BYLAWS

                                       OF

                                YOUBET.COM, INC.

 

                            (A DELAWARE CORPORATION)

 

ARTICLE I

 

                                     OFFICES

 

 

     Section 1. REGISTERED OFFICE. The registered office of the corporation in

the State of Delaware shall be in the City of Dover, County of Kent.

 

     Section 2. OTHER OFFICES. The corporation shall also have and maintain an

office or principal place of business at such place as may be fixed by the Board

of Directors, and may also have offices at such other places, both within and

without the State of Delaware as the Board of Directors may from time to time

determine or the business of the corporation may require.

 

                                   ARTICLE II

 

                                 CORPORATE SEAL

 

     Section 3. CORPORATE SEAL. The corporate seal shall consist of a die

bearing the name of the corporation and the inscription, "Corporate

Seal-Delaware." Said seal may be used by causing it or a facsimile thereof to be

impressed or affixed or reproduced or otherwise.

 

                                  ARTICLE III

 

                             STOCKHOLDERS' MEETINGS

 

     Section 4. PLACE OF MEETINGS. Meetings of the stockholders of the

corporation shall be held at such place, either within or without the State of

Delaware, as may be designated from time to time by the Board of Directors, or,

if not so designated, then at the office of the corporation required to be

maintained pursuant to Section 2 hereof.

 

     Section 5. ANNUAL MEETING. The annual meeting of the stockholders of the

corporation, for the purpose of election of directors and for such other

business as may lawfully come before it, shall be held on such date and at such

time as may be designated from time to time by the Board of Directors.

 

     Section 6. SPECIAL MEETINGS.

 

                  (a) Special meetings of the stockholders of the corporation

may be called, for any purpose or purposes, by (i) the Chairman of the Board of

Directors, (ii) the Chief Executive Officer, (iii) the Board of Directors

pursuant to a resolution adopted by a majority of the total number of authorized

directors (whether or not there exist any vacancies in previously authorized

directorships at the time any such resolution is presented to the Board of

Directors for adoption) or (iv) by the holders of shares entitled to cast not

less than ten percent (10%) of the votes at the meeting, and shall be held at

such place, on such date, and at such time as the Board of Directors, shall fix.

 

                  (b) If a special meeting is called by any person or persons

other than the Board of Directors, the request shall be in writing, specifying

the general nature of the business proposed to be transacted, and shall be

delivered personally or sent by registered mail or by telegraphic or other

facsimile transmission to the Chairman of the Board of Directors, the Chief

Executive Officer, or the Secretary of the corporation. No business may be

transacted at such special meeting otherwise than specified in such notice. The

Board of Directors shall determine the time and place of such special meeting,

which shall be held not less than thirty-five (35) nor more than one hundred

twenty (120) days after the date of the receipt of the request. Upon

determination of the time and place of the meeting, the officer receiving the

request shall cause notice to be given to the stockholders entitled to vote, in

accordance with the provisions of Section 7 of these Bylaws. If the notice is

not given within sixty (60) days after the receipt of the request, the person or

persons requesting the meeting may set the time and place of the meeting and

give the notice. Nothing contained in this paragraph (b) shall be construed as

limiting, fixing, or affecting the time when a meeting of stockholders called by

action of the Board of Directors may be held.

 

         Section 7. NOTICE OF MEETINGS. Except as otherwise provided by law or

the Certificate of Incorporation, written notice of each meeting of stockholders

shall be given not less than ten (10) nor more than sixty (60) days before the

date of the meeting to each stockholder entitled to vote at such meeting, such

notice to specify the place, date and hour and purpose or purposes of the

meeting. Notice of the time, place and purpose of any meeting of stockholders

may be waived in writing, signed by the person entitled to notice thereof,

either before or after such meeting, and will be waived by any stockholder by

his attendance thereat in person or by proxy, except when the stockholder

attends a meeting for the express purpose of objecting, at the beginning of the

meeting, to the transaction of any business because the meeting is not lawfully

called or convened. Any stockholder so waiving notice of such meeting shall be

bound by the proceedings of any such meeting in all respects as if due notice

thereof had been given.

 

         Section 8. QUORUM. At all meetings of stockholders, except where

otherwise provided by statute or by the Certificate of Incorporation, or by

these Bylaws, the presence, in person or by proxy duly authorized, of the

holders of a majority of the outstanding shares of stock entitled to vote shall

constitute a quorum for the transaction of business. In the absence of a quorum,

any meeting of stockholders may be adjourned, from time to time, either by the

chairman of the meeting or by vote of the holders of a majority of the shares

represented thereat, but no other business shall be transacted at such meeting.

The stockholders present at a duly called or convened meeting, at which a quorum

is present, may continue to transact business until adjournment, notwithstanding

the withdrawal of enough stockholders to leave less than a quorum. Except as

otherwise provided by law, the Certificate of Incorporation or these Bylaws, all

action taken by the holders of a majority of the vote cast, excluding

abstentions, at any meeting at which a quorum is present shall be valid and

binding upon the corporation; provided, however, that directors shall be elected

by a plurality of the votes of the shares present in person or represented by

proxy at the meeting and entitled to vote on the election of directors. Where a

separate vote by a class or classes or series is required, except where

otherwise provided by the statute or by the Certificate of Incorporation or

these Bylaws, a majority of the outstanding shares of such class or classes or

series, present in person or represented by proxy, shall constitute a quorum

entitled to take action with respect to that vote on that matter and, except

where otherwise provided by the statute or by the Certificate of Incorporation

or these Bylaws, the affirmative vote of the majority (plurality, in the case of

the election of directors) of the votes cast, including abstentions, by the

holders of shares of such class or classes or series shall be the act of such

class or classes or series.

 

         Section 9. ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS. Any meeting of

stockholders, whether annual or special, may be adjourned from time to time

either by the chairman of the meeting or by the vote of a majority of the shares

casting votes, excluding abstentions. When a meeting is adjourned to another

time or place, notice need not be given of the adjourned meeting if the time and

place thereof are announced at the meeting at which the adjournment is taken. At

the adjourned meeting, the corporation may transact any business which might

have been transacted at the original meeting. If the adjournment is for more

than thirty (30) days or if after the adjournment a new record date is fixed for

the adjourned meeting, a notice of the adjourned meeting shall be given to each

stockholder of record entitled to vote at the meeting.

 

         Section 10. VOTING RIGHTS. For the purpose of determining those

stockholders entitled to vote at any meeting of the stockholders, except as

otherwise provided by law, only persons in whose names shares stand on the stock

records of the corporation on the record date, as provided in Section 12 of

these Bylaws, shall be entitled to vote at any meeting of stockholders. Every

person entitled to vote shall have the right to do so either in person or by an

agent or agents authorized by a proxy granted in accordance with Delaware law.

An agent so appointed need not be a stockholder. No proxy shall be voted after

three (3) years from its date of creation unless the proxy provides for a longer

period.

 

         Section 11. JOINT OWNERS OF STOCK. If shares or other securities having

voting power stand of record in the names of two (2) or more persons, whether

fiduciaries, members of a partnership, joint tenants, tenants in common, tenants

by the entirety, or otherwise, or if two (2) or more persons have the same

fiduciary relationship respecting the same shares, unless the Secretary is given

written notice to the contrary and is furnished with a copy of the instrument or

order appointing them or creating the relationship wherein it is so provided,

their acts with respect to voting shall have the following effect: (a) if only

one (1) votes, his act binds all; (b) if more than one (1) votes, the act of the

majority so voting binds all; (c) if more than one (1) votes, but the vote is

evenly split on any particular matter, each faction may vote the securities in

question proportionally, or may apply to the Delaware Court of Chancery for

relief as provided in the General Corporation Law of Delaware, Section 217(b).

If the instrument filed with the Secretary shows that any such tenancy is held

in unequal interests, a majority or even-split for the purpose of subsection (c)

shall be a majority or even-split in interest.

 

         Section 12. LIST OF STOCKHOLDERS. The Secretary shall prepare and make,

at least ten (10) days before every meeting of stockholders, a complete list of

the stockholders entitled to vote at said meeting, arranged in alphabetical

order, showing the address of each stockholder and the number of shares

registered in the name of each stockholder. Such list shall be open to the

examination of any stockholder, for any purpose germane to the meeting, during

ordinary business hours, for a period of at least ten (10) days prior to the

meeting, either at a place within the city where the meeting is to be held,

which place shall be specified in the notice of the meeting, or, if not

specified, at the place where the meeting is to be held. The list shall be

produced and kept at the time and place of meeting during the whole time thereof

and may be inspected by any stockholder who is present.

 

         Section 13. ACTION WITHOUT MEETING.

 

                  (a) Unless otherwise provided in the Certificate of

Incorporation, any action required by statute to be taken at any annual or

special meeting of the stockholders, or any action which may be taken at any

annual or special meeting of the stockholders, may be taken without a meeting,

without prior notice and without a vote, if a consent in writing, setting forth

the action so taken, shall be signed by the holders of outstanding stock having

not less than the minimum number of votes that would be necessary to authorize

or take such action at a meeting at which all shares entitled to vote thereon

were present and voted.

 

                  (b) Every written consent shall bear the date of signature of

each stockholder who signs the consent, and no written consent shall be

effective to take the corporate action referred to therein unless, within sixty

(60) days of the earliest dated consent delivered to the corporation in the

manner herein required, written consents signed by a sufficient number of

stockholders to take action are delivered to the corporation by delivery to its

registered office in the State of Delaware, its principal place of business or

an officer or agent of the corporation having custody of the book in which

proceedings of meetings of stockholders are recorded. Delivery made to a

corporation's registered office shall be by hand or by certified or registered

mail, return receipt requested.

 

                  (c) Prompt notice of the taking of the corporate action

without a meeting by less than unanimous written consent shall be given to those

stockholders who have not consented in writing. If the action which is consented

to is such as would have required the filing of a certificate under any section

of the General Corporation Law of the State of Delaware if such action had been

voted on by stockholders at a meeting thereof, then the certificate filed under

such section shall state, in lieu of any statement required by such section

concerning any vote of stockholders, that written notice and written consent

have been given as provided in Section 228 of the General Corporation Law of

Delaware.

 

         Section 14. ORGANIZATION.

 

                  (a) At every meeting of stockholders, the Chairman of the

Board of Directors, or, if a Chairman has not been appointed or is absent, the

President, or, if the President is absent, a chairman of the meeting chosen by a

majority in interest of the stockholders entitled to vote, present in person or

by proxy, shall act as chairman. The Secretary, or, in his absence, an Assistant

Secretary directed to do so by the President, shall act as secretary of the

meeting.

 

                  (b) The Board of Directors of the corporation shall be

entitled to make such rules or regulations for the conduct of meetings of

stockholders as it shall deem necessary, appropriate or convenient. Subject to

such rules and regulations of the Board of Directors, if any, the chairman of

the meeting shall have the right and authority to prescribe such rules,

regulations and procedures and to do all such acts as, in the judgment of such

chairman, are necessary, appropriate or convenient for the proper conduct of the

meeting, including, without limitation, establishing an agenda or order of

business for the meeting, rules and procedures for maintaining order at the

meeting and the safety of those present, limitations on participation in such

meeting to stockholders of record of the corporation and their duly authorized

and constituted proxies and such other persons as the chairman shall permit,

restrictions on entry to the meeting after the time fixed for the commencement

thereof, limitations on the time allotted to questions or comments by

participants and regulation of the opening and closing of the polls for

balloting on matters which are to be voted on by ballot. Unless and to the

extent determined by the Board of Directors or the chairman of the meeting,

meetings of stockholders shall not be required to be held in accordance with

rules of parliamentary procedure.

 

                                   ARTICLE IV

                                    DIRECTORS

 

         Section 15. NUMBER AND TERM OF OFFICE. The authorized number of

directors of the corporation shall be three. Directors need not be stockholders

unless so required by the Certificate of Incorporation. If for any cause, the

directors shall not have been elected at an annual meeting, they may be elected

as soon thereafter as convenient at a special meeting of the stockholders called

for that purpose in the manner provided in these Bylaws.

 

         Section 16. POWERS. The powers of the corporation shall be exercised,

its business conducted and its property controlled by the Board of Directors,

except as may be otherwise provided by statute or by the Certificate of

Incorporation.

 

         Section 17. CLASSES OF DIRECTORS. Subject to the rights of the holders

of any series of Preferred Stock to elect additional directors under specified

circumstances, directors shall be elected at each annual meeting of stockholders

for a term of one year. Each director shall serve until his successor is duly

elected and qualified or until his death, resignation or removal. No decrease in

the number of directors constituting the Board of Directors shall shorten the

term of any incumbent director.

 

         Section 18. VACANCIES. Unless otherwise provided in the Certificate of

Incorporation, any vacancies on the Board of Directors resulting from death,

resignation, disqualification, removal or other causes and any newly created

directorships resulting from any increase in the number of directors, shall

unless the Board of Directors determines by resolution that any such vacancies

or newly created directorships shall be filled by stockholders, be filled only

by the affirmative vote of a majority of the directors then in office, even

though less than a quorum of the Board of Directors. Any director elected in

accordance with the preceding sentence shall hold office for the remainder of

the full term of the director for which the vacancy was created or occurred and

until such director's successor shall have been elected and qualified. A vacancy

in the Board of Directors shall be deemed to exist under this Bylaw in the case

of the death, removal or resignation of any director.

 

         Section 19. RESIGNATION. Any director may resign at any time by

delivering his written resignation to the Secretary, such resignation to specify

whether it will be effective at a particular time, upon receipt by the Secretary

or at the pleasure of the Board of Directors. If no such specification is made,

it shall be deemed effective at the pleasure of the Board of Directors. When one

or more directors shall resign from the Board of Directors, effective at a

future date, a majority of the directors then in office, including those who

have so resigned, shall have power to fill such vacancy or vacancies, the vote

thereon to take effect when such resignation or resignations shall become

effective, and each Director so chosen shall hold office for the unexpired

portion of the term of the Director whose place shall be vacated and until his

successor shall have been duly elected and qualified.

 

         Section 20. REMOVAL. Subject to the rights of the holders of any series

of Preferred Stock, the Board of Directors or any individual director may be

removed from office at any time with or without cause by the holders of a

majority of the voting power of all the then-outstanding shares of voting stock

of the corporation, entitled to vote at an election of directors (the "Voting

Stock").

 

 

         Section 21. MEETINGS.

 

                  (a) ANNUAL MEETINGS. The annual meeting of the Board of

Directors shall be held immediately before or after the annual meeting of

stockholders and at the place where such meeting is held. No notice of an annual

meeting of the Board of Directors shall be necessary and such meeting shall be

held for the purpose of electing officers and transacting such other business as

may lawfully come before it.

 

                  (b) REGULAR MEETINGS. Except as hereinafter otherwise

provided, regular meetings of the Board of Directors shall be held in the office

of the corporation required to be maintained pursuant to Section 2 hereof.

Unless otherwise restricted by the Certificate of Incorporation, regular

meetings of the Board of Directors may also be held at any place within or

without the State of Delaware which has been designated by resolution of the

Board of Directors or the written consent of all directors.

 

                  (c) SPECIAL MEETINGS. Unless otherwise restricted by the

Certificate of Incorporation, special meetings of the Board of Directors may be

held at any time and place within or without the State of Delaware whenever

called by the Chairman of the Board, the President or any two of the directors.

 

                  (d) TELEPHONE MEETINGS. Any member of the Board of Directors,

or of any committee thereof, may participate in a meeting by means of conference

telephone or similar communications equipment by means of which all persons

participating in the meeting can hear each other, and participation in a meeting

by such means shall constitute presence in person at such meeting.

 

                  (e) NOTICE OF MEETINGS. Notice of the time and place of all

special meetings of the Board of Directors shall be orally or in writing, by

telephone, facsimile, telegraph or telex, during normal business hours, at least

twenty-four (24) hours before the date and time of the meeting, or sent in

writing to each director by first class mail, charges prepaid, at least three

(3) days before the date of the meeting. Notice of any meeting may be waived in

writing at any time before or after the meeting and will be waived by any

director by attendance thereat, except when the director attends the meeting for

the express purpose of objecting, at the beginning of the meeting, to the

transaction of any business because the meeting is not lawfully called or

convened.

 

                  (f) WAIVER OF NOTICE. The transaction of all business at any

meeting of the Board of Directors, or any committee thereof, however called or

noticed, or wherever held, shall be as valid as though had at a meeting duly

held after regular call and notice, if a quorum be present and if, either before

or after the meeting, each of the directors not present shall sign a written

waiver of notice. All such waivers shall be filed with the corporate records or

made a part of the minutes of the meeting.

 

         Section 22. QUORUM AND VOTING.

 

                  (a) Unless the Certificate of Incorporation requires a greater

number and except with respect to indemnification questions arising under

Section 43 hereof, for which a quorum shall be one-third of the exact number of

directors fixed from time to time in accordance with the Certificate of

Incorporation, a quorum of the Board of Directors shall consist of a majority of

the exact number of directors fixed from time to time by the Board of Directors

in accordance with the Certificate of Incorporation; provided, however, at any

meeting whether a quorum be present or otherwise, a majority of the directors

present may adjourn from time to time until the time fixed for the next regular

meeting of the Board of Directors, without notice other than by announcement at

the meeting.

 

                  (b) At each meeting of the Board of Directors at which a

quorum is present, all questions and business shall be determined by the

affirmative vote of a majority of the directors present, unless a different vote

be required by law, the Certificate of Incorporation or these Bylaws.

 

         Section 23. ACTION WITHOUT MEETING. Unless otherwise restricted by the

Certificate of Incorporation or these Bylaws, any action required or permitted

to be taken at any meeting of the Board of Directors or of any committee thereof

may be taken without a meeting, if all members of the Board of Directors or

committee, as the case may be, consent thereto in writing, and such writing or

writings are filed with the minutes of proceedings of the Board of Directors or

committee.

 

         Section 24. FEES AND COMPENSATION. Directors shall be entitled to such

compensation for their services as may be approved by the Board of Directors,

including, if so approved, by resolution of the Board of Directors, a fixed sum

and expenses of attendance, if any, for attendance at each regular or special

meeting of the Board of Directors and at any meeting of a committee of the Board

of Directors. Nothing herein contained shall be construed to preclude any

director from serving the corporation in any other capacity as an officer,

agent, employee, or otherwise and receiving compensation therefor.

 

         Section 25. COMMITTEES. The Board of Directors may, by resolution

passed by a majority of the whole Board of Directors, from time to time appoint

such committees as may be permitted by law. Such other committees appointed by

the Board of Directors shall consist of one (1) or more members of the Board of

Directors and shall have such powers and perform such duties as may be

prescribed by the resolution or resolutions creating such committees.

 

         Section 26. ORGANIZATION. At every meeting of the directors, the

Chairman of the Board of Directors, or, if a Chairman has not been appointed or

is absent, the President, or if the President is absent, the most senior Vice

President, or, in the absence of any such officer, a chairman of the meeting

chosen by a majority of the directors present, shall preside over the meeting.

The Secretary, or in his absence, an Assistant Secretary directed to do so by

the President, shall act as secretary of the meeting.

 

                                   ARTICLE V

                                    OFFICERS

 

         Section 27. OFFICERS DESIGNATED. The officers of the corporation shall

include, if and when designated by the Board of Directors, the Chairman of the

Board of Directors, the Chief Executive Officer, the President, one or more Vice

Presidents, the Secretary, the Chief Financial Officer, the Treasurer, the

Controller, all of whom shall be elected at the annual organizational meeting of

the Board of Directors. The Board of Directors may also appoint one or more

Assistant Secretaries, Assistant Treasurers, Assistant Controllers and such

other officers and agents with such powers and duties as it shall deem

necessary. The Board of Directors may assign such additional titles to one or

more of the officers as it shall deem appropriate. Any one person may hold any

number of offices of the corporation at any one time unless specifically

prohibited there from by law. The salaries and other compensation of the

officers of the corporation shall be fixed by or in the manner designated by the

Board of Directors.

 

         Section 28. TENURE AND DUTIES OF OFFICERS.

 

                  (a) GENERAL. All officers shall hold office at the pleasure of

the Board of Directors and until their successors shall have been duly elected

and qualified, unless sooner removed. Any officer elected or appointed by the

Board of Directors may be removed at any time by the Board of Directors. If the

office of any officer becomes vacant for any reason, the vacancy may be filled

by the Board of Directors.

 

                  (b) DUTIES OF CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman

of the Board of Directors, when present, shall preside at all meetings of the

stockholders and the Board of Directors. The Chairman of the Board of Directors

shall perform other duties commonly incident to his office and shall also

perform such other duties and have such other powers as the Board of Directors

shall designate from time to time. If there is no President, then the Chairman

of the Board of Directors shall also serve as the Chief Executive Officer of the

corporation and shall have the powers and duties prescribed in paragraph (c) of

this Section 28.

 

                  (c) DUTIES OF PRESIDENT. The President shall preside at all

meetings of the stockholders and at all meetings of the Board of Directors,

unless the Chairman of the Board of Directors has been appointed and is present.

Unless some other officer has been elected Chief Executive Officer of the

corporation, the President shall be the chief executive officer of the

corporation and shall, subject to the control of the Board of Directors, have

general supervision, direction and control of the business and officers of the

corporation. The President shall perform other duties commonly incident to his

office and shall also perform such other duties and have such other powers as

the Board of Directors shall designate from time to time.

 

                  (d) DUTIES OF VICE PRESIDENTS. The Vice Presidents may assume

and perform the duties of the President in the absence or disability of the

President or whenever the office of President is vacant. The Vice Presidents

shall perform other duties commonly incident to their office and shall also

perform such other duties and have such other powers as the Board of Directors

or the President shall designate from time to time.

 

                  (e) DUTIES OF SECRETARY. The Secretary shall attend all

meetings of the stockholders and of the Board of Directors and shall record all

acts and proceedings thereof in the minute book of the corporation. The

Secretary shall give notice in conformity with these Bylaws of all meetings of

the stockholders and of all meetings of the Board of Directors and any committee

thereof requiring notice. The Secretary shall perform all other duties given him

in these Bylaws and other duties commonly incident to his office and shall also

perform such other duties and have such other powers as the Board of Directors

shall designate from time to time. The President may direct any Assistant

Secretary to assume and perform the duties of the Secretary in the absence or

disability of the Secretary, and each Assistant Secretary shall perform other

duties commonly incident to his office and shall also perform such other duties

and have such other powers as the Board of Directors or the President shall

designate from time to time.

 

                  (f) DUTIES OF CHIEF FINANCIAL OFFICER. The Chief Financial

Officer shall keep or cause to be kept the books of account of the corporation

in a thorough and proper manner and shall render statements of the financial

affairs of the corporation in such form and as often as required by the Board of

Directors or the President. The Chief Financial Officer, subject to the order of

the Board of Directors, shall have the custody of all funds and securities of

the corporation. The Chief Financial Officer shall perform other duties commonly

incident to his office and shall also perform such other duties and have such

other powers as the Board of Directors or the President shall designate from

time to time. The President may direct the Treasurer or any Assistant Treasurer,

or the Controller or any Assistant Controller to assume and perform the duties

of the Chief Financial Officer in the absence or disability of the Chief

Financial Officer, and each Treasurer and Assistant Treasurer and each

Controller and Assistant Controller shall perform other duties commonly incident

to his office and shall also perform such other duties and have such other

powers as the Board of Directors or the President shall designate from time to

time.

 

         Section 29. DELEGATION OF AUTHORITY. The Board of Directors may from

time to time delegate the powers or duties of any officer to any other officer

or agent, notwithstanding any provision hereof.

 

         Section 30. RESIGNATIONS. Any officer may resign at any time by giving

written notice to the Board of Directors or to the President or to the

Secretary. Any such resignation shall be effective when received by the person

or persons to whom such notice is given, unless a later time is specified

therein, in which event the resignation shall become effective at such later

time. Unless otherwise specified in such notice, the acceptance of any such

resignation shall not be necessary to make it effective. Any resignation shall

be without prejudice to the rights, if any, of the corporation under any

contract with the resigning officer.

 

         Section 31. REMOVAL. Any officer may be removed from office at any

time, either with or without cause, by the affirmative vote of a majority of the

directors in office at the time, or by the unanimous written consent of the

directors in office at the time, or by any committee or superior officers upon

whom such power of removal may have been conferred by the Board of Directors.

 

                                   ARTICLE VI

                  EXECUTION OF CORPORATE INSTRUMENTS AND VOTING

                     OF SECURITIES OWNED BY THE CORPORATION

 

         Section 32. EXECUTION OF CORPORATE INSTRUMENTS. The Board of Directors

may, in its discretion, determine the method and designate the signatory officer

or officers, or other person or persons, to execute on behalf of the corporation

any corporate instrument or document, or to sign on behalf of the corporation

the corporate name without limitation, or to enter into contracts on behalf of

the corporation, except where otherwise provided by law or these Bylaws, and

such execution or signature shall be binding upon the corporation.

 

         Unless otherwise specifically determined by the Board of Directors or

otherwise required by law, promissory notes, deeds of trust, mortgages and other

evidences of indebtedness of the corporation, and other corporate instruments or

documents requiring the corporate seal, and certificates of shares of stock

owned by the corporation, shall be executed, signed or endorsed by the Chairman

of the Board of Directors, or the President or any Vice President, and by the

Secretary or Treasurer or any Assistant Secretary or Assistant Treasurer. All

other instruments and documents requiring the corporate signature, but not

requiring the corporate seal, may be executed as aforesaid or in such other

manner as may be directed by the Board of Directors.

 

         All checks and drafts drawn on banks or other depositaries on funds to

the credit of the corporation or in special accounts of the corporation shall be

signed by such person or persons as the Board of Directors shall authorize so to

do.

 

         Unless authorized or ratified by the Board of Directors or within the

agency power of an officer, no officer, agent or employee shall have any power

or authority to bind the corporation by any contract or engagement or to pledge

its credit or to render it liable for any purpose or for any amount.

 

         Section 33. VOTING OF SECURITIES OWNED BY THE CORPORATION. All stock

and other securities of other corporations owned or held by the corporation for

itself, or for other parties in any capacity, shall be voted, and all proxies

with respect thereto shall be executed, by the person authorized so to do by

resolution of the Board of Directors, or, in the absence of such authorization,

by the Chairman of the Board of Directors, the Chief Executive Officer, the

President, or any Vice President.

 

                                  ARTICLE VII

                                 SHARES OF STOCK

 

         Section 34. FORM AND EXECUTION OF CERTIFICATES. Certificates for the

shares of stock of the corporation shall be in such form as is consistent with

the Certificate of Incorporation and applicable law. Every holder of stock in

the corporation shall be entitled to have a certificate signed by or in the name

of the corporation by the Chairman of the Board of Directors, or the President

or any Vice President and by the Treasurer or Assistant Treasurer or the

Secretary or Assistant Secretary, certifying the number of shares owned by him

in the corporation. Any or all of the signatures on the certificate may be

facsimiles. In case any officer, transfer agent, or registrar who has signed or

whose facsimile signature has been placed upon a certificate shall have ceased

to be such officer, transfer agent, or registrar before such certificate is

issued, it may be issued with the same effect as if he were such officer,

transfer agent, or registrar at the date of issue. Each certificate shall state

upon the face or back thereof, in full or in summary, all of the powers,

designations, preferences, and rights, and the limitations or restrictions of

the shares authorized to be issued or shall, except as otherwise required by

law, set forth on the face or back a statement that the corporation will furnish

without charge to each stockholder who so requests the powers, designations,

preferences and relative, participating, optional, or other special rights of

each class of stock or series thereof and the qualifications, limitations or

restrictions of such preferences and/or rights. Within a reasonable time after

the issuance or transfer of uncertificated stock, the corporation shall send to

the registered owner thereof a written notice containing the information

required to be set forth or stated on certificates pursuant to this section or

otherwise required by law or with respect to this section a statement that the

corporation will furnish without charge to each stockholder who so requests the

powers, designations, preferences and relative participating, optional or other

special rights of each class of stock or series thereof and the qualifications,

limitations or restrictions of such preferences and/or rights. Except as

otherwise expressly provided by law, the rights and obligations of the holders

of certificates representing stock of the same class and series shall be

identical.

 

         Section 35. LOST CERTIFICATES. A new certificate or certificates shall

be issued in place of any certificate or certificates theretofore issued by the

corporation alleged to have been lost, stolen, or destroyed, upon the making of

an affidavit of that fact by the person claiming the certificate of stock to be

lost, stolen, or destroyed. The corporation may require, as a condition

precedent to the issuance of a new certificate or certificates, the owner of

such lost, stolen, or destroyed certificate or certificates, or his legal

representative, to advertise the same in such manner as it shall require or to

give the corporation a surety bond in such form and amount as it may direct as

indemnity against any claim that may be made against the corporation with

respect to the certificate alleged to have been lost, stolen, or destroyed.

 

         Section 36. TRANSFERS.

 

                  (a) Transfers of record of shares of stock of the corporation

shall be made only upon its books by the holders thereof, in person or by

attorney duly authorized, and upon the surrender of a properly endorsed

certificate or certificates for a like number of shares.

 

                  (b) The corporation shall have power to enter into and perform

any agreement with any number of stockholders of any one or more classes of

stock of the corporation to restrict the transfer of shares of stock of the

corporation of any one or more classes owned by such stockholders in any manner

not prohibited by the General Corporation Law of Delaware.

 

         Section 37. FIXING RECORD DATES.

 

                  (a) In order that the corporation may determine the

stockholders entitled to notice of or to vote at any meeting of stockholders or

any adjournment thereof, the Board of Directors may fix, in advance, a record

date, which record date shall not precede the date upon which the resolution

fixing the record date is adopted by the Board of Directors, and which record

date shall not be more than sixty (60) nor less than ten (10) days before the

date of such meeting. If no record date is fixed by the Board of Directors, the

record date for determining stockholders entitled to notice of or to vote at a

meeting of stockholders shall be at the close of business on the day next

preceding the day on which notice is given, or if notice is waived, at the close

of business on the day next preceding the day on which the meeting is held. A

determination of stockholders of record entitled to notice of or to vote at a

meeting of stockholders shall apply to any adjournment of the meeting; provided,

however, that the Board of Directors may fix a new record date for the adjourned

meeting.

 

                  (b) In order that the corporation may determine the

stockholders entitled to receive payment of any dividend or other distribution

or allotment of any rights or the stockholders entitled to exercise any rights

in respect of any change, conversion or exchange of stock, or for the purpose of

any other lawful action, the Board of Directors may fix, in advance, a record

date, which record date shall not precede the date upon which the resolution

fixing the record date is adopted, and which record date shall be not more than

sixty (60) days prior to such action. If no record date is fixed, the record

date for determining stockholders for any such purpose shall be at the close of

business on the day on which the Board of Directors adopts the resolution

relating thereto.

 

         Section 38. REGISTERED STOCKHOLDERS. The corporation shall be entitled

to recognize the exclusive right of a person registered on its books as the

owner of shares to receive dividends, and to vote as such owner, and shall not

be bound to recognize any equitable or other claim to or interest in such share

or shares on the part of any other person whether or not it shall have express

or other notice thereof, except as otherwise provided by the laws of Delaware.

 

                                  ARTICLE VIII

                       OTHER SECURITIES OF THE CORPORATION

 

         Section 39. EXECUTION OF OTHER SECURITIES. All bonds, debentures and

other corporate securities of the corporation, other than stock certificates

(covered in Section 34), may be signed by the Chairman of the Board of

Directors, the President or any Vice President, or such other person as may be

authorized by the Board of Directors, and the corporate seal impressed thereon

or a facsimile of such seal imprinted thereon and attested by the signature of

the Secretary or an Assistant Secretary, or the Chief Financial Officer or

Treasurer or an Assistant Treasurer; provided, however, that where any such

bond, debenture or other corporate security shall be authenticated by the manual

signature, or where permissible facsimile signature, of a trustee under an

indenture pursuant to which such bond, debenture or other corporate security

shall be issued, the signatures of the persons signing and attesting the

corporate seal on such bond, debenture or other corporate security may be the

imprinted facsimile of the signatures of such persons. Interest coupons

appertaining to any such bond, debenture or other corporate security,

authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an

Assistant Treasurer of the corporation or such other person as may be authorized

by the Board of Directors, or bear imprinted thereon the facsimile signature of

such person. In case any officer who shall have signed or attested any bond,

debenture or other corporate security, or whose facsimile signature shall appear

thereon or on any such interest coupon, shall have ceased to be such officer

before the bond, debenture or other corporate security so signed or attested

shall have been delivered, such bond, debenture or other corporate security

nevertheless may be adopted by the corporation and issued and delivered as

though the person who signed the same or whose facsimile signature shall have

been used thereon had not ceased to be such officer of the corporation.

 

                                   ARTICLE IX

                                    DIVIDENDS

 

         Section 40. DECLARATION OF DIVIDENDS. Dividends upon the capital stock

of the corporation, subject to the provisions of the Certificate of

Incorporation, if any, may be declared by the Board of Directors pursuant to law

at any regular or special meeting. Dividends may be paid in cash, in property,

or in shares of the capital stock, subject to the provisions of the Certificate

of Incorporation.

 

         Section 41. DIVIDEND RESERVE. Before payment of any dividend, there may

be set aside out of any funds of the corporation available for dividends such

sum or sums as the Board of Directors from time to time, in their absolute

discretion, think proper as a reserve or reserves to meet contingencies, or for

equalizing dividends, or for repairing or maintaining any property of the

corporation, or for such other purpose as the Board of Directors shall think

conducive to the interests of the corporation, and the Board of Directors may

modify or abolish any such reserve in the manner in which it was created.

 

                                   ARTICLE X

                                   FISCAL YEAR

 

         Section 42. FISCAL YEAR. The fiscal year of the corporation shall be

fixed by resolution of the Board of Directors.

 

                                   ARTICLE XI

                                 INDEMNIFICATION

 

         Section 43. INDEMNIFICATION OF DIRECTORS, EXECUTIVE OFFICERS, OTHER

OFFICERS, EMPLOYEES AND OTHER AGENTS.

 

                  (a) DIRECTORS AND EXECUTIVE OFFICERS. The corporation shall

indemnify its directors and executive officers (for the purposes of this Article

XI, "executive officers" shall have the meaning defined in Rule 3b-7 promulgated

under the Securities Exchange Act of 1934, as amended (the "1934 Act")) to the

fullest extent not prohibited by the Delaware General Corporation Law; provided,

however, that the corporation may modify the extent of such indemnification by

individual contracts with its directors and executive officers; and, provided

further, that the corporation shall not be required to indemnify any director or

executive officer in connection with any proceeding (or part thereof) initiated

by such person unless (i) such indemnification is expressly required to be made

by law (ii) the proceeding was authorized by the Board of Directors of the

corporation, (iii) such indemnification is provided by the corporation, in its

sole discretion, pursuant to the powers vested in the corporation under the

Delaware General Corporation Law or (iv) such indemnification is required to be

made under subsection (d).

 

                  (b) OTHER OFFICERS, EMPLOYEES AND OTHER AGENTS. The

corporation shall have power to indemnify its other officers, employees and

other agents as set forth in the Delaware General Corporation Law.

 

                  (c) EXPENSES. The corporation shall advance to any person who

was or is a party or is threatened to be made a party to any threatened, pending

or completed action, suit or proceeding, whether civil, criminal, administrative

or investigative, by reason of the fact that he is or was a director or

executive officer, of the corporation, or is or was serving at the request of

the corporation as a director or executive officer of another corporation,

partnership, joint venture, trust or other enterprise, prior to the final

disposition of the proceeding, promptly following request therefor, all expenses

incurred by any director or executive officer in connection with such proceeding

upon receipt of an undertaking by or on behalf of such person to repay said

amounts if it should be determined ultimately that such person is not entitled

to be indemnified under this Bylaw or otherwise.

 

Notwithstanding the foregoing, unless otherwise determined pursuant to paragraph

(e) of this Bylaw, no advance shall be made by the corporation to an executive

officer of the corporation (except by reason of the fact that such executive

officer is or was a director of the corporation in which event this paragraph

shall not apply) in any action, suit or proceeding, whether civil, criminal,

administrative or investigative, if a determination is reasonably and promptly

made (i) by the Board of Directors by a majority vote of a quorum consisting of

directors who were not parties to the proceeding, or (ii) if such quorum is not

obtainable, or, even if obtainable, a quorum of disinterested directors so

directs, by independent legal counsel in a written opinion, that the facts known

to the decision-making party at the time such determination is made demonstrate

clearly and convincingly that such person acted in bad faith or in a manner that

such person did not believe to be in or not opposed to the best interests of the

corporation.

 

                  (d) ENFORCEMENT. Without the necessity of entering into an

express contract, all rights to indemnification and advances to directors and

executive officers under this Bylaw shall be deemed to be contractual rights and

be effective to the same extent and as if provided for in a contract between the

corporation and the director or executive officer. Any right to indemnification

or advances granted by this Bylaw to a director or executive officer shall be

enforceable by or on behalf of the person holding such right in any court of

competent jurisdiction if (i) the claim for indemnification or advances is

denied, in whole or in part, or (ii) no disposition of such claim is made within

ninety (90) days of request therefor. The claimant in such enforcement action,

if successful in whole or in part, shall be entitled to be paid also the expense

of prosecuting his claim. In connection with any claim for indemnification, the

corporation shall be entitled to raise as a defense to any such action that the

claimant has not met the standards of conduct that make it permissible under the

Delaware General Corporation Law for the corporation to indemnify the claimant

for the amount claimed. In connection with any claim by an executive officer of

the corporation (except in any action, suit or proceeding, whether civil,

criminal, administrative or investigative, by reason of the fact that such

executive officer is or was a director of the corporation) for advances, the

corporation shall be entitled to raise a defense as to any such action clear and

convincing evidence that such person acted in bad faith or in a manner that such

person did not believe to be in or not opposed to the best interests of the

corporation, or with respect to any criminal action or proceeding that such

person acted without reasonable cause to believe that his conduct was lawful.

Neither the failure of the corporation (including its Board of Directors,

independent legal counsel or its stockholders) to have made a determination

prior to the commencement of such action that indemnification of the claimant is

proper in the circumstances because he has met the applicable standard of

conduct set forth in the Delaware General Corporation Law, nor an actual

determination by the corporation (including its Board of Directors, independent

legal counsel or its stockholders) that the claimant has not met such applicable

standard of conduct, shall be a defense to the action or create a presumption

that claimant has not met the applicable standard of conduct.

 

                  (e) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any

person by this Bylaw shall not be exclusive of any other right which such person

may have or hereafter acquire under any statute, provision of the Certificate of

Incorporation, Bylaws, agreement, vote of stockholders or disinterested

directors or otherwise, both as to action in his official capacity and as to

action in another capacity while holding office. The corporation is specifically

authorized to enter into individual contracts with any or all of its directors,

officers, employees or agents respecting indemnification and advances, to the

fullest extent not prohibited by the Delaware General Corporation Law.

 

                  (f) SURVIVAL OF RIGHTS. The rights conferred on any person by

this Bylaw shall continue as to a person who has ceased to be a director,

officer, employee or other agent and shall inure to the benefit of the heirs,

executors and administrators of such a person.

 

                  (g) INSURANCE. To the fullest extent permitted by the Delaware

General Corporation Law, the corporation, upon approval by the Board of

Directors, may purchase insurance on behalf of any person required or permitted

to be indemnified pursuant to this Bylaw.

 

                  (h) AMENDMENTS. Any repeal or modification of this Bylaw shall

only be prospective and shall not affect the rights under this Bylaw in effect

at the time of the alleged occurrence of any action or omission to act that is

the cause of any proceeding against any agent of the corporation.

 

                  (i) SAVING CLAUSE. If this Bylaw or any portion hereof shall

be invalidated on any ground by any court of competent jurisdiction, then the

corporation shall nevertheless indemnify each director and executive officer to

the full extent not prohibited by any applicable portion of this Bylaw that

shall not have been invalidated, or by any other applicable law.

 

                  (j) CERTAIN DEFINITIONS. For the purposes of this Bylaw, the

following definitions shall apply:

 

                           (i) The term "proceeding" shall be broadly construed

and shall include, without limitation, the investigation, preparation,

prosecution, defense, settlement, arbitration and appeal of, and the giving of

testimony in, any threatened, pending or completed action, suit or proceeding,

whether civil, criminal, administrative or investigative.

 

                           (ii) The term "expenses" shall be broadly construed

and shall include, without limitation, court costs, attorneys' fees, witness

fees, fines, amounts paid in settlement or judgment and any other costs and

expenses of any nature or kind incurred in connection with any proceeding.

 

                           (iii) The term the "corporation" shall include, in

addition to the resulting corporation, any constituent corporation (including

any constituent of a constituent) absorbed in a consolidation or merger which,

if its separate existence had continued, would have had power and authority to

indemnify its directors, officers, and employees or agents, so that any person

who is or was a director, officer, employee or agent of such constituent

corporation, or is or was serving at the request of such constituent corporation

as a director, officer, employee or agent of another corporation, partnership,

joint venture, trust or other enterprise, shall stand in the same position under

the provisions of this Bylaw with respect to the resulting or surviving

corporation as he would have with respect to such constituent corporation if its

separate existence had continued.

 

                           (iv) References to a "director," "executive officer,"

"officer," "employee," or "agent" of the corporation shall include, without

limitation, situations where such person is serving at the request of the

corporation as, respectively, a director, executive officer, officer, employee,

trustee or agent of another corporation, partnership, joint venture, trust or

other enterprise.

 

                           (v) References to "other enterprises" shall include

employee benefit plans; references to "fines" shall include any excise taxes

assessed on a person with respect to an employee benefit plan; and references to

"serving at the request of the corporation" shall include any service as a

director, officer, employee or agent of the corporation which imposes duties on,

or involves services by, such director, officer, employee, or agent with respect

to an employee benefit plan, its participants, or beneficiaries; and a person

who acted in good faith and in a manner he reasonably believed to be in the

interest of the participants and beneficiaries of an employee benefit plan shall

be deemed to have acted in a manner "not opposed to the best interests of the

corporation" as referred to in this Bylaw.

 

                                  ARTICLE XII

                                     NOTICES

 

         Section 44. NOTICES.

 

                  (a) NOTICE TO STOCKHOLDERS. Whenever, under any provisions of

these Bylaws, notice is required to be given to any stockholder, it shall be

given in writing, timely and duly deposited in the United States mail, postage

prepaid, and addressed to his last known post office address as shown by the

stock record of the corporation or its transfer agent.

 

                  (b) NOTICE TO DIRECTORS. Any notice required to be given to

any director may be given by the method stated in subsection (a), or by

facsimile, telex or telegram, except that such notice other than one which is

delivered personally shall be sent to such address as such director shall have

filed in writing with the Secretary, or, in the absence of such filing, to the

last known post office address of such director.

 

                  (c) AFFIDAVIT OF MAILING. An affidavit of mailing, executed by

a duly authorized and competent employee of the corporation or its transfer

agent appointed with respect to the class of stock affected, specifying the name

and address or the names and addresses of the stockholder or stockholders, or

director or directors, to whom any such notice or notices was or were given, and

the time and method of giving the same, shall in the absence of fraud, be prima

facie evidence of the facts therein contained.

 

                  (d) TIME NOTICES DEEMED GIVEN. All notices given by mail, as

above provided, shall be deemed to have been given as at the time of mailing,

and all notices given by facsimile, telex or telegram shall be deemed to have

been given as of the sending time recorded at time of transmission.

 

                  (e) METHODS OF NOTICE. It shall not be necessary that the same

method of giving notice be employed in respect of all directors, but one

permissible method may be employed in respect of any one or more, and any other

permissible method or methods may be employed in respect of any other or others.

 

                  (f) FAILURE TO RECEIVE NOTICE. The period or limitation of

time within which any stockholder may exercise any option or right, or enjoy any

privilege or benefit, or be required to act or within which any director may

exercise any power or right, or enjoy any privilege, pursuant to any notice sent

him in the manner above provided, shall not be affected or extended in any

manner by the failure of such stockholder or such director to receive such

notice.

 

                  (g) NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL.

Whenever notice is required to be given, under any provision of law or of the

Certificate of Incorporation or Bylaws of the corporation, to any person with

whom communication is unlawful, the giving of such notice to such person shall

not be required and there shall be no duty to apply to any governmental

authority or agency for a license or permit to give such notice to such person.

Any action or meeting which shall be taken or held without notice to any such

person with whom communication is unlawful shall have the same force and effect

as if such notice had been duly given. In the event that the action taken by the

corporation is such as to require the filing of a certificate under any

provision of the Delaware General Corporation Law, the certificate shall state,

if such is the fact and if notice is required, that notice was given to all

persons entitled to receive notice except such persons with whom communication

is unlawful.

 

                  (h) NOTICE TO PERSON WITH UNDELIVERABLE ADDRESS. Whenever

notice is required to be given, under any provision of law or the Certificate of

Incorporation or Bylaws of the corporation, to any stockholder to whom (i)

notice of two consecutive annual meetings, and all notices of meetings or of the

taking of action by written consent without a meeting to such person during the

period between such two consecutive annual meetings, or (ii) all, and at least

two, payments (if sent by first class mail) of dividends or interest on

securities during a twelve-month period, have been mailed addressed to such

person at his address as shown on the records of the corporation and have been

returned undeliverable, the giving of such notice to such person shall not be

required. Any action or meeting which shall be taken or held without notice to

such person shall have the same force and effect as if such notice had been duly

given. If any such person shall deliver to the corporation a written notice

setting forth his then current address, the requirement that notice be given to

such person shall be reinstated. In the event that the action taken by the

corporation is such as to require the filing of a certificate under any

provision of the Delaware General Corporation Law, the certificate need not

state that notice was not given to persons to whom notice was not required to be

given pursuant to this paragraph.

 

                                  ARTICLE XIII

                                   AMENDMENTS

 

         Section 45. AMENDMENTS. Subject to paragraph (h) of Section 43 of the

Bylaws, the Bylaws may be altered or amended or new Bylaws adopted by the

affirmative vote of at least sixty-six and two-thirds percent (66-2/3%) of the

voting power of all of the then-outstanding shares of the Voting Stock. The

Board of Directors shall also have the power to adopt, amend, or repeal Bylaws.

 

                                  ARTICLE XIV

                                LOANS TO OFFICERS

 

         Section 46. LOANS TO OFFICERS. The corporation may lend money to, or

guarantee any obligation of, or otherwise assist any officer or other employee

of the corporation or of its subsidiaries, including any officer or employee who

is a Director of the corporation or its subsidiaries, whenever, in the judgment

of the Board of Directors, such loan, guarantee or assistance may reasonably be

expected to benefit the corporation. The loan, guarantee or other assistance may

be with or without interest and may be unsecured, or secured in such manner as

the Board of Directors shall approve, including, without limitation, a pledge of

shares of stock of the corporation. Nothing in these Bylaws shall be deemed to

deny, limit or restrict the powers of guaranty or warranty of the corporation at

common law or under any statute.

 

                                   ARTICLE XV

                                  MISCELLANEOUS

 

         Section 47. ANNUAL REPORT.

 

                  (a) Subject to the provisions of paragraph (b) of this Bylaw,

the Board of Directors shall cause an annual report to be sent to each

stockholder of the corporation not later than one hundred twenty (120) days

after the close of the corporation's fiscal year. Such report shall include a

balance sheet as of the end of such fiscal year and an income statement and

statement of changes in financial position for such fiscal year, accompanied by

any report thereon of independent accounts or, if there is no such report, the

certificate of an authorized officer of the corporation that such statements

were prepared without audit from the books and records of the corporation. When

there are more than 100 stockholders of record of the corporation's shares, as

determined by Section 605 of the California Corporations Code, additional

information as required by Section 1501 (b) of the California Corporations Code

shall also be contained in such report, provided that if the corporation has a

class of securities registered under Section 12 of the 1934 Act, that Act shall

take precedence. Such report shall be sent to stockholders at least fifteen (15)

days prior to the next annual meeting of stockholders after the end of the

fiscal year to which it relates.

 

                  (b) If and so long as there are fewer than 100 holders of

record of the corporation's shares, the requirement of sending of an annual

report to the stockholders of the corporation is hereby expressly waived.

 

 

                            CERTIFICATE OF SECRETARY

 

         I, the undersigned, do hereby certify that:

 

         1. I am the duly elected and acting Secretary of YOUBET.COM , INC. a

Delaware corporation; and

 

         2. The foregoing by-laws, comprising 20 pages, are the bylaws of this

corporation as duly approved and adopted by the sole director by written consent

dated January 19, 1999.

 

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the

seal of this corporation as of this 19th of January, 1999.

 

                                                    /S/ GARY N. JACOBS

                                                    ------------------

                                                    Gary N. Jacobs