Exhibit 10.4
[Manufacturers and Traders Trust Company Letterhead]
April 19, 2006
Youbet.com, Inc.
5901 De Soto Avenue
Woodland Hills, California 91367
Attention: Gary Sproule, CFO
United Tote Company
11505 Susquehanna Trial
Glen Rock, PA 17327
Attention: Jeff True, President
     Re:    Sale of United Tote Company
Gentlemen:
Pursuant to a Credit Agreement dated September 5, 2003, as amended by a First
Amendment dated January 4, 2005, a Second Amendment dated June 13, 2005, a Third
Amendment dated August 22, 2005, and a Fourth Amendment dated November 23, 2005
(as so amended, the “Credit Agreement”) by and among United Tote Company
(“Borrower”) and Manufacturers and Traders Trust Company (“Lender”), Lender has
made certain loans and financial accommodations available to Borrower.
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed thereto in the Credit Agreement.
Borrower, Lender, Youbet.com, Inc. (“Youbet”), and UT Gaming, Inc., a
wholly-owned subsidiary of Youbet (“Purchaser”), are parties to that certain
letter agreement dated February 9, 2006 (the “Forbearance Agreement”) and wish
to modify the definition of, and extend, the Forbearance Period (as defined
therein) as follows:
“Forbearance Period” shall mean the period commencing on the date of the
consummation of the acquisition of Borrower by Purchaser and continuing through
the earliest of : (i) June 30, 2006; (ii) the occurrence of any Event of
Default, other than the Potential Event of Default or any Event of Default
arising as a result of a breach of Section 8 of the Credit Agreement for the
period ending June 30, 2006; and (iii) the date of any breach of any of the
conditions, agreements, representations or warranties provided in this letter
agreement.
The Borrower acknowledges and agrees that upon the termination of Lender’s
agreement to forbear as provided herein, Lender shall be entitled to exercise
any or all of its rights and remedies under the Transaction Documents or any
applicable law, including seeking the appointment of a receiver, acceleration of
the Obligations and at any time thereafter Lender shall be entitled to exercise
any or all of its rights and remedies under the Transaction Documents as a
result of any Default or Event of Default.
Each of Youbet, Purchaser and Borrower (collectively, the “Companies”) hereby
acknowledge and agree that (a) Lender has not agreed to, and Lender has no
obligations whatsoever to discuss, negotiate or to agree to, any restructuring
of Companies’ liabilities to Lender, or any modification, amendment,
restructuring, restatement or renewal of the Credit Agreement or the other
Transaction Documents, (b) if there are any future discussions between Lender
and Companies concerning any such modification, amendment, restructuring,
restatement, renewal or forbearance, that no modification, amendment,
restructuring, restatement, renewal, forbearance, compromise, settlement,
agreement or understanding with respect to Companies’ liabilities to Lender
under the Credit Agreement or the other Transaction Documents or any term,
provision or aspect thereof, shall constitute a legally binding agreement or
contract or have any force or effect whatsoever unless and until reduced to
writing and signed by authorized representatives of all parties thereto, and
that none of the parties hereto shall assert or claim in any legal proceedings
or otherwise that any such agreement or contract exists except in accordance
with the terms of this agreement,

 

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(c) if there are any future discussions among Lender and Companies or any of
their respective affiliates concerning any new loan, financing or other
extension of credit by Lender, that no such discussions or any written
correspondence, proposals or other communications in conjunction therewith shall
constitute a legally binding agreement or contract or have any force or effect
whatsoever unless and until, if ever, reduced to writing and signed by
authorized representatives of all parties thereto, and that none of the parties
hereto shall assert or claim in any legal proceedings or otherwise that any such
agreement or contract exists except in accordance with the terms of this
agreement, and (d) except as otherwise expressly set forth herein, the Credit
Agreement and the other Transaction Documents shall remain unchanged and in full
force and effect.
This letter agreement is limited as specified and shall not constitute (i) an
endorsement of any action or inaction of any Company or (ii) a modification,
amendment or waiver of any other provision of the Credit Agreement or any of the
other Transaction Documents. Each Company agrees that it will not assert laches,
waiver or any other defense to the enforcement of any of the Transaction
Documents based upon the foregoing agreement.
This Agreement shall be construed and enforced in accordance with and governed
by all of the provisions of the internal laws (as opposed to conflicts of law
provisions) of the State of Maryland.
All provisions, terms or conditions and all covenants, representations,
warranties and agreement contained in the Transaction Documents and the
Forbearance Agreement shall remain in full force and effect, except as expressly
provided herein. The forbearance referenced herein is limited to the specifics
hereof, shall not apply with respect to any facts or occurrences other than
those on which the same are based and shall not be deemed to constitute a waiver
or modification of any other term, provision or condition of the Credit
Agreement or any other Transaction Document or to prejudice any right or remedy
that any holder of the Security Documents may now have or may have in the
future.
Please acknowledge your receipt and acceptance of the terms of this letter by
signing in the space below.

            Sincerely,

MANUFACTURERS AND TRADERS TRUST COMPANY

      By:   /s/ Mark S. Gaffin       Name:   Mark S. Gaffin      Title:   Vice
President        YOUBET.COM, INC.

      By:   /s/ Gary W. Sproule       Name:   Gary W. Sproule      Title:  
Chief Financial Officer        UT GAMING, INC.

      By:   /s/ Gary W. Sproule       Name:   Gary W. Sproule      Title:  
Chief Financial Officer        UNITED TOTE COMPANY

      By:   /s/ Gary W. Sproule       Name:   Gary W. Sproule      Title:  
Chief Financial Officer