EXHIBIT 10.1


 


AMENDMENT NO. 1


TO


STOCK PURCHASE AGREEMENT


 


This AMENDMENT NO. 1 to STOCK PURCHASE AGREEMENT is
dated as of February 29, 2008 to the STOCK PURCHASE AGREEMENT dated as of June 26,
2007 (the “Agreement”) by and among MTR Gaming Group, Inc., a Delaware
corporation (“Seller”), and TLC Casino Enterprises, Inc., a Nevada
corporation (“Purchaser”). Each of Purchaser and Seller is deemed a “Party” to
this Agreement and hereinafter may collectively be referred to as the
“Parties.”


 


RECITALS


 


A.            Seller
and Purchaser entered into the Agreement pursuant to which Seller wishes to
sell, and Purchaser wishes to purchase, the issued and outstanding shares of
common stock of Speakeasy Gaming of Fremont, Inc., a Nevada corporation
that owns and operates the casino facility known as Binion’s Gambling Hall and
Hotel located in Las Vegas, Nevada, and the issued and outstanding shares of
common stock of Speakeasy Fremont Street Experience Operating Company, a Nevada
corporation.


 


B.            Seller
and Purchaser have agreed to amend Section 1.2(a) of the
Agreement regarding certain adjustments to be made based on a Final Closing
Balance Sheet and a calculation of Adjusted Net Working Capital as of the
Closing Date.


 


C.            Seller
and Purchaser intend to close the transactions contemplated by the Agreement on
or before March 7, 2008 and Purchaser is ready, willing, and able to
perform its obligations under the Agreement in order to close on or before March 7,
2008.


 


D.            Capitalized
terms used in this Amendment are defined either where used in this Amendment or
where used in the Agreement or in the Glossary attached as Exhibit A
to the Agreement.


 


NOW, THEREFORE, in consideration of the foregoing and
the representations, warranties, covenants and agreements as set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
are acknowledged, the Parties, intending to be legally bound, hereby agree to
amend the Agreement as follows:


 


Section 1.  Section 1.2 of the Agreement shall be
deleted and replaced in its entirety as follows:


 


(a)           On or prior to the Closing Date,
Seller shall provide to Purchaser (i) an estimated closing balance sheet
for SGF as of the Closing Date prepared in accordance with generally accepted
accounting principles (“GAAP”) consistent with the accounting principles used
in the preparation of Seller’s financial statements dated as of December 31,
2006, representing Seller’s good faith estimate (except as otherwise provided
herein) of SGF’s Adjusted Net Working Capital (as defined below) as of the
Closing Date (the “Estimated Closing Balance Sheet”) and (ii) based on
such Estimated Closing Balance Sheet, an estimate of Adjusted Net Working
Capital of SGF (as defined below) as of the Closing Date, determined as
provided in this Section 


 


 


 

















 


1.2. 
If and to the extent that the estimated Adjusted Net Working Capital of
SGF as of the Closing Date, as reflected in the Estimated Closing Balance Sheet
and determined in accordance with this Section 1.2, exceeds
$3,000,000, Purchaser shall pay such excess to Seller as additional Purchase
Price, payable by wire transfer of immediately available funds to Seller on the
Closing Date.  If and to the extent that
the estimated Adjusted Net Working Capital of SGF as of the Closing Date, as
reflected in the Estimated Closing Balance Sheet and determined in accordance
with this Section 1.2, is less than $3,000,000, Seller shall pay
such deficiency to Purchaser, payable by wire transfer of immediately available
funds to Purchaser on the Closing Date or, at Seller’s option, by a reduction
in the amount of proceeds payable by Purchaser at Closing.


 


(b)           Within ninety (90) days of the
Closing Date, Seller shall provide to Purchaser (i) a final closing
balance sheet for SGF as of the Closing Date prepared in accordance with
generally accepted accounting principles (“GAAP”) consistent with the
accounting principles used in the preparation of Seller’s financial statements
dated as of December 31, 2006, which balance sheet must be reviewed by a
nationally recognized independent auditing firm of Seller’s choosing (the
“Final Closing Balance Sheet”), and (ii) based on such Final Closing
Balance Sheet, a final calculation of Adjusted Net Working Capital of SGF as of
the Closing Date, determined as provided in this Section 1.2.  If and to the extent that the final Adjusted
Net Working Capital of SGF as of the Closing Date, as reflected in the Final
Closing Balance Sheet and determined in accordance with this Section 1.2,
exceeds the estimated Adjusted Net Working Capital calculated pursuant to Section 1.2(a) above,
Purchaser shall pay such excess to Seller as additional Purchase Price, payable
by wire transfer of immediately available funds to Seller within ten (10) calendar
days following the final determination of Adjusted Net Working Capital as
provided in this Section 1.2(b). 
If and to the extent that the final Adjusted Net Working Capital of SGF
as of the Closing Date, as reflected in the Final Closing Balance Sheet and
determined in accordance with this Section 1.2, is less than the
estimated Adjusted Net Working Capital calculated pursuant to Section 1.2(a) above,
Seller shall pay such deficiency to Purchaser, payable by wire transfer of
immediately available funds to Purchaser within ten (10) calendar days
following the final determination of Adjusted Net Working Capital as provided
in this Section 1.2.


 


(c)           For
purposes of this Agreement, the term Adjusted Net Working Capital shall mean
Current Assets minus House Funds (as defined in Section 7.2) minus
Current Liabilities.


 


(d)           For
purposes of this Agreement, the term “Current Assets” means, with respect to
the financial information of SGF, the aggregate of the following assets to the
extent that such assets are classified as current under GAAP and are acquired
by Purchaser pursuant to the terms of this Agreement: (i) cash plus cash
equivalents; (ii) marketable securities; (iii) accounts receivable
generated in the ordinary course of business, less a reasonable reserve for
doubtful accounts consistent with past practices; (iv) inventories held
for use in the ordinary course of business (excluding any inventories that are
obsolete or otherwise unusable in the business); (v) prepaid expenses; and
(vi) all other assets of any kind classified as current under GAAP.  Current Assets shall not include any amounts
due from HHLV Management Company LLC or any affiliate of Harrah’s Entertainment
pursuant to the Joint Operating License Agreement, as amended, dated March 10,
2004 and the Purchase and Sale Agreement, as amended, by and among Seller, HHLV
and SGF, dated as of February 9, 2004.


 


 


 


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(e)           For
purposes of this Agreement, the term “Current Liabilities” means with respect
to the financial information of SGF, the aggregate of the following liabilities
(without duplication) to the extent that such liabilities are assumed by
Purchaser in accordance with the terms of this Agreement:  (i) all accounts payable; (ii) all
accrued liabilities of any kind shown on a balance sheet prepared in accordance
with GAAP, including but not limited to contingent obligations, accrued
vacation pay, accrued employee bonuses, litigation reserves, liabilities for
outstanding gaming chips and accrued payroll and related liabilities and
accrued gaming tax for the current fiscal year; and (iii) all other
liabilities of any kind classified as current under GAAP.  Notwithstanding anything in this Agreement to
the contrary, the term Current Liabilities shall not include progressive
liabilities described in Section 4.6. Notwithstanding anything to
the contrary in Section 1.2(d) or this Section 1.2(e),
for the purpose of determining Adjusted Net Working Capital, “Current Assets”
shall not include any assets or any portion of any assets that are not
realizable by Purchaser within twelve (12) months following the Closing Date,
“Current Liabilities” shall not include any liabilities that are not being
assumed by Purchaser, including without limitation, the Pre-existing Claims as
defined in Section 4.4, and neither “Current Assets” nor “Current
Liabilities” shall include assets or liabilities that constitute intercompany
accounts.


 


(f)            After
Seller has provided the Final Closing Balance Sheet and the calculation of
final Adjusted Net Working Capital as provided by Section 1.2(b),
Purchaser will have thirty (30) days to accept or object to the determination
of final Adjusted Net Working Capital. 
If Purchaser accepts the determination of final Adjusted Net Working
Capital as provided by Seller, either Seller or Purchaser will pay the other
Party the amount required to be paid by Section 1.2(b) within
ten (10) calendar days of such acceptance. If Purchaser objects to the
determination of final Adjusted Net Working Capital, then the Parties shall
attempt to resolve any differences in determining final Adjusted Net Working
Capital for a period of at least twenty (20) calendar days.  If the Parties are unable to resolve such
differences, then the Parties shall jointly select an independent auditor of
recognized national standing (who is not rendering, and during the preceding
two (2) year period has not rendered, services to Seller or Purchaser or
any of their respective Affiliates) to make a final determination of Adjusted
Net Working Capital of SGF as of the Closing Date.  If Seller and Purchaser are unable to jointly
select such independent auditor within ten (10) calendar days after the
end of the twenty (20) calendar day described above, each Party shall select an
independent auditor of recognized national standing and each such selected
independent auditor shall select a third independent auditor of recognized
national standing (who is not rendering, and during the preceding two (2) year
period has not rendered, services to Seller or Purchaser or any of their
respective Affiliates) (such selected independent auditor whether pursuant to
this or the preceding sentence, the “Auditor”). In connection with the
resolution of any dispute regarding Adjusted Net Working Capital, each Auditor
shall have access to all documents, records, workpapers, facilities and
personnel reasonably necessary to perform its function as the Auditor. Seller
and Purchaser shall use their reasonable best efforts to cause the Auditor to
make its determination within thirty (30) calendar days after its selection.
The determination by the Auditor of the Adjusted Net Working Capital of SGF as
of the Closing Date shall be final, binding and conclusive on the Parties. The
fees and expenses of the Auditor shall be borne by Seller and Purchaser
equally, unless the Auditor makes a final determination of Adjusted Net Working
Capital that is more than (i) 10% less than the estimated Adjusted Net
Working Capital initially determined by Seller, in which case the fees and
expenses of the Auditor shall be borne entirely by Seller or (ii) 10% more
than the estimated Adjusted Net 


 


 


 


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Working Capital
initially determined by Seller, in which case the fees and expenses of the
Auditor shall be borne entirely by Purchaser.


 


Section 2. 
The Laws of the State of Nevada (irrespective of its choice of law
principles) shall govern all issues concerning the validity of this Amendment,
the construction of its terms and the interpretation and enforcement of the
right and duties of the Parties.


 


Section 3. 
The effectiveness of this Amendment is conditioned upon the performance
by Purchaser of all of its obligations under the Agreement on or before March 7,
2008 or such later date as agreed to by Seller in writing in its sole and
absolute discretion.  If Purchaser fails
to perform all of its obligations on or before the date provided for in the
preceding sentence, the terms and conditions of the Agreement (without giving
effect to this Amendment) shall govern the Parties.  Except as expressly provided in this
Amendment, the Agreement remains unchanged and in full force and effect.  The Agreement, as modified by this Amendment
and subject to the effectiveness of this Amendment, constitutes the entire agreement
among the Parties hereto with respect to the subject matter hereof and thereof,
and supersedes and replaces all prior agreements, understandings, commitments,
communications and representations made between such Parties, whether written
or oral, with respect to the subject matter hereof.


 


IN WITNESS WHEREOF, each of the Parties has caused
this Amendment to be duly executed with legal and binding effect by their
respective authorized officers, in their individual capacity, as of the date
first written above.


 


MTR GAMING GROUP, INC.,


a Delaware corporation


 


 


	
  /s/ Edson R. Arneault

  
	
  By:

  	
  Edson R. Arneault

  
	
  Its:

  	
  President

  
	
   

  	
   

  



 


TLC CASINO ENTERPRISES, INC.


a Nevada corporation


 


 


	
  /sl Terry Caudill

  
	
  By:

  	
  Terry Caudill

  
	
  Its:

  	
  President

  



 


 


 


 


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