of shares of Preferred Stock,
Common Stock or other securities upon the exercise thereof under state
securities or “blue sky” laws.  Upon any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect.  The Company shall notify the
Rights Agent in writing whenever it makes a public announcement pursuant to this
Section 9(e) and give the Rights Agent a copy of such
announcement.  In addition, if the Company determines that a
registration statement or other document should be filed under the Securities
Act or any state securities laws following the Distribution Date, the Company
may temporarily suspend the exercisability of the Rights, for a period of time
not to exceed 90 days, in each relevant jurisdiction until such time as a
registration statement has been declared effective or any such other document
filed and, if required, approved, and, upon any such suspension, the Company
shall issue a public announcement stating that the exercisability of the rights
has been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. Notwithstanding anything in this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite registration or qualification in such jurisdiction
has not been effected or the exercise of the Rights is not permitted under
applicable law.

       

      (f)           Notwithstanding
anything in this Agreement to the contrary, after the later of the Stock
Acquisition Date and the Distribution Date, the Company shall not take (or
permit any Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action shall eliminate or otherwise diminish
the benefits intended to be afforded by the Rights.

       

      (g)           In
the event that the Company is obligated to issue other securities of the Company
and/or pay cash pursuant to Sections 7, 11, 13 or 23 it shall make all
arrangements necessary so that such other securities and/or cash are available
for distribution by the Rights Agent, if and when necessary to comply with this
Agreement.

       

      
        	
                10.

              	
                Record
      Date

              

      

       

      Each
Person in whose name any certificate for a number of one one-thousandths of a
share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of such shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Rights Certificate
representing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable taxes and charges) was made; provided, however, that if the
date of such surrender and payment is a date upon which the transfer books of
the Company for shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) are closed, such Person shall be deemed to have
become the record holder of such securities on, and such certificate shall be
dated, the next succeeding Business Day on which the transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a holder
of any security of the Company with respect to shares for which the Rights are
or may be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
        	
                11.

              	
                Adjustment
      of Purchase Price, Number and Kind of Securities or Number of
      Rights

              

      

       

      The
Purchase Price, the number of shares of Preferred Stock or other securities or
property purchasable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.

       

      (a)           (i)           In
the event the Company shall at any time after the Rights Dividend Declaration
Date (A) declare a dividend on the shares of Preferred Stock payable in shares
of Preferred Stock, (B) subdivide the outstanding shares of Preferred Stock, (C)
combine the outstanding shares of Preferred Stock into a smaller number of
shares of Preferred Stock or (D) issue any shares of its capital stock in a
reclassification of the shares of Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, as the case may be, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
transfer books of the Company for the shares of Preferred Stock were open, the
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right.

       

      (ii)           Subject
to Section 23 of this Agreement and except as otherwise provided in this Section
11(a)(ii) and Section 11(a)(iii), in the event that any Person becomes an
Acquiring Person, each holder of a Right shall thereafter have the right to
receive, upon exercise thereof at a price equal to the then-current Purchase
Price, in accordance with the terms of this Agreement and in lieu of shares of
Preferred Stock, such number of shares of Common Stock (or at the option of the
Company, such number of one one-thousandths of a share of Preferred Stock) as
shall equal the result obtained by (x) multiplying the then-current Purchase
Price by the number of one one-thousandths of a share of Preferred Stock for
which a Right is then exercisable and dividing that product by (y) 50% of the
Current Per Share Market Price of the Company’s Common Stock (determined
pursuant to Section 11(d) hereof) on the date of the occurrence of such event;
provided, however, that the Purchase Price (as so adjusted) and the number of
shares of Common Stock so receivable upon exercise of a Right shall thereafter
be subject to further adjustment as appropriate in accordance with Section 11(f)
hereof.  Notwithstanding anything in this Agreement to the contrary,
however, from and after the time (the “invalidation time”) when any
Person first becomes an Acquiring Person, any Rights that are beneficially owned
by (A) any Acquiring Person (or any Affiliate or Associate of any Acquiring
Person), (B) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the invalidation time or (C) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the invalidation time pursuant
to either (1) a transfer from the Acquiring
Person to holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding, written or otherwise,
regarding the transferred Rights or (2) a transfer that the Board has determined
is part of a plan, arrangement or understanding, written or otherwise, which has
the purpose or effect of avoiding the provisions of this paragraph, and
subsequent transferees of such Persons, shall be void without any further action
and any holder of such Rights shall thereafter have no rights whatsoever with
respect to such Rights under any provision of this Agreement. The Company will
use commercially reasonable efforts to ensure that the provisions of this
Section 11(a)(ii) are complied with, but shall have no liability to any holder
of Rights Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.  From and after the invalidation time, no
Right Certificates shall be issued pursuant to Section 3 or Section 6 hereof
that represents Rights that are or have become void pursuant to the provisions
of this paragraph, and any Right Certificates delivered to the Rights Agent that
represents Rights that are or have become void pursuant to the provisions of
this paragraph shall be cancelled.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      (iii)           The
Company may at its option substitute for a share of Common Stock issuable upon
the exercise of Rights in accordance with the foregoing subparagraph (ii) such
number or fractions of shares of Preferred Stock having an aggregate current
market value equal to the Current Per Share Market Price of a share of Common
Stock.  In the event that there shall be an insufficient number of
Common Stock authorized but unissued (and unreserved) to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii), the Board
shall, with respect to such deficiency, to the extent permitted by applicable
law and any material agreements then in effect to which the Company is a party
(A) determine the excess of (x) the value of the shares of Common Stock issuable
upon the exercise of a Right in accordance with the foregoing subparagraph (ii)
(the “Current Value”)
over (y) the then-current Purchase Price multiplied by the number of one
one-thousandths of shares of Preferred Stock for which a Right was exercisable
immediately prior to the time that the Acquiring Person became such (such
excess, the “Spread”), and (B) with respect to each Right (other than Rights
which have become void pursuant to Section 11(a)(ii)), make adequate provision
to substitute for the shares of Common Stock issuable in accordance with
subparagraph (ii) upon exercise of the Right and payment of the applicable
Purchase Price, (1) cash, (2) a reduction in such Purchase Price, (3) shares of
Preferred Stock or other equity securities of the Company (including, without
limitation, shares or fractions of shares of preferred stock which, by virtue of
having dividend, voting and liquidation rights substantially comparable to those
of the shares of Common Stock, are deemed in good faith by the Board to have
substantially the same value as the shares of Common Stock (such shares of
preferred stock and shares or fractions of shares of preferred stock are
hereinafter referred to as “Common Stock equivalents”)
(4) debt securities of the Company, (5) other assets or (6) any combination of
the foregoing, having a value which, when added to the value of the shares of
Common Stock actually issued upon exercise of such Right, shall have an
aggregate value equal to the
Current Value (less the amount of any reduction in such Purchase Price), where
such aggregate value has been determined by the Board (upon the advice of a
nationally recognized investment banking firm selected by the Board in good
faith); provided, however, if the Company shall
not make adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the date that the Acquiring Person became such (the
“Section 11(a)(ii) Trigger
Date”), then the Company shall be obligated to deliver, to the extent
permitted by applicable law and any material agreements then in effect to which
the Company is a party, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent
available), and then, if necessary, such number or fractions of shares of
Preferred Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If within the
thirty (30) day period referred to above the Board shall determine in good faith
that it is likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, then, if the Board
so elects, such thirty (30) day period may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek stockholder approval for the authorization of
such additional shares (such thirty (30) day period, as it may be extended, is
hereinafter called the “Substitution Period”). To the
extent that the Company determines that some action need be taken pursuant to
the second and/or third sentence of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 11(a)(ii) hereof and the last sentence of this
Section 11(a)(iii) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to such second sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (b)           If
the Company fixes a record date for the issuance of rights, options or warrants
to all holders of shares of Preferred Stock entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase shares of Preferred Stock (or securities having equivalent rights,
privileges and preferences as the shares of Preferred Stock (for purposes of
this Section 11(b), “Equivalent Preferred Stock”))
or securities convertible into shares of Preferred Stock or Equivalent Preferred
Stock at a price per share of Preferred Stock or Equivalent Preferred Stock (or
having a conversion price per share, if a security convertible into shares of
Preferred Stock or Equivalent Preferred Stock) less than the Current Per Share
Market Price of the shares of Preferred Stock (determined pursuant to Section
11(d)) on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which is the number of
shares of Preferred Stock outstanding on such record date plus the number of
shares of Preferred Stock which the aggregate offering price of the total number
of shares of Preferred Stock and/or Equivalent Preferred Stock so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such Current Per Share Market Price and the
denominator of which is the number of shares of Preferred Stock outstanding on
such record date plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred Shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible);
provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock issuable upon exercise of
one Right. In case such subscription price may be paid in a consideration part
or all of which is in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board, whose determination shall be
described in a written statement filed with the Rights Agent.  Shares
of Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation.  Such
adjustment shall be made successively whenever such a record date is fixed, and
in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      (c)           If
the Company fixes a record date for the making of a distribution to all holders
of shares of Preferred Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness, cash (other than a regular
periodic cash dividend), assets, stock (other than a dividend payable in shares
of Preferred Stock) or subscription rights, options or warrants (excluding those
referred to in Section 11(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which is
the Current Per Share Market Price of the shares of Preferred Stock (as
determined pursuant to Section 11(d)) on such record date or, if earlier, the
date on which shares of Preferred Stock begin to trade on an ex-dividend or when
issued basis for such distribution, less the fair market value (as determined in
good faith by the Board, whose determination shall be described in a written
statement filed with the Rights Agent) of the portion of the evidences of
indebtedness, cash, assets or stock so to be distributed or of such subscription
rights, options or warrants applicable to one share of Preferred Stock, and the
denominator of which is such Current Per Share Market Price of the shares of
Preferred Stock; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right but less than
the aggregate par value of the shares of capital stock issuable upon exercise of
one Right. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.

       

      (d)           (i)           For
the purpose of any computation hereunder, the “Current Per Share Market
Price” of any security (a “Security” for purposes of this Section 11(d)
only) on any date shall be deemed to be the average of the daily closing prices
per share of a share of the Common Stock for the 30 consecutive Trading Days
immediately prior to, but not including, such date; provided, however, that in the event
that the Current Per Share Market Price of the Security is determined during a
period following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such Security or
securities convertible into such shares (other than the Rights) or (B) any
subdivision, combination or reclassification of such Security, and prior to the
expiration of 30 Trading Days after, but not including, the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per
Share Market Price shall be appropriately adjusted to take into account
ex-dividend trading or to reflect the current per share market price per share
equivalent of such Security. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the principal national securities
exchange on which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
automated quotation system then in use, or, if on any such date the Security is
not so quoted, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the Board.
If the Security is not publicly held or not so listed or traded, or is not the
subject of available bid and asked quotes, the Current Per Share Market Price of
such Security shall mean the fair value per share as determined in good faith by
the Board, whose determination shall be described in a statement filed with the
Rights Agent.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      (ii)           For
the purpose of any computation hereunder, the “Current Per Share Market
Price” of shares of the Preferred Stock shall be determined in accordance
with the method set forth above in Section 11(d)(i) other than the last sentence
thereof.  If the Current Per Share Market Price of Preferred Stock
cannot be determined in the manner provided above, it shall be conclusively
deemed to be an amount equal to the current per share market price of the shares
of Common Stock multiplied by one thousand (as such number may be appropriately
adjusted to reflect events such as stock splits, stock dividends,
recapitalizations or similar transactions relating to the shares of Common Stock
occurring after the date of this Agreement). If neither the Common Stock nor the
Preferred Stock are publicly held or so listed or traded, or the subject of
available bid and asked quotes, “Current Per Share Market Price” of the
Preferred Stock shall mean the fair value per share as determined in good faith
by the Board, whose determination shall be described in a statement filed with
the Rights Agent.  For all purposes of this Agreement, the current per
share market price of one one-thousandth of a Preferred Share will be equal to
the current per share market price of one Preferred Share divided by one
thousand.

       

      (e)           Except
as set forth below, no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment.  All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-millionth of a share of Preferred
Stock or one one-thousandth of a share of a Common Stock or other security, as
the case may be.  Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which requires
such adjustment and (ii) the Expiration Date.

       

      (f)           If
as a result of an adjustment made pursuant to Section 11(a), the holder of any
Right thereafter exercised becomes entitled to receive any securities of the
Company other than shares of Preferred Stock, thereafter the number and/or kind
of such other securities so receivable upon exercise of any Right (and/or the
Purchase Price in respect thereof) shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Preferred Stock (and the Purchase Price
in respect thereof) contained in this Section 11, and the provisions of Sections
7, 9, 10 and 13 with respect to the shares of Preferred Stock (and the Purchase
Price in respect thereof) shall apply on like terms to any such other securities
(and the Purchase Price in respect thereof).

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      (g)           All
Rights originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-thousandths of a share of Preferred Stock
issuable from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.

       

      (h)           Unless
the Company has exercised its election as provided in Section 11(i), upon each
adjustment of the Purchase Price pursuant to Section 11(b) or Section 11(c),
each Right outstanding immediately prior to the making of such adjustment shall
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-thousandths of a share of Preferred Stock (calculated to the nearest one
one-millionth of a share of Preferred Stock) obtained by (i) multiplying (x) the
number of one one-thousandths of a share of Preferred Stock issuable upon
exercise of a Right immediately prior to such adjustment of the Purchase Price
by (y) the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.

       

      (i)           The
Company may elect, on or after the date of any adjustment of the Purchase Price,
to adjust the number of Rights in substitution for any adjustment in the number
of one one-thousandths of a share of Preferred Stock issuable upon the exercise
of a Right.  Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of one one-thousandths
of a share of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment.  Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price.  The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be
made.  The Company shall also, as promptly as practicable, notify the
Rights Agent in writing of same pursuant to Section 9(e) hereof and give the
Rights Agent a copy of such announcement.  Such record date may be the
date on which the Purchase Price is adjusted or any day thereafter, but if the
Rights Certificates have been issued, such record date shall be at least 10
calendar days later than the date of the public announcement.  If
Rights Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Rights Certificates
on such record date Rights Certificates evidencing, subject to the provision of
Section 13, the additional Rights to which such holders are entitled as a result
of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders are entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed,
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      (j)           Without
respect to any adjustment or change in the Purchase Price and/or the number
and/or kind of securities issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number and kind of securities which were expressed in the
initial Rights Certificate issued hereunder.

       

      (k)           Before
taking any action that would cause an adjustment reducing the Purchase Price
below one one-thousandth of the then par value, if any, of the shares of
Preferred Stock or below the then par value, if any, of any other securities of
the Company issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Preferred Stock or such other securities, as the case may be, at such
adjusted Purchase Price.

       

      (l)           In
any case in which this Section 11 otherwise requires that an adjustment in the
Purchase Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuance to
the holder of any Right exercised after such record date the number of one
one-thousandths of a share of Preferred Stock or other securities of the
Company, if any, issuable upon such exercise over and above the number of one
one-thousandths of a share of Preferred Stock or other securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, that the Company
delivers to such holder a due bill or other appropriate instrument evidencing
such holder’s right to receive such additional shares of Preferred Stock or
other securities upon the occurrence of the event requiring such
adjustment.

       

      (m)           Notwithstanding
anything in this Agreement to the contrary, the Company shall be entitled to
make such reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that in its good
faith judgment the Board determines to be necessary or advisable in order that
any (i) consolidation or subdivision of the shares of Preferred Stock, (ii)
issuance wholly for cash of shares of Preferred Stock at less than the Current
Per Share Market Price therefor, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or (v) issuance
of rights, options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its shares of Preferred Stock is not taxable to such
stockholders.

       

      (n)           Notwithstanding
anything in this Agreement to the contrary, in the event that the Company at any
time after the Rights Dividend Declaration Date and prior to the Distribution
Date (i) pays a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivides the outstanding shares of Common Stock,
(iii) combines the outstanding shares of Common Stock into a smaller number of
shares or (iv) issues any shares of its capital stock in a reclassification of
the outstanding shares of Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event equals the result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such event by a fraction
the numerator of which is the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which is
the total number of shares of Common Stock outstanding immediately following the
occurrence of such event. The adjustments provided for in this Section 11(n)
shall be made successively whenever such a dividend is paid or such a
subdivision, combination or reclassification is effected.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      
        	
                12.

              	
                Certificate
      of Adjusted Purchase Price or Number of
Shares

              

      

       

      Whenever
an adjustment is made or any event affecting the Rights or their exercisability
(including without limitation an event which causes Rights to become null and
void) occurs as provided in Section 11, the Company shall promptly (a) prepare a
certificate setting forth such adjustment and a brief statement of the facts and
calculations accounting for such adjustment or describing such event, (b) file
with the Rights Agent, and with each transfer agent for the shares of Preferred
Stock and the shares of Common Stock, a copy of such certificate, and (c) mail a
brief summary thereof to each holder of a Rights Certificate. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate, provided, however, that the Rights
Agent will not be entitled to such protection in cases of bad faith or willful
misconduct.

       

      
        	
                13.

              	
                Fractional
      Rights and Fractional Shares

              

      

       

      (a)           The
Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates which evidence fractional Rights.  In lieu of such
fractional Rights, the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of one Right.  For purposes of this Section 13(a), the current
market value of one Right is the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable.  The closing price for any Trading Day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
automated quotation system then in use or, if on any such date the Rights are
not so quoted, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights, such market maker to be
selected by the Board. If the Rights are not publicly held or are not so listed
or traded, or are not the subject of available bid and asked quotes, the current
market value of one Right shall mean the fair value thereof as determined in
good faith by the Board, whose determination shall be described in a statement
filed with the Rights Agent.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      (b)           The
Company shall not be required to issue fractions of shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock).  Fractions of Preferred Stock in integral multiples
of one one-thousandth of such Preferred Stock may, in the sole discretion of the
Company, be evidenced by depositary receipts pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement provides that the holders of such depositary receipts have all
the rights, privileges and preferences to which they are entitled as beneficial
owners of the Preferred Stock represented by such depositary receipts. In lieu
of fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one one-thousandth of a share of Preferred Stock.  For
purposes of this Section 13(b), the current market value of one one-thousandth
of a share of Preferred Stock shall be one one-thousandth of the closing price
of a share of Preferred Stock (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date of such exercise;
provided, however, that if the closing
price of the shares of the Preferred Stock cannot be so determined, the closing
price of the shares of the Preferred Stock for such Trading Day shall be
conclusively deemed to be an amount equal to the closing price of the shares of
Common Stock shares for such Trading Day multiplied by one thousand (as such
number may be appropriately adjusted to reflect events such as stock splits,
stock dividends, recapitalizations or similar transactions relating to the
Common Stock shares occurring after the date of this Agreement).

       

      (c)           Following
the occurrence of any Person becoming an Acquiring Person, the Company shall not
be required to issue fractions of shares of Common Stock upon exercise or
exchange of the Rights or to distribute certificates which evidence fractional
shares of Common Stock.  In lieu of issuing any such fractional
securities, the Company may pay to any Person to whom or which such fractional
securities would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of one such security.  For
purposes of this Section 13(c), the current market value of one share of Common
Stock, or other security issuable upon the exercise or exchange of Rights shall
be the closing price thereof (as determined pursuant to Section 11(d)(i) hereof)
on the Trading Day immediately prior to the date of such exercise or
exchange.

       

      (d)           The
holder of a Right by the acceptance of the Rights expressly waives his right to
receive any fractional Rights or any fractional shares upon exercise of a Right,
except as permitted by this Section 13.

       

      
        	
                14.

              	
                Rights
      of Action

              

      

       

      (a)           All
rights of action in respect of this Agreement, excepting the rights of action
given to the Rights Agent hereunder, are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution Date, the
registered holders of shares of Common Stock); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of the shares of Common
Stock), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of the shares of Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this
Agreement.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      (b)           Notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights
Agent shall have any liability to any holder of a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, judgment,
decree or ruling (whether interlocutory or final) issued by a court of competent
jurisdiction or by a governmental regulatory, self-regulatory or administrative
agency or commission, or any statute, rule, regulation, or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however that the Company
shall use commercially reasonable efforts to have any such injunction, order,
judgment, decree or ruling lifted or otherwise overturned as soon as
possible.

       

      
        	
                15.

              	
                Agreement
      of Rights Holders

              

      

       

      Every
holder of a Right consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:

       

      (a)           prior
to the Distribution Date, the Rights shall be transferable only in connection
with the transfer of shares of Common Stock;

       

      (b)           after
the Distribution Date, the Rights Certificates are transferable only on the
registry books of the Rights Agent if surrendered at the principal office or
offices of the Rights Agent designated for such purposes, duly endorsed and
accompanied by a properly executed instrument of transfer with the appropriate
forms and certificates fully executed;

       

      (c)           the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Stock share certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Rights Certificates or the associated Common Stock share certificate made
by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary; and

       

      (d)           such
holder expressly waives any right to receive any fractional Rights and any
fractional securities upon exercise or exchange of a Right, except as otherwise
provided in Section 13.

       

      
        	
                16.

              	
                Rights
      Certificate Holder Not Deemed a
Stockholder

              

      

       

      No
holder, of any Rights Certificate, by means of such possession, shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
the number of one one-thousandths of a share of Preferred Stock or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, by means of such possession, any of the rights of a stockholder of
the Company including any right to vote on any matter submitted to stockholders
at any meeting thereof, including the election of directors, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 24 hereof),
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate have been exercised in accordance
with the provisions of this Agreement.

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      
        	
                17.

              	
                Concerning
      the Rights Agent

              

      

       

      (a)           The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder, and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the preparation, administration and execution of this Agreement and
the exercise and performance of its duties hereunder.  The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, damage, judgment, fine, penalty, claim, demand, cost or
expense incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent (which gross negligence, bad faith or willful
misconduct must be determined by a final, non-appealable order, judgment, decree
or ruling of a court of competent jurisdiction), for anything done or omitted by
the Rights Agent in connection with the acceptance and administration of this
Agreement and the performance of its duties and responsibilities and the
exercise of its rights hereunder, including the costs and expenses of defending
against any claim of liability arising therefrom, directly or indirectly. The
costs and expenses of enforcing this right of indemnification will also be paid
by the Company.  The provisions of this Section 17 shall survive the
exercise, exchange, redemption or expiration of the Rights, the resignation,
replacement or removal of the Rights Agent and the termination of this
Agreement.

       

      (b)           The
Rights Agent may conclusively rely on, and will be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with, its acceptance or administration of this Agreement and the
exercise and performance of its duties and responsibilities and the exercise of
its rights hereunder, in reliance upon any Rights Certificate or certificate
evidencing shares of Preferred Stock, Common Stock or other securities of the
Company, or any instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons, or otherwise upon the advice of counsel as set forth in
Section 19.

       

      (c)           Notwithstanding
anything in this Agreement to the contrary, in no event will the Rights Agent be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and regardless of the
form of action.

       

      
        	
                18.

              	
                Merger,
      Consolidation or Change of Name of Rights
Agent

              

      

       

      (a)           Any
Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent is a
party, will be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided that such Person would be eligible for appointment
as a successor Rights Agent under the provisions of Section 20 hereof. If at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and if at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this
Agreement.

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      (b)           If
at any time the name of the Rights Agent changes and at such time any of the
Rights Certificates have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver Rights
Certificates so countersigned; and if at that time any of the Rights
Certificates have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and in all
such cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.

       

      
        	
                19.

              	
                Duties
      of Rights Agent

              

      

       

      The
Rights Agent undertakes to perform the duties and obligations expressly imposed
by this Agreement (and no implied duties) upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:

       

      (a)           The
Rights Agent may consult with competent legal counsel (who may be legal counsel
for the Company), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent and the Rights Agent
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in accordance with the content of such advice or
opinion.

       

      (b)           Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the determination of the
Current Per Share Market Price) be proved or established by the Company prior to
taking, suffering or omitting to take any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
any Authorized Officer and delivered to the Rights Agent; and such certificate,
pursuant to its terms, shall be full and complete authorization and protection
to the Rights Agent for any action taken or suffered by it under the provisions
of this Agreement in reliance upon such certificate.

       

      (c)           The
Rights Agent shall be liable hereunder only for its own gross negligence, bad
faith or willful misconduct (which gross negligence, bad faith or willful
misconduct must be determined by a final, non-appealable order, judgment, decree
or ruling of a court of competent jurisdiction).

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      (d)           The
Rights Agent shall not be liable for or by reason of any of the statements of
fact or recitals contained in this Agreement or in the Rights Certificates
(except its countersignature thereof) be required to verify the same, but all
such statements and recitals are and shall be deemed to have been made by the
Company only.

       

      (e)           The
Rights Agent will have no liability in respect of the validity of this Agreement
or the execution and delivery hereof (except the due execution and delivery
hereof by the Rights Agent) or in respect of the validity or execution of any
Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant contained in this
Agreement or in any Rights Certificate; nor shall it be responsible for any
adjustment required under the provisions of Sections 11, 12, 22 or 23 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Rights Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Rights Certificate or as to whether any shares
of Common Stock or Preferred Stock shall, when so issued, be validly authorized
and issued, fully paid and nonassessable.

       

      (f)           The
Company agrees that it shall perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the provisions
of this Agreement.

       

      (g)           The
Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties and the exercise of the rights
hereunder from any person reasonably believed by the Rights Agent to be one of
the Authorized Officers, and to apply to such Authorized Officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with instructions of
any such Authorized Officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Agreement
and the date on and/or after which such action shall be taken or such omission
shall be effective.  The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any Authorized Officer of the Company actually receives such application, unless
any such Authorized Officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.

       

      (h)           The
Rights Agent and any stockholder, director, officer or employee of the Rights
Agent may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this
Agreement.  Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other Person.

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

      (i)           The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself (through its directors,
officers or employees) or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, omission, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company or any other Person resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.

       

      (j)           If,
with respect to any Rights Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate contained in the form of assignment or the
form of election to purchase set forth on the reverse thereof, as the case may
be, has not been completed to certify the holder is not an Acquiring Person (or
an Affiliate or Associate thereof) or a transferee thereof, the Rights Agent
shall not take any further action with respect to such requested exercise or
transfer without first consulting with the Company.

       

      (k)           No
provision of this Agreement shall require the Rights Agent to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to
it.

       

      (l)           The
Rights Agent will not be required to take notice or be deemed to have notice of
any fact, event or determination (including, without limitation, any dates or
events defined in this Agreement or the designation of any Person as an
Acquiring Person, Affiliate or Associate) under this Agreement unless and until
the Rights Agent is specifically notified in writing by the Company of such
fact, event or determination.

       

      (m)           The
provisions of this Section 19 shall survive the exercise, exchange, redemption
or expiration of the Rights, the resignation, replacement or removal of the
Rights Agent and the termination of this Agreement.

       

      
        	
                20.

              	
                Change
      of Rights Agent

              

      

       

      The
Rights Agent or any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days’ written notice mailed to the
Company, and to each transfer agent of the shares of Common Stock and Preferred
Stock known to the Rights Agent, respectively, by registered or certified mail,
and, if such resignation occurs after the Distribution Date, to the registered
holders of the Rights Certificates by first-class mail.  The Company
may remove the Rights Agent or any successor Rights Agent upon thirty (30) days’
written notice, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the shares of Common Stock and the
Preferred Stock, by registered or certified mail, and, if such removal occurs
after the Distribution Date, to the holders of the Rights Certificates by
first-class mail.  If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall, in its sole
discretion, appoint a successor to the Rights Agent.  If the Company
shall fail to make such appointment within a period of thirty (30) days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then any registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a legal business entity
organized and doing business under the laws of the United States or of the State
of New York or of any other state of the United States, in good standing, which
is authorized under such laws to exercise corporate trust, stock transfer or
shareholder services powers and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an
affiliate of a legal business entity described in clause (a) of this sentence.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose.  Not later than the
effective date of any such appointment, the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the shares
of Common Stock and the Preferred Stock, and, if such appointment occurs after
the Distribution Date, mail a notice thereof in writing to the registered
holders of the Rights Certificates.  Failure to give any notice
provided for in this Section 20, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may
be.

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

       

      
        	
                21.

              	
                Issuance
      of New Rights Certificates

              

      

       

      Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by the Board to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
the provisions of this Agreement.  In addition, in connection with the
issuance or sale by the Company of shares of Common Stock following the
Distribution Date and prior to the Expiration Date, the Company (a) shall, with
respect to shares of Common Stock so issued or sold pursuant to the exercise,
exchange or conversion of securities (other than Rights) issued prior to the
Distribution Date which are exercisable or exchangeable for, or convertible
into, shares of Common Stock and (b) may, in any other case, if deemed necessary
or appropriate by the Board, issue Rights Certificates representing the
appropriate number of Rights as would have been issued in respect of such shares
of Common Stock if they had been issued or sold prior to the Distribution Date,
as appropriately adjusted as provided herein as if they had been so issued or
sold; provided, however, that (i) no such Rights Certificate shall be issued if,
and to the extent that, in its good faith judgment the Board determines that the
issuance of such Rights Certificate could have a material adverse tax
consequence to the Company or to the Person to whom or which such Rights
Certificate otherwise would be issued, and (ii) no such Rights Certificate shall
be issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

      
        	
                22.

              	
                Redemption

              

      

       

      (a)           The
Board may, at any time prior to such time as any Person first becomes an
Acquiring Person, redeem all but not less than all the then-outstanding Rights
at the Redemption Price.  The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board in
its sole discretion may establish.  The Company may, at its option,
pay the Redemption Price in cash, securities or any other form of consideration
deemed appropriate by the Board.

       

      (b)           Immediately
upon the effectiveness of the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights shall terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held without interest
thereon.  Promptly after the effectiveness of the redemption of the
Rights, the Company shall give notice of such redemption to the Rights Agent and
the holders of the then outstanding Rights by mailing such notice to all such
holders at each holder’s last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the shares of Common Stock; provided however, that the failure to
give, or any defect in, any such notice will not affect the validity of the
Redemption of the Rights. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice.  Each such notice of redemption shall state the method by
which the payment of the Redemption Price shall be made.

       

      
        	
                23.

              	
                Exchange

              

      

       

      (a)           The
Board may, at its option, at any time after any Person first becomes an
Acquiring Person, exchange all or part of the then-outstanding and exercisable
Rights (which shall not include Rights that have not become effective or that
have become void pursuant to the provisions of Section 11(a)(ii) hereof) for
shares of Common Stock at an exchange ratio of one share of Common Stock (or
one-thousandth of a share of Preferred Stock) per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such amount per Right being hereinafter referred to as
the “Exchange
Ratio.”  The exchange of the Rights by the Board may be made
effective at such time, on such basis and with such conditions as the Board in
its sole discretion may establish.

       

      (b)           Immediately
upon the effectiveness of the action of the Board ordering the exchange of any
Rights pursuant to subsection (a) of this Section 23 and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive
that number of shares of Common Stock equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such
exchange.  The Company shall promptly mail a notice of any such
exchange to all of the holders of the Rights so exchanged at their last
addresses as they appear upon the registry books of the Rights
Agent.  Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice.  Each
such notice of exchange will state the method by which the exchange of the
shares of Common Stock, for Rights shall be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged.  Any
partial exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      (c)           The
Company may at its option substitute and, in the event that there shall not be
sufficient shares of Common Stock issued but not outstanding or authorized but
unissued (and unreserved) to permit an exchange of Rights as contemplated in
accordance with this Section 23, the Company shall substitute to the extent of
such insufficiency, for each share of Common Stock that would otherwise be
issuable upon exchange of a Right, a number of shares of Preferred Stock or
fraction thereof (or Equivalent Preferred Stock as such term is defined in
Section 11(b)) such that the Current Per Share Market Price of one share of
Preferred Stock (or Equivalent Preferred Stock) multiplied by such number or
fraction is equal to the Current Per Share Market Price as of the date of such
exchange.

       

      
        	
                24.

              	
                Notice
      of Certain Events

              

      

       

      (a)           If
the Company proposes to (i) pay any dividend payable in stock of any class to
the holders of shares of Preferred Stock or to make any other distribution to
the holders of shares of Preferred Stock (other than a regular periodic cash
dividend), (ii) offer to the holders of shares of Preferred Stock rights,
options, warrants or any similar instrument to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, (iii) effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), (iv) effect any consolidation or merger
into or with any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company or (vi) declare or pay any dividend on the shares of
Common Stock payable in shares of Common Stock or to effect a subdivision,
combination or reclassification of the Common Stock, then, in each such case,
the Company shall give to the Rights Agent and, to the extent possible, to each
holder of a Rights Certificate, in accordance with Section 25 hereof, a notice
of such proposed action, which shall specify the record date for the purposes of
such stock dividend, distribution or offering of rights, warrants, options or
any similar instrument or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
shares of Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least ten (10) days prior to the record date for determining holders of the
shares of Common Stock and/or Preferred Stock for purposes of such action, and
in the case of any such other action covered by clause (1) or (ii) above at
least ten (10) days prior to the date of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock, whichever
is the earlier.

       

      (b)           If
a Stock Acquisition Date occurs, then the Company shall as soon as practicable
thereafter give to the Rights Agent and each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights.

       

      
        	
                25.

              	
                Notices

              

      

       

      (a)           Notices
or demands authorized by this Agreement to be given or made by the Rights Agent
or by the holder of any Rights Certificate to or on the Company shall be
sufficiently given or made (i) immediately, if made by personal delivery to the
party to be notified, (ii) on the fifth (5th) day if sent by first-class mail,
postage prepaid, (iii) the next Business Day if by nationally recognized
overnight courier or (iv) upon confirmation, if transmission by facsimile
combined with a phone call to the Company notifying it of such transmission, all
addressed (until another address is filed in writing by the Company with the
Rights) as follows:

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

       

      Youbet.com,
Inc.

      2600 West
Olive Avenue

      5th
floor

      Burbank,
CA  91505

       

      Attention:
Daniel Perini, General Counsel

      Facsimile:
818-668-2101

      Phone:
818-668-2218

       

      (b)           Subject
to the provisions of Section 20, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made (i)
immediately, if made by personal delivery to the party to be notified, (ii) on
the fifth (5th) day if sent by first-class mail, postage prepaid, (iii) the next
Business Day if by nationally recognized overnight courier or (iv) upon
confirmation, if transmission by facsimile combined with a phone call to the
Rights Agent notifying it of such transmission, all addressed (until another
address is filed in writing by the Rights Agent with the Company) as
follows:

       

      American
Stock Transfer & Trust Company LLC

      6201 15th
Avenue

      Brooklyn,
NY  11219

       

      Attention:
Corporate Trust Department

      Facsimile:
718-238-4588

      Phone:
718-921-8200

       

      (c)           Notices
or demands authorized by this Agreement to be given or made by the Company or
the Rights Agent to the holder of any Rights Certificate (or, if prior to the
Distribution Date, to the holder of certificates representing shares of Common
Stock) shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.

       

      
        	
                26.

              	
                Supplements
      and Amendments

              

      

       

      Prior to
the Distribution Date, the Company may in its sole and absolute discretion, and
the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any holders
Rights, any such supplement or amendment to be evidenced by writing signed by
the Company and the Rights Agent.  From and after the time at which
the Rights cease to be redeemable pursuant to Section 22, the Company may and
the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder or (iv) to amend or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable; provided,
however, that no such
supplement or amendment shall adversely affect the interests of the holders of
Rights (other than an Acquiring Person or any Affiliate or Associate of an
Acquiring Person), and no such amendment may cause the Rights again to become
redeemable or cause this Rights Agreement again to become amendable other than
in accordance with this sentence. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the Rights Agent
shall execute such supplement or amendment.  Notwithstanding anything
herein to the contrary, the Rights Agent shall not be obligated to enter into
any supplement or amendment that affects the Rights Agent’s own right, duties,
obligations or immunities under this Agreement.

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

       

      
        	
                27.

              	
                Successors

              

      

       

      All the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.

       

      
        	
                28.

              	
                Determinations
      and Actions by the Board

              

      

       

      For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock or any other class of capital stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the Beneficial Owner,
shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act or the provisions of
Section 382 of the Code or any successor or replacement
provision.  The Board shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations and calculations deemed necessary or advisable for the
administration of this Agreement (including without limitation a determination
to redeem or not redeem the Rights or amend this Agreement).  All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board, or any of the directors on the
Board to any liability to any person, including without limitation the Rights
Agent and the holders of the Rights. Unless otherwise notified, the Rights Agent
shall always be entitled to assume that the Board acted in good faith and the
Rights Agent shall be fully protected and shall incur no liability in reliance
thereon.

       

      
        	
                29.

              	
                Benefits
      of this Agreement

              

      

       

      Nothing
in this Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of shares of Common
Stock) any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of shares of Common
Stock).

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

       

      
        	
                30.

              	
                Severability

              

      

       

      If any
term, provision, covenant or restriction of this Agreement 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
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated; provided, however, that nothing contained in this
Section 30 will affect the ability of the Company under the provisions of
Section 26 to supplement or amend this Agreement to replace such invalid, void
or unenforceable term, provision, covenant or restriction with a legal, valid
and enforceable term, provision, covenant or restriction.

       

      
        	
                31.

              	
                Governing
      Law

              

      

       

      This
Agreement, each Right and each Rights Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the laws of such
State applicable to contracts made and to be performed entirely within such
State.

       

      
        	
                32.

              	
                Counterparts

              

      

       

      This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.

       

      
        	
                33.

              	
                Descriptive
      Headings

              

      

       

      Descriptive
headings of the several sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.

       

      [REMAINDER
Of PAGE LEFT INTENTIONALLY BLANK]

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

       

      IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.

       

      
        	 
      	
                YOUBET.COM,
      INC.

              
	 
      	 
      
	 
      	/s/
      Daniel T. Perini
	 
      	
                Name:

              	Daniel
      T. Perini
	 
      	
                Title:

              	General
      Counsel and Secretary

      

      

      
        	 
      	
                AMERICAN
      STOCK TRANSFER & TRUST COMPANY LLC

              
	 
      	 
      
	 
      	/s/
      Herbert J. Lemmer
	 
      	
                Name:

              	Herbert
      J. Lemmer
	 
      	
                Title:

              	Vice
      President

      

      

      

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

       

      Exhibit
A

       

      CERTIFICATE
OF DESIGNATION

      OF

      SERIES
B JUNIOR PARTICIPATING PREFERRED STOCK

      OF

      YOUBET.COM,
INC.

       

      (Pursuant
to Section 151 of the General Corporation Law of the State of
Delaware)

       

      Youbet.com,
Inc., a corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the “Company”),

       

      DOES
HEREBY CERTIFY:

       

      That
pursuant to authority conferred upon the Board of Directors of the Company (the
“Board”) by the
Certificate of Incorporation of the Company, as amended (the “Certificate of
Incorporation”), which authorizes the issuance of 1,000,000 shares of
Preferred Stock, $0.001 par value (the “Preferred Stock”), and
pursuant to the provisions of Section 151(g) of the General Corporation Law of
the State of Delaware, the Board has duly determined that One Hundred Thousand
(100,000) shares of Preferred Stock shall be designated “Series B Junior Participating
Preferred Stock,” and to that end the Board has adopted a resolution
providing for the designations, powers, preferences and rights, and the
qualifications, limitations and restrictions, of the Series B Junior
Participating Preferred Stock, which resolution is as follows:

       

      RESOLVED,
that a series of the class of authorized Preferred Stock of the Company be and
hereby is created, and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:

       

      SERIES
B JUNIOR PARTICIPATING PREFERRED STOCK

       

      1.      Designation and
Amount.  The shares of such series will be designated as Series
B Junior Participating Preferred Stock (the “Series B Preferred”) and the
number of shares constituting the Series B Preferred is 100,000.  Such
number of shares may be increased or decreased by resolution of the Board;
provided, however, that no decrease will reduce the number of shares of Series B
Preferred to a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities issued
by the Company and convertible into Series B Preferred.

       

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

       

      2.      Dividends and
Distributions.  1)  Subject to the rights of the
holders of any shares of any series of Preferred Stock ranking prior to the
Series B Preferred with respect to dividends, the holders of shares of Series B
Preferred, in preference to the holders of Common Stock, par value $0.001 per
share (the “Common
Stock”), of the Company, and of any other junior stock, will be entitled
to receive, when, as and if declared by the Board out of funds legally available
for the purpose, dividends payable in cash (except as otherwise provided below)
on such dates as are from time to time established for the payment of dividends
on the Common Stock (each such date being referred to herein as a “Dividend Payment Date”),
commencing on the first Dividend Payment Date after the first issuance of a
share or fraction of a share of Series B Preferred (the “First Dividend Payment Date”),
in an amount per share (rounded to the nearest cent) equal to, subject to the
provision for adjustment hereinafter set forth, the greater of (i) $1 and (ii)
one thousand (1,000) times the aggregate per share amount of all cash dividends,
and one thousand (1,000) times the aggregate per share amount (payable in kind)
of all non-cash dividends, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Dividend Payment Date or, with respect to the First
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series B Preferred. In the event that the Company at any time (i)
declares a dividend on the outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivides the outstanding shares of Common Stock, (iii)
combines the outstanding shares of Common Stock into a smaller number of shares
or (iv) issues any shares of its capital stock in a reclassification of the
outstanding shares of Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, in each such case and regardless of whether any
shares of Series B Preferred are then issued or outstanding, the amount to which
holders of shares of Series B Preferred would otherwise be entitled immediately
prior to such event will be correspondingly adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

       

      (b)                      The
Company will declare a dividend on the Series B Preferred as provided in
paragraph (a) of this Section 2 immediately after it declares a dividend on the
Common Stock (other than a dividend payable in shares of Common
Stock).  Each such dividend on the Series B Preferred will be payable
immediately prior to the time at which the related dividend on the Common Stock
is payable.

       

      (c)                      Dividends
will accrue, and be cumulative, on outstanding shares of Series B Preferred from
the Dividend Payment Date next preceding the date of issue of such shares,
unless (i) the date of issue of such shares is prior to the record date for the
First Dividend Payment Date, in which case dividends on such shares will accrue
from the date of the first issuance of a share of Series B Preferred or (ii) the
date of issue is a Dividend Payment Date or is a date after the record date for
the determination of holders of shares of Series B Preferred entitled to receive
a dividend and before such Dividend Payment Date, in either of which events such
dividends will accrue, and be cumulative, from such Dividend Payment Date.
Accrued but unpaid dividends will cumulate from the applicable Dividend Payment
Date but will not bear interest.  Dividends paid on the shares of
Series B Preferred in an amount less than the total amount of such dividends at
the time accrued and payable on such shares will be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding.  The Board may fix a record date for the determination of
holders of shares of Series B Preferred entitled to receive payment of a
dividend or distribution declared thereon, which record date will be not more
than 60 calendar days prior to the date fixed for the payment
thereof.

       

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

       

      3.      Voting
Rights.

       

      The
holders of shares of Series B Preferred shall have the following voting
rights:

       

      (a)                      Subject
to the provision for adjustment hereinafter set forth and except as otherwise
provided in the Certificate of Incorporation or required by law, each share of
Series B Preferred shall entitle the holder thereof to 1,000 votes, on all
matters upon which the holders of the Common Stock of the Company are entitled
to vote.  In the event the Company shall at any time after the Record
Date declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of votes per share
to which holders of shares of Series B Preferred were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.

       

      (b)                      Except
as otherwise provided herein, in the Certificate of Incorporation or in any
other Certificate of Designations creating a series of Preferred Stock or any
similar stock, and except as otherwise required by law, the holders of shares of
Series B Preferred and the holders of shares of Common Stock and any other
capital stock of the Company having general voting rights shall vote together as
one class on all matters submitted to a vote of stockholders of the
Company.

       

      (c)                      Except
as set forth herein, or as otherwise provided by law, holders of Series B
Preferred shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.

       

      4.      Restrictions.

       

      (a)                      Whenever
dividends or other dividends or distributions payable on the Series B Preferred
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Preferred
outstanding have been paid in full, the Company will not:

       

      (i)           Declare
or pay dividends, or make any other distributions, on any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) (“Junior
Stock”) to the shares of Series B Preferred;

       

      (ii)           Declare
or pay dividends, or make any other distributions, on any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) (“Parity
Stock”) with the shares of Series B Preferred, except dividends paid
ratably on the shares of Series B Preferred and all such Parity Stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;

       

      (iii)           Redeem,
purchase or otherwise acquire for consideration shares of any Junior Stock;
provided, however, that the Company may at any time redeem, purchase or
otherwise acquire shares of any such Junior Stock in exchange for shares of any
other Junior Stock of the Company; or

       

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

       

      (iv)           Redeem,
purchase or otherwise acquire for consideration any shares of Series B
Preferred, or any shares of Parity Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board) to all
holders of such shares upon such terms as the Board, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, may determine in good faith will result in
fair and equitable treatment among the respective series or
classes.

       

      (b)                      The
Company will not permit any majority-owned subsidiary of the Company to purchase
or otherwise acquire for consideration any shares of stock of the Company unless
the Company could, under paragraph (a) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.

       

      5.      Reacquired
Shares.  Any shares of Series B Preferred purchased or
otherwise acquired by the Company in any manner whatsoever will be retired and
canceled promptly after the acquisition thereof.  All such shares will
upon their cancellation become authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the Certificate of
Incorporation of the Company, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.

       

      6.      Liquidation, Dissolution or Winding
Up.  Upon any liquidation, dissolution or winding up of the
Company, no distribution will be made (a) to the holders of shares of Junior
Stock unless, prior thereto, the holders of shares of Series B Preferred have
received an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment; provided,
however, that the holders of shares of Series B Preferred will be entitled to
receive an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to a minimum per share liquidation payment of
$1,000 but will be entitled to an aggregate per share liquidation payment of
1,000 times the payment made per share of Common Stock or (b) to the holders of
shares of Parity Stock, except distributions made ratably on the shares of
Series B Preferred and all such Parity Stock in proportion to the total amounts
to which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Company at any time (i) declares a
dividend on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivides the outstanding shares of Common Stock, (iii) combines
the outstanding shares of Common Stock into a smaller number of shares or (iv)
issues any shares of its capital stock in a reclassification of the outstanding
shares of Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), then, in each such case and regardless of whether any shares of
Series B Preferred are then issued or outstanding, the aggregate amount to which
each holder of shares of Series B Preferred would otherwise be entitled
immediately prior to such event will be correspondingly adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

       

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

       

      7.      Consolidation, Merger,
Etc.  In the event that the Company enters into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then, in each such case, each share of Series B
Preferred will at the same time be similarly exchanged for or changed into an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to one thousand (1,000) times the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or exchanged. In the event
the Company at any time (a) declares a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (b) subdivides the outstanding
shares of Common Stock, (c) combines the outstanding shares of Common Stock in a
smaller number of shares or (d) issues any shares of its capital stock in a
reclassification of the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such case and
regardless of whether any shares of Series B Preferred are then issued or
outstanding, the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series B Preferred will be correspondingly
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

       

      8.      Redemption.  The
shares of Series B Preferred are not redeemable.

       

      9.      Rank.  The Series B
Preferred rank, with respect to the payment of dividends and the distribution of
assets, junior to all other series of the Company’s Preferred Stock, unless the
terms of such series shall so provide.

       

      10.    Fractional
Shares.  Series B Preferred may be issued in fractions of a
share that shall entitle the holder, in proportion to such holder’s fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series B
Preferred.

       

      FURTHER
RESOLVED, that the statements contained in the foregoing resolutions creating
and designating the said Series B Junior Participating Preferred Stock and
fixing the number, powers, preferences and relative, optional, participating,
and other special rights and the qualifications, limitations, restrictions, and
other distinguishing characteristics thereof shall, upon the effective date of
said series, be deemed to be included in and be a part of the Certificate of
Incorporation of the Company pursuant to the provisions of Sections 104 and 151
of the General Corporation Law of the State of Delaware.

       

      [REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK]

       

      
        
          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

       

      

       

      IN
WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the
Company by the undersigned on __________, 2009.

       

      
        	 
      	
                YOUBET.COM,
      INC.

              
	 
      	 
      
	 
      	
                By:

              	 
      
	 
      	 
      	
                Name:

              	 
      
	 
      	 
      	
                Title:

              	 
      

      

       

       

      
        
          
          

        

        
          A-6

          
            

          

        

        
          
          

        

      

      
 

      Exhibit
B

       

      FORM
OF RIGHTS CERTIFICATE

       

      
        	
                Certificate
      No. R-

              	 
      	
                Rights

              

      

      

      NOT
EXERCISABLE AFTER MARCH 31, 2019 OR EARLIER IF REDEEMED, EXCHANGED OR
AMENDED.  THE RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT
AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT.  UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS
AGREEMENT, RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) OR A TRANSFEREE THEREOF SHALL BECOME NULL AND VOID AND
NO LONGER TRANSFERABLE.

       

      RIGHTS
CERTIFICATE

       

      YOUBET.COM,
INC.

       

      This
certifies
that                      ,
or registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions, and conditions of the Rights Agreement, (the “Rights
Agreement”), by and 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”), dated as of March 31, 2009, to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 p.m. (New York time) on the Expiration Date (as
such term is defined in the Rights Agreement) at the office or offices of the
Rights Agent designated for such purpose, one one-thousandth of a fully paid
nonassessable share of Series B Junior Participating Preferred Stock, par value
$0.001 per share (the “Preferred
Shares”), of the Company, at a purchase price of $8.00 per one
one-thousandth of a Preferred Share (the “Purchase
Price”), upon presentation and surrender of this Rights Certificate with
the Form of Election to Purchase and related Certificate duly executed. If this
Rights Certificate is exercised in part, the holder will be entitled to receive
upon surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.  The number of Rights evidenced
by this Rights Certificate (and the number of one one-thousandths of a Preferred
Share which may be purchased upon exercise thereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of the date
of the Rights Agreement, based on the Preferred Shares as constituted at such
date.  Terms used herein with initial capital letters and not defined
herein are used herein with the meanings ascribed thereto in the Rights
Agreement.

       

      As
provided in the Rights Agreement, the Purchase Price and/or the number and/or
kind of shares of Preferred Stock (or other securities, as the case may be)
which may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to adjustment upon the occurrence of certain
events.

       

      
        
          
          

        

        
          B-1

          
            

          

        

        
          
          

        

      

       

      This
Rights Certificate is subject to all of the terms, provisions and conditions of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of the Rights Certificates, which limitations of
rights include the temporary suspension of the exercisability of the Rights
under the circumstances specified in the Rights Agreement. Copies of the Rights
Agreement are on file at the principal executive offices of the Company and can
be obtained from the Company without charge upon written request
therefor.

       

      Pursuant
to the Rights Agreement, from and after the occurrence of any Person becoming an
Acquiring Person, any Rights that are Beneficially Owned by (i) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (ii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the occurrence of any Person becoming an Acquiring
Person or (iii) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who became a transferee prior to or concurrently with any Person
becoming an Acquiring Person pursuant to either (a) a transfer from an Acquiring
Person to holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (b) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has the purpose
or effect of avoiding certain provisions of the Rights Agreement, and subsequent
transferees of any of such Persons, will be void without any further action and
any holder of such Rights will thereafter have no rights whatsoever with respect
to such Rights under any provision of the Rights Agreement. From and after the
occurrence of any Person becoming an Acquiring Person, no Rights Certificate
will be issued that represents Rights that are or have become void pursuant to
the provisions of the Rights Agreement, and any Rights Certificate delivered to
the Rights Agent that represents Rights that are or have become void pursuant to
the provisions of the Rights Agreement will be canceled.

       

      This
Rights Certificate, with or without other Rights Certificates, may be exchanged
for another Rights Certificate or Rights Certificates entitling the holder to
purchase a like number of one one-thousandths of a Preferred Share (or other
securities, as the case may be) as the Rights Certificate or Rights Certificates
surrendered entitled such holder (or former holder in the case of a transfer) to
purchase, upon presentation and surrender hereof at the office or offices of the
Rights Agent designated for such purpose, with the Form of Assignment (if
appropriate) and the related Certificate duly executed.

       

      Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at a redemption price
of $0.001 per Right or may be exchanged in whole or in part.  The
Rights Agreement may be supplemented and amended by the Company, as provided
therein.

       

      The
Company is not required to issue fractions of Preferred Shares (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share, which may, at the option of the Company, be evidenced by depositary
receipts) or other securities issuable, as the case may be, upon the exercise of
any Right or Rights evidenced hereby.  In lieu of issuing such
fractional Preferred Shares or other Securities, the Company may make a cash
payment, as provided in the Rights Agreement.

       

      
        
          
          

        

        
          B-2

          
            

          

        

        
          
          

        

      

       

      No holder
of this Rights Certificate, as such, will be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable upon the
exercise of the Right or Rights represented hereby, nor will anything contained
herein or in the Rights Agreement be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate have been exercised in accordance with the provisions of the Rights
Agreement.

       

      This
Rights Certificate will not be valid or obligatory for any purpose until it has
been countersigned by the Rights Agent.

       

      [REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK]

       

      
        
          
          

        

        
          B-3

          
            

          

        

        
          
          

        

      

       

      WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal.  Dated as
of                        ,          .

       

      
        	 
      	
                YOUBET.COM,
      INC.

              
	 
      	 
      
	 
      	
                By:

              	 
      
	 
      	 
      	
                Name:

              	 
      
	 
      	 
      	
                Title:

              	 
      

      

      

      
        
          	
                  COUNTERSIGNED:

                
	 
      
	
                  AMERICAN
      STOCK TRANSFER & TRUST COMPANY LLC

                
	 
      
	 
      
	
                  By:

                	 
      
	 
      	
                  Name:

                	 
      
	 
      	
                  Title:

                	 
      

        

      

      

      Signature
page for Rights Certificate

       

      
        
          
          

        

        
          B-4

          
            

          

        

        
          
          

        

      

       

      Form of
Reverse Side of Rights Certificate

       

      FORM
OF ASSIGNMENT

       

      (To be
executed by the registered holder if such holder desires to transfer the Rights
Certificate)

       

      FOR VALUE
RECEIVED,                        hereby
sells, assigns and transfers unto

       

      
        
          	 
      
	
                  (Please
      print name and address of
transferee)

                

        

      

      

      this
Rights Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint Attorney, to transfer the within
Rights Certificate on the books of the within-named Company, with full power of
substitution.

       

      Dated
:                        ,

       

      
        
          	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                  Signature

                

        

      

      

      Signature(s)
Guaranteed:

       

      SIGNATURE(S)
SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
17Ad-15.

       

      _______________________

       

      The
undersigned hereby certifies that the Rights evidenced by this Rights
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).

       

      
        	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                Signature

              

      

       

       

      
        
          
          

        

        
          B-5

          
            

          

        

        
          
          

        

      

      
 

      CERTIFICATE

       

      The
undersigned hereby certifies by checking the appropriate boxes
that:

       

      (1)   the
Rights evidenced by this Rights Certificate o are o are not being sold,
assigned, transferred, split up, combined or exchanged by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or Associate of any
such Person (as such terms are defined in the Rights Agreement);
and

       

      (2)   after
due inquiry and to the best knowledge of the undersigned, it o did o did not
acquire the Rights evidenced by this Rights Certificate from any Person who is,
was or became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.

       

      Dated
:                        ,

       

      
        	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                Signature

              

      

       

       

      
        
          
          

        

        
          B-6

          
            

          

        

        
          
          

        

      

      
 

      Form of
Reverse Side of Rights Certificate—continued

       

      FORM
OF ELECTION TO PURCHASE

       

      (To be
executed if holder desires to exercise the Rights Certificate)

       

      To
Youbet.com, Inc.:

       

      The
undersigned hereby irrevocably elects to
exercise                                    Rights
represented by this Rights Certificate to purchase the one one-thousandths of a
Preferred Share or other securities issuable upon the exercise of such Rights
and requests that certificates for such securities be issued in the name of and
delivered to:

       

      Please
insert social security or other identifying number:
_________________

       

      
        
          	 
      
	
                  (Please
      print name and address)

                

        

      

      

      If such
number of Rights is not all the Rights evidenced by this Rights Certificate, a
new Rights Certificate for the balance remaining of such Rights will be
registered in the name of and delivered to:

       

      Please
insert social security or other identifying number:
_________________

       

      
        
          	 
      
	
                  (Please
      print name and address)

                

        

      

      

      Dated:                   ,                   ,

       

      
        	 
      	 
      
	 
      	 
      
	 
      	
                Signature

              

      

      

      Signature(s)
Guaranteed:

       

      SIGNATURE(S)
SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
17Ad-15.

       

      _____________________

       

      The
undersigned hereby certifies that the Rights evidenced by this Rights
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).

       

      
        	 
      	 
      
	 
      	 
      
	 
      	
                Signature

              

      

       

       

      
        
          
          

        

        
          B-7

          
            

          

        

        
          
          

        

      

      
 

      CERTIFICATE

       

      The
undersigned hereby certifies by checking the appropriate boxes
that:

       

      (1)   the
Rights evidenced by this Rights Certificate o are o are not being exercised by
or on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined pursuant to the Rights
Agreement); and

       

      (2)   after
due inquiry and to the best knowledge of the undersigned, it o did o did not
acquire the Rights evidenced by this Rights Certificate from any Person who is,
was, or became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.

       

      Dated
:                        ,

       

      
        	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                Signature

              

      

       

       

      
        
          
          

        

        
          B-8

          
            

          

        

        
          
          

        

      

      
 

      NOTICE

       

      The
signature in the Form of Assignment or Form of Election to Purchase, as the case
may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.

       

      In the
event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, such Assignment or
Election to Purchase will not be honored.

       

      
        
          
          

        

        
          B-9

          
            

          

        

        
          
          

        

      

       

      Exhibit
C

       

      UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR
TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN
THE RIGHTS PLAN) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND
WILL NO LONGER BE TRANSFERABLE.

       

      SUMMARY
OF RIGHTS

       

      On March
31, 2009, the Board of Directors (the “Board”) of
Youbet.com, Inc., a Delaware corporation (“we,”
“us,”
“our” or
the “Company”),
adopted a rights plan and declared a dividend of one preferred share purchase
right (a “Right”)
for each outstanding share of common stock, par value $0.001 per share, of the
Company (the “Common
Stock”).  The dividend is payable to our stockholders of record
as of April 10, 2009.  The terms of the Rights are set forth in a
Rights Agreement, between us and American Stock Transfer & Trust Company
LLC, as Rights Agent, dated as of March 31, 2009 (the “Rights
Plan”).

       

      This
summary of rights provides only a general description of the Rights Plan, and
thus, should be read together with the entire Rights Plan, which is incorporated
into this summary by reference.  All capitalized terms used herein but
not defined herein shall have the meanings ascribed to such terms in the Rights
Plan.  Upon written request, the Company will provide a copy of the
Rights Plan free of charge to any of its stockholders.

       

      The Board
adopted the Rights Plan in an effort to protect stockholder value by attempting
to protect against a possible limitation on the Company’s ability to use our net
operating loss carryforwards (the “NOLs”) to
reduce potential future federal income tax obligations.  We have
experienced and continue to experience substantial operating losses, and under
the Internal Revenue Code and rules promulgated by the Internal Revenue Service,
we may “carry forward” these losses in certain circumstances to offset any
current and future earnings and thus reduce our federal income tax liability,
subject to certain requirements and restrictions.  To the extent that
the NOLs do not otherwise become limited, we believe that we will be able to
carry forward a significant amount of NOLs, and therefore these NOLs could be a
substantial asset to us.  However, if we experience an “Ownership
Change,” as defined in Section 382 of the Internal Revenue Code, our ability to
use the NOLs will be substantially limited, and the timing of the usage of the
NOLs could be substantially delayed, which could therefore significantly impair
the value of that asset.

       

      The
Rights Plan is intended to act as a deterrent to any person or group acquiring
4.9% or more of our outstanding Common Stock (an “Acquiring
Person”) without the approval of the Board.  Stockholders who
own 4.9% or more of our outstanding Common Stock as of the close of business on
March 31, 2009 will not trigger the Rights Plan so long as they do not (i)
acquire any additional shares of Common Stock or (ii) fall under 4.9% ownership
of Common Stock and then re-acquire 4.9% or more of the Common
Stock.  The Rights Plan does not exempt any future acquisitions of
Common Stock by such persons.  Any rights held by an Acquiring Person
are void and may not be exercised.  The Board may, in its sole
discretion, exempt any person or group from being deemed an Acquiring Person for
purposes of the Rights Plan.

       

      
        
          
          

        

        
          C-1

          
            

          

        

        
          
          

        

      

       

      The Rights.  The
Board authorized the issuance of one right per each outstanding share of Common
Stock payable to our stockholders of record as of April 10,
2009.  Subject to the terms, provisions and conditions of the Rights
Plan, if the rights become exercisable, each right would initially represent the
right to purchase from us one one-thousandth of a share of Series B Junior
Participating Preferred Stock, par value $0.001 per share, of the Company (the
“Series B
Preferred Stock”) for a purchase price of $8.00 (the “Purchase
Price”) .  If issued, each fractional share of Series B
Preferred Stock would give the stockholder approximately the same dividend,
voting and liquidation rights as does one share of our Common
Stock.  However, prior to exercise, a right does not give its holder
any rights as a stockholder of the Company, including without limitation any
dividend, voting or liquidation rights.

       

      Exercisability.  The
rights will not be exercisable until the earlier of (i) 10 business days after a
public announcement by us that a person or group has become an Acquiring Person
and (ii) 10 business days after the commencement of a tender or exchange offer
by a person or group for 4.9% of the Common Stock.

       

      We refer
to the date that the rights become exercisable as the “Distribution
Date.”  Until the Distribution Date, the Common Stock
certificates will evidence the rights and will contain a notation to that
effect.  Any transfer of shares of Common Stock prior to the
Distribution Date will constitute a transfer of the associated
rights.  After the Distribution Date, the rights may be transferred
other than in connection with the transfer of the underlying shares of Common
Stock unless and until the Board has determined not to affect an exchange
pursuant to the Rights Plan (as described below).

       

      After the
Distribution Date, each holder of a Right, other than Rights beneficially owned
by the Acquiring Person (which will thereupon become void), will thereafter have
the right to receive upon exercise of a Right and payment of the Purchase Price,
that number of shares of Common Stock having a market value of two times the
Purchase Price.

       

      Exchange.  After
the Distribution Date, the Board may exchange the Rights (other than Rights
owned by such person or group which will have become void), in whole or in part,
at an exchange ratio of one share of Common Stock, or a fractional share of
Series B Preferred Stock (or of a share of a similar class or series of the
Company’s preferred stock having similar rights, preferences and privileges) of
equivalent value, per Right (subject to adjustment).

       

      Expiration.  The
rights and the Rights Plan will expire on the earliest of (i) March 31, 2019,
(ii) the time at which the Rights are redeemed pursuant to the Rights Agreement,
(iii) the time at which the Rights are exchanged pursuant to the Rights
Agreement, (iv) the repeal of Section 382 of the Code or any successor statute
if the Board determines that the Rights Agreement is no longer necessary for the
preservation of Tax Benefits, (v) the beginning of a taxable year of the Company
to which the Board determines that no Tax Benefits may be carried forward and
(vi) March 31, 2010 if Stockholder Approval has not been obtained.

       

      Redemption.  At any
time prior to the time an Acquiring Person becomes such, the Board may redeem
the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption
Price”).  The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board in its sole
discretion may establish.  Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.

       

      
        
          
          

        

        
          C-2

          
            

          

        

        
          
          

        

      

       

      Anti-Dilution
Provisions.  The Board may adjust the purchase price of the
Series B Preferred Stock, the number of shares of Series B Preferred Stock
issuable and the number of outstanding rights to prevent dilution that may occur
as a result of certain events, including among others, a stock dividend, a stock
split or a reclassification of the Series B Preferred Stock or the Common
Stock.  No adjustments to the purchase price of less than 1% will be
made.

       

      Amendments.  Before
the Distribution Date, the Board may amend or supplement the Rights Plan without
the consent of the holders of the Rights.  After the Distribution
Date, the Board may amend or supplement the Rights Plan only to cure an
ambiguity, to alter time period provisions, to correct inconsistent provisions,
or to make any additional changes to the Rights Plan, but only to the extent
that those changes do not impair or adversely affect any rights holder and do
not result in the rights again becoming redeemable, and no such amendment may
cause the Rights again to become redeemable or cause this Rights Agreement again
to become amendable other than in accordance with this sentence.

       

      

       

      
        
          
          

        

        
          C-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00156-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00156-of-00352.parquet"}]]