Document:

<PAGE>
                                                                    Exhibit 10.8

              AMENDMENT NUMBER FOUR TO LOAN AND SECURITY AGREEMENT

          THIS AMENDMENT NUMBER FOUR TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of December 21, 2005, is entered into by and among THE
MAJESTIC STAR CASINO, LLC, an Indiana limited liability company ("Parent"), and
each of Parent's Subsidiaries identified on the signature pages hereof (such
Subsidiaries, together with Parent, are referred to hereinafter each
individually as a "Borrower", and individually and collectively, jointly and
severally, as the "Borrowers"), each of the lenders that is a signatory to this
Amendment (together with its successors and permitted assigns, individually,
"Lender" and, collectively, "Lenders"), and WELLS FARGO FOOTHILL, INC., a
California corporation, as the arranger and administrative agent for the Lenders
(in such capacity, together with its successors, if any, in such capacity,
"Agent"; and together with each of the Lenders, individually and collectively,
the "Lender Group"), in light of the following:

                                   WITNESSETH

          WHEREAS, each Borrower and the Lender Group are parties to that
certain Loan and Security Agreement, dated as of October 7, 2003 (as amended,
restated, supplemented, or modified from time to time, the "Loan Agreement");

          WHEREAS, the Borrowers have informed the Lender Group that pursuant to
that certain Stock Purchase Agreement dated as of November 3, 2005 by and
between Parent and Trump Entertainment Resorts Holdings, L.P. (the "Acquisition
Agreement") Parent intends to acquire 100% of the Stock of Trump Indiana, Inc.
for an aggregate cash purchase price not to exceed $253,000,000 (the
"Acquisition");

          WHEREAS, each Borrower has requested that the Lender Group agree to
(i) amend the Loan Agreement in accordance with the provisions of this
Amendment, (ii) consent to the consummation of the Acquisition and (iii) consent
to the release of MSCCC as a Guarantor; and

          WHEREAS, subject to the terms and conditions set forth in this
Amendment, the Lender Group is willing to so amend the Loan Agreement, so
consent to the Acquisition and so consent to such release.

          NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree to amend the
Loan Agreement as follows:

1. DEFINITIONS. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement, as amended
hereby.

<PAGE>

2. AMENDMENTS TO LOAN AGREEMENT.

     (a) Section 1.1 of the Loan Agreement is hereby amended as follows:

          (i)  by (A) deleting the word "and" immediately preceding clause
               (b)(viii) of the definition of "Consolidated Cash Flow", (B)
               deleting the semicolon at the end of clause (b)(viii) of the
               definition of "Consolidated Cash Flow" and replacing it with ",
               and", and (C) by inserting the following new clause (b)(ix)
               immediately following clause (b)(viii) of the definition of
               "Consolidated Cash Flow":

               "(ix) charges incurred by Parent, BHR Joint Venture and MSC II
               during Parent's fourth fiscal quarter of its 2005 fiscal year and
               Parent's first fiscal and second fiscal quarters of its 2006
               fiscal year in respect of severance payments made to employees of
               Parent, BHR Joint Venture and MSC II in connection with the
               Acquisition (as such term is defined in the Fourth Amendment) and
               the consolidation of the operations of Parent, BHR Joint Venture
               and MSC II, in an aggregate amount not in excess of $2,000,000,
               in each case determined in accordance with GAAP;"

          (ii) by (A) deleting the phrase ", in each case as determined in
               accordance with GAAP." appearing at the end of clause (h) of the
               definition of "EBITDA" and replacing it with ", plus", and (C) by
               inserting the following new clause (i) immediately thereafter:

               "(i) to the extent that such amounts are deducted in calculating
               such consolidated net earnings (or loss) for such fiscal period
               (and to the extent that such fiscal period includes Parent's
               fourth fiscal quarter of its 2005 fiscal year and Parent's first
               and second fiscal quarters of its 2006 fiscal year), charges
               incurred by Parent, BHR Joint Venture and MSC II during Parent's
               fourth fiscal quarter of its 2005 fiscal year and Parent's first
               and second fiscal quarters of its 2006 fiscal year in respect of
               severance payments made to employees of Parent, BHR Joint Venture
               and MSC II in connection with the Acquisition (as such term is
               defined in the Fourth Amendment) and the consolidation of the
               operations of Parent, BHR Joint Venture and MSC II, in an
               aggregate amount not in excess of $2,000,000, in each case as
               determined in accordance with GAAP."

          (iii) by deleting the number $270,000,000" appearing in clause (g) of
               the definition of Permitted Indebtedness and replacing it with
               the number "$330,000,000".

                                       -2-

<PAGE>

     (b) Section 1.1 of the Loan Agreement is hereby further amended by
     inserting the following new definitions in proper alphabetical order:

          ""Adjusted EBITDA" means, for any period, Parent's and its Restricted
Subsidiaries' EBITDA for such period, adjusted give pro forma effect to the
Acquisition (as such term is defined in the Fourth Amendment) calculated in a
manner consistent with the projections delivered to Agent on or about December
10, 2005, to the extent that the Acquisition occurred during such period.

          ""BHPA" means Buffington Harbor Parking Associates, L.L.C., a Delaware
limited liability company."

          ""Discount Notes" means the 12-1/2% Senior Discount Notes co-issued by
Majestic Holdco, LLC and Majestic Star Holdco, Inc. in the aggregate principal
amount of $63,500,000 due 2011."

          ""Fourth Amendment" means that certain Amendment Number Four to Loan
and Security Agreement dated as of December 21, 2005, by and among the Borrowers
and the Lender Group."

          ""Fourth Amendment Effective Date" means the date, if ever, that all
of the conditions set forth in Section 4 of the Fourth Amendment shall be
satisfied (or waived by Agent in its sole discretion)."

          ""Fourth Amendment Fee" has the meaning set forth in Section 2.11(e)."

          ""Holdings" means Majestic Holdco, LLC, an Indiana limited liability
company."

          ""MSC II" means The Majestic Star Casino II, Inc., an Indiana
corporation (formerly known as Trump Indiana, Inc.)."

          ""MSCCC" means The Majestic Star Casino Capital Corp., an Indiana
corporation."

          ""MSCCC II" means Majestic Star Casino Capital Corp. II, an Indiana
corporation."

          ""MSHI" means Majestic Star Holdco, Inc., an Indiana corporation."

          ""Senior Unsecured Notes" means the 9-3/4% Senior Notes co-issued by
The Majestic Star Casino, LLC and Majestic Star Casino Capital Corp. II in the
aggregate principal amount of $200,000,000 due 2011."

                                       -3-

<PAGE>

     (c) Section 1.1 of the Loan Agreement is hereby further amended by amending
     and restating the following definitions in their entirety as follows:

          ""Applicable Prepayment Premium" means, as of any date of
determination, an amount equal to (a) from and after the Fourth Amendment
Effective Date through and including December 31, 2007, 2.0% times the Maximum
Revolver Amount, (b) from and after January 1, 2008 through and including
December 31, 2008, 1.5% times the Maximum Revolver Amount, and (c) from and
after January 1, 2009 up to the Maturity Date, 1.0% times the Maximum Revolver
Amount."

          ""Applicable Unused Line Fee Percentage" means, as of any date of
determination, an amount equal to 0.25%."

          ""Base Rate Margin" means, as of any date of determination, the
following margin based upon Parent's most recent Adjusted EBITDA calculation
(determined as set forth in the following paragraph); provided, however, that
for the period from the Closing Date through the date Agent receives the
certified calculation of Parent's Adjusted EBITDA in respect of the testing
period ended on December 31, 2005 delivered by Parent pursuant to Section 6.3,
the applicable Base Rate Margin shall be 0.25 percentage points:

<TABLE>
<CAPTION>
Level                  Adjusted EBITDA                     Base Rate Margin
-----                  ---------------                     ----------------
<S>     <C>                                             <C>
 I      greater than $100,000,000                       0.00 percentage points
 II     equal to or greater than $90,000,000 and less   0.25 percentage points
        than or equal to $100,000,000
 III    less than $90,000,000                           0.50 percentage points
</TABLE>

          Except as set forth in the foregoing proviso, the Base Rate Margin
shall be based upon Parent's most recent Adjusted EBITDA calculation, which will
be calculated monthly based upon the 12 consecutive fiscal months then ended.
Except as set forth in the initial proviso in this definition, the Base Rate
Margin shall be re-determined each month on the first day of the month following
the date Parent delivers to Agent the certified calculation of Adjusted EBITDA
pursuant to Section 6.3 hereof; provided, however, that if Parent fails to
provide such certification when such certification is due, the applicable Base
Rate Margin shall be set at the margin in the row styled "Level III" as of the
first day of the month following the date on which the certification was
required to be delivered until the date on which such certification is delivered
(on which date (but not retroactively), without constituting a waiver of any
Default or Event of Default occasioned by the failure to timely deliver such
certification, the Base Rate Margin shall

                                       -4-

<PAGE>

be set at the margin based upon the Adjusted EBITDA calculation disclosed by
such certification)."

          ""BHR Joint Venture" means Buffington Harbor Riverboats, L.L.C., a
Delaware limited liability company."

          ""Change of Control" means (a) a majority of the members of the Board
of Directors of Parent do not constitute Continuing Directors, (b) Parent ceases
to own and control, directly or indirectly, 100% of the outstanding Stock of
each of its Restricted Subsidiaries extant as of the Fourth Amendment Effective
Date (including BHR and BHPA), (c) Permitted Holders cease to own and control,
beneficially, directly, and of record more than 60% of the issued and
outstanding Stock of Holdings, (e) a "change of control" (as that term is
defined in the Indenture as in effect on the Closing Date) has occurred, or (d)
Holdings ceases to own and control, beneficially, directly, and of record 100%
of the outstanding Stock of Parent."

          ""Guarantor" means, Majestic Investor, Majestic Investor Capital
Corp., Majestic Investor Holdings, BHPA, BHR Joint Venture, and all of the
current or future other Restricted Subsidiaries of Parent."

          ""Letter of Credit Fee" means, as of any date of determination, 2.00
percentage points."

          ""LIBOR Rate Margin" means, as of any date of determination, the
following margin based upon Parent's most recent Adjusted EBITDA calculation
(determined as set forth in the following paragraph); provided, however, that
for the period from the Closing Date through the date Agent receives the
certified calculation of Parent's Adjusted EBITDA in respect of the period ended
on December 31, 2005 delivered by Parent pursuant to Section 6.3, the applicable
LIBOR Base Rate Margin shall be 2.75 percentage points:

<TABLE>
<CAPTION>
Level                  Adjusted EBITDA                     LIBOR Rate Margin
-----                  ---------------                     -----------------
<S>     <C>                                             <C>
 I      greater than $100,000,000                       2.50 percentage points
 II     equal to or greater than $90,000,000 and less   2.75 percentage points
        than or equal to $100,000,000
 III    less than $90,000,000                           3.00 percentage points
</TABLE>

          Except as set forth in the foregoing proviso, the LIBOR Rate Margin
shall be based upon Parent's most recent Adjusted EBITDA calculation, which will
be calculated monthly based upon the 12 consecutive fiscal months then ended.
Except as

                                       -5-

<PAGE>

set forth in the initial proviso in this definition, the LIBOR Rate Margin shall
be re-determined each month on the first day of the month following the date
Parent delivers to Agent the certified calculation of Adjusted EBITDA pursuant
to Section 6.3 hereof; provided, however, that if Parent fails to provide such
certification when such certification is due, the applicable LIBOR Rate Margin
shall be set at the margin in the row styled "Level III" as of the first day of
the month following the date on which the certification was required to be
delivered until the date on which such certification is delivered (on which date
(but not retroactively), without constituting a waiver of any Default or Event
of Default occasioned by the failure to timely deliver such certification, the
LIBOR Rate Margin shall be set at the margin based upon the Adjusted EBITDA
calculation disclosed by such certification)."

          ""Limited Recourse Guarantor" means Holdings."

     (d) Section 2.11(c) of the Loan Agreement is hereby amended by (i) deleting
     the phrase "5 Examiner-Days" appearing therein and replacing it with the
     phrase "10 Examiner-Days", and (ii) deleting the number "$25,000,"
     appearing at the end thereof and replacing it with the number "$50,000,".

     (e) Section 2.11 of the Loan Agreement is hereby amended (i) by deleting
     the phrase "(except in the case of the fee described in clause (d) of this
     Section 2.11, which fee shall be distributed ratably among the Lenders as
     set forth in such clause (d) hereof)" immediately following the words
     "(irrespective of whether this Agreement is terminated thereafter) and
     shall" appearing in the first sentence therein and replacing it with the
     phrase "(except in the case of the fees described in clauses (d) and (e) of
     this Section 2.11, which fees shall be distributed ratably among the
     Lenders as set forth in such clauses (d) and (e) hereof)", (ii) by deleting
     the word "and" at the end of clause (c), (iii) by deleting the period at
     the end of clause (d) and replacing it with ", and", and (iv) by adding the
     following new clause (e):

          "(e) FOURTH AMENDMENT FEE. An amendment fee in the amount of $100,000
(the "Fourth Amendment Fee"), which amendment fee shall be fully earned on the
Fourth Amendment Effective Date, shall be distributed ratably among the Lenders
in accordance with their respective Pro Rata Shares, and shall be charged to
Borrowers' Loan Account on such date."

     (f) Section 3.4 of the Loan Agreement is hereby amended and restated in its
     entirety as follows:

          "3.4 TERM. This Agreement shall continue in full force and effect for
a term ending on April 15, 2010 (the "Maturity Date"). The foregoing
notwithstanding, the Lender Group, upon the election of the Required Lenders,
shall have the right to terminate its obligations under this Agreement
immediately and without notice upon the occurrence and during the continuation
of an Event of Default."

                                       -6-

<PAGE>

     (g) The Loan Agreement is hereby amended by inserting the following new
     Section 5.22 immediately following Section 5.21:

          "5.22 MSCCC; MSCCC II; MSHI. None of MSCCC, MSCCC II and MSHI has any
assets of any kind or nature or has incurred any Indebtedness other than
Indebtedness evidenced by the Indenture as a co-issuer of the Notes, in the case
of MSCCC, or by the indenture governing the Discount Notes as a co-issuer of the
Discount Notes, in the case of MSHI, or by the indenture governing the Senior
Unsecured Notes as a co-issuer of the Senior Unsecured Notes, in the case of
MSCCC II."

     (h) Section 6.3(a)(i) of the Loan Agreement is hereby amended and restated
     in its entirety as follows:

          "(i) (A) a company prepared consolidated and consolidating balance
sheet, income statement, and statement of cash flow covering Parent's and its
Restricted Subsidiaries' operations during such period, and (B) during the
period from and including the Fourth Amendment Effective Date through and
including December 31, 2006, a calculation of Parent's Adjusted EBITDA."

     (i) Section 7.13(b)(iv)(B) of the Loan Agreement is hereby amended by
     deleting the number "$10,000,000" appearing therein and replacing it with
     the number "$15,000,000".

     (j) Section 7.18(a)(i) of the Loan Agreement is hereby amended by deleting
     the chart appearing therein and replacing it with the following chart:

<TABLE>
<CAPTION>
"Applicable Amount                   Applicable Period
------------------                   -----------------
<S>                  <C>
    $60,000,000                   For the 12 month period
                                   ending March 31, 2006

    $65,000,000                   For the 12 month period
                                    ending June 30, 2006

    $70,000,000                   For the 12 month period
                                 ending September 30, 2006

    $80,000,000                   For the 12 month period
                                  ending December 31, 2006

    $90,000,000                   For the 12 month period
                     ending March 31, 2007 and for the 12 month period
                               ending on the last day of each
                                     month thereafter"
</TABLE>

                                       -7-

<PAGE>

     (k) Section 7.18(a)(ii) of the Loan Agreement is hereby amended by deleting
     the chart appearing therein and replacing it with the following chart:

<TABLE>
<CAPTION>
"Applicable Ratio                   Applicable Period
-----------------                   -----------------
<S>                 <C>
    1.85:1.0                     For the 12 month period
                    ending March 31, 2006 and on the last day of each
                         fiscal quarter of Borrowers thereafter"
</TABLE>

     (l) Section 7.18(b)(i) of the Loan Agreement is hereby amended by amending
     and restating the first sentence thereof in its entirety as follows:

               "(i) CAPITAL EXPENDITURES. Capital Expenditures in any fiscal
year in excess of $20,000,000 other than (A) Capital Expenditures made or
incurred on or before June 30, 2007 in connection with the purchase of new
slot-machines or conversion of existing slot-machines, in each case in
connection with their conversion from cash-pay slot-machines to
ticket-in-ticket-out slot-machines at the casinos located in Black Hawk,
Colorado, and Tunica, Mississippi, in an aggregate amount of all such Capital
Expenditures described in this clause (A) not to exceed $7,500,000, and (B)
Capital Expenditures made or incurred on or before December 31, 2008 in
connection with the expansion of the casino in Black Hawk, Colorado, in an
aggregate amount not to exceed $25,000,000."

     (m) The Loan Agreement is hereby amended by inserting the following new
     Section 7.25 immediately following Section 7.24:

          "7.25 MSCCC; MSHI. Permit MSCCC or MSHI to at any time acquire any
assets of any kind or nature, conduct any business of any kind or other take any
action which would cause either of MSCCC or MSHI to fail to comply with each of
the conditions for being an Unrestricted Subsidiary which are set forth in the
definition thereof in this Agreement."

3. CONSENT. The provisions of the Loan Agreement to the contrary
notwithstanding, each member of the Lender Group hereby (a) consents to the
consummation of the Acquisition in accordance with the terms of the Acquisition
Agreement, and (b) authorizes Agent to release MSCCC from each Loan Document to
which it is a party as of the date hereof. Each Borrower hereby covenants and
agrees that it will, on or before January 12, 2006, (a) deliver to Agent such
Mortgages, title insurance policies, surveys, Phase I Environmental Reports,
ship mortgages and other documents, opinions (including, without limitation, any
opinions with respect to the joinder of any parties to any of the Loan
Documents) of or agreements as Agent shall require to

                                       -8-

<PAGE>

evidence the granting of a first priority Lien in favor of Agent with respect to
the Real Property and the vessel to be acquired in connection with the
Acquisition, (b) use its commercially reasonable efforts to cause the Indenture
Trustee to execute such subordination agreements as Agent shall reasonably
require (in recordable form) to provide record notice of the existence of the
Intercreditor Agreement, and (c) deliver to Agent true and correct copies of
each of the agreements and other documents executed in connection with the
Acquisition, this agreement and the issuance of the other Indebtedness that is
to be issued in connection therewith. The failure of the Borrowers to comply
with any of the foregoing shall constitute an immediate Event of Default.

4. CONDITIONS PRECEDENT TO THIS AMENDMENT. The satisfaction of each of the
following shall constitute conditions precedent to the effectiveness of this
Amendment and each and every provision hereof:

     (a) After giving effect to this Amendment, the representations and
warranties in this Amendment, the Loan Agreement and the other Loan Documents
shall be true and correct in all respects on and as of the date hereof, as
though made on such date (except to the extent that such representations and
warranties relate solely to an earlier date);

     (b) Agent shall have received such joinder and amendment documents as Agent
shall require so that (i) MSC II has been joined as an additional Borrower to
the Loan Agreement, (ii) BHR Joint Venture and BHPA has been joined as
additional Guarantors to the Guaranty, and each of MSCII, BHR Joint Venture and
BHPA have become parties to the other Loan Documents, (iii) Holdings has
executed a limited recourse guaranty and a stock pledge agreement, (iv) the
Stock of Parent acquired by Holdings, the Stock of MSC II, BHR and BHPA acquired
by Parent is pledged to secure the Obligations and the certificates evidencing
such Stock (together with appropriate Stock powers) are delivered to Agent,
together with such other documents and opinions as Agent shall require in
connection therewith, in each case, which are in form and substance reasonably
satisfactory to Agent;

     (c) Agent and BDI shall have executed and delivered a release with respect
to the Loan Documents to which BDI is a party, which shall be in form and
substance satisfactory to Agent and BDI;

     (d) Agent shall have received a true and correct copy of (i) the
Acquisition Agreement, the escrow agreement, the license agreement, the
transition services agreement and all other agreements or documents executed in
connection therewith, (ii) the supplemental indentures issued in connection with
the Indenture, (iii) the indenture governing the Discount Notes, and (iv) the
indenture governing the Senior Unsecured Notes, in each case, certified by a
vice president and chief financial officer of Parent as being true, correct and
complete copies thereof, as in effect on the date hereof;

     (e) Agent shall have received the reaffirmation and consent of each
Guarantor and Limited Recourse Guarantor attached hereto as Exhibit A (the
"Consent"), duly

                                       -9-

<PAGE>

executed and delivered by an authorized official of each Guarantor and of
Limited Recourse Guarantor;

     (f) After giving effect to this Amendment, no Default or Event of Default
shall have occurred and be continuing on the date hereof or as of the date of
the effectiveness of this Amendment; and

     (g) No injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any
Governmental Authority against any Borrower, any Guarantor, Limited Recourse
Guarantor, or any member of the Lender Group.

5. REPRESENTATIONS AND WARRANTIES. Each Borrower hereby represents and warrants
to the Lender Group as follows:

     (a) After giving effect to this Amendment, the representations and
warranties in this Amendment, the Loan Agreement and the other Loan Documents
are true and correct in all respects on and as of the date hereof, as though
made on such date (except to the extent that such representations and warranties
relate solely to an earlier date);

     (b) The execution, delivery, and performance of this Amendment and of the
Loan Agreement, as amended by this Amendment, are within each Borrower's
corporate powers, have been duly authorized by all necessary corporate action,
and are not in contravention of any law, rule, or regulation, or any order,
judgment, decree, writ, injunction, or award of any arbitrator, court, or
governmental authority, or of the terms of its charter or bylaws, or of any
contract or undertaking to which it is a party or by which any of its properties
may be bound or affected,

     (c) This Amendment and the Loan Agreement, as amended by this Amendment,
constitute each Borrower's legal, valid, and binding obligation, enforceable
against such Borrower in accordance with its terms,

     (d) This Amendment has been duly executed and delivered by each Borrower,

     (e) The execution, delivery, and performance of the Consent is within each
Guarantor's and Limited Recourse Guarantor's corporate power, has been duly
authorized by all necessary corporate action, and is not in contravention of any
law, rule or regulation, or any order, judgment, decree, writ, injunction, or
award of any arbitrator, court or governmental authority, or of the terms of its
charter or bylaws, or of any contract or undertaking to which it is a party or
by which any of its properties may be bound or affected,

                                      -10-

<PAGE>

     (f) The Consent constitutes each Guarantor's and Limited Recourse
Guarantor's legal, valid, and binding obligations, enforceable against each such
Person in accordance with its terms,

     (g) After giving effect to this Amendment, no Default or Event of Default
has occurred and is continuing on the date hereof or as of the date of the
effectiveness of this Amendment,

     (h) No injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein has been issued and remains in force by any Governmental
Authority against Borrower, any Guarantor, Limited Recourse Guarantor, or any
member of the Lender Group, and

     (i) The Consent has been duly executed and delivered by each Guarantor and
Limited Recourse Guarantor.

6. CONSTRUCTION. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF CALIFORNIA.

7. ENTIRE AMENDMENT; EFFECT OF AMENDMENT. This Amendment, and terms and
provisions hereof, constitute the entire agreement among the parties pertaining
to the subject matter hereof and supersedes any and all prior or contemporaneous
amendments relating to the subject matter hereof. Except for the amendments to
the Loan Agreement expressly set forth in Section 2 hereof, the Loan Agreement
and other Loan Documents shall remain unchanged and in full force and effect.
The execution, delivery, and performance of this Amendment shall not operate as
a waiver of or, except as expressly set forth herein, as an amendment of, any
right, power, or remedy of the Lender Group as in effect prior to the date
hereof. The amendments set forth herein are limited to the specifics hereof,
shall not apply with respect to any facts or occurrences other than those on
which the same are based, and except as expressly set forth herein, shall
neither excuse any future non-compliance with the Loan Agreement, nor shall
operate as a waiver of any Default or Event of Default. To the extent any terms
or provisions of this Amendment conflict with those of the Loan Agreement or
other Loan Documents, the terms and provisions of this Amendment shall control.
This Amendment is a Loan Document.

8. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Amendment by
signing any such counterpart. Delivery of an executed counterpart of this
Amendment by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Amendment. Any party delivering an
executed counterpart

                                      -11-

<PAGE>

of this Amendment by telefacsimile also shall deliver an original executed
counterpart of this Amendment, but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.

9. MISCELLANEOUS.

     (a) Upon the effectiveness of this Amendment, each reference in the Loan
Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like
import referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by this Amendment.

     (b) Upon the effectiveness of this Amendment, each reference in the Loan
Documents to the "Loan Agreement", "thereunder", "therein", "thereof" or words
of like import referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by this Amendment.

                                      -12-

<PAGE>

                                                               EXECUTION VERSION

          IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered as of the date first written above.

                                        THE MAJESTIC STAR CASINO, LLC
                                        an Indiana limited liability company

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        THE MAJESTIC STAR CASINO II, INC.,
                                        an Indiana corporation

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        BARDEN MISSISSIPPI GAMING, LLC
                                        a Mississippi limited liability company

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        BARDEN COLORADO GAMING, LLC
                                        a Colorado limited liability company

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                       S-1

<PAGE>

                                        WELLS FARGO FOOTHILL, INC.,
                                        as Agent and as a Lender

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        GENERAL ELECTRIC CAPITAL CORPORATION,
                                        as a Lender

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        ALLIED IRISH BANKS PLC.,
                                        as a Lender

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                        CANPARTNERS INVESTMENTS IV, LLC,
                                        as a Lender

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                       S-2

<PAGE>

                                                               EXECUTION VERSION

                                    EXHIBIT A

                            REAFFIRMATION AND CONSENT

          All capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to them in that certain Loan and Security
Agreement by and among THE MAJESTIC STAR CASINO, LLC, an Indiana limited
liability company ("MSC"), and each of MSC's Subsidiaries identified on the
signature pages thereof (such Subsidiaries, together with MSC, are referred to
hereinafter each individually as a "Borrower", and individually and
collectively, jointly and severally, as the "Borrowers"), each of the lenders
that is from time to time a party thereto (together with their respective
successors and permitted assigns, individually, "Lender" and, collectively,
"Lenders"), and WELLS FARGO FOOTHILL, INC., a California corporation, as the
arranger and administrative agent for the Lenders (in such capacity, together
with its successors, if any, in such capacity, "Agent"; and together with each
of the Lenders, individually and collectively the "Lender Group"), dated as of
October 7, 2003 (as amended, restated, supplemented or otherwise modified, the
"Loan Agreement"), or in Amendment Number Four to Loan and Security Agreement,
dated as of December 21, 2005 (the "Amendment"), among the Borrowers and the
Lender Group. The undersigned each hereby (a) represent and warrant to the
Lender Group that the execution, delivery, and performance of this Reaffirmation
and Consent are within its powers, have been duly authorized by all necessary
action, and are not in contravention of any law, rule, or regulation, or any
order, judgment, decree, writ, injunction, or award of any arbitrator, court, or
governmental authority, or of the terms of its charter or bylaws, or of any
contract or undertaking to which it is a party or by which any of its properties
may be bound or affected; (b) consents to the amendment of the Loan Agreement by
the Amendment; (c) acknowledges and reaffirms its obligations owing to the
Lender Group under any Loan Documents to which it is a party; and (d) agrees
that each of the Loan Documents to which it is a party is and shall remain in
full force and effect. Although the undersigned has been informed of the matters
set forth herein and has acknowledged and agreed to same, it understands that
the Lender Group has no obligations to inform it of such matters in the future
or to seek its acknowledgment or agreement to future amendments, and nothing
herein shall create such a duty. Delivery of an executed counterpart of this
Reaffirmation and Consent by telefacsimile shall be equally as effective as
delivery of an original executed counterpart of this Reaffirmation and Consent.
Any party delivering an executed counterpart of this Reaffirmation and Consent
by telefacsimile also shall deliver an original executed counterpart of this
Reaffirmation and Consent but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed
by the laws of the State of California.

                            [signature page follows]

<PAGE>

          IN WITNESS WHEREOF, the undersigned have each caused this
Reaffirmation and Consent to be executed as of the date of the Amendment.

                                        MAJESTIC HOLDCO, LLC,
                                        an Indiana limited liability company

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        MAJESTIC INVESTOR, LLC,
                                        a Delaware limited liability company

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        MAJESTIC INVESTOR HOLDINGS, LLC,
                                        a Delaware limited liability company

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        MAJESTIC INVESTOR CAPITAL CORP.,
                                        a Delaware corporation

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        BUFFINGTON HARBOR PARKING ASSOCIATES,
                                        LLC Delaware limited liability company

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                       R-1

<PAGE>

                                        BUFFINGTON HARBOR RIVERBOATS, LLC,
                                        a Delaware limited liability company

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                       R-2exv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of December 28, 2005 (the
“Effective Date”), by and between GREY WOLF, INC., a Texas corporation (the “Company”), and Robert
J. Proffit (the “Executive”).

     The parties agree as follows:

     1. Employment, Duties and Acceptance.

          1.1 Employment by the Company and Duties. The Company hereby agrees to employ the
Executive for a term commencing on the Effective Date and expiring at the end of the day on
December 31, 2007 (such date, or later date to which this Agreement is extended in accordance with
the terms hereof, the “Termination Date”), unless earlier terminated as provided in Section 4 or
unless extended as provided herein (the “Term”). The Term shall be automatically extended
commencing on the Termination Date and on each Termination Date thereafter (each such date being a
“Renewal Date”), so as to terminate one (1) year from such Renewal Date, unless and until at least
ninety (90) days prior to a Renewal Date either party hereto gives written notice to the other that
the Term should not be further extended after the next Renewal Date, in which event the Termination
Date shall be the Renewal Date next following such notice. During the Term, the Executive shall
serve in the capacity of Vice President – Human Resources of the Company, and shall also serve in
those offices and directorships of subsidiary corporations or entities of the Company to which he
may from time to time be appointed or elected. During the Term, the Executive shall devote all
reasonable efforts and all of his business time and services to the Company, subject to the
direction of the Board of Directors of the Company (the “Board”). The Executive shall not engage
in any other business activities except for passive investments as more particularly described in
subsection 3.1.1 below.

          1.2 Acceptance of Employment by the Executive. The Executive hereby accepts such
employment and shall render the services and perform the duties described above.

     2. Compensation and Other Benefits.

          2.1 Annual Salary. The Company shall pay to the Executive an annual salary at a rate
of not less than One Hundred Fifty Thousand and No/100 Dollars ($150,000.00) per year (the “Annual
Salary”), subject to increase at the sole discretion of the Board. The Annual Salary shall be
payable in accordance with the payroll policies of the Company as from time to time in effect, but
in no event less frequently than once each month, less such deductions as shall be required to be
withheld by applicable law and regulations.

          2.2 Bonuses. The Executive shall receive, at the sole discretion of the Board, an
incentive bonus with respect to the fiscal years ending during the term hereof (the “Incentive
Bonus”).

          2.3 Vacation Policy. The Executive shall be entitled to three (3) weeks of paid
vacation during each year of the Term until Executive has been employed by the Company

1

 

for ten (10) years when the Executive shall be entitled to four (4) weeks of paid vacation
during each year of the Term until Executive has been employed by the Company for twenty (20) years
when the Executive shall be entitled to five (5) weeks paid vacation during each year of the Term.

          2.4 Participation in Employee Benefit Plans. The Company agrees to permit the
Executive during the Term to participate in any group life, hospitalization or disability insurance
plan, health program, pension plan, similar benefit plan or other so called “fringe benefits” of
the Company (collectively, “Benefits”) which may be available to other executives of the Company on
terms no less favorable to the Executive than the terms offered to such other executives. The
Executive shall cooperate with the Company in applying for such coverage, including submitting to a
physical exam and providing all relevant health and personal data.

          2.5 General Business Expenses. The Company shall pay or reimburse the Executive for
all expenses reasonably and necessarily incurred by the Executive during the Term in the
performance of the Executive’s services under this Agreement. Such payment shall be made upon
presentation of such documentation as the Company customarily requires of its senior executive
employees prior to making such payments or reimbursements.

          2.6 Company Car and Cellular Telephone. The Company shall provide an automobile, of
the Executive’s choice, to be used by the Executive during the Term hereof or until his employment
hereunder is terminated. The purchase price of the automobile shall not exceed $45,000 (the “Auto
Allowance”); provided, however, the Auto Allowance shall be increased effective January 1, 2007 and
on January 1 of each year thereafter during the Term by a percentage equal to the percentage
increase in the Consumer Price Index (Urban-Houston Metropolitan Area) for the previous calendar
year. If requested by the Executive, the Company will replace the automobile with a new automobile
no less frequently than every three (3) years during the Term hereof. The Company shall, at its
expense, pay any and all expenses associated with the operation of such company car, including, but
not limited to, collision and liability insurance, maintenance and repair costs, replacement parts,
tires, fuel and oil. The Executive may use the automobile for personal purposes and the value of
any such personal use shall be deemed to be additional compensation. The Company shall also
furnish the Executive with a cellular telephone of his choice and the Company shall pay all charges
in connection with the use thereof, other than charges for calls not related to the Executive’s
duties hereunder.

          2.7 Certain Additional Payments by the Company.

               2.7.1 Excise Tax; Gross-Up Payment. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or distribution by the
Company to or for benefit of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 2.7) (a “Payment”) would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or any
interest or penalties are incurred by the Executive with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Executive of all

2

 

taxes (including any interest or penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.

               2.7.2 Accounting Firm Determinations. Subject to the provisions of Section 2.7.3, all
determinations required to be made under this Section 2.7, including whether and when Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by KPMG, LLP (the “Accounting Firm”) which shall
provide detailed supporting calculations both to the Company and the Executive within fifteen (15)
business days of the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting a Change of Control, the
Executive shall appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 2.7, shall be paid by the Company to
the Executive within five (5) days of the receipt of the Accounting Firm’s determination. If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the Executive’s
applicable federal income tax return would not result in the imposition of a negligence or similar
penalty. Any determination by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (“Underpayment”),
consistent with the calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 2.7.3 and the Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit
of the Executive.

               2.7.3 Notification of Claims. The Executive shall notify the Company in writing of
any claims by the Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no
later than thirty (30) days after the Executive actually receives notice in writing of such claim
and shall apprise the Company of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior to the expiration of the thirty
(30) day period following the date on which he gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:

          (i) give the Company any information reasonably requested by the Company relating to
such claim;

3

 

          (ii) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by the
Company;

          (iii) cooperate with the Company in good faith in order to effectively contest such
claim; and

          (iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing provisions of this Section 2.7.3, the
Company shall control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties
with respect thereto) imposed with respect to such advance or with respect to any imputed income
with respect to such advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the
Company’s control of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

               2.7.4 Refund. If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 2.7.3, the Executive becomes entitled to receive any refund with
respect to such claim, the Executive shall (subject to the Company’s complying with the
requirements of Section 2.7.3) promptly pay to the Company the amount of such refund (together with
any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Company pursuant to Section 2.7.3, a determination is
made that the Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty (30) days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.

4

 

     3. Non-Competition, Confidentiality and Company Property.

          3.1 Covenants Against Competition. The Executive acknowledges that (i) the Company is
currently engaged in the business of owning, managing and operating onshore drilling and workover
rigs for its own account or for others which are contracted or hired for the purpose of drilling
and/or workover of oil or natural gas wells (the “Company Business”); (ii) his work for the Company
will give him access to trade secrets of and confidential information concerning the Company; and
(iii) the agreements and covenants contained in this Agreement are essential to protect the
business and goodwill of the Company. Accordingly, the Executive covenants and agrees as follows:

               3.1.1 Non-Compete. The Executive agrees that he shall not during the Restricted
Period (as hereinafter defined) within a two hundred (200) mile radius of any office maintained by
the Company within one year prior to the end of the Term, including, without limitation, the office
address specified from time to time pursuant to Section 7.2 hereof and any field offices, directly
or indirectly (except in the Executive’s capacity as an officer of the Company) (i) engage or
participate in the Company Business; or (ii) enter the employ of, or render any other services to,
any person engaged in the Company Business except as permitted hereunder. In addition, the
Executive agrees that he shall not during the Restrictive Period (as hereinafter defined) become
interested in any such person in any capacity, including, without limitation, as an individual,
partner, shareholder, lender, officer, director, principal, agent or trustee except as permitted
hereunder; provided, however, that the Executive may own, directly or indirectly, solely as an
investment, securities of any person traded on any national securities exchange or listed on the
National Association of Securities Dealers Automated Quotation System if the Executive is not a
controlling person of, or a member of a group which controls, such person and the Executive does
not, directly or indirectly, own five percent (5%) or more of any class of equity securities, or
securities convertible into or exercisable or exchangeable for five percent (5%) or more of any
class of equity securities, of such person. As used herein, the “Restricted Period” shall mean a
period commencing on the date hereof and terminating upon the first to occur of (a) the date on
which the Company terminates or is deemed to terminate the Executive’s employment without Cause (as
hereinafter defined), (b) the date the Executive terminates or is deemed to terminate his
employment pursuant to Section 4.6 hereof, or (c) the date of termination of this Agreement;
provided, however, that if the Company shall have terminated the Executive’s employment for Cause
and such Cause in fact exists or if the Executive shall have terminated his employment with the
Company in breach of the terms of this Agreement, the Restricted Period shall end one (1) year
following the termination of the Executive’s employment hereunder.

               3.1.2 Confidential Information. The Executive acknowledges that the Company has a
legitimate and continuing proprietary interest in the protection of its confidential information
and that it has invested substantial sums and will continue to invest substantial sums to develop,
maintain and protect confidential information. The Company agrees to provide the Executive access
to confidential information in conjunction with the Executive’s duties, including, without
limitation, information of a technical and business nature regarding the Company’s past, current or
anticipated business that may encompass financial information, financial figures, trade secrets,
customer lists, details of client or consultant contracts, pricing policies, operational methods,
marketing plans or strategies, product development techniques or

5

 

plans, business acquisition plans, Company employee information, organizational charts, new
personnel acquisition plans, technical processes, designs and design projects, inventions and
research projects, ideas, discoveries, inventions, improvements, trade secrets, design
specifications, writings and other works of authorship. In exchange, as an independent covenant,
the Executive agrees not to make any unauthorized use, publication, or disclosure, during or
subsequent to his employment by the Company, of any information of a confidential or trade secret
nature, generated or acquired by him during the course of his employment, except to the extent that
the disclosure of such confidential information is necessary to fulfill his responsibilities as an
employee of the Company. The Executive understands that confidential information and trade secrets
include information not generally known by or available to the public about or belonging to the
Company, its divisions, subsidiaries, and related affiliates, or belonging to other companies to
whom the Company, its divisions, subsidiaries, and related affiliates, may have an obligation to
maintain information in confidence, and that authorization for public disclosure may only be
obtained through the Company’s written consent.

               3.1.3 Property of the Company. All memoranda, notes, lists, records, engineering
drawings, technical specifications and related documents and other documents or papers (and all
copies thereof) relating to the Company, including such items stored in computer memories,
microfiche or by any other means, made or compiled by or on behalf of the Executive after the date
hereof, or made available to the Executive after the date hereof relating to the Company, its
affiliates or any entity which may hereafter become an affiliate thereof, shall be the property of
the Company, and shall be delivered to the Company promptly upon the termination of the Executive’s
employment with the Company or at any other time upon request; provided, however, that the
Executive’s address books, diaries, chronological correspondence files and rolodex files shall be
deemed to be property of the Executive.

               3.1.4 Original Material. The Executive agrees that any inventions, discoveries,
improvements, ideas, concepts or original works of authorship relating directly to the Company
Business, including without limitation information of a technical or business nature such as ideas,
discoveries, designs, inventions, improvements, trade secrets, know-how, manufacturing processes,
product formulae, design specifications, writings and other works of authorship, computer programs,
financial figures, marketing plans, customer lists and data, business plans or methods and the
like, which relate in any manner to the actual or anticipated business or the actual or anticipated
areas of research and development of the Company and its divisions, subsidiaries, affiliates, or
related entities, whether or not protectable by patent or copyright, that have been originated,
developed or reduced to practice by the Executive alone or jointly with others during the
Executive’s employment with the Company shall be the property of and belong exclusively to the
Company. The Executive shall promptly and fully disclose to the Company the origination or
development by the Executive of any such material and shall provide the Company with any
information that it may reasonably request about such material. Either during or subsequent to the
Executive’s employment, upon the request and at the expense of the Company or its nominee, and for
no remuneration in addition to that due the Executive pursuant to his employment by the Company,
but at no expense to him, the Executive agrees to execute, acknowledge, and deliver to the Company
or its attorneys any and all instruments which, in the judgment of the Company or its attorneys,
may be necessary or desirable to secure or maintain for the benefit of the Company adequate patent,
copyright, and other property rights in the

6

 

United States and foreign countries with respect to any such inventions, improvements, ideas,
concepts, or original works of authorship embraced within this Agreement.

               3.1.5 Employees of the Company and its Affiliates. The Executive agrees to refrain
during the Restricted Period from inducing or attempting to influence any employee of the Company,
its divisions, subsidiaries and/or affiliated entities to terminate his employment.

               3.1.6 Customers. The Executive also agrees to refrain during the Restricted Period
from diverting, taking, soliciting and/or accepting on his own behalf or on the behalf of another
person, firm, or company, the business of any past or present customer of the Company, its
divisions, subsidiaries and/or other affiliated entities, or any identified prospective or
potential customer of the Company, its divisions, subsidiaries and/or affiliated entities, whose
identity became known to the Executive through his employment by the Company.

          3.2 Rights and Remedies Upon Breach. If the Executive breaches, any of the provisions
contained in Section 3.1 of this Agreement (the “Restrictive Covenants”), the Company shall have
the following rights and remedies, each of which rights and remedies shall be independent of the
others and severally enforceable, and each of which is in addition to, and not in lieu of, any
other rights and remedies available to the Company under law or in equity:

               3.2.1 Specific Performance. The right and remedy to have the Restrictive Covenants
specifically enforced by any court of competent jurisdiction, it being agreed that any breach of
the Restrictive Covenants would cause irreparable injury to the Company and that money damages
would not provide an adequate remedy to the Company.

               3.2.2 Accounting. The right and remedy to require the Executive to account for and
pay over to the Company all compensation, profits, monies, accruals, increments or other benefits
derived or received by the Executive as the result of any action constituting a breach of the
Restrictive Covenants.

          3.3 Severability of Covenants. The Executive acknowledges and agrees that the
Restrictive Covenants are reasonable and valid in duration and geographical scope and in all other
respects. If any court determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected
and shall be given full effect without regard to the invalid portions.

          3.4 Court Review. If any court determines that any of the Restrictive Covenants, or
any part thereof, is unenforceable because of the duration or geographical scope of, or scope of
activities restrained by, such provision, such court shall have the power to reduce the duration or
scope of such provision, as the case may be, and, in its reduced form, such provision shall then be
enforceable.

          3.5 Enforceability in Jurisdictions. The Company and the Executive intend to and
hereby confer jurisdiction to enforce the Restrictive Covenants upon the courts of any jurisdiction
within the geographical scope of such Restrictive Covenants. If the courts of any one or more of
such jurisdictions hold the Restrictive Covenants unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the Company that such determination

7

 

not bar or in any way affect the right of the Company to the relief provided above in the
courts of any other jurisdiction within the geographical scope of such Restrictive Covenants, as to
breaches of such Restrictive Covenants in such other respective jurisdictions, such Restrictive
Covenants as they relate to each jurisdiction being, for this purpose, severable into diverse and
independent covenants.

     4. Termination.

          4.1 Termination Upon Death. If the Executive dies during the Term, this Agreement
shall terminate; provided, however, that in any such event, the Company shall pay to the
Executive’s estate (i) any portion of the Annual Salary and any Incentive Bonus that shall have
been earned by the Executive prior to the termination but not yet paid; (ii) any Benefits that have
vested in the Executive at the time of such termination as a result of his participation in any of
the Company’s benefit plans; and (iii) any expenses with respect to which the Executive is entitled
to reimbursement pursuant to this Agreement. In addition, the Executive’s right to
indemnification, payment or reimbursement pursuant to Section 6 of this Agreement shall not be
affected by such termination and shall continue in full force and effect, both with respect to
proceedings that are threatened, pending or completed at the date of such termination and with
respect to proceedings that are threatened, pending or completed after that date.

          4.2 Termination With Cause. The Company has the right, at any time during the Term,
subject to all of the provisions hereof, exercisable by serving notice, effective on or after the
date of service of such notice as specified therein, to terminate the Executive’s employment under
this Agreement and discharge the Executive with Cause. If such right is exercised, the Company’s
obligation to the Executive shall be limited solely to the payment of unpaid Annual Salary accrued,
together with earned but unpaid Incentive Bonus, if any, and Benefits vested up to the effective
date specified in the Company’s notice of termination. As used in this Agreement, the term “Cause”
shall mean and include (i) chronic alcoholism or controlled substance abuse as determined by a
doctor mutually acceptable to the Company and the Executive; (ii) an act of proven fraud or
dishonesty on the part of the Executive with respect to the Company or its subsidiaries; (iii)
knowing and material failure by the Executive to comply with material applicable laws and
regulations relating to the business of the Company or its subsidiaries; (iv) the Executive’s
material and continuing failure to perform (as opposed to unsatisfactory performance) his duties
hereunder or a material breach by the Executive of this Agreement except, in each case, where such
failure or breach is caused by the illness or other similar incapacity or disability of the
Executive; or (v) conviction of a crime involving moral turpitude or a felony. Prior to the
effectiveness of termination for Cause under subclause (i), (ii), (iii) or (iv) above, the
Executive shall be given thirty (30) days prior notice from the Board specifically identifying the
reasons which are alleged to constitute Cause for any termination hereunder and an opportunity to
be heard by the Board in the event the Executive disputes such allegations.

          4.3 Termination Without Cause. The Company has the right, at any time during the
Term, subject to all of the provisions hereof, exercisable by serving notice, effective on or after
the date of service of such notice as specified therein, to terminate the Executive’s employment
under this Agreement and discharge the Executive without Cause. If the Executive is terminated
during the Term without Cause (including any termination which is deemed to be a

8

 

constructive termination without Cause under Section 4.6 hereof), the Company’s obligation to
the Executive shall be limited solely to the following:

               4.3.1 Severance Payments. The Company shall pay the Executive, in lump sum within
thirty (30) days after the date of termination:

          (i) the amounts otherwise payable to Executive upon his death under Section 4.1 hereof;
and

          (ii) an amount equal to: 1) in the event such termination occurs within one (1) year
after a Change of Control, an amount equal to three (3) times (3x) the sum of: (a) the
Annual Salary of Executive in effect on the date of termination (or, if the Company has
reduced the Executive’s Annual Salary in breach of this Agreement, the Executive’s Annual
Salary immediately before such reduction) plus (b) a bonus equal to fifty percent (50%) of
such Annual Salary; or 2) in the event such termination occurs at any time other than within
one (1) year after a Change of Control, an amount equal to the sum of: (a) the Annual Salary
of the Executive in effect on the date of termination (or, if the Company has reduced the
Executive’s Annual Salary in breach of this Agreement, the Executive’s Annual Salary
immediately before such reduction) plus (b) a bonus equal to fifty percent (50%) of such
Annual Salary.

               4.3.2 Extension of Medical Benefits. The Executive shall be entitled to an extension
of medical benefits as provided in clauses (i) or (ii) below, as applicable:

          (i) if the Executive has attained age 55 and has completed at least five years of
continuous service with the Company at the date of his termination, the Company will provide
the Executive and, if the Executive is married, the Executive’s spouse and minor dependents
with medical and dental coverage at a level that in all respects is not less than the
medical and dental coverage available to the Executive under the Company’s group health plan
as of the Effective Date for the period commencing on the date such coverage otherwise would
cease due to his termination and ending on the earlier of (a) the Executive’s attainment of
age 65 or (b) the date the Executive first becomes covered after the date of his termination
under another group health plan; provided, however that the Executive is not obligated to
seek employment following his termination or to enroll for coverage under any other group
health plan; or

          (ii) if the Executive has not attained age 55, but has completed at least five years of
continuous service with the Company at the date of his termination, the Company will provide
the Executive and, if the Executive is married, the Executive’s spouse and minor dependents
with medical and dental coverage at a level that in all respects is not less than the
medical and dental coverage available to the Executive under the Company’s group health plan
as of the Effective Date, for the period commencing on the date such coverage otherwise
would cease due to his termination and ending on the earlier of (a) three years following
the date of the Executive’s termination or (b) the date the Executive first becomes covered
after the date of his termination under another group health plan; provided, however that
the Executive is not obligated to seek employment following his termination or to enroll for
coverage under any other group health plan.

9

 

The medical and dental benefits provided to the Executive and, if applicable, to the Executive’s
spouse and minor dependents pursuant to this Section 4.3.2 shall be provided by the Company in a
manner such that the Executive will not be taxable on any reimbursements to or on behalf of the
Executive and, if applicable, to or on behalf of the Executive’s spouse. In addition, such medical
and dental benefits shall be provided at no cost to the Executive; provided, however, that if the
Company reasonably determines, based on the advice of its legal counsel, that the Executive must be
taxed on the Company’s actual cost of providing such medical and dental coverage to the Executive
(the “Coverage Cost”) to avoid the Executive being taxed on the reimbursements relating to such
coverage, the Company and the Executive agree that the Company will deliver timely to the Executive
appropriate tax information returns to cause the Executive to include the Coverage Cost in the
Executive’s income.

          4.4 Termination by the Executive. Any termination of this Agreement by the Executive
during the Term, except such termination as is deemed to be a constructive termination without
Cause by the Company under Section 4.6 of this Agreement, shall be deemed to be a breach of the
terms of this Agreement for the purposes of Section 3.1.1 hereof and shall entitle the Company to
discontinue payment of all Annual Salary, Incentive Bonus and Benefits not earned and payable prior
to the date of such termination.

          4.5 Termination upon Disability. If during the Term the Executive becomes physically
or mentally disabled, whether totally or partially, as evidenced by the written statement of a
competent physician licensed to practice medicine in the United States who is mutually acceptable
to the Company and the Executive or his closest relative if he is not then able to make such a
choice, so that the Executive is unable substantially to perform his services hereunder for (i) a
period of four consecutive months, or (ii) for shorter periods aggregating six months during any
twelve (12) month period, the Company may at any time after the last day of the four consecutive
months of disability or the day on which the shorter periods of disability equal an aggregate of
six months, by written notice to the Executive, terminate the Executive’s employment hereunder and
discontinue payments of the Annual Salary, Incentive Bonus and Benefits accruing from and after the
date of such termination. The Executive shall be entitled to the full compensation payable to him
hereunder for periods of disability shorter than the periods specified in clauses (i) and (ii) of
the previous sentence. In addition, the Executive’s right to indemnification, payment or
reimbursement pursuant to Section 6 of this Agreement shall not be affected by such termination and
shall continue in full force and effect, both with respect to proceedings that are threatened,
pending or completed at the date of such termination and with respect to proceedings that are
threatened, pending or completed after that date.

          4.6 Constructive Termination Without Cause. Notwithstanding any other provision of
this Agreement, the Executive’s employment under this Agreement may be terminated during the Term
by the Executive, which shall be deemed to be constructive termination by the Company without
Cause, if one of the following events shall occur without the consent of the Executive: (i) a
failure to elect or reelect or to appoint or reappoint the Executive to the office of Vice
President – Human Resources of the Company or other material change by the Company of the
Executive’s functions, duties or responsibilities which change would reduce the ranking or level,
dignity, responsibility, importance or scope of the Executive’s position with the Company from the
position and attributes thereof described in Section 1 above; (ii) the assignment or reassignment
by the Company of the Executive to a location not within

10

 

fifty (50) miles of the Company’s current location; (iii) the liquidation, dissolution,
consolidation or merger of the Company, or transfer of all or substantially all of its assets,
other than a transaction in which a successor corporation with a net worth substantially the same
as or greater than that of the Company assumes this Agreement and all obligations and undertakings
of the Company hereunder; (iv) a reduction in the Executive’s fixed salary; (v) a Change of Control
as hereinafter defined; (vi) the failure of the Company to continue to provide the Executive with
office space, related facilities and secretarial assistance that are commensurate with the
Executive’s responsibilities to and position with the Company; (vii) the notification by the
Company of the Company’s intention not to observe or perform one or more of the obligations of the
Company under this Agreement; (viii) the failure by the Company to indemnify, pay or reimburse the
Executive at the time and under the circumstances required by Section 6 of this Agreement; (ix) the
occurrence of any other material breach of this Agreement by the Company or any of its
subsidiaries; or (x) the delivery of notice by the Company in accordance with Section 1.1 hereof
that it desires to terminate this Agreement. Any such termination shall be made by written notice
to the Company specifying the event relied upon for such termination and given within sixty (60)
days after such event. Any constructive termination shall be effective sixty (60) days after the
date the Company has been given such written notice setting forth the grounds for such termination
with specificity; provided, however, that the Executive shall not be entitled to terminate this
Agreement in respect of any of the grounds set forth above if within sixty (60) days after such
notice the action constituting such ground for termination has been cured and is no longer
continuing. A constructive termination by the Company without Cause shall terminate the
Restrictive Period hereunder.

          4.7 Change of Control. For the purposes hereof, a “Change of Control of the Company”
shall be deemed to have occurred if (i) any “Person” (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the “Act”)) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Act, directly or indirectly, of securities of the
Company representing thirty-five percent (35%) or more of the combined voting power of the
Company’s then outstanding securities; (ii) there occurs a proxy contest or a consent solicitation,
or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other
reorganization, as a consequence of which members of the Board in office immediately prior to such
transaction or event constitute less than a majority of the Board thereafter; or (iii) during any
period of two consecutive years, other than as a result of an event described in clause (ii) of
this Section 4.7, individuals who at the beginning of such period constituted the Board (including
for this purpose any new director whose election or nomination for election by the Company’s
stockholders was approved by a vote of at least a majority of the directors then still in office
who were directors at the beginning of such period) cease for any reason to constitute at least a
majority of the Board.

     5. Insurance. The Company may, from time to time, apply for and take out, in its own
name and at its own expense, naming itself or one or more of its affiliates as the designated
beneficiary (which it may change from time to time), policies for life, health, accident,
disability or other insurance upon the Executive in any amount or amounts that it may deem
necessary or appropriate to protect its interest. The Executive agrees to aid the Company in
procuring such insurance by submitting to medical examinations and by completing, executing and
delivering such applications and other instruments in writing as may reasonably be required by an
insurance

11

 

company or companies to which any application or applications for insurance may be made by or
for the Company.

     6. Indemnification.

          6.1 Claims. The Company shall, to the maximum extent not prohibited by law, indemnify
the Executive if he is made, or threatened to be made, a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or investigative,
including an action by or in the right of the Company to procure a judgment in its favor
(collectively, a “Proceeding”), by reason of the fact that the Executive is or was a director or
officer of the Company, or is or was serving in any capacity at the request of the Company for any
other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise,
against judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges
and expenses (including attorneys’ fees and disbursements) paid or incurred in connection with any
such Proceeding.

          6.2 Expenses. The Company shall, from time to time, reimburse or advance to the
Executive the funds necessary for payment of expenses, including attorneys’ fees and disbursements,
incurred in connection with any Proceeding in advance of the final disposition of such Proceeding;
provided, however, that, if required by the Texas Business Corporation Act, such expenses incurred
by or on behalf of the Executive may be paid in advance of the final disposition of a Proceeding
only upon receipt by the Company of an undertaking, by or on behalf of the Executive, to repay any
such amount so advanced if it shall ultimately be determined by final judicial decision from which
there is no further right of appeal that the Executive is not entitled to be indemnified for such
expenses.

          6.3 Non-Exclusivity. The right to indemnification and reimbursement or advancement of
expenses provided by, or granted pursuant to, this Section 6 shall not be deemed exclusive of any
other rights which the Executive may now or hereafter have under any law, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.

          6.4 Continuation of Rights. The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Section 6 shall continue as to
the Executive after he has ceased to be a director, officer or employee of the Company and shall
inure to the benefit of the heirs, executors and administrators of the Executive’s estate.

          6.5 D&O Insurance. The Company shall purchase and maintain director and officer
liability insurance on such terms and providing such coverage as the Board determines is
appropriate, and the Executive shall be covered by such insurance on the same basis as the other
directors and executive officers of the Company.

          6.6 Enforcement. The right to indemnification and reimbursement or advancement of
expenses provided by, or granted pursuant to, this Section 6 shall be enforceable by the Executive
in any court of competent jurisdiction. The burden of proving that such indemnification or
reimbursement or advancement of expenses is not appropriate shall be on the Company. Neither the
failure of the Company (including its board of directors, independent

12

 

legal counsel, or its stockholders) to have made a determination prior to the commencement of
such action that such indemnification or reimbursement or advancement of expenses is proper in the
circumstances nor an actual determination by the Company (including its board of directors,
independent legal counsel, or its stockholders) that the Executive is not entitled to such
indemnification or reimbursement or advancement of expenses shall constitute a defense to the
action or create a presumption that the Executive is not so entitled. The Executive shall also be
indemnified for any expenses incurred in connection with successfully establishing his right to
such indemnification or reimbursement or advancement of expenses, in whole or in part, in any such
proceeding.

          6.7 Other Services. If the Executive serves (i) another corporation of which a
majority of the shares entitled to vote in the election of its directors is held by the Company, or
(ii) any employee benefit plan of the Company or any corporation referred to in clause (i), in any
capacity, then he shall be deemed to be doing so at the request of the Company.

          6.8 Applicable Law. The right to indemnification or reimbursement or advancement of
expenses shall be interpreted on the basis of the applicable law in effect at the time of the
occurrence of the event or events giving rise to the applicable Proceeding.

     7. Other Provisions.

          7.1 Section 409A Compliance. It is the intention of the Company and the Executive
that this Agreement not result in unfavorable tax consequences to the Executive under Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”). The Company and the Executive
acknowledge that Section 409A of the Code was enacted pursuant to the American Jobs Creation Act of
2004, generally effective with respect to amounts deferred after January 1, 2005, and only limited
guidance has been issued by the Internal Revenue Service with respect to the application of Code
Section 409A to certain arrangements, such as this Agreement. The Internal Revenue Service has
indicated that it will provide further guidance regarding interpretation and application of Section
409A of the Code during 2005. The Company and the Executive acknowledge further that the full
effect of Section 409A of the Code on potential payments pursuant to this Agreement cannot be fully
determined at the time that the Company and the Executive are entering into this Agreement. The
Company and the Executive agree to work together in good faith in an effort to comply with Section
409A of the Code including, if necessary, amending the Agreement based on further guidance issued
by the Internal Revenue Service from time to time, provided that the Company shall not be required
to assume any increased economic burden.

          7.2 Certain Definitions. As used in this Agreement, the following terms have the
following meanings unless the context otherwise requires:

          (i) “affiliate” with respect to the Company means any other person controlled by or
under common control with the Company but shall not include any stockholder or director of
the Company, as such.

13

 

          (ii) “person” means any individual, corporation, partnership, firm, limited liability
company, association, joint-stock company, trust, unincorporated organization, governmental
or regulatory body or other entity.

          (iii) “subsidiary” means any corporation 50% or more of the voting securities of which
are owned directly or indirectly by the Company.

          7.3 Notices. Any notice or other communication required or permitted hereunder shall
be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile
transmission or sent by certified, registered or express mail, postage prepaid. Any such notice
shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, on the date of actual receipt thereof, as follows:

	 	 	 
	(i)

	 	if to the Company, to:
	 
	 	 
	 

	 	Grey Wolf, Inc.
	 

	 	10370 Richmond Avenue, Suite 600
	 

	 	Houston, Texas 77042
	 
	 	 
	(ii)

	 	if to the Executive, to:
	 
	 	 
	 

	 	Robert J. Proffit
	 

	 	c/o Grey Wolf, Inc.
	 

	 	10370 Richmond Avenue, Suite 600
	 

	 	Houston, Texas 77042

Any party may change its address for notice hereunder by notice to the other party hereto.

          7.4 Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior agreements, written or
oral, with respect thereto.

          7.5 Waivers and Amendments. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms and conditions hereof may be waived, only by a written
instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No
delay on the part of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any waiver on the part of any party of any such right, power or
privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder,
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege hereunder.

          7.6 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas (without giving effect to the choice of law provisions thereof)
where the employment of the Executive shall be deemed, in part, to be performed and enforcement of
this Agreement or any action taken or held with respect to this Agreement shall be taken in the
courts of appropriate jurisdiction in Houston, Texas.

14

 

          7.7 Assignment. This Agreement, and any rights and obligations hereunder, may not be
assigned by the Executive and may be assigned by the Company (subject to Section 4.6 (iii) hereof)
only to a successor by merger or purchasers of substantially all of the assets of the Company.

          7.8 Counterparts. This Agreement may be executed in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all of which together shall
constitute one and the same instrument.

          7.9 Headings. The headings in this Agreement are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.

          7.10 No Presumption Against Interest. This Agreement has been negotiated, drafted,
edited and reviewed by the respective parties, and therefore, no provision arising directly or
indirectly herefrom shall be construed against any party as being drafted by said party.

          7.11 Validity Contest. The Company shall promptly pay any and all legal fees and
expenses incurred by the Executive from time to time as a direct result of the Company’s contesting
the due execution, authorization, validity or enforceability of this Agreement. Executive shall
have no obligation to mitigate damages suffered as a result of termination of his employment with
the Company. The provisions of this Section 7.10 shall survive termination of this Agreement.

          7.12 Dispute Resolution. If any dispute arises out of or relates to this Agreement,
or the breach thereof, the Executive and the Company agree to promptly negotiate in good faith to
resolve such dispute. If the dispute cannot be settled by the parties through negotiation, the
Executive and the Company agree to try in good faith to settle the dispute by mediation under the
Commercial Mediation Rules of the American Arbitration Association before resorting to arbitration,
litigation or any other dispute resolution procedure. If the parties are unable to settle the
dispute by mediation as provided in the preceding sentence, any claim, controversy or dispute
arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding
arbitration before a panel of three arbitrators in accordance with the Commercial Arbitration Rules
of the American Arbitration Association. The arbitration shall be conducted in Houston, Harris
County, Texas, or such other location to which the parties mutually agree. The decision of the
arbitrator(s) shall be final and binding and judgment upon the award rendered may be entered in any
court having jurisdiction thereof. Notwithstanding the foregoing provisions of this Section 7.12,
the Company may exercise its rights as provided in Section 3 at any time and without regard to the
foregoing provisions of this Section 7.12.

          7.13 Binding Agreement. This Agreement shall inure to the benefit of and be binding
upon the Company and its respective successors and assigns and the Executive and his legal
representatives.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

15

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	 	EXECUTIVE
	 
	 	 	 	 
	 	 	/s/ Robert J. Proffit
	 	 	 
	 	 	Robert J. Proffit
	 
	 	 	 	 
	 	 	COMPANY
	 
	 	 	 	 
	 	 	GREY WOLF, INC.
	 
	 	 	 	 
	 

	 	By:  /s/ Thomas P. Richards
	 

	 	 

	 

	 	Name:
	 	Thomas P. Richards
	 

	 	Title:
	 	Chairman, President and CEO

16

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