Document:

Separation Agreement

  Exhibit 10.10
 SEPARATION AGREEMENT
AND RELEASE
 RECITALS
 This Separation Agreement
and Release (“Agreement”) is made by and between Charles S. Byrne (“Employee”) and Hytek Microsystems, Inc. (“Company”) (jointly referred to as the
“Parties”):
 WHEREAS, Employee was employed by the Company;
 WHEREAS, Employee’s employment will be terminated effective April 25, 2003 (the “Termination Date”);
 WHEREAS, this Agreement is
effective after it has been signed by both parties and eight (8) days after Employee has signed the Agreement as defined below in Paragraph 27 (the “Effective Date”);
 WHEREAS, the Company presented this Agreement to Employee on April 4, 2003, with the understanding that the Agreement is to be signed by Employee no earlier than April 26, 2003;
 WHEREAS, the Company and Employee entered into a Confidentiality and Invention Assignment Agreement signed by Employee on July 20, 1989 (the “Confidentiality Agreement”); 
 WHEREAS, the Company and Employee have entered into a Stock Option Agreement dated May 15, 1998, granting Employee the option to purchase shares of the Company’s
common stock subject to the terms and conditions of the Company’s 1991 Stock Option Plan and the Stock Option Agreement (the “Stock Option Agreements”);
 WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions and demands that the Employee may have against the Company, including, but not limited to, any and
all claims arising or in any way related to Employee’s employment with or separation from the Company;
 NOW THEREFORE, in consideration of the promises
made herein, the Parties hereby agree as follows:
 COVENANTS
 1.
Consideration. The following consideration is conditioned upon Employee signing this Agreement
no earlier than the Termination Date:
 a.
Cash.  The Company agrees to pay Employee, or his heirs and assigns, the equivalent of his base salary, less applicable withholding, in accordance with the Company’s regular payroll practices, for twelve (12) months. The first

 

  payment will be made on the first regular payroll date following the Effective Date of this Agreement and will continue, thereafter, in
accordance with the Company’s regular payroll practices, for twelve (12) months (the “Payment Period”). During the Payment Period, Employee will not be entitled to accrual of any employee benefits, including, but not limited to,
vesting in stock options or vacation or other paid time off benefits. These payments are subject to the provisions set forth in paragraphs 1(a) and 1(c).
 b.
Lump Sum Payment.  The Company agrees to pay Employee the cash lump sum payment of Thirty-Four Thousand, Two
Hundred Forty-Five Dollars and Seven Cents ($34,245.07), less applicable withholding, in accordance with the Company’s regular payroll practices. This payment will be made to Employee within five (5) business days after the Effective Date of
this Agreement. 
 c.
COBRA.  If
Employee elects to continue his group health insurance coverage pursuant to COBRA after the Termination Date, the Company agrees to reimburse Employee for the payments he makes for COBRA coverage for a period of twelve (12) months beginning May 1,
2003, or until Employee has secured other employment which provides comparable coverage, whichever occurs first, provided that Employee timely elects and pays for COBRA coverage. COBRA reimbursements shall be made by the Company to Employee within
fifteen (15) days of Employee’s provision to the Company of documentation substantiating his payments for COBRA coverage.
 2.
Stock. The Parties agree that for purposes of determining the number of shares of the Company’s common stock
that Employee is entitled to purchase from the Company, pursuant to the exercise of outstanding options, the Employee will be considered to have vested only up to the Termination Date. Employee acknowledges that, as of the Termination Date, he will
have vested in options to purchase Twenty-Five Thousand (25,000) shares and no more. The exercise of any stock options shall continue to be subject to the terms and conditions of the Stock Option Agreements, which will remain in full force and
effect unmodified by the Agreement.
 3.
Benefits. Employee’s health insurance benefits will cease on April 30, 2003, subject to Employee’s right to continue his health insurance under COBRA. Employee’s participation in all other benefits and
incidents of employment ceased on the Termination Date. Employee ceased accruing employee benefits, including, but not limited to, vacation time and paid time off, as of the Termination Date. 
 4.
Payment of Salary. Employee
acknowledges and represents that the Company has paid all salary, wages, bonuses, accrued vacation or other paid time off, commissions, interest, outplacement costs, fees, stock, stock options, vesting, and any and all other benefits and
compensation due to Employee. Employee acknowledges and represents that the Company will have paid all severance pay and benefits due Employee once the benefits outlined in paragraphs 1(a), 1(b) and 1(c) have been provided to Employee.

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  5.
Release of
Claims. Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company and its current and former officers, directors, employees, agents,
investors, attorneys, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations and assigns (the “Releasees”). Employee hereby and forever releases the Releasees from, and agrees not to sue
concerning, or in any manner to institute, prosecute or pursue, any claim, complaint, charge, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may
possess against any of the Releasees arising from any omissions, acts or facts that have occurred up until and including the Effective Date of this Agreement including, without limitation,
 (a)  any and all claims relating to or arising out of Employee’s employment relationship with the Company and the termination of that relationship; 
 (b)  any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for
fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;
 (c)  any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of a covenant of good faith and
fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; workers’ compensation and disability benefits;
 (d)  any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil
Rights Act of 1991; the Americans with Disabilities Act of 1990; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Employee Retirement Income Security Act of 1974; the Worker
Adjustment and Restraining Notification Act; the Family and Medical Leave Act; the Nevada Fair Employment Practices Act and applicable Nevada employment and labor laws;
 (e)  any and all claims for violation of the federal, or any state, constitution; 
 (f)  any and all claims
arising out of any other laws and regulations relating to employment or employment discrimination; and
 (g)  any and all claims for attorneys’
fees and costs.
 Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to
the matters released. This release does not extend to any obligations incurred under this Agreement.
 
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  6.
Acknowledgement of
Waiver of Claims Under ADEA. Employee acknowledges that he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing
and voluntary. Employee and the Company agree that this waiver and release does not apply to any rights or claims that may arise under ADEA after the Effective Date of this Agreement. Employee acknowledges that the consideration given for this
waiver and release Agreement is in addition to anything of value to which Employee was already entitled. Employee further acknowledges that he has been advised by this writing that 
 (a)  he should consult with an attorney prior to executing this Agreement;
 (b)  he has up to twenty-one (21) days within which to consider this Agreement;
 (c)  he has seven (7) days following his execution
of this Agreement to revoke the Agreement; 
 (d)  this Agreement shall not be effective until the revocation period has expired; and
 (e)  nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties or costs from doing so, unless specifically authorized by federal law.
 7.
Unknown Claims. The Employee represents that he is not aware of any claims that are released by this Agreement.
Employee acknowledges that he has had the opportunity to be advised by legal counsel and is familiar with the principle that:
 A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS THAT THE RELEASOR OR CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE RELEASEES OR DEBTOR.
 Employee, being aware of said principle, agrees to expressly waive any rights he may have to that effect, as well as under any other statute or common law principles of
similar effect.
 8.
No Pending or Future
Lawsuits. Employee represents that he has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or Releasees. Employee also represents that he does not intend to
bring any claims on his own behalf or on behalf of any other person or entity against the Company or Releasees.
 9.
Application for Employment. Employee understands and agrees that, as a condition of this Agreement, he shall not be
entitled to any employment with the Company, and he hereby waives any right, or alleged right, of employment or re-employment with the Company. Employee further agrees that he will not apply for employment with the Company. Nothing herein shall
preclude Employee from seeking a position on the Board or serving on the Company Board of Directors and being compensated for such services.
 
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  10.
Conditional
Nature of Severance Payments/Noncompete. Employee acknowledges that the nature of the Company’s business is such that if Employee were to become employed by, or substantially involved in, the business of a competitor of
the Company during the twelve (12) months following the termination of Employee’s employment with the Company, it would be very difficult for Employee not to rely on or use the Company’s trade secrets and confidential information. Thus, to
avoid the inevitable disclosure of the Company’s trade secrets and confidential information, Employee agrees and acknowledges that Employee’s right to receive the severance payments and Company paid COBRA coverage set forth in paragraphs
1(a), 1(b), and 1(c) (to the extent Employee would otherwise be entitled to such payments) shall be conditioned upon Employee not directly or indirectly engaging in (whether as an employee, consultant, agent, proprietor, principal, partner,
stockholder, corporate officer, director or otherwise), nor having any ownership interest in or participating in the financing, operation, management or control of, any person, firm, corporation or business that is directly competitive with Company
(other than investments in professionally managed funds over which the Employee does not have control or discretion in investment decisions and investments in publicly traded companies, so long as the Employee’s beneficial ownership does not
exceed 2% of the public company’s outstanding voting stock). For the purposes of this paragraph, and to eliminate any uncertainty, the Parties agree that for purposes of identifying companies or businesses that are directly competitive with
Company, this paragraph shall only prevent Employee from working for the following companies: Interpoint, Micropae, MS Kennedy, Teledyne Micro, Natel Engineering, National Hybrid, Lambda Advanced Analog. Employee represents that he (i) is familiar
with the foregoing covenant not to compete, and (ii) is fully aware of his obligations hereunder, including, without limitation, the reasonableness of the length of time, scope and geographic coverage of this covenant.
 11.
Trade Secrets and Confidential Information/Company
Property. Employee reaffirms and agrees to observe and abide by the terms of the Confidentiality Agreement, specifically including provisions therein regarding nondisclosure of the Company’s trade secrets and
confidential and proprietary information. Employee shall continue to maintain the confidentiality of all confidential and proprietary information and trade secrets of the Company. Employee agrees at all times hereafter to hold in the strictest
confidence, and not to use or disclose to any person, firm or corporation, any Confidential Information of the Company. Employee understands that “Confidential Information” includes, but is not limited to, any Company proprietary
information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, customer lists and customers (including, but not limited to, customers of the Company on whom Employee has called or
with whom he became acquainted during the term of his employment), markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances or other
business information disclosed to Employee by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment. Employee further understands that Confidential Information does not include any of the
foregoing items that has become publicly known and made generally available through no wrongful act of Employee’s or of others who were under confidentiality obligations as to the item or items involved or improvements or new versions thereof,
nor shall it include management techniques, general knowledge of bookkeeping, accounting, budgeting, SEC requirements and filings and executive practices of publicly traded companies so long as the use of such knowledge does not reveal trade
secrets, technical data or proprietary 
 
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  information of the Company. Employee hereby grants consent to notification by the Company to any new employer about Employee’s obligations under this
paragraph. 
 Employee further agrees to deliver to the Company on or before the Effective Date of the Agreement, and not to keep in his possession, recreate or
deliver to anyone else, any and all Company property and Confidential Information including, but not limited to, devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any aforementioned items provided to Employee by the Company, developed by Employee pursuant to his employment with the Company, or otherwise belonging to the Company, its successors or
assigns. Employee’s signature below constitutes his certification under penalty of perjury that he has returned all documents and other items provided to Employee by the Company, developed or obtained by Employee as a result of his employment
with the Company, or otherwise belonging to the Company.
 12.
No Cooperation. Employee agrees he will not act in any manner that might reasonably and forseeably damage the
business of the Company. Employee agrees that he will not encourage, counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party
against any of the Releasees, unless under a subpoena or other court order to do so. Employee further agrees both to immediately notify the Company upon receipt of any such subpoena or court order, and to furnish, within three (3) business days of
its receipt, a copy of such subpoena or court order to the Company.
 13.
Non-Disparagement. Employee agrees to refrain from any defamation, libel or slander of the Releasees, and any
tortious interference with the contracts, relationships and prospective economic advantage of the Releasees. The Company’s officers agree to refrain from any defamation, libel or slander of the Employee, and any tortious interference with the
contracts, relationships and prospective economic advantage of Employee. Immediately upon any officer’s separation from employment with the Company, the Company is no longer responsible for his or her conduct pursuant to this
paragraph.
 Nothing herein shall be deemed to restrict Employee’s free discussions in meetings of the Board of Directors and related
activities. Employee agrees that he shall direct all inquiries by potential future employers to Rowena Borg in Human Resources. 
 14.
Non-Solicitation. Employee
agrees that, for a period of twelve (12) months immediately following the Effective Date of this Agreement, Employee shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees or consultants to
leave their employment, or attempt to do so, either for himself or any other person or entity. 
 15.
Breach. Employee acknowledges and agrees that any breach of any provision of this Agreement, except as permitted by
paragraph 6(e) of the “Acknowledgement of Waiver of Claims Under ADEA,” provision, shall constitute a material breach of this Agreement and shall entitle the Company immediately to cease the severance benefits provided to Employee under
this Agreement. 
 16.
Attorneys’
Fees. In the event that either Party brings an action to enforce or effect its rights under this Agreement, the prevailing party shall be entitled to recover its costs and expenses, 
 
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  including the costs of mediation, arbitration, litigation, court fees, plus reasonable attorneys’ fees, incurred in connection with such an
action.
 17.
No Admission of
Liability. The Parties understand and acknowledge that this Agreement constitutes a compromise and settlement of actual or potential disputed claims. No action taken by the Parties hereto, or either of them, either previously
or in connection with this Agreement shall be deemed or construed to be:
 (a)  an admission of the truth or falsity of any claims made or any
potential claims; or 
 (b)  an acknowledgment or admission by either party of any fault or liability whatsoever to the other party or to any third
party.
 18.
Costs.
The Parties shall each bear their own costs, expert fees, attorneys’ fees and other fees incurred in connection with this Agreement, except as provided herein.
 19.
Arbitration. The Parties agree that any and all disputes arising out of the terms of this
Agreement, their interpretation, and any of the matters herein released, shall be subject to arbitration in Carson City, Nevada, before the American Arbitration Association under its National Rules for the Resolution of Employment Disputes,
supplemented by the Nevada law. The arbitrator may grant injunctions and other relief in such disputes. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. The parties agree that the prevailing
party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The parties hereby agree to waive their right to have any dispute between them resolved in a court of law by a
judge or jury. This paragraph will not prevent either party from seeking injunctive relief (or any provisional remedy) from any court having jurisdiction over the Parties and the subject matter of their dispute relating to Employee’s
obligations under this Agreement and the Confidentiality Agreement.
 20.
Authority. The Company represents and warrants that the undersigned has the authority to act on behalf of the Company
and to bind the Company and all who may claim through it to the terms and conditions of this Agreement. Employee represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might claim through him to bind them
to the terms and conditions of this Agreement. Each party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.

21.
No Representations. Each
party represents that it has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. In entering into this Agreement, neither party has relied upon any
representations or statements made by the other party hereto that are not specifically set forth in this Agreement.
 22.
Severability. In the event that any provision, or any portion thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision or portion of said provision.
 
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  23.
Entire
Agreement. This Agreement represents the entire agreement and understanding between the Company and Employee concerning the subject matter of this Agreement and Employee’s relationship with the Company, and supersedes
and replaces any and all prior agreements and understandings between the Parties concerning the subject matter of this Agreement and Employee’s relationship with the Company, with the exception of the Stock Option Agreements, and the
Confidentiality Agreement.
 24.
No
Waiver. The failure of the Company to insist upon the performance of any of the terms and conditions in this Agreement, or the failure to prosecute any breach of any of the terms and conditions of this Agreement, shall not be
construed thereafter as a waiver of any such terms or conditions. This entire Agreement shall remain in full force and effect as if no such forbearance or failure of performance had occurred.
 25.
No Oral Modification. This
Agreement may only be amended in a writing signed by Employee and the Chief Executive Officer of the Company.
 26.
Governing Law. This Agreement shall be construed, interpreted, governed, and enforced in accordance with the laws of
the State of Nevada, without regard to choice-of-law provisions. Employee hereby consents to personal and exclusive jurisdiction and venue in the State of Nevada.
 27.
Effective Date. This Agreement is effective after it has been signed by both parties and
eight (8) days after Employee has signed the Agreement.
 28.
Counterparts. This Agreement may be executed in counterparts and by facsimile, and each counterpart and facsimile
shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.
 29.
Voluntary Execution of Agreement. This Agreement is executed voluntarily and without any duress or undue influence on
the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that:
 (a)  They have read this
Agreement;
 (b)  They have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or
they have voluntarily declined to seek such counsel;
 (c)  They understand the terms and consequences of this Agreement and of the releases it
contains; and
 (d)  They are fully aware of the legal and binding effect of this Agreement.
 
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  IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.
  

	  
 	  
 	 Hytek Microsystems, Inc.
 
	 
 Dated: April 25, 2003
 	  
 	 By: 
 	 
 /s/ JOHN F. COLE
 
	  
 	  
 	  
 	 
 
	  
 	  
 	  
 	 John F. Cole
 Chief Executive Officer
 

  

	  
 	  
 	 Charles S. Byrne, an individual
 
	 
 Dated: April 26, 2003
 	  
 	  
 	 
 /s/ CHARLES S. BYRNE
 
	  
 	  
 	  
 	 
 
	  
 	  
 	  
 	 Charles S. Byrne
 

 
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Exhibit 10.2  

 
  LOAN AGREEMENT  
    

        THIS LOAN AGREEMENT ("Agreement") is made this 5th day of May, 2003 by and between Scioto Downs, Inc., an Ohio corporation ("Borrower"), having as its
address 6000 South High Street, Columbus, OH 43207; and MTR Gaming Group, Inc., a Delaware corporation ("Lender"), having as its address State Route 2, P.O. Box 356, Chester, WV 26034. 

 
 

RECITALS:  
    

        WHEREAS, the Borrower is in need of accessing funds for use for both capital expenditure and general operating matters and desires to borrow, and the Lender
desires to lend, such amounts as may be advanced from time to time in an amount not to exceed One Million Dollars ($1,000,000.00) [the "Loan"]; and 

        WHEREAS,
pursuant to the an Open-End Mortgage, Security Agreement and Financing Statement of even date hereof (the "Mortgage"), the Borrower has granted to the Lender a
mortgage on the approximately 173 acre parcel of real property located in the State of Ohio, County of Franklin, and Township of Hamilton, commonly known as 6000 South High Street, as more fully
described in Exhibit A attached hereto and made a part hereof (the "Property"); and 

        WHEREAS,
pursuant to the terms and conditions of a Merger Agreement entered into as of December 23, 2002, as amended (the "Merger Agreement), by and between Lender, Borrower and
Racing Acquisition Corp. (a wholly owned subsidiary of the Lender), the Lender has contracted to acquire all of the issued and outstanding stock of the Borrower (the "Acquisition"); and 

        WHEREAS,
in consideration of the Loan, and on account of Manager's extensive experience in the racing, simulcasting, gaming and food service business, the Borrower has entered into a
Management Agreement, of even date herewith (the "Management Agreement"), pursuant to which, subject to the
approval of the Ohio Racing Commission, the Lender will manage the business operations of the Borrower: and 

        WHEREAS,
the Loan is evidenced by a Promissory Note, of even date herewith, in the maximum principal amount of One Million Dollars ($1,000,000.00); and 

        WHEREAS,
the parties desire to set forth their respective rights and obligations under this Agreement. 

        NOW,
THEREFORE in consideration of the Loan and for other good and valuable consideration the receipt and sufficiency of which have been hereby acknowledged, the parties hereto agree as
follows: 

        1.    Recitals.    The foregoing recitals are hereby incorporated as though more fully set forth herein. 

        2.    Term.    The Term of the Loan shall commence on the date first written above, with all obligations maturing on
December 31, 2003, or on such earlier date on which the Loan shall become due and payable, in whole or in part, in accordance with the terms of the Loan Documents, by acceleration or otherwise
(the "Maturity Date"). 

        3.    Promissory Note.    Borrower shall, contemporaneously with the execution of this Agreement, execute a Promissory
Note in the form attached hereto as Exhibit B and incorporated herein by reference (the "Note"). The principal and interest and any other amount of payment or premium due shall hereinafter be
referred to as the "Indebtedness." 

        4.    Loan Documents.    This Agreement, the Note, the Mortgage, the Management Agreement and such other documentation
as shall be required under this Agreement or by Lender or its counsel shall hereinafter collectively be referred to as the "Loan Documents". 

 

        5.    Extension of Loan.    

        (a)   Lender's
obligation to extend the Loan is subject to the satisfaction of the following conditions: 

        (i)    Receipt
by Lender of a copy of the resolutions adopted by the Board of Directors of the Borrower, certified by an authorized officer thereof, authorizing (i) the
borrowings hereunder and the transactions contemplated by the Loan Documents to which such entity is or will be a party and (ii) the execution, delivery and performance by Borrower of each Loan
Document to which it is or will be a party and the execution and delivery of the other documents to be delivered by Borrower in connection herewith; 

        (ii)   Receipt
by Lender of a certificate of an authorized officer of the Borrower certifying the names and true signatures of the officers of Borrower authorized to sign each
Loan Document to which such entity is or will be a party and the other documents to be executed and delivered by the Borrower in connection herewith, together with evidence of the incumbency of such
authorized officers; 

        (iii)  Receipt
by Lender of duly executed Loan Documents; 

        (iv)  Receipt
by Lender of a certificate, dated as of a date not more than ten (10) Business Days prior to the date on which the Loan is to be made, of the appropriate
official of the State of Ohio, of the Borrower certifying as to the existence in good standing of, and the payment of taxes by, the Borrower in such jurisdictions and listing all charter documents of
the Borrower on file with such official(s); 

        (v)   Receipt
by Lender of a copy of the charter of the Borrower, certified as of a date not more than thirty (30) days prior to the Effective Date by the appropriate
official(s) of the jurisdiction of incorporation of the Borrower and as of the date on which the Loan is to be made by an authorized officer of Borrower; 

        (vi)  Receipt
by Lender of a schedule of payables together with such other substantiation as Lender may require in its sole and absolute discretion; 

        (vii) Receipt
by the Lender of a non-disturbance agreement from National City Bank providing that National City Bank will not terminate the Management Agreement
upon the foreclosure of National City Bank's loan with the Borrower (the "National City Bank Loan"), or upon National City Bank taking title to the Scioto Property under a deed in lieu of foreclosure,
or taking possession of the Scioto Property directly or through a receiver. 

        (viii) Receipt
by the Lender of an estoppel certificate from National City Bank to the effect that the National City Bank Loan is not in default. 

        (ix)  If
required, the receipt by the Lender of authorization from the Ohio Racing Commission as to the execution of the Management Agreement and the permissibility of the
Manager Fees thereunder. 

        (x)   Receipt
by Lender of such other agreements, instruments, approvals, opinions and other documents as the Lender may reasonably request; 

        (b)   Lender's
obligation to extend the loan is conditioned upon the documents referred to in Section 5(a) above being satisfactory to the Lender in its sole
discretion. 

2

 

        6.    Representations and Warranties of Borrower.    Borrower represents and warrants to Lender the following, each of
which shall be true and correct as of the date of this Agreement: 

        a.     The
making of and performance of this Agreement by Borrower does not violate any laws, or breach any agreement, nor will it result in the default of any other agreement
or instrument to which such party is bound. 

        b.     Borrower
has the power and authority to enter into and perform this Agreement, including the Loan Documents, and to incur and perform the Obligations (as hereafter
defined) herein and therein provided, and has taken all actions necessary to authorize the execution, delivery and performance of the Agreement including the Loan Documents. 

        c.     All
of the representations and warranties set forth above shall survive and continue in full force and effect and remain true until all Obligations (as hereinafter
defined) are satisfied in full and there remain no outstanding commitments hereunder. 

        7.    Borrower's Obligations.    Borrower shall have the following obligations, which shall hereinafter be referred to
as the "Obligations." 

        a.     To
pay the principal of and interest on the Note in accordance with the terms thereof and to satisfy all of its other liabilities to Lender hereunder, whether now
existing or hereafter incurred, matured or unmatured, direct or contingent, joint or several, including any extensions, modifications, renewals thereof and substitutions therefore. 

        b.     To
pay applicable property taxes with respect to the Property. 

        c.     To
safeguard the Property against waste, impairment, loss or damage, and to maintain the Property in substantially the same condition as on the date hereof. 

        d.     To
obtain such insurance as the Lender may, in its sole discretion, specify and, at Lender's request, to cause Lender to be named as an additional insured. 

        e.     To
observe and comply with any and all of the covenants and promises made or due or owing to Lender pursuant to this Agreement or any of the Loan Documents. 

        8.    Default.    The occurrence of any one or more of the following events shall constitute an Event of Default
("Event of Default") hereunder: 

        a.     Borrower
shall admit its inability to pay its debts or shall make an assignment for the benefit of itself or any of its creditors. 

        c.     Proceedings
in bankruptcy or for reorganization of Borrower for readjustment of any of its debts under the Bankruptcy Code shall be commenced against or by Borrower and,
except with respect to any such proceedings instituted by Borrower shall not be discharged within thirty (30) days of their commencement. 

        d.     A
receiver or trustee shall be appointed for Borrower or for any substantial part of its assets; any proceedings shall be instituted for the dissolution, or the full or
partial liquidation, of Borrower which shall not be discharged within thirty (30) days of its commencement. 

        e.     Borrower's
representations and warranties set forth in Section 6 hereof are not true and complete in all material respects on the date hereof and during the period
during which the Borrower's Indebtedness has not been satisfied in full. 

        f.      Borrower
fails to satisfy its obligations set forth in Section 7 hereof. 

        g.     Borrower
breaches its obligation under the Merger Agreement. 

3

 

        h.     Borrower
breaches its obligations under the, the Note, the Mortgage, the Management Agreement or under any other of the Loan Documents (subject to any applicable cure
period). 

        (i)    Mara
Enterprises, Inc. ("Mara") breaches its obligations under the Option Agreement, of even date hereof, or of substantially even date hereof, pursuant to which
Mara granted to Lender an option to purchase the approximately 37 acre parcel of land in the County of Franklin, Township of Hamilton, as more fully described in such Option Agreement. 

        9.    Acceleration.    Upon the occurrence of an Event of Default, Lender may, by written notice to Borrower, declare
the Loan, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Loan, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by Borrower. 

        10.    Notice.    All notices, requests, demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally (upon delivery), by recognized overnight courier service (one business day after deposit), or by United States certified or registered mail,
postage prepaid, return receipt requested (upon three (3) business days after deposit). If to Lender, notice shall be sent to the following address: MTR Gaming Group, Inc., State Route
2, P.O. Box 356, Chester, WV 26034, Attn: Edson R. Arneault with a copy to Robert L. Ruben, Esq., Ruben & Aronson, LLP, 4800 Montgomery Lane, Suite 150, Bethesda, MD 20814; if to
Borrower, notice shall be sent to the following address: 6000 South High Street, Columbus, OH 43207 with a copy to Roderick H. Willcox, 65 E. State Street, Suite 1000, Columbus, OH
43215-4213. Any party hereto may change its address for receipt of notice by giving written notice to all other parties hereto. 

        11.    Waiver.    The Borrower hereby waives, to the extent permitted by law, any requirement that the Lender protect,
secure, perfect or insure any security interest or lien on any property subject thereto or exhaust any right or take any action against any Person or collateral prior to Lender's exercise of its
rights hereunder. 

        12.    Remedies.    

        a.     No
remedy herein conferred upon or reserved to a party is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative,
and shall be in addition to every other remedy given hereunder and now or hereafter existing at law or in equity or by statute. 

        b.     Notwithstanding
any provision in the Loan Documents to the contrary, the prevailing party in any litigation or mediation with respect to any disputes relating to this
Agreement shall be entitled to recover its reasonable attorneys fees from the other party for all matters, including but not limited to appeals. 

        13.    Miscellaneous.    

        a.     This
Agreement shall be binding upon, and shall inure to the benefit of, and be enforceable by, the respective personal representatives, heirs, successors and/or assigns
of the parties hereto. 

        b.     This
Agreement shall be construed and enforced in accordance with the laws of the State of Ohio and any action or proceeding instituted with respect to the performance or
interpretation of any of the Loan Documents shall be brought in the courts of Ohio, with respect to which neither party shall assert lack of personal or subject matter jurisdiction or improper
venue.

        c.     This
Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same
document. 

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        d.     The
Borrower agrees to execute such further documentation and/or to undertake such further action(s) as may be necessary in the reasonable opinion of Lender in order to
effectuate the terms of this Agreement. 

        e.     If
any provision of this Agreement shall be held invalid under any applicable laws, such invalidity shall not affect any other provision of this Agreement that can be
given effect without the invalid provision and, to this end, the provisions hereof are severable. 

        f.      All
terms defined in this Agreement and any of the Loan Documents shall have the same meaning and effect in this Agreement as they have in the Loan Documents. 

        g.     This
Agreement is not assignable by Borrower. 

        h.     The
occurrence of an Event of Default under this Agreement shall be treated by the parties as a default under the terms and provisions of the Loan Documents. 

        i.      Time
is of the essence to this Agreement and the Loan Documents in each and every provision where time is a factor. 

        14.    Jury Trial Waiver.    BY EXECUTION HEREOF AND ACCEPTANCE HEREOF, BORROWER, AND LENDER AGREE THAT NEITHER
BORROWER NOR LENDER, NOR ANY ASSIGNEE, SUCCESSOR, HEIR OR LEGAL REPRESENTATIVE (ALL OF WHOM ARE COLLECTIVELY REFERRED TO AS THE "PARTIES") SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,
COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED UPON OR ARISING OUT OF THIS OBLIGATION OR ANY OF THE LOAN DOCUMENTS, ANY RELATED AGREEMENT OR INSTRUMENT, ANY OTHER COLLATERAL FOR THE INDEBTEDNESS
OR THE DEALINGS OR RELATIONSHIP BY OR AMONG THE PARTIES, OR ANY OF THEM. NONE OF THE PARTIES WILL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY THE PARTIES WITH LENDER, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. LENDER HAS IN NO
WAY AGREED WITH OR REPRESENTED TO BORROWER THAT ANY PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES. 

        15.    Entire Agreement.    All prior negotiations between the parties are merged in this Agreement, and the Loan
Documents, and there are no promises, agreements, additions, undertakings, warranties or representations, oral or written, expressed or implied, between them other than as set forth hereinabove. No
change or modification of this Agreement shall be valid unless the same is in writing and signed by the parties hereto. No waiver of any breach of any provision of this Agreement shall be valid unless
in writing and signed by the party against whom it is sought to be enforced and no such waiver shall be deemed to be a consent to any subsequent breach of the same or any other provision. 

5

 

        IN
WITNESS WHEREOF, the parties have executed this Agreement for the purposes herein contained, the date, month and year first above written. 

	
ATTEST:	
 	
LENDER:
	

 	
 	
MTR GAMING GROUP, INC.
	

/s/  RODERICK H. WILLCOX      
	
 	

/s/  EDSON R. ANEAULT      
 By:  Edson R. Aneualt

Its:
	
WITNESS:	
 	
BORROWER:
	

 	
 	
SCIOTO DOWNS, INC.
	
	 	 
	

/s/  RODERICK H. WILLCOX      
	
 	

/s/  EDWARD T. RYAN      
 By:  Edward T. Ryan

Its:  President

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