**Exhibit 10.5**MODIFICATION AGREEMENT     THIS MODIFICATION AGREEMENT effective as of 4:00 p.m. (Baltimore time) on June 30, 2006 (this“Agreement”) is made by and among MANUFACTURERS AND TRADERS TRUST COMPANY (the“Bank”), UNITED TOTE COMPANY (the “Borrower”), and YOUBET.COM, INC.(“Youbet”), and UT GAMING, INC. (“UT Gaming” and together with Youbet, collectively, the“Guarantors” and individually, a “Guarantor”).RECITALS     A. Pursuant to a Credit Agreement dated September 5, 2003 (the “Closing Date”), theBank made available to the Borrower (a) an equipment line of credit in the original maximumprincipal amount of $5,000,000 (the “Equipment Line of Credit”), (b) a revolving creditfacility in the original maximum principal amount of $2,000,000 (the “Revolving CreditFacility”), and (c) a term loan in the original principal amount of $580,000 (the “TermLoan”, which together with the Equipment Line of Credit and the Revolving Credit Facility arehereinafter referred to as the “Credit Facilities”) (such credit agreement, as the same mayfrom time to time be amended, restated, supplemented, or otherwise modified, is hereinafter calledthe “Credit Agreement”). Pursuant to a First Amendment to Credit Agreement dated as ofApril 23, 2004 (the “First Amendment”), a Second Amendment to Credit Agreement dated as ofJune 13, 2005 (the “Second Amendment”), and a Third Amendment to Credit Agreement dated asof August 22, 2005, (the “Third Amendment”), the Bank and the Borrower have previouslyagreed, among other things, to temporarily increase the maximum amount of the Revolving CreditFacility to $3,000,000, to increase the maximum principal amount of the Equipment Line of Credit to$15,500,000, and to amend certain other terms and conditions of the Credit Agreement.     B. Pursuant to the terms of the Credit Agreement, the Bank’s obligation to make loans underthe Equipment Line of Credit (each, an “Equipment Loan”) terminated on September 5, 2005.The Borrower’s obligation to repay each Equipment Loan, together with interest thereon, isevidenced by a separate promissory note in the principal amount of the applicable Equipment Loanand made payable to the order of the Bank (each such promissory note, as the same may from time totime be amended, restated, supplemented or otherwise modified, being herein called an“Equipment Note”). The Borrower’s obligation to repay all sums advanced to it from time totime under the Revolving Credit Facility, together with interest thereon, is evidenced by theBorrower’s First Amended and Restated Revolving Credit Note dated April 23, 2004, in the principalamount of $3,000,000 and made payable to the order of the Bank (as the same may from time to timebe renewed, extended, modified, amended, replaced or restated, the “Revolving CreditNote”). The Borrower’s obligation to repay the Term Loan, with interest, is evidenced by theBorrower’s Libor Term Note dated the Closing Date in the principal amount of $580,000 and madepayable to the order of the Bank (as the same may from time to time be amended, restated,supplemented or otherwise modified, the “Term Note”). The Equipment Notes, the RevolvingCredit Note and the Term Note are sometimes hereinafter called collectively, the “Notes”).
 

 
     C. Subsequent thereto, the parties entered into an ISDA Master Agreement dated as of March 24,2005, to effectuate one or more interest rate hedging agreements (the “ISDA MasterAgreement”). As of the date hereof, there is one Transaction (as defined therein) outstanding.     D. To induce the Bank to make the Credit Facilities and other financial accommodationsavailable to the Borrower, the Guarantors agreed to unconditionally and irrevocably guarantee therepayment in full of all sums due by the Borrower to the Bank, pursuant to (a) a ContinuingGuaranty dated February 9, 2006 from Youbet, Inc to the Bank, and (b) a Continuing Guaranty datedFebruary 9, 2006 from UT Gaming, Inc. to the Bank (such guaranties, as the same may from time totime be amended, restated, supplemented, or otherwise modified, being hereinafter calledcollectively the “Guaranties”).     E. The Borrower’s obligations in connection with the Credit Facilities are secured by, amongother things, the collateral (collectively, the “Collateral”) granted and described in (a)that certain General Security Agreement dated as of the Closing Date from the Borrower to the Bank(as the same may from time to time be amended, restated, supplemented, or otherwise modified, the“Security Agreement”), (b) that certain Securities Pledge Agreement dated as of the ClosingDate from the Borrower, United Tote Canada, Inc., and Dynatote of Pennsylvania, Inc. (as the samemay from time to time be amended, restated, supplemented, or otherwise modified, the“Securities Pledge Agreement”), (c) that certain Trademark Security Agreement dated as ofthe Closing Date from the Borrower to the Bank (as the same may from time to time be amended,restated, supplemented, or otherwise modified, the “Trademark Security Agreement”) and (d)that certain Mortgage dated as of the Closing Date from the Borrower to the Bank (as the same mayfrom time to time be amended, restated, supplemented, or otherwise modified, the“Mortgage”).     F. As used herein, the term “Transaction Documents” means, collectively, the CreditAgreement, the Notes, the ISDA Master Agreement and all Confirmations executed pursuant thereto,the Guaranties, the Security Agreement, the Securities Pledge Agreement, the Trademark SecurityAgreement, the Mortgage, and all other documents now or hereafter executed and delivered toevidence, secure, or guarantee, or in connection with, any or all of the Credit Facilities, and theterm “Obligations” means the unpaid principal balance of each of the Credit Facilities,together with all accrued and unpaid interest thereon and all of the other obligations owed by theBorrower to the Bank under and pursuant to the Transaction Documents.     G. Pursuant to Section 8 of the Credit Agreement, the Borrower agreed to comply with and bebound by certain financial covenants set forth therein.     H. Pursuant to Section 9 of the Credit Agreement, the parties agreed that any of the followingevents or conditions, among others, shall constitute an “Event of Default” thereunder: (i) default, breach, failure or violation by the Borrower in theperformance, observance or compliance with any covenant, obligation, term orcondition contained in Section 7 or Section 8 of the Credit Agreement; and
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 (ii) the occurrence of a “Change of Control” with respect tothe Borrower.As set forth in the Credit Agreement, “Change of Control” means “with respect to anyperson, (i) a merger, consolidation, reorganization, recapitalization or share or interestexchange, sale or transfer or any other transaction or series of transactions in which thestockholders, managers, partners, owners or interest holders immediately prior to such transactionor series of transactions receive, in exchange for the stock or interests owned by them, cash,property or securities of the resulting or surviving entity or any affiliate thereof, and as aresult thereof, persons who, individually or in the aggregate, were holders of 50% or more of itsvoting stock, securities or equity, partnership or ownership interests immediately prior to suchtransaction or series of transactions hold less than 50% of the voting stock, securities or otherequity, partnership or ownership interests of the resulting or surviving entity, or such affiliatethereof, calculated on a fully diluted basis, or (ii) a direct or indirect sale, transfer or otherconveyance or disposition, in any single transaction or series of transactions, of all orsubstantially all of such person’s assets.”     I. On or about November 30, 2005, the Borrower, UT Group, LLC (the former shareholder of theBorrower), Youbet and UT Gaming entered into a Stock Purchase Agreement (the “Stock PurchaseAgreement”), pursuant to which UT Gaming agreed to purchase from UT Group, LLC 100% of theBorrower’s outstanding capital stock. On February 10, 2006, the parties consummated said sale (the“Change of Control Date”).     J. Prior to the Change of Control Date, the Borrower notified the Bank of the intended sale ofits stock, and, notwithstanding the fact that such sale would constitute a “Change ofControl” thereby giving rise to an Event of Default, requested that the Bank temporarilyforbear from exercising its various rights and remedies as a result of the occurrence of such Eventof Default (the “Acknowledged Default”).     K. On February 9, 2006, the Bank, by a letter agreement with the Obligors, agreed to forbearuntil April 30, 2006 (the “Original Forbearance Period”) from exercising its various rightsand remedies as a result of the Acknowledged Default or any Event of Default arising as a result ofa breach of Section 8 of the Credit Agreement.     L. Pursuant to Section 6 of the Credit Agreement, the Borrower is required to deliver to theBank each quarter a quarterly compliance certificate signed by the Borrower’s chief financialofficer or such other person responsible for the financial management of the Borrower, (A) settingforth the computation required to establish the Borrower’s compliance with each financial covenantduring such period, (B) stating that the signer of the certificate has reviewed the CreditAgreement and the operations and conditions (financial or other) of the Borrower during therelevant period, and (C) stating that no Event of Default has occurred during this period, or if anEvent of Default did occur, describing its nature, the date(s) of its occurrence or period ofexistence and what action the Borrower has taken with respect thereto.     M. To date, the Bank has yet to receive the quarterly compliance certificate due from theBorrower with respect to the quarterly period ending March 31, 2006 (the “Additional KnownDefault”).
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     N. On April 19, 2006, the Bank issued a letter to Youbet wherein the Bank agreed to extend theOriginal Forbearance Period through June 30, 2006 (the Original Forbearance Period, as extendedthereby, the “Forbearance Period”).     O. The Bank asserts that certain other events of default have occurred under certain of thecovenants contained in the Credit Agreement, all as more particularly identified in that certainletter dated May 22, 2006 from the Bank to the Borrower, such additional defaults, together with(i) any additional existing events of default under Section 6(a)(i), 6(a)(ii), 6(a)(iii), 6(e),6(f), 8(a), and Additional Financial Covenants (§8) of the Credit Agreement, (ii) the AcknowledgedDefault and Additional Known Default being hereinafter referred to as the “ExistingDefaults”).     P. Upon expiration of the Forbearance Period, absent further agreement, the Bank has the rightto pursue its various rights and remedies under the Transaction Documents.     Q. Borrower and the Guarantors (hereinafter collectively referred to as the“Obligors”) have now requested that the Bank, among other things, (a) waive the ExistingDefaults and, (b) modify certain other terms and conditions of the Transaction Documents. The Bankis willing to grant the Obligors’ request, subject to the terms and conditions hereinafter setforth.     NOW, THEREFORE, in consideration of the premises and of the representations and mutualagreements made herein and for other good and valuable consideration, the receipt and sufficiencyof which is hereby acknowledged, the parties hereto agree as follows:ARTICLE IDEFINITIONS; EFFECTIVE DATE     Section 1.1. Defined Terms. Capitalized terms used herein and in the Preamble shallhave the meanings given to such terms in the Recitals. All other capitalized terms used herein andnot defined shall have the meanings given to such terms in the Credit Agreement.     Section 1.2. Effective Date. This Agreement shall become effective as of 4:00 p.m.(Baltimore time) on June 30, 2006 (referred to herein as the “Effective Date”) if and onlyif Obligors shall not have indefeasibly satisfied in full all Obligations prior to that time.ARTICLE IIREPRESENTATIONS AND WARRANTIES     Section 2.1. Acknowledgments of the Borrower. The Borrower hereby acknowledges that:          a. The Recitals set forth above are true and complete in all respects and are incorporated byreference herein.
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          b. As of the date hereof, by virtue of the Acknowledged Default and Additional Known Default,the Borrower is currently in default of its Obligations under one or more of the TransactionDocuments.          c. As of June 20, 2006, the Borrower owed the Bank, (i) pursuant to the terms of the EquipmentNotes, $11,404,802.95, consisting of $11,369,309.61 in principal, $35,493.34 in accrued but unpaidinterest, plus fees, costs and other expenses, (ii) pursuant to the terms of the Revolving CreditNote, $1,327,767.97, consisting of $1,320,992.12 in principal, $6,775.85 in accrued but unpaidinterest, plus fees, costs and other expenses and (iii) pursuant to the terms of the Term Note,$501,931.76, consisting of $500,249.89 in principal, $1,681.87 in accrued but unpaid interest, plusfees, costs and other expenses.          d. The Borrower has no defenses, affirmative or otherwise, rights of setoff, rights ofrecoupment, claims, counterclaims, actions or causes of action of any kind or nature whatsoeveragainst the Bank or any past, present or future agent, attorney, legal representative,predecessor-in-interest, affiliate, successor, assign, employee, director or officer of the Bank(collectively, the “Bank Group”), directly or indirectly, arising out of, based upon, or inany manner connected with, any transaction, event, circumstance, action, failure to act, oroccurrence of any sort or type, whether known or unknown, which occurred, existed, was taken,permitted, or began prior to the execution of this Agreement and accrued, existed, was taken,permitted or begun in accordance with, pursuant to, or by virtue of the Obligations or any of theterms or conditions of the Transaction Documents, or which directly or indirectly relate to orarise out of or in any manner are connected with the Obligations or any of the TransactionDocuments; TO THE EXTENT ANY SUCH DEFENSES, AFFIRMATIVE OR OTHERWISE, RIGHTS OF SETOFF, RIGHTS OFRECOUPMENT, CLAIMS, COUNTERCLAIMS, ACTIONS OR CAUSES OF ACTION EXIST, SUCH DEFENSES, RIGHTS,CLAIMS, COUNTERCLAIMS, ACTIONS AND CAUSES OF ACTION ARE HEREBY FOREVER WAIVED, DISCHARGED ANDRELEASED.          e. The Borrower has freely and voluntarily entered into this Agreement after an adequateopportunity and sufficient period of time to review, analyze and discuss all terms and conditionsof this Agreement and all factual and legal matters relevant hereto with counsel freely andindependently chosen by them. The Borrower further acknowledges that it has actively and with fullunderstanding participated in the negotiation of this Agreement after consultation and review withits counsel and that this Agreement has been negotiated, prepared and executed without fraud,duress, undue influence or coercion of any kind or nature whatsoever having been exerted by orimposed upon any party to this Agreement.          f. As of the date hereof, there are no proceedings or investigations pending or, so far as theBorrower knows, threatened against the Borrower, before any court or arbitrator or anygovernmental, administrative or other judicial authority or agency, in each case, which wouldprohibit or cause a default under or in any way prevent the execution, delivery, performance,compliance or observance of any of the terms or conditions of this Agreement.
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          g. There is no statute, rule, regulation, order or judgment, no charter, by-law, operatingagreement, or preference stock provision of the Borrower, and no provision of any mortgage,indenture, contract or other agreement binding on the Borrower or any of its properties which wouldprohibit or cause a default under or in any way prevent the execution, delivery, performance,compliance or observance of any of the terms or conditions of this Agreement.          h. The Borrower has not, voluntarily or involuntarily, granted any liens or security intereststo any creditor not previously disclosed to the Bank in writing on or before the date of thisAgreement or otherwise taken any action or failed to take any action which could or would impair,change, jeopardize or otherwise adversely affect the priority, perfection, validity orenforceability of any liens or securing interests securing all or any portion of the Obligations orthe priority or validity of the Bank’s claims with respect to the Obligations relative to any othercreditor of the Borrower.          i. The Borrower has the full legal right, power and authority to enter into and perform itsobligations under this Agreement and any other documents executed in connection herewith(collectively, the “Modification Documents”), and the execution and delivery of thisAgreement and the other Modification Documents by the Borrower and the consummation by the Borrowerof the transactions contemplated hereby and thereby and performance of its obligations hereunderand thereunder have been duly authorized by all appropriate action (corporate or otherwise).          j. This Agreement and each of the other Modification Documents to which the Borrower is partyconstitutes the valid, binding and enforceable agreement of the Borrower, enforceable against theBorrower in accordance with the terms thereof.     Section 2.2. Acknowledgments of the Guarantors. The Guarantors hereby acknowledgethat:          a. The Recitals set forth above are true and complete in all respects and incorporated byreference herein.          b. As of the date hereof, by virtue of the Acknowledged Defaults and Additional Known Default,the Guarantors are currently in default of their Obligations under the Transaction Documents.          c. The Guarantors acknowledge that they have no defenses, affirmative or otherwise, rights ofsetoff, rights of recoupment, claims, counterclaims, actions or causes of action of any kind ornature whatsoever against the Bank or any of the Bank Group, directly or indirectly, arising outof, based upon, or in any manner connected with, any transaction, event, circumstance, action,failure to act, or occurrence of any sort or type, whether known or unknown, which occurred,existed, was taken, permitted, or began prior to the execution of this Agreement and accrued,existed, was taken, permitted or begun in accordance with, pursuant to, or by virtue of theObligations or any of the terms or conditions of the Transaction Documents, or which directly orindirectly relate to or arise out of or in any manner are connected with the Obligations or any ofthe Transaction Documents; TO THE EXTENT ANY SUCH DEFENSES,
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AFFIRMATIVE OR OTHERWISE, RIGHTS OF SETOFF, RIGHTS OF RECOUPMENT, CLAIMS, COUNTERCLAIMS, ACTIONS ORCAUSES OF ACTION EXIST, SUCH DEFENSES, RIGHTS, CLAIMS, COUNTERCLAIMS, ACTIONS AND CAUSES OF ACTIONARE HEREBY FOREVER WAIVED, DISCHARGED AND RELEASED.          d. The Guarantors have freely and voluntarily entered into this Agreement after an adequateopportunity and sufficient period of time to review, analyze and discuss all terms and conditionsof this Agreement and all factual and legal matters relevant hereto with counsel freely andindependently chosen by the Guarantors. The Guarantors further acknowledge that they have activelyand with full understanding participated in the negotiation of this Agreement after consultationand review with their counsel and that this Agreement has been negotiated, prepared and executedwithout fraud, duress, undue influence or coercion of any kind or nature whatsoever having beenexerted by or imposed upon any party to this Agreement.          e. As of the date hereof, there are no proceedings or investigations pending or, so far as anyGuarantor knows, threatened against any Guarantor, before any court or arbitrator or anygovernmental, administrative or other judicial authority or agency, in each case, which wouldprohibit or cause a default under or in any way prevent the execution, delivery, performance,compliance or observance of any of the terms or conditions of this Agreement.          f. There is no statute, rule, regulation, order or judgment, no charter , bylaw, or preferencestock provision, and no provision of any mortgage, indenture, contract or other agreement bindingon any Guarantor or any of its or their properties which would prohibit or cause a default under orin any way prevent the execution, delivery, performance, compliance or observance of any of theterms or conditions of this Agreement.          g. No Guarantor has, voluntarily or involuntarily, granted any liens or security interests toany creditor not previously disclosed to the Bank in writing on or before the date of thisAgreement or otherwise taken any action or failed to take any action which could or would impair,change, jeopardize or otherwise adversely affect the priority, perfection, validity orenforceability of any liens or securing interests securing all or any portion of the Obligations orthe priority or validity of the Bank’s claims with respect to the Obligations relative to any othercreditor of any of the Guarantors.          h. The Guarantors have the full legal right, power and authority to enter into and performtheir obligations under this Agreement and any other Modification Documents, and the execution anddelivery of this Agreement and the other Modification Documents by the Borrower and theconsummation by the Borrower of the transactions contemplated hereby and thereby and performance ofits obligations hereunder and thereunder have been duly authorized by all appropriate action(corporate or otherwise).          i. This Agreement constitutes the valid, binding and enforceable agreement of each Guarantor,enforceable against each Guarantor, in accordance with its terms.
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ARTICLE IIICOVENANTS AND AMENDMENTS     In consideration of the Bank’s agreement to enter into this Agreement, the Obligors herebyagree with the Bank as follows:     Section 3.1. Amendments to Credit Agreement. The Credit Agreement is hereby amendedas follows:          a. The definition of “Maturity Date” set forth in Section 1(cc) thereof is herebydeleted in its entirety, and the following inserted in lieu thereof:               “cc. “Maturity Date “ means August 31, 2006”.          b. The third sentence of Section 2(f) is hereby deleted, and the following is inserted in lieuthereof:“In addition, notwithstanding anything to the contrary containedherein or in the Equipment Notes, the Revolving Note or the TermNote (each, a “Note” and collectively, the “Notes”),immediately upon the occurrence of an Event of Default, the interestrate payable on each of the Notes shall automatically increase tothe default rate provided in the applicable Note, or, if no suchdefault rate is specified, to a rate equal to 2.5 percentage pointsabove the otherwise applicable interest rate, and any judgmententered hereon or thereon or otherwise in connection with anyamounts due hereunder shall bear interest at such default rate ofinterest.”          c. The Section entitled “Additional Financial Covenants” in the Schedule to the CreditAgreement is hereby deleted in its entirety.          d. Section 8A. is hereby deleted, and the following is hereby inserted in lieu thereof:“A. The Borrower shall maintain Tangible Net Worth of not less than$7,600,000, as measured quarterly at the end of each quarter.”          e. Section 9(a)(ii) is amended by deleting therefrom the words “which is not cured withinfifteen (15) days of the date when the Borrower knew or should have known of such default”.
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          f. The following paragraph is hereby added to the end of Section 9(b):     **CONFESSION OF JUDGMENT****. AFTER THE OCCURRENCE OF ANEVENT OF DEFAULT, THE BORROWER HEREBY AUTHORIZES ANY ATTORNEYDESIGNATED BY THE BANK OR CLERK OF ANY COURT OF RECORD TO APPEAR FORIT IN ANY COURT OF RECORD AND TO CONFESS JUDGMENT AGAINST IT WITHOUTPRIOR NOTICE OR A PRIOR HEARING, IN FAVOR OF THE BANK FOR AND IN THEAMOUNT OF THE PRINCIPAL BALANCE OF THE NOTES THEN OUTSTANDING PLUSINTEREST ACCRUED AND UNPAID THEREON, ALL OTHER AMOUNTS THEN DUE ANDPAYABLE HEREUNDER, COSTS OF SUIT AND AN ATTORNEY’S FEE OF THEGREATER OF 10% OF SUCH SUMS OR $1,000 (BUT NOT TO EXCEED THE MAXIMUMAMOUNT PERMITTED BY APPLICABLE LAW). THE AUTHORITY AND POWER TOAPPEAR FOR AND TO ENTER JUDGMENT AGAINST THE BORROWER SHALL NOT BEEXHAUSTED BY ONE OR MORE EXERCISES THEREOF, OR BY ANY IMPERFECTEXERCISE THEREOF, AND SHALL NOT BE EXTINGUISHED BY ANY JUDGMENTENTERED PURSUANT THERETO. SUCH AUTHORITY AND POWER MAY BE EXERCISEDON ONE OR MORE OCCASIONS, FROM TIME TO TIME, IN THE SAME ORDIFFERENT JURISDICTIONS, AS OFTEN AS THE BANK SHALL DEEM NECESSARYOR DESIRABLE, FOR ALL OF WHICH THIS NOTE SHALL BE A SUFFICIENTWARRANT. THE BORROWER HEREBY FOREVER WAIVES AND RELEASES ALL ERRORSIN SAID PROCEEDINGS AND ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANYAND ALL APPRAISEMENT, STAY OR EXCEPTION LAWS OF ANY STATE NOW INFORCE OR HEREAFTER ENACTED IN TRUST ON SUCH JUDGMENT THAT ACCRUE ATTHE DEFAULT RATE.**     Section 3.2. Amendments to Equipment Notes. Each Equipment Line of Credit Term Noteis hereby amended as follows:          a. The definition of “Maturity Date” as set forth in Section 1.i. thereof is herebydeleted in its entirety, and the following inserted in lieu thereof.               “i. “Maturity Date” is August 31, 2006”.
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          b. Notwithstanding anything contained in Section 2.d. thereof to the contrary, the Note shallmature and all sums due thereunder shall be due and payable in full on the Maturity Date.     Section 3.3. Amendments to Revolving Credit Note. The Revolving Credit Note ishereby amended as follows:          a. The following paragraph is hereby added at the end of the Revolving Credit Note:     **11.****CONFESSION OF JUDGMENT****. AFTER MATURITY OF THISNOTE (WHETHER BY ACCELERATION, DECLARATION, EXTENSION OR OTHERWISE),THE BORROWER HEREBY AUTHORIZES ANY ATTORNEY DESIGNATED BY THE BANKOR CLERK OF ANY COURT OF RECORD TO APPEAR FOR IT IN ANY COURT OFRECORD AND TO CONFESS JUDGMENT AGAINST IT WITHOUT PRIOR NOTICE OR APRIOR HEARING, IN FAVOR OF THE BANK FOR AND IN THE AMOUNT OF THEPRINCIPAL BALANCE OF THIS NOTE THEN OUTSTANDING PLUS INTERESTACCRUED AND UNPAID THEREON, ALL OTHER AMOUNTS THEN DUE AND PAYABLEHEREUNDER, COSTS OF SUIT AND AN ATTORNEY’S FEE OF THE GREATER OF 10%OF SUCH SUMS OR $1,000 (BUT NOT TO EXCEED THE MAXIMUM AMOUNTPERMITTED BY APPLICABLE LAW). THE AUTHORITY AND POWER TO APPEAR FORAND TO ENTER JUDGMENT AGAINST THE BORROWER SHALL NOT BE EXHAUSTED BYONE OR MORE EXERCISES THEREOF, OR BY ANY IMPERFECT EXERCISE THEREOF,AND SHALL NOT BE EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANTTHERETO. SUCH AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR MOREOCCASIONS, FROM TIME TO TIME, IN THE SAME OR DIFFERENTJURISDICTIONS, AS OFTEN AS THE BANK SHALL DEEM NECESSARY ORDESIRABLE, FOR ALL OF WHICH THIS NOTE SHALL BE A SUFFICIENT WARRANT.THE BORROWER HEREBY FOREVER WAIVES AND RELEASES ALL ERRORS IN SAIDPROCEEDINGS AND ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANY AND ALLAPPRAISEMENT, STAY OR EXCEPTION LAWS OF ANY STATE NOW IN FORCE ORHEREAFTER ENACTED IN TRUST ON SUCH JUDGMENT THAT ACCRUE AT THEDEFAULT RATE.**
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     Section 3.4. Amendments to Term Note. The Term Note is hereby amended as follows:          a. Section 1(i) of the Term Note is hereby deleted in its entirety, and the following insertedin lieu thereof:               “i. “Maturity Date” is August 31, 2006.”          b. The following paragraph is hereby added at the end of the Term Note:     **12.****CONFESSION OF JUDGMENT****. AFTER MATURITY OF THISNOTE (WHETHER BY ACCELERATION, DECLARATION, EXTENSION OR OTHERWISE),THE BORROWER HEREBY AUTHORIZES ANY ATTORNEY DESIGNATED BY THE BANKOR CLERK OF ANY COURT OF RECORD TO APPEAR FOR IT IN ANY COURT OFRECORD AND TO CONFESS JUDGMENT AGAINST IT WITHOUT PRIOR NOTICE OR APRIOR HEARING, IN FAVOR OF THE BANK FOR AND IN THE AMOUNT OF THEPRINCIPAL BALANCE OF THIS NOTE THEN OUTSTANDING PLUS INTERESTACCRUED AND UNPAID THEREON, ALL OTHER AMOUNTS THEN DUE AND PAYABLEHEREUNDER, COSTS OF SUIT AND AN ATTORNEY’S FEE OF 10% OF SUCH SUMSOR $1,000 (BUT NOT TO EXCEED THE MAXIMUM AMOUNT PERMITTED BYAPPLICABLE LAW). THE AUTHORITY AND POWER TO APPEAR FOR AND TO ENTERJUDGMENT AGAINST THE BORROWER SHALL NOT BE EXHAUSTED BY ONE OR MOREEXERCISES THEREOF, OR BY ANY IMPERFECT EXERCISE THEREOF, AND SHALLNOT BE EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO. SUCHAUTHORITY AND POWER MAY BE EXERCISED ON ONE OR MORE OCCASIONS, FROMTIME TO TIME, IN THE SAME OR DIFFERENT JURISDICTIONS, AS OFTEN ASTHE BANK SHALL DEEM NECESSARY OR DESIRABLE, FOR ALL OF WHICH THISNOTE SHALL BE A SUFFICIENT WARRANT. THE BORROWER HEREBY FOREVERWAIVES AND RELEASES ALL ERRORS IN SAID PROCEEDINGS AND ALL RIGHTS OFAPPEAL AND ALL RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OREXCEPTION LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED INTRUST ON SUCH JUDGMENT THAT ACCRUE AT THE DEFAULT RATE.**
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     Section 3.5. Covenants of the Obligors.          a. Inspection. During the period from the date hereof until all Obligations have beenrepaid in full, the Borrower shall permit the Bank, by its representatives and agents, upon oneday’s prior notice and during normal business hours, to perform inspections or field audits of anyof the properties, books and financial records of the Borrower to examine and make copies of thebooks of accounts and other financial records of the Borrower, and to discuss the affairs, financesand accounts of the Borrower with, and to be advised as to the same by, the Borrower (or itsrepresentatives) at such reasonable times and intervals as the Bank may designate. In connectionwith the foregoing, the Bank and its representatives and agents, at the expense of the Borrower,shall have the right to (i) enter any business premises of the Borrower or any other premises wherethe Collateral and the records relating thereto may be located and to audit, appraise, examine andinspect the Borrower’s records and to make extracts therefrom and copies thereof, and (ii) verifyunder reasonable procedures the validity, amount, quality, quantity, value and condition of, andany other matter relating to Collateral, including contacting account debtors or any personpossessing any of such Collateral. The Borrower shall pay all reasonable costs and expenses relatedto any field audits or inspections performed by or on behalf of the Bank.          b. Equipment Line of Credit Facility; Strict Compliance with Transaction Documents.The Borrower acknowledges that the Bank is under no obligation to make any further advances underthe Equipment Line of Credit. The Bank shall continue to make such advances under the RevolvingCredit Facility, up to the maximum amount at any one time outstanding not to exceed the RevolverBorrowing Capacity (as defined in the Credit Agreement) subject to the terms and conditions setforth in the Credit Agreement, as amended, only so long as the Borrower shall be in strictcompliance with the provisions of each of the Transaction Documents and no Event of Default (asdefined in the Credit Agreement) or event which, with the passage of time or the giving of noticeor both, shall have occurred and be continuing.          c. Swap Agreements. If not previously instructed by the Borrower to do so, theBorrower hereby instructs the Bank to terminate all swap and other interest rate hedging agreementsbetween the Bank and the Borrower with respect to, or executed in connection with, the Obligations.Any amounts owed to Borrower as a result of such termination shall be applied to the remainingbalances due under one or more of the Equipment Notes (as selected by the Bank in its discretion),and any amount applied to repay any portion of any Equipment Note shall be applied to principalpayments due under such Equipment Note in the inverse order of their maturity. The Borrowerrecognizes that all rights and obligations of the Bank and the Borrower under the ISDA MasterAgreement and all Confirmations executed pursuant thereto are now cancelled and terminated and theBorrower hereby agrees not to make any claim against the Bank with respect to any obligations ofthe Bank arising and to be performed by it thereunder.          d. Borrower’s DDA Account. The Bank shall be under no obligation to honor anypresentments made on the Borrower’s DDA Account in the event there are either insufficient orunavailable funds to cover those items. In such event, such items will be dishonored and returnedby the Bank with no liability to the Bank whatsoever.
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          e. Modification Fee. To induce the Bank to enter into this Agreement, the Borrower hasagreed to pay to the Bank a modification fee in the amount of $150,000 (the “ModificationFee”), which fee shall be deemed fully earned and non-refundable as of the Effective Date. Onehalf of such Modification Fee shall be paid to the Bank by not later than 4:00 p.m., Baltimoretime, on the Effective Date, and the remaining half of such Modification Fee shall be due andpayable no later than 4:00 p.m. (Baltimore time) on August 1, 2006, unless the Obligations arerepaid in full prior to such time.          f. Additional Fees and Other Payments Due. On the date hereof, the Borrower shall (a)pay to the Bank all past-due payments of principal and/or interest, if any, and (b) pay to the Bankand to its counsel all Enforcement Costs due under Section 6.10(a) hereof. On theEffective Date, the Bank shall pay to the Bank $75,000 of the Modification Fee due on said datepursuant to Section 3.5(e) hereof.          g. Commitment and Mandatory Prepayment. Unless the Borrower delivers to the Bank,prior to 12:00 p.m., Baltimore time, on July 31, 2006, an Acceptable Commitment (as hereinafterdefined), the Borrower shall pay to the Bank, not later than 4:00 p.m., Baltimore time, on August1, 2006, a mandatory prepayment in the amount of $500,000, which prepayment shall be applied to theObligations in such order and manner as the Bank shall determine in its discretion. As usedherein, the term “Acceptable Commitment” means a commitment letter from a bank or otherfinancial institution acceptable to the Bank, committing to lend to the Borrower an amountsufficient to repay in full all of the Borrower’s Obligations, which commitment letter shall (1)contemplate a closing not later than August 31, 2006, and (2) be non-contingent except for ordinaryand customary closing conditions.ARTICLE IVDEFAULT WAIVER PROVISIONS     Section 4.1. Waiver. The Bank hereby agrees to waive the Existing Defaults. Nothingherein shall be construed to impair the Bank’s ability to exercise any available remedies withrespect to (a) any future Event of Default, or (b) any existing Event of Default not previouslyidentified in writing to the Bank.     Section 4.2. Other Obligations. All of the Obligations under the TransactionDocuments, except to the extent modified or altered by the terms of this Agreement, shall remain infull force and effect and unchanged.ARTICLE VRELEASES     Section 5.1. Releases and Waivers.          a. The Obligors hereby knowingly and voluntarily forever release, acquit and discharge theBank and the Bank Group from and of any and all claims that the Bank or any
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member of the Bank Group is in any way responsible for the past, current or future condition ordeterioration of the business operations and/or financial condition of the Obligors, and from andof any and all claims that the Bank or any member of the Bank Group breached any agreement to loanmoney, to execute and/or terminate a Rate Protection Transaction, or make other financialaccommodations available to the Obligors or to fund any operations of the Borrower at any time.The Obligors also hereby knowingly and voluntarily forever release, acquit and discharge the Bankand the Bank Group, from and of any and all other claims, damages, losses, actions, counterclaims,suits, judgments, obligations, liabilities, defenses, affirmative defenses, setoffs, and demands ofany kind or nature whatsoever, in law or in equity, whether presently known or unknown, which anyof the Obligors may have had, or may now have (regardless of when asserted or brought), by reasonof any matter, course or thing whatsoever relating to, arising out of, based upon, or in any mannerconnected with, any transaction, event, circumstance, action, failure to act, or occurrence of anysort or type, whether known or unknown, which occurred, existed, was taken, permitted, begun, orotherwise related or connected to or with any or all of the Obligations, this Agreement, or any ofthe Transaction Documents, and/or any direct or indirect action or omission of the Bank and/or anyof the Bank Group. The Obligors further agree that from and after the date hereof, they will notassert to any person or entity that any deterioration of the business operations or financialcondition of the Obligors was caused by any breach or wrongful act of the Bank or any of the BankGroup which occurred prior to the date hereof.          b. Upon the indefeasible payment in full of all sums due to the Bank and satisfaction of allof the Obligors’ other Obligations, the Bank shall, at the Obligors’ sole cost and expense, releaseits liens on all collateral pledged or given to secure said Obligations and, in connectiontherewith, forever release, acquit and discharge the Obligors from and of any and all other futureclaims, suits, actions, obligations and liabilities of any kind or nature whatsoever arising out ofor relating to or due in connection with the Transaction Documents.ARTICLE VIMISCELLANEOUS     Section 6.1. Headings. Descriptive headings are for convenience only and will notcontrol or affect the meaning or construction of any provision of this Agreement.     Section 6.2. Successors and Assigns. This Agreement shall be binding upon and inureto the benefit of the parties hereto and each of their respective heirs, personal representatives,successors and assigns.     Section 6.3. Time of Essence. Time is of the essence of this Agreement.     Section 6.4. Counterparts. This Agreement may be executed in any number of duplicateoriginals or counterparts, each of such duplicate originals or counterparts shall be deemed to bean original and all taken together shall constitute but one and the same instrument. The partiesfurther agree that facsimile signatures shall be binding on all parties and have the same force andeffect as original signatures.
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     Section 6.5. Governing Law. This Agreement shall be governed by, and construed inaccordance with, the laws of the State of Maryland.     Section 6.6. Severability. In case one or more provisions contained in this Agreementshall be invalid, illegal, or unenforceable in any respect under any law, the validity, legalityand enforceability of the remaining provisions contained herein shall remain effective and bindingand shall not be affected or impaired thereby.     Section 6.7. Amendments. This Agreement may be amended, modified or supplemented onlyby written agreement signed by all parties hereto. No provision of this Agreement may be waivedexcept in writing signed by the party against whom such waiver is sought to be enforced.     Section 6.8. Entire Agreement. This Agreement, each of the documents to be executedpursuant to the terms hereof, and the Transaction Documents set forth the entire agreement andunderstanding of the parties hereto with respect to payment and performance of the Obligations,superseding all prior representations, understandings and agreements, whether written or oral.     Section 6.9. Enforcement Costs. The Borrower agrees to pay to the Bank, on the datehereof (and, if incurred after the date hereof, to the Bank or as the Bank may direct, within 10days after receipt of an invoice therefor), all unpaid out-of-pocket fees, costs and expensesincurred by or on behalf of the Bank in connection with (a) the original closing of the CreditFacilities, and the negotiation and execution of the Forbearance Agreement, (b) the preparation,negotiation, execution and delivery of this Agreement and any and all of the other documentsrelated hereto, and (c) the enforcement, preservation, or collection of the Obligations and/or thisAgreement, including, without limitation, reasonable attorneys fees and expenses, and recordationand filing fees and taxes (collectively, the “Enforcement Costs”). The Borrower agrees topay directly to Ober, Kaler, Grimes & Shriver, the Bank’s counsel, on the date hereof, all fees andexpenses incurred in connection with the events leading up to and the negotiation and execution ofthis Agreement and all of the other documents related hereto. If any such Enforcement Cost is notpaid when due, the Bank is hereby authorized, in its sole discretion, (a) to make an advance to paysuch Enforcement Costs, or (b) to offset the amount due against the Borrower’s Checking Account,(as defined in the Credit Agreement). Such Enforcement Costs shall be deemed to be part of theObligations and be secured by all Collateral pledged to secure the Obligations.     Section 6.10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVE TRIAL BYJURY IN ANY ACTION OR PROCEEDING TO WHICH THEY MAY BE PARTIES, ARISING OUT OF OR IN ANY WAYPERTAINING TO (A) THIS AGREEMENT (B) ANY OF THE OTHER DOCUMENTS EXECUTED BY THEM IN CONNECTIONHEREWITH, (C) ANY OF THE OBLIGATIONS, AND/OR (D) ANY OF THE TRANSACTION DOCUMENTS. IT IS AGREED ANDUNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIESTO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THISAGREEMENT.
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     THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE PARTIES HERETO, AND EACH OFTHE PARTIES HERETO HEREBY REPRESENT AND WARRANT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVEBEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY NOTIFY ORNULLIFY ITS EFFECT. EACH OF THE PARTIES HERETO FURTHER REPRESENT THAT THEY HAVE BEEN REPRESENTED INTHE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITHCOUNSEL.     Section 6.11. Termination of Automated Borrowing Functions. Anything herein or in theCredit Agreement or the other Transaction Documents to the contrary notwithstanding, the Borrowerhereby agrees with the Bank that (a) the Borrower shall give the Bank not less than three (3)Business Days (and in all events by not later than 2:00 p.m., Baltimore time, on August 28, 2006)prior written notice of its intent to repay the Obligations and to terminate the Revolving CreditFacility; (b) three (3) Business Days prior to the termination of the Revolving Credit Facility,the Bank shall be entitled to terminate all automated borrowing functions, and (c) from and afterthe termination of said automated borrowing functions, the Bank shall be under no obligation tomake any further advances to pay instruments presented against or to be presented against theChecking Account prior to the Maturity Date, and any further advances will be made (subject to allof the conditions precedent set forth in the Credit Agreement), only upon the Bank’s receipt of theBorrower’s written request therefore, such request to be received by the Bank not later than 2:00p.m., Baltimore time, three (3) Business Days prior to the proposed payoff date with such advanceto be effective as of the next Business Day.     Section 6.12. No Novation. This Agreement is only an agreement amending certainprovisions of the Transaction Documents. All of the provisions of the Transaction Documents areincorporated herein by reference and shall continue in full force and effect as amended hereby.The Obligors agrees that it is their intention that nothing herein shall be construed toextinguish, release or discharge or constitute, create or effect a novation of, or an agreement toextinguish, any of the obligations, indebtedness and liabilities of any of the Obligors or anyother party under the provisions of the Transaction Documents (as amended hereby).[Signatures on Succeeding Page]
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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, underseal, as of the day and year first above written.       WITNESS: MANUFACTURERS AND TRADERS TRUST COMPANY              /s/ Theresa E. Hardee By: /s/ Linda J. Weinberg(SEAL)           Name: Linda J. Weinberg      Title: Administrative Vice President                  UNITED TOTE COMPANY                /s/ Jae Yu By: /s/ Gary W. Sproule(SEAL)           Name: Gary W. Sproule      Title: Chief Financial Officer                  YOUBET.COM, INC                /s/ Jae Yu By: /s/ Gary W. Sproule(SEAL)           Name: Gary W. Sproule      Title: Chief Financial Officer                  UT GAMING, INC                /s/ Jae Yu By: /s/ Gary W. Sproule(SEAL)           Name: Gary W. Sproule      Title: Chief Financial Officer  
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