Exhibit 10.4

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) made as of this 2nd day of April,
2009, and shall be effective January 1, 2009 (the “Effective Date”), by and
between the DOWNS RACING L.P., a Pennsylvania limited partnership (the
“Employer”), acting through Mohegan Commercial Ventures PA, LLC, its General
Partner, a Pennsylvania limited liability company (“General Partner”) whose sole
member is the Mohegan Tribal Gaming Authority (the “Authority”), having an
address c/o the Mohegan Tribal Gaming Authority, One Mohegan Sun Boulevard,
Uncasville, Connecticut 06382, and ROBERT SOPER ., residing at 203 Greystone
Drive, Shavertown, Pennsylvania 18708 (“Executive”).

WITNESSETH:

WHEREAS, the Employer owns and operates, among other things, a harness racetrack
and casino located in Wilkes-Barre, Pennsylvania known as Mohegan Sun at Pocono
Downs, along with several off-track wagering facilities located in the State of
Pennsylvania (as presently existing and hereafter developed, the “Business”);
and

WHEREAS the Employer is desirous of retaining Executive as its President and
General Manager for the Business and assuring that Executive has the authority
to fully carry out his duties hereunder by being responsible to the Employer,
acting through its General Partner.

NOW, THEREFORE, in consideration of the promises and the mutual covenants, terms
and conditions hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency whereof is specifically acknowledged,
the parties hereto hereby agree as follows:

 

  1. Termination of all Prior Agreements

Executive and Employer mutually agree that effective with the date first written
on this Agreement, all prior agreements, written or oral, shall be terminated
and neither party thereto shall have any further obligations to the other
thereunder.

 

  2. Nature of Services and Duties

(A) The Employer hereby agrees to continue to employ Executive as its President
and General Manager upon the terms set forth herein, and Executive hereby
accepts such continued employment.

(B) Executive shall perform such duties and services of an executive, managerial
and administrative nature as are customary for a President and General Manager
and which, consistent with the foregoing, the Employer may from time to time
through communication from the Chief Executive Officer or the Chief Operating
Officer of the Authority, acting on behalf of

 

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the General Partner of the Employer, hereafter assign to him. Such duties shall
include, but not be limited to, (i) in coordination with the Chief Executive
Officer and Chief Operating Officer of the Authority, acting on behalf of the
General Partner of the Authority, oversee the financial reporting and treasury
activities of the Employer, the strategic direction of the Employer’s business
development, and the financial performance of the Business, (ii) in coordination
with and with the direction of the Chief Executive Officer and the Chief
Operating Officer of the Authority, acting as aforesaid, oversee the operations
of the Business; and (iii) attend professional training and continuing
professional education events as approved by the Chief Executive Officer or the
Chief Operating Officer of the Authority, acting as aforesaid. Executive shall
report exclusively to the Chief Executive Officer and the Chief Operating
Officer of the Authority, acting on behalf of the General Partner of the
Employer. The Employer shall not restrict, reduce or otherwise limit Executive’s
responsibility or authority without his consent; provided, however, that the
Executive shall comply with the General Manager’s Handbook as hereafter adopted
by the Authority. Executive shall comply with Employer’s policies, including,
without limitation, the standards of personal conduct set forth in Mohegan Sun
at Pocono Downs Policy #27, as amended from time to time.

(C) Executive shall devote his best efforts and ability and all required
business time to the performance of his duties and responsibilities hereunder to
achieve the goals set forth in the Employer’s annual business plan. Executive
shall perform all of his duties to the Employer faithfully, competently, and
diligently.

(D) Except for actions of the Executive that could be the basis for termination
for Cause as set forth in Paragraph 9(C), below, the Employer shall indemnify,
defend, and hold Executive harmless, including the payment of reasonable
attorney fees, if the Employer does not directly provide Executive’s defense,
from and against all claims made by anyone, including, but not limited to, a
corporate entity, company, other employee, agent, patron, tribal member, or any
member of the general public with respect to any claim that asserts as a basis,
any acts, omissions, or other circumstances involving the performance of
Executive.

 

  3. Effective Date

This Agreement shall be effective from the date set forth in the opening
paragraph of this Agreement (the “Effective Date”).

 

  4. Term

This Agreement shall govern Executive’s employment with the Employer from the
Effective Date through and including June 30, 2011. This Agreement, including
this paragraph, shall automatically renew for an additional term of three
(3) years unless either party shall notify the other of its intention to
terminate, or unless otherwise terminated as provided herein. Any such notice of
intention to terminate shall be delivered not later than one hundred and eighty
(180) days prior to the end of the then current term and shall be effective at
the end of such term, except as otherwise provided herein.

 

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  5. Base Annual Salary

Commencing with the Effective Date and until January 31, 2010, the Employer
shall pay Executive a Base Annual Salary in the amount of $385,679.26 in equal
weekly installments. Commencing January 1, 2010, and on each January 1
thereafter during the term of this Agreement, the Base Annual Salary shall be
increased in an amount mutually agreed to by Executive and the Employer, which
amount shall in no event be less than 13% of the then current Base Annual Salary
for the year commencing January 1, 2010 and 5% of the then current Base Annual
Salary each year thereafter.

 

  6. Annual Bonus

The Employer may determine an annual bonus payable to Executive, the amount of
which shall be based upon the business plan and financial goals of the Employer
as established at the beginning of each fiscal year. The annual bonus, if any,
for the previous fiscal year shall be paid no later than November 30 of each
year during the term.

 

  7. Life Insurance

The Employer may, within its discretion, at any time during the term of this
Agreement apply for and procure as owner and for its own benefit insurance on
the life of Executive, in such amounts and in such form as the Employer may
choose. Executive shall have no interest whatsoever in any such policies, but he
shall upon request by the Employer submit to such medical examinations, supply
such information, and execute such documents as may be required by the Employer
or the insurance companies to whom the Employer has made application.

 

  8. Reimbursement of Certain Expenses; Vacation; Medical Benefits

(A) The Employer will reimburse Executive for necessary and reasonable business
expenses incurred by him in the performance of his duties hereunder, provided,
that he shall obtain the approval for such expenditures in accordance with the
procedures adopted by the Employer from time to time and generally-applicable to
its executive-level employees, including such procedures with respect to
submission of appropriate documentation and receipts. Failure by Executive to
follow such procedures shall entitle the Employer to refuse to reimburse
Executive for such expenses until such time as such failure has been cured. It
is understood and agreed that Employer shall not be responsible for any expense
of Executive for leasing or operation of a vehicle for Executive (except that
Executive shall be entitled to reimbursement for the expenses, including
mileage, actually incurred in connection with his use of his automobile for the
business-related purposes of the Employer), nor for any expense of Executive for
legal expenses or tax planning expenses incurred by Executive in interpreting
this or any other agreement between Executive and Employer.

(B) Executive shall be entitled to four (4) weeks paid vacation per full year of
employment.

(C) Executive shall participate in such employee benefit plans and programs
(including but not limited to medical and life insurance programs) as are now or
may hereafter be adopted

 

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by the Employer for its executive employees and their families. The life
insurance program shall provide term life insurance coverage on Executive’s life
for the benefit of Executive’s designated beneficiary in an amount not less than
Executive’s Base Annual Salary. Employer shall continue to provide such medical
insurance coverage for a period of one (1) year after any termination by
Employer of Executive’s employment hereunder if such termination was without
Cause, as hereinafter defined.

 

  9. Disability; Termination

(A) If Executive shall become unable to perform all of his duties set forth in
Paragraph 1 of this Agreement due to mental or physical disability, all
compensation and benefits provided in this Agreement shall continue to be paid
and provided in full for a period not exceeding one hundred and eighty
(180) consecutive days. Upon completion of such one hundred and eighty
(180) days (or if Executive shall be disabled by the same incapacity for an
aggregate period of one hundred and eighty (180) days in any period of three
hundred and sixty (360) consecutive days by the same incapacity) the Employer
may, at its sole option, suspend Executive’s employment until Executive is
recovered (as reasonably certified by a physician designated by the Employer)
from such mental or physical disability. During any period of suspension on
account of disability, Executive shall receive only such compensation as may be
provided under the disability insurance described in Paragraph 9(B). If the
physician designated by the Employer certifies that Executive is permanently
disabled, Employer’s obligations under this Agreement shall cease; provided,
however, Executive shall be entitled to the disability benefits set forth in
Paragraph 9(B), below.

(B) Employer, at the sole expense of Employer, shall provide disability
insurance coverage for Executive. Such policy shall provide payment of 50% of
Executive’s Base Annual Salary commencing with suspension or termination of
employment, pursuant to Paragraph 9(A), above, by reason of physical or mental
disability, and for a period of two (2) years if such disability was the result
of injury, and to age 65 if such disability was the result of physical or mental
illness. In the event the Employer is unable to obtain disability insurance in
the amount required, or is unable to obtain all or part of such insurance at
standard rates, the Employer shall at its option obtain part or all of such
insurance at non-standard rates or shall self-insure in whole or in part for the
time periods set forth in this paragraph.

(C) Subject to the provisions of this paragraph, the Employer may terminate
Executive’s employment for Cause, defined as (i) Executive’s violation of the
restriction contained in Paragraph 10 of this Agreement, (ii) the loss or
suspension by the Commonwealth of Pennsylvania of Executive’s key qualifier
license and/or other required license for casino gaming, (iii) Executive’s
conviction of any crime involving fraud, theft or moral turpitude, or
(iv) Executive’s intentional or material breach of his obligations under this
Agreement. Employer may suspend Executive without pay upon Executive’s arrest
for any alleged crime against the Employer, the General Partner or any of their
affiliates. In the event that Executive is found not guilty or otherwise
exonerated for an alleged crime against Employer, the General Partner or any of
their affiliates, Executive’s suspended pay shall be reimbursed to him.

 

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Except in the event of suspension upon Executive’s arrest or termination upon
conviction of a crime, if Employer desires to terminate Executive for Cause,
Employer shall give written notice specifying the act(s) claimed to constitute
cause and specifying an effective date of termination, which date shall be no
sooner than thirty (30) days after the giving of such notice. Employer may, in
its sole discretion, give Executive an opportunity to rectify the reasons for
termination. In the event Executive fails to rectify the act(s) claimed to
constitute cause as set forth in the notice of termination, Executive’s
employment with the Employer shall cease effective upon the date provided in the
notice of termination. If such termination is for Cause, then Executive shall
not be entitled to any further compensation from and after the date of
termination.

(D) Subject to the provisions of this paragraph, the Employer may terminate
Executive’s employment other than for Cause, as defined above. In the event of
termination other than for Cause, Executive shall be paid, following
termination, his Base Annual Salary from the date of termination to the
expiration date of this Agreement (without regard to any renewal right after the
date of termination), except in the event of sale of the Business. In the event
of sale of the Business and Executive is not employed in substantially the same
position at the same base compensation and bonus compensation, if any, by the
purchaser of the Business or by another casino operated directly or indirectly
by the Mohegan Tribal Gaming Authority, the Executive shall be paid, following
termination upon the sale of the Business, his Base Annual Salary from the date
of termination and for a period equal to the lesser of (i) one (1) year or
(ii) to the expiration date of this Agreement (without regard to any renewal
right after the date of termination). Such Base Annual Salary shall be payable
to Executive in the same amount and at the same intervals as would have been
paid had his employment continued, and all payments of such Base Annual Salary
shall be paid to the Executive’s estate in the event of Executive’s death prior
to the expiration date of this Agreement. For purposes of this Agreement, a
“sale of the Business” shall mean a transfer of a controlling interest in the
Employer or a transfer of all or substantially all of the assets constituting
the Business.

(E) In the event that Executive voluntarily terminates his employment hereunder,
Executive’s employment shall cease as of the date provided in Executive’s notice
to Employer of his voluntary termination, and thereafter, provided that the
Employer shall not then be in material breach of this Agreement, Executive shall
not be entitled to any further compensation hereunder.

 

  10. Covenants of Executive Not to Compete

Executive acknowledges that with respect to the Business, as defined above, and
in the states of Pennsylvania, New Jersey, New York, Connecticut, Massachusetts,
Rhode Island, Vermont, New Hampshire and Maine (the “Restricted Area”) (i) the
Employer is one of a limited number of entities engaged in the Business;
(ii) his services to the Employer are special and unique; (iii) his work for the
Employer has given him and will continue to give him access to confidential
information concerning the Employer; and (iv) he has the means to support
himself and his dependents other than by engaging in the Business of the
Employer and the provisions of this Paragraph 10 will not impair such ability.
Accordingly, in order to induce the Employer to enter into this Agreement,
Executive covenants and agrees that:

(A) So long as Executive is employed by Employer under this Agreement and for a
period of twelve (12) months following the voluntary or involuntary termination
of his employment (the “Restricted Period”), Executive shall not, in the
Restricted Area, entertain or accept any offer of employment and shall not
compete in any manner, either directly or indirectly, including, without

 

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limitation, as an employee or independent contractor, investor, partner,
shareholder, officer, director, principal, agent or trustee of any entity
engaged in casino gaming, in the Restricted Area, without the express written
approval of the Employer; provided, however, that ownership of less than five
percent (5%) of the shares of a publicly traded corporation engaged in casino
gaming shall not be deemed to violate this paragraph. Notwithstanding anything
provided herein to the contrary, the Restricted Period shall not apply after the
initial term or renewal term, if applicable, has naturally expired.

(B) During the Restricted Period Executive shall not, directly or indirectly,
hire or solicit any employee of the Employer or any of its affiliates or
encourage any such employee to leave such employment.

 

  11. Confidential Information

Executive agrees to receive Confidential Information (as hereinafter defined) of
the Employer or any of its affiliates in confidence, and not to disclose to
others, assist others in the application of, or use for his own gain, such
information, or any part thereof, unless and until it has become public
knowledge, has come into the possession of such other or others by legal and
equitable means, or if required to do so by order of a court of competent
jurisdiction. Executive further agrees that, upon termination of his employment
with the Employer, all documents, records, notebooks and similar repositories of
or containing Confidential Information, including copies thereof, then in
Executive’s possession, whether prepared by him or others, will be left with or
returned to the Employer. For purposes of this Paragraph 11, “Confidential
Information” means information disclosed to Executive or known by Executive as a
consequence of or arising from or out of his employment by the Employer, not
generally known in the industry in which the Employer is or may become engaged
about the Employer’s Business or the business of its affiliates, products,
processes and/or services. Executive’s obligations under this Paragraph 11 shall
survive any termination or expiration of this Agreement and Executive’s
employment hereunder.

 

  12. Rights and Remedies Upon Breach.

Executive acknowledges and agrees that a violation of any provision of Paragraph
10 or 11 of this Agreement (the “Restrictive Covenants”) shall cause irreparable
harm to the Employer, and the Employer shall be entitled to specific performance
of this Agreement or an injunction without proof of special damages, together
with costs and attorney’s fees incurred by the Employer in enforcing its rights
under this Agreement. If Executive breaches, or threatens to commit a breach of
any of the Restrictive Covenants, the Employer shall have the following rights
and remedies, each of which rights and remedies shall be independent of the
other and severally enforceable, and all of which rights and remedies shall be
in addition to, and not in lieu of, any other rights and remedies available to
the Employer under law or in equity;

 

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(A) The right and remedy to have the Restrictive Covenants specifically enforced
by any court of competent jurisdiction including, without limitation, the right
to entry against Executive of restraining orders and injunctions (preliminary,
mandatory, temporary and permanent), without proof of special damages, against
violations of such covenants, threatened or actual, and whether or not then
continuing, it being acknowledged and agreed that any such breach or threatened
breach will cause irreparable injury to the Employer and that money damages will
not provide an adequate remedy to the Employer; and

(B) The right and remedy to require Executive to account for and pay over to the
Employer all compensation, profits, monies, accruals, increments or other
benefits derived or received by Executive as the result of any transaction
constituting a breach of the Restrictive Covenants. The Employer may set off any
amounts due it under this Paragraph 12(B) against any amounts owed to Executive
under Paragraph 5, 6 or 9.

 

  13. Notice

All notices hereunder shall be in writing. Any notice, request, information,
legal process, or other instrument to be given or served hereunder by any party
to another shall be deemed given or served hereunder by any party to the other
if either delivered personally or sent by prepaid registered or certified mail,
return receipt requested. Any such notice to the Employer shall be sent to the
address set forth in the introductory paragraph of this Agreement, to the
attention of the Chief Executive Officer of the Authority with a copy to the
Chairman of the Management Board of the Authority. Any such notice to Executive
shall be sent to his residential address as set forth in the introductory
paragraph of this Agreement. Either party may, through written notice to the
other party, change the address of notice as provided in this paragraph.

 

  14. Entire Agreement; Modification

Except as otherwise provided herein, this Agreement supersedes and cancels any
and all prior agreements between the parties hereto, express or implied,
relating to the subject matter hereof. This Agreement sets forth the entire
agreement of the parties hereto with respect to the subject matter hereof. This
Agreement may not be changed, modified, amended or altered except in a writing
signed by both parties.

 

  15. Non-Waiver

The failure or refusal of either party to insist upon the strict performance of
any provision of this Agreement or to exercise any right in any one or more
instances or circumstances shall not be construed as a waiver or relinquishment
of such provision or right and shall in no way effect such provision or right,
nor shall such failure or refusal be deemed a custom or practice contrary to
such provision or right.

 

  16. Severability

If any paragraph, term or provision of this Agreement shall be held or
determined to be unenforceable, the balance of this Agreement shall nevertheless
continue in full force and effect and unaffected by such holding or
determination. In addition, in any such event, the parties agree

 

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that it is their intention and agreement that any such paragraph, term or
provision which is held or determined to be unenforceable as written, shall
nonetheless be enforced and binding to the fullest extent permitted by law as
though such paragraph, term or provision had been written in such a manner to
such an extent as to be enforceable under the circumstances. Without limitation
of the foregoing, with respect to any Restrictive Covenant contained herein, if
it is determined that any such provision is excessive as to duration or scope,
it is intended that it nonetheless be enforced for such shorter duration or with
such narrower scope as will render it enforceable.

 

  17. Governing Law

This Agreement shall be construed in accordance with the laws of the State of
Connecticut without regard to its conflict of laws provisions, and the parties
agree that only the federal and state courts located in the State of Connecticut
shall have jurisdiction to enforce the terms of this Agreement.

 

  18. Limited Waiver of Sovereign Immunity

To the extent applicable, the Employer hereby waives its sovereign immunity from
suit for claims by the Executive for the enforcement of this Agreement and any
remedies for breach thereof under Connecticut law. Nothing herein shall limit
the Executive’s right to proceed with any claims otherwise allowed under the
laws of the Mohegan Tribe of Indians of Connecticut. The Employer hereby
consents to personal jurisdiction and venue in any court of the State of
Connecticut or any federal court sitting in the State of Connecticut and hereby
waives any claim that it may have that such court is an inconvenient forum for
the purposes of any proceeding arising under this Agreement as aforesaid and,
with respect to a proceeding in a court of the State of Connecticut or a federal
court sitting in the State of Connecticut, any requirement that tribal remedies
must be exhausted.

 

  19. Dispute Resolution

Except as otherwise provided herein, whenever during the term of this Agreement,
any disagreement or dispute arises between the parties as to the interpretation
of this Agreement or any rights or obligations arising hereunder, such matters
shall be resolved, whenever possible, by meeting and conferring. Any party may
request such a meeting by giving notice to the other, in which case such other
party shall make itself available within seven (7) days thereafter. If such
matters cannot be resolved within ten (10) days after such meeting, either party
may seek a resolution by binding arbitration in accordance with the then
prevailing rules of the American Arbitration Association (or any successor
thereto to the extent not inconsistent herewith), upon notice to the other party
of its intention to do so. The parties agree that in any such arbitration each
party shall be entitled to discovery as provided by the Federal Rules of Civil
Procedure. All hearings shall be conducted in Hartford County, Connecticut
within fifteen (15) days after the arbitrator is selected and shall be conducted
in his or her presence. The decision of the arbitrator will be final and binding
on the parties. The costs and expenses of the arbitration shall be shared
equally by the parties.

 

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  20. Headings

The headings of this Agreement are inserted for convenience only and shall not
be considered in construction of the provisions hereof.

 

  21. Assignment and Successors; Binding Effect

The rights and obligations of the Employer under this Agreement shall inure to
the benefit of and shall be binding upon the successors of the Employer and may
be assigned by the Employer, for all or any part of the term hereof, provided
that the Employer shall continue to be financially responsible to Executive
hereunder. Executive shall have no right to assign, transfer, pledge or
otherwise encumber any of the rights, nor to delegate any of the duties created
by this Agreement without prior written consent of the Employer. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
Employer, its successors and assigns, and Executive, his heirs and legal
representatives.

IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed by
Bruce S. Bozsum, acting in his capacity as the Chairman of the Management Board
of the Authority; Mitchell G. Etess has affixed his signature hereto signifying
his assent to the Agreement; and Executive has affixed his signature hereto, on
the date and year first above written.

 

EMPLOYER:     EXECUTIVE: DOWNS RACING L.P.    

By:

 

Mohegan Commercial Ventures PA, LLC,

Its General Partner

   

 

By:  

/s/ Bruce S. Bozsum

   

/s/ Robert Soper

  Bruce S. Bozsum, Chairman,     Robert Soper   Management Board of the Mohegan
      Tribal Gaming Authority, Sole Member    

 

By:  

/s/ Mitchell Grossinger Etess

      Mitchell Etess, President and CEO       Mohegan Tribal Gaming Authority  
 

 

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STATE OF CONNECTICUT

  )        )    ss. Uncasville, CT   April 2, 2009

COUNTY OF NEW LONDON

  )     

Personally appeared Bruce S. Bozsum, Chairman of the Management Board of the
MOHEGAN TRIBAL GAMING AUTHORITY, sole member of MOHEGAN COMMERCIAL VENTURES PA,
LLC, General Partner of DOWNS RACING L.P., signer and sealer of the foregoing
instrument, and acknowledged the same to be his free act and deed and the free
act and deed of Downs Racing L.P., before me.

 

/s/ Donna G. Kuflik

Notary Public

My Commission Expires: October 31, 2012

 

COMMONWEALTH OF PENNSYLVANIA   )        )    ss.   April 9, 2009 COUNTY OF   )
    

Personally appeared ROBERT SOPER signer and sealer of the foregoing instrument,
and acknowledged the same to be his free act and deed, before me.

 

/s/ Lisa M. Symeon

Notary Public My Commission Expires: July 27, 2009

 

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