Exhibit 10.6
WAIVER
THIS WAIVER (this “Waiver”), dated as of November 8, 2007, is entered into by
and between WELLS FARGO FOOTHILL, INC., a California corporation, as arranger
and administrative agent (in such capacity, “Agent”) for the Lenders (as defined
below), the Lenders, YOUBET.COM, INC., a Delaware corporation (“Parent”), and
UNITED TOTE COMPANY, a Montana corporation (“United Tote”, and together with
Parent, each individually a “Borrower”, and individually and collectively,
jointly and severally, the “Borrowers”).
RECITALS
A. Borrowers, the lenders signatory thereto (the “Lenders”) and Agent have
previously entered into that certain Credit Agreement dated as of July 27, 2006
(as the same has been or may be modified, supplemented, restated or amended from
time to time, the “Credit Agreement”), pursuant to which the Lenders have made
certain loans and financial accommodations available to Borrowers. Terms used
herein without definition shall have the meanings ascribed to them in the Credit
Agreement.
B. An Event of Default has occurred and is continuing under the Credit Agreement
due to the Borrowers’ having, when measured for the fiscal quarter ended
September 30, 2007, a Leverage Ratio in excess of the amount permitted under
Section 6.16(c) of the Credit Agreement (the “Known Existing Default”).
C. Borrowers have requested that Agent and the Lenders waive the Known Existing
Default which Agent and the Lenders are willing to do pursuant to the terms and
conditions set forth herein.
D. Borrowers are entering into this Waiver with the understanding and agreement
that, except as specifically provided herein, none of Agent’s or any Lender’s
rights or remedies as set forth in the Credit Agreement are being waived or
modified by the terms of this Waiver.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Waiver of Known Existing Default. Agent and the Lenders hereby waive
enforcement of their rights against Borrowers arising from the Known Existing
Default; provided, however, nothing herein shall be deemed a waiver with respect
to any other or future failure of Borrowers to comply fully with Section 6.16(c)
of the Credit Agreement. This waiver shall be effective only for the specific
default comprising the Known Existing Default, and in no event shall this waiver
be deemed to be a waiver of enforcement of Agent’s or any Lender’s rights with
respect to any other Defaults or Events of Default now existing or hereafter
arising. Nothing contained in this Amendment nor any communications between any
Borrower and Agent or any Borrower and any Lender shall be a waiver of any
rights or remedies Agent or any Lender has or may have against any Borrower,
except as specifically provided herein. Except as specifically provided herein,
Agent hereby reserves and preserves all of its and the Lenders’ rights and
remedies against each Borrower under the Credit Agreement and the other Loan
Documents.

 

 

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2. Conditions Precedent to Effectiveness of this Waiver. This Waiver shall not
become effective until all of the following conditions precedent shall have been
satisfied in the sole discretion of Agent or waived by Agent:
(a) Waiver. Agent shall have received this Waiver fully executed by all parties
hereto.
(b) Representations and Warranties. The representations and warranties set forth
herein shall be true and correct.
3. Release; Covenant Not to Sue.
(a) Each Borrower hereby absolutely and unconditionally releases and forever
discharges Agent and each Lender, and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents and employees of any of the foregoing
(each a "Released Party”), from any and all claims, demands or causes of action
of any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which such
Borrower has had, now has or has made claim to have against any such person for
or by reason of any act, omission, matter, cause or thing whatsoever arising
from the beginning of time to and including the date of this Waiver, whether
such claims, demands and causes of action are matured or unmatured or known or
unknown. It is the intention of each Borrower in providing this release that the
same shall be effective as a bar to each and every claim, demand and cause of
action specified, and in furtherance of this intention it waives and
relinquishes all rights and benefits under Section 1542 of the Civil Code of the
State of California, which provides:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MIGHT HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”
Each Borrower acknowledges that it may hereafter discover facts different from
or in addition to those now known or believed to be true with respect to such
claims, demands, or causes of action and agree that this instrument shall be and
remain effective in all respects notwithstanding any such differences or
additional facts. Each Borrower understands, acknowledges and agrees that the
release set forth above may be pleaded as a full and complete defense and may be
used as a basis for an injunction against any action, suit or other proceeding
which may be instituted, prosecuted or attempted in breach of the provisions of
such release.

 

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(b) Each Borrower, on behalf of itself and its successors, assigns, and other
legal representatives, hereby absolutely, unconditionally and irrevocably,
covenants and agrees with and in favor of each Released Party above that it will
not sue (at law, in equity, in any regulatory proceeding or otherwise) any
Released Party on the basis of any claim released, remised and discharged by
such Borrower pursuant to the above release. If any Borrower or any of its
successors, assigns or other legal representations violates the foregoing
covenant, such Borrower, for itself and its successors, assigns and legal
representatives, agrees to pay, in addition to such other damages as any
Released Party may sustain as a result of such violation, all attorneys’ fees
and costs incurred by such Released Party as a result of such violation.
4. Representations and Warranties. Each Borrower represents and warrants as
follows:
(a) Authority. Each Borrower has the requisite corporate power and authority to
execute and deliver this Waiver, and to perform its obligations hereunder and
under the Loan Documents (as amended or modified hereby) to which it is a party.
The execution, delivery and performance by each Borrower of this Waiver have
been duly approved by all necessary corporate action, have received all
necessary governmental approval, if any, and do not contravene any law or any
contractual restriction binding on any Borrower. No other corporate proceedings
are necessary to consummate such transactions.
(b) Enforceability. This Waiver has been duly executed and delivered by each
Borrower. This Waiver and each Loan Document (as amended or modified hereby) is
the legal, valid and binding obligation of each Borrower, enforceable against
each Borrower in accordance with its terms, and is in full force and effect.
(c) Representations and Warranties. The representations and warranties contained
in each Loan Document (other than any such representations or warranties that,
by their terms, are specifically made as of a date other than the date hereof)
are correct in all material respects on and as of the date hereof as though made
on and as of the date hereof.
(d) No Default. Other than the Known Existing Default, no event has occurred and
is continuing that constitutes a Default or Event of Default.
5. Choice of Law. The validity of this Waiver, the construction, interpretation,
and enforcement hereof, and the rights of the parties hereto with respect to all
matters arising hereunder or related hereto shall be determined under, governed
by, and construed in accordance with the laws of the State of California.
6. Counterparts. This Waiver may be executed in any number of counterparts and
by different parties and separate counterparts, each of which when so executed
and delivered, shall be deemed an original, and all of which, when taken
together, shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Waiver by telefacsimile shall be
effective as delivery of a manually executed counterpart of this Waiver.
7. Reference to and Effect on the Loan Documents.
(a) The Credit Agreement and all other Loan Documents, are and shall continue to
be in full force and effect and are hereby in all respects ratified and
confirmed and shall constitute the legal, valid, binding and enforceable
obligations of each Borrower to Agent and Lenders without defense, offset, claim
or contribution.

 

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(b) The execution, delivery and effectiveness of this Waiver shall not, except
as expressly provided herein, operate as a waiver of any right, power or remedy
of Agent or any Lender under any of the Loan Documents, nor constitute a waiver
of any provision of any of the Loan Documents.
8. Ratification. Each Borrower hereby restates, ratifies and reaffirms each and
every term and condition set forth in the Credit Agreement, as amended hereby,
and the Loan Documents effective as of the date hereof.
9. Estoppel. To induce Agent and Lenders to enter into this Waiver and to induce
Agent and Lenders to continue to make advances to Borrowers under the Credit
Agreement, each Borrower hereby acknowledges and agrees that, after giving
effect to this Waiver, as of the date hereof, there exists no Default or Event
of Default and no right of offset, defense, counterclaim or objection in favor
of any Borrower as against Agent or any Lender with respect to the Obligations.
10. Integration. This Waiver, together with the other Loan Documents,
incorporates all negotiations of the parties hereto with respect to the subject
matter hereof and is the final expression and agreement of the parties hereto
with respect to the subject matter hereof.
11. Severability. In case any provision in this Waiver shall be invalid, illegal
or unenforceable, such provision shall be severable from the remainder of this
Waiver and the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
12. Submission of Waiver. The submission of this Waiver to the parties or their
agents or attorneys for review or signature does not constitute a commitment by
Agent or any Lender to waive any of their respective rights and remedies under
the Loan Documents, and this Waiver shall have no binding force or effect until
all of the conditions to the effectiveness of this Waiver have been satisfied as
set forth herein.
[Remainder of Page Left Intentionally Blank]

 

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IN WITNESS WHEREOF, the parties have entered into this Waiver as of the date
first above written.

              YOUBET.COM, INC.,     a Delaware corporation
 
       
 
  By:   /s/ James A. Burk
 
       
 
  Name:   James A. Burk
 
       
 
  Title:   CFO
 
       
 
            UNITED TOTE COMPANY,     a Montana corporation
 
       
 
  By:   /s/ Gary Sproule
 
       
 
  Name:   Gary Sproule
 
       
 
  Title:   Secretary
 
       
 
            WELLS FARGO FOOTHILL, INC.,     a California corporation, as Agent
and as a Lender
 
       
 
  By:   /s/ Michael Ganann
 
       
 
  Name:   Michael Ganann
 
       
 
  Title:   Vice President
 
       

 

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