WARRANT ISSUANCE AGREEMENT

    WARRANT ISSUANCE AGREEMENT (this "Agreement"), dated as of May 18, 2001, by and between YOUBET.COM, INC., a Delaware corporation ("UBET") and ODS TECHNOLOGIES, L.P., a Delaware limited partnership ("TVG").

RECITALS

    WHEREAS, UBET and TVG are parties to a License and Content Agreement (the "License Agreement"), dated as of the date hereof, relating to the grant by TVG to UBET of a non-exclusive license to use, subject to the terms thereof, (i) TVG's patented systems, platforms, methods and technologies for the making of pari-mutuel wagers on horse races using telephones and online using personal computers and other devices approved by the TVG in its business judgment, and (ii) certain horsetrack simulcast audio, video and data content for the purpose of streaming such content online and the agreement of each track to accept wagers based on such content;

    WHEREAS, UBET and TVG have made the execution and delivery of this Agreement a condition to the execution and delivery of the License Agreement; and

    WHEREAS, UBET intends, subject to the terms and conditions set forth in this Agreement, to issue to TVG certain warrants representing the right to purchase shares of common stock, par value $.001 per share, of UBET ("UBET Common Stock").

    NOW, THEREFORE, in consideration of the premises and the respective representations, warranties, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE I

ISSUANCE OF WARRANTS

    SECTION 1.01.  Issuance of Initial Warrant. UBET, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, shall issue to TVG a warrant (the "Initial Warrant") to purchase an aggregate of 3,884,650 shares of UBET Common Stock (as the same may be adjusted pursuant to the terms of the Initial Warrant, the "Initial Warrant Shares"). The Initial Warrant shall be evidenced by, and have the terms (including adjustment terms) set forth in, the Warrant Certificate attached hereto as Exhibit A.

    SECTION 1.02.  Issuance of Additional Warrant. Subject only to (i) the approval of UBET's stockholders of the Warrant Proposal as provided in Section 4.01, and (ii) the License Agreement not having been terminated according to its terms, immediately following the UBET Stockholders Meeting (as hereinafter defined), UBET, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, shall issue to TVG a warrant (the "Additional Warrant") to purchase a number of shares of UBET Common Stock which, when aggregated with the number of Initial Warrant Shares, shall equal 51.0% of the sum of (i) the total number of shares of UBET Common Stock outstanding on the date the Additional Warrant is exercised (the "Additional Warrant Exercise Date"), (ii) the total number of shares of UBET Common Stock issuable upon exercise of the Additional Warrant, and (iii) the total number of Initial Warrant Shares then issuable upon exercise of the Initial Warrant (as the same may be adjusted pursuant to the terms of the Additional Warrant, the "Additional Warrant Shares"). The Additional Warrant shall be evidenced by, and have terms (including adjustment terms) set forth in, the Warrant Certificate attached hereto as Exhibit B.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF UBET

    UBET hereby represents and warrants to TVG as follows:

    SECTION 2.01.  Organization and Qualification. UBET (i) is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted and (iii) is duly qualified or licensed and in good standing to do business in each jurisdiction in which the properties owned, leased or operated by it or the nature of the business conducted by it makes such qualification or license necessary, except in such jurisdictions where the failure to be so duly qualified or licensed or in good standing has not had, either individually or in the aggregate, a material adverse effect on the business, assets, results of operations or financial condition of UBET. UBET has delivered to TVG true and complete copies of its Certificate of Incorporation and By-laws, each as amended through and in effect on the date hereof. UBET has no Subsidiaries.

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