Document:

Exhibit 10.1

 

EXECUTION
VERSION

 

AMENDMENT NO.
5 TO CREDIT AGREEMENT

 

This Amendment
No. 5 to Credit Agreement, dated as of December   , 2004 (this “Amendment”),
is entered into by and among Blue Ridge Paper Products Inc., a Delaware
corporation (“Borrower”), as Borrower; Blue Ridge Holding Corp., a Delaware
corporation (“Holdings”), as a Credit Party; BRPP, LLC, a North Carolina
limited liability company (the “IP Subsidiary”), as a Credit Party; and General
Electric Capital Corporation, as a Lender and as Agent for Lenders (in such
capacity, “Agent”).

 

RECITALS

 

A.            Borrower, Holdings,
the IP Subsidiary, Agent and Lender are parties to that certain Credit
Agreement, dated as of December 17, 2003 (as amended by Amendment No. 1
thereto, dated as of February 17, 2004, Amendment No. 2 thereto, dated as of
September 15, 2004, Consent and Amendment No. 3 thereto, dated as of October 8,
2004, Amendment No. 4 thereto, dated as of October 8, 2004, and as from time to
time hereafter further amended, restated, supplemented or otherwise modified
and in effect, the “Credit Agreement”), pursuant to which Lender has made and
will hereafter make loans and advances and other extensions of credit to
Borrower.

 

B.            Borrower, Agent and
Lender are desirous of amending the Credit Agreement as and to the extent set
forth herein and pursuant to, and subject to, the terms and conditions set
forth in this Amendment.

 

C.            This Amendment shall
constitute a Loan Document and these Recitals shall be construed as part of
this Amendment.  Capitalized terms used
herein without definition are so used as defined in the Credit Agreement and
Annex A thereto.

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

1.             Amendments
to Credit Agreement.

 

1.1.          Paragraph
(b) of Annex G (Financial Covenants) to the Credit Agreement is amended and
restated in its entirety as follows:

 

“(b)         Minimum
Fixed Charge Coverage Ratio.  If
Borrowing Availability falls below $7,500,000, then, for the most recently
ended Fiscal Quarter and for each Fiscal Quarter thereafter, Borrower and its
Subsidiaries shall have on a consolidated basis at the end of each such Fiscal
Quarter, a Fixed Charge Coverage Ratio for the 12-month period then ended of
not less than 1.10 to 1.00.”

 

2.             Representations
and Warranties.  Borrower and the IP
Subsidiary jointly and severally represent and warrant to Agent and Lender that
the execution, delivery and performance by

 

 

Borrower and
the IP Subsidiary of this Amendment (a) have been duly authorized by all
necessary action on the part of Borrower and the IP Subsidiary, and (b) do not
and will not conflict with, result in the breach or termination of, constitute
a default under, or accelerate or permit the acceleration of any performance
required by, any indenture (including, without limitation, the Senior Secured
Notes Indenture), mortgage, deed of trust, lease, agreement or other instrument
to which Borrower or the IP Subsidiary is a party.

 

3.             Conditions
to Effectiveness.  The effectiveness
of this Amendment is expressly conditioned upon the satisfaction of each of the
following conditions precedent in a manner acceptable to Agent:

 

3.1.          Agent’s
receipt of counterparts of this Amendment, duly executed by Borrower, Holdings,
the IP Subsidiary, Agent and Lender.

 

3.2.          No
Default or Event of Default shall have occurred and be continuing or would
result from the effectiveness of this Amendment.

 

3.3.          The
representations and warranties contained in Section 2 of this Amendment shall
be true, correct and complete.

 

4.             Reference
to and Effect Upon the Credit Agreement and other Loan
Documents.

 

4.1.          The
Credit Agreement, the Notes and each other Loan Document shall remain in full
force and effect and each is hereby ratified and confirmed by Borrower,
Holdings and the IP Subsidiary.  Without
limiting the foregoing, the Liens granted pursuant to the Collateral Documents
shall continue in full force and effect and the guaranties of Holdings and the
IP Subsidiary shall continue in full force and effect.

 

4.2.          Each
reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”
or any other word or words of similar import shall mean and be a reference to
the Credit Agreement as amended hereby, and each reference in any other Loan
Document to the Credit Agreement or any word or words of similar import shall
be and mean a reference to the Credit Agreement as amended hereby.

 

5.             Counterparts.  This Amendment may be executed in any number
of counterparts, each of which when so executed shall be deemed an original but
all such counterparts shall constitute one and the same instrument.  A counterpart signature page delivered by fax
transmission shall be as effective as delivery of an originally executed
counterpart.

 

6.             Costs
and Expenses.  As provided in Section
11.3 of the Credit Agreement, Borrower shall pay the fees, costs and expenses
incurred by Agent in connection with the preparation, execution and delivery of
this Amendment (including, without limitation, reasonable attorneys’ fees).

 

7.             GOVERNING
LAW.  THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS (AS
OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NEW YORK.

 

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8.             Headings.  Section headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose.

 

[SIGNATURE PAGE FOLLOWS]

 

3

 

IN WITNESS WHEREOF, this Amendment has been
duly executed as of the date first written above.

 

 

	
   

  	
  BLUE RIDGE PAPER PRODUCTS INC.,
  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BLUE RIDGE HOLDING CORP.,
  as a Credit Party

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRPP, LLC, as a
  Credit Party

  
	
   

  	
  By:

  	
  Blue Ridge Paper Products Inc., sole Member
  and

  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL
  CORPORATION,

  
	
   

  	
  as Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Title:  Duly Authorized
  SignatoryExhibit 10.1

 

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

 

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”), made
this 22nd day of December, 2004, by and
between MTR Gaming Group, Inc., a Delaware corporation having its principal
office at State Route 2 South, Chester, West Virginia 26034, together with all
of its subsidiaries whether now existing or hereafter formed or acquired
(collectively, the “Company”), and Edson R. Arneault, One Riverside Drive, New
Cumberland, West Virginia (“Executive”).

 

WHEREAS, the Executive has been employed by the Company in the capacity
of President, Chief Executive Officer and Chairman of the Company pursuant to
an Employment Agreement between the Company and the Executive dated September 28,
2001 (the “2001 Agreement”); and

 

WHEREAS, the
Executive and the Company desire to amend the terms of the 2001 Agreement.

 

Now,
therefore, the parties, in reliance upon the mutual promises and covenants
herein contained, do hereby agree as follows, effective as of the date of the
Agreement:

 

A.                                    Amendments.

 

1.                                       Amendment
to Section 2 of the Agreement. 
Section 2 of the Agreement is hereby amended and restated in its
entirety as follows:

 

“The Company hereby agrees to employ
Executive, and Executive agrees to serve the Company, in the capacity of (A)
President and Chief Executive Officer of the Company for a six year period
commencing on January 1, 2001 (the “Employment Date”) and ending on December
31, 2006 (such period, subject to earlier termination as provided herein, being
referred to as the “Period of Employment”) and (B) Chairman of the Company for
a nine year period commencing on the Employment Date and ending on December 31,
2009 (the period beginning on the January 1, 2007 and ending on December 31,
2009, subject to earlier termination as provided herein, being referred to as
the “Period of Relationship,” and the Period of Employment together with the
Period of Relationship, the “Total Period”).”

 

2.                                     Amendment
to Section 3 of the Agreement. 
Section 3 of the Agreement is hereby amended and restated in its
entirely as follows:

 

“During the Period of Employment,
Executive agrees to serve the Company as President, Chief Executive Officer,
and Chairman, as well as President, Chief Executive Officer, and Chairman of
Mountaineer Park, Inc., Speakeasy Gaming of Las Vegas, Inc., Speakeasy Gaming
of Reno, Inc., Speakeasy Gaming of Fremont, Inc., MTR-Harness, Inc., Jackson
Harness, Inc., vice president and director of Scioto Downs, Inc. and in such
other offices and directorships of the Company and of its subsidiaries and
related companies (collectively, “Affiliates”) to which he may be elected or
appointed, and to perform such other reasonable and appropriate

 

 

duties as may be requested of him by the
board of directors of the Company (the “Board of Directors”), in accordance
with the terms herein set forth.  During
the Period of Relationship, Executive agrees to serve the Company as Chairman,
and to perform such other reasonable and appropriate duties as may be requested
of him by the Board of Directors.  In
performance of his duties, Executive shall be subject to the direction of the
Board of Directors.  During the Period of
Employment, excluding periods of vacation and sick leave to which Executive is
entitled, Executive shall devote his full time, energy and skill during regular
business hours to the business and affairs of the Company and its affiliates
and to the promotion of their interests. 
During the Period of Relationship, excluding periods of vacation and sick leave to which Executive is
entitled, Executive shall devote his full energy and skill for approximately
25% of regular business hours to the business and affairs of the Company and
its Affiliates and to the promotion of their interests at such times as the
Board of Directors shall determine.”

 

3.                                       Amendments
to Section 4(a) and 4(b) of the Agreement. 
Section 4(a) of the Agreement is hereby amended by the addition of the
phrase “During the Period of Employment,” as the beginning of each sentence
therein.

 

4.                                       Amendment
to Section 4(b) of the Agreement. 
Section 4(b) of the Agreement is hereby amended and restated in its
entirety as follows:

 

“Annual Bonus.  During the Period of Employment, Executive
shall be entitled to (i) semi-annual cash bonuses of $50,000 and (ii) an annual
cash bonus in an amount equal to one plus the factor by which EBITDA
(determined on the basis of independently audited financial statements) for the
calendar year then completed exceeded (by at least $1) EBITDA for calendar year
2000 (i.e., $32.1 million) multiplied by $250,000.  In no event shall the sum of one plus the
aforementioned factor be less than zero. 
By way of example, (A) if EBITDA for 2001 were $40 million, then the
bonus earned in 2001 and payable in 2002 upon completion of the Company’s audit
would be $311,500, (B) if EBITDA for 2001 were $32,100,000, then such bonus
would be $0, (C) if EBITDA for 2001 were $32,100,001, then such bonus would be
$250,000, (D) if EBITDA for 2001 were $20,000,000, then such bonus would be $0
and (E) if EBITDA for 2001 were -($100,000), then such bonus would be $0, each
of which is calculated as follows:

 

A.    $40,000,000 - $32,100,000 = $7,900,000;

$7,900,000 ÷ $32,100,000 = 0.246;

$250,000 X (1 + . 246) = $311,500

 

B.    $32,100,000 - $32,100,000 = $0

$0 ÷ $32,100,000 = $0

$250,000 X (1 + 0) = $250,000, BUT because EBITDA for 2001 did not exceed
EBITDA for 2000 by $1, the bonus is $0

 

2

 

C.    $32,100,001 - $32,100,000 = $1

$1  ÷ $32,100,001 = $0.00000003

$250,000 X (1 + 0.00000003) = $250,000

 

D.    $20,000,000 - $32,100,000 = -($12,100,000)

-($12,100,000) ÷ $32,100,000 = -.377

$250,000 X (1 + (-.377)) = $155,750, BUT because EBITDA for 2001 did not exceed
EBITDA for 2000 by $1, the bonus is $0

 

E.     -($100,000) - $32,100,000 = -($32,200,000)

-($32,200,000) ÷ $32,100,000 = -1.003

1 + (-1.003) = -.003, BUT this calculation may not drop below zero

$250,000 X 0 = $0

 

Each Annual Bonus shall be payable to
Executive within ten (10) days after the conclusion of the Company’s audit for
the calendar year then completed.”

 

5.                                       Amendments
to Section 4(c) of the Agreement. 
Section 4(c) of the Agreement is hereby amended as follows:

 

I.  Section 4(c)(i) of the
Agreement is hereby amended and restated in its entirety as follows:

 

“for each calendar year commencing with 2001,
calculate the factor by which each of the following measures differed from such
measure for calendar year 2000 (referred to herein as the “Base Year”) plus
one; provided, that in no instance shall any such factor plus one
be less than zero:”

 

II.  Section 4(c)(ii) of the
Agreement is hereby amended and restated in its entirety as follows:

 

“Calculate the average of all such
factors by adding them and dividing the sum by the total number of factors (24 factors
assuming the Period of Employment is not terminated early) to determine the “Factor
Average”.

 

III.  Section 4(c)(iii) of the
Agreement is hereby amended and restated in its entirety as follows:

 

“Add 1.0 to the Factor Average for each of
the following to determine the “Adjusted Factor Average”:

 

(A)      Acquisition of a racetrack (including a license
to build and operate a racetrack) at any time from the Employment Date to the
date that is one day prior to the date of this Amendment in New York, New
Jersey, Delaware, Maryland, Ohio, Kentucky, Virginia, West Virginia, Michigan (including
a definitive agreement to acquire a racetrack so long as such acquisition is consummated
during the Period of

 

3

 

Employment pursuant to the definitive
agreement) or Minnesota (including the Company’s acquisition of a 50% interest
in North Metro Harness Initiative, LLC so long as that entity receives during
the Period of Employment a license to build and operate a racetrack); provided,
however the acquisition of a portion of such an enterprise will result
in an addition to the Factor Average of the product of the percentage acquired by
the Company multiplied by 1.0;

 

(B)        Acquisition of a gaming venue at any time from
the Employment Date to the date that is one day prior to the date of this
Amendment; provided, however, that such gaming venue generates
positive EBITDA in the first full year of operations during which non
pari-mutuel gaming commenced; provided further, however the
acquisition of a portion of such an enterprise will result in an addition to
the Factor Average of the product of the percentage acquired by the Company multiplied
by 1.0;

 

(C)        Acquisition of a racetrack or a gaming venue at
any time from the date of this Amendment to the end of the Period of Employment;
provided, that such racetrack or gaming venue generates, (i) during
the first full year or (ii) as a per year average over the first three full
years (each such period, the “Reference Period”) of operations of either racing
or gaming activity, the target incremental Return on Investment determined by
the Board of Directors; provided further, however the acquisition
of a portion of such an enterprise will result in an addition to the Factor
Average of the product of the percentage acquired by the Company multiplied by
1.0; the determinations as to the period that constitutes a “full year of
operations” and whether the Reference Period shall consist of one full year of
operations or the average of the first three full years of operations shall be
made at the discretion of the Board of Directors;

 

(D)       The passage of a law or regulation at any time
from the Employment Date to the date that is one day prior to the date of this
Amendment as to which the Executive has devoted substantial effort that, in the
judgment of the compensation committee, substantially improves the gaming product
at a Company owned facility; and

 

(E)         The passage of a law or regulation at any time
from the date of this Amendment to the end of the Period of Employment as to
which the Executive has devoted substantial effort that generates, during the
first full year after such passage, the target incremental Return on Investment
determined by the Board of Directors.”

 

IV. 
The concluding paragraph of Section 4(c) is hereby amended and restated
in its entirety as follows:

 

4

 

“The Long-Term Performance Bonus determined
pursuant to Sections 4(c)(i)-(iv) shall be payable to Executive within ten (10)
days after the conclusion of the Company’s audit for the last calendar year of
the Period of Employment; provided, however that if such audit is
completed prior to the date on which proper and complete calculations with
respect to any acquisition or law/regulation can be made pursuant to either of
Sections 4(c)(iii)(C) or 4(c)(iii)(E), then any amounts owed pursuant to either
such section with respect to any such acquisition or law/regulation shall be
paid within ten (10) days after the conclusion of the Company’s audit for the
calendar year during which the completion of such calculation was possible; and
provided further, however that the Company may withhold from such
payment an amount sufficient to satisfy any applicable withholding taxes.  Further, the Long-Term Performance Bonus
shall be capped at $10 million.  Examples
of the calculation of the Long-Term Performance Bonus are set forth on Exhibit
A, attached hereto.”

 

6.                                       Amendment to Section 4(d) of the Agreement.  Section
4(d) of the Agreement is hereby amended by adding a closing parenthesis after the
reference therein to the “Period of Employment.”

 

7.                                     Amendment to Section 4(e) of the Agreement.  A new
Section 4(e) is hereby added as follows, and the current Sections 4(e) through
(l) are re-lettered as Sections 4(f) through (m), respectively:

 

“(e)                            Period
of Relationship.  From January 1,
2007 until the end of the Period of Relationship, the compensation of the Executive for his services pursuant to the
terms of this Agreement shall be:

 

(i)                                     25% of the average of the amount paid to
Executive pursuant to Section 4(a) during the final three calendar years of the
Period of Employment, which shall be payable on the same terms as described in
Section 4(a); plus

 

(ii)                                  semi-annual
cash bonuses of $12,500; plus

 

(iii)                               an
annual cash bonus equal to 25% of the average amount paid to Executive pursuant
to Section 4(b)(ii) during the final three calendar years of the Period of
Employment, which shall be payable on the same terms described in Section
4(b)(ii).”

 

8.                                       Amendment
to Section 4(k) of the Agreement. 
Section 4(k) of the Agreement (as in effect immediately after giving
effect to Amendment Number 7, above) is hereby amended by adding the following
to the end of the existing text:

 

“Until September 1, 2008, Executive shall have the non-transferable option,
exercisable by the provision of written notice to the Board of Directors, to
purchase the house and real property located at One Riverside Drive, New

 

5

 

Cumberland, West Virginia and certain surrounding acreage acquired by
the Company in 2004 (as described on Schedule 4(k)) and/or the furnishings
therein for a purchase price equal to the book value reflected on the current
financial statements and records of the Company at the time of such notice.  The purchase shall be consummated as promptly
as practicable after provision of the notice, but in any event within six
months thereafter.  The purchase rights
created hereby shall (i) be subject to compliance with the Company’s Third
Amended and Restated Credit Agreement with Wells Fargo Bank, N.A. as agent bank
as such agreement may be amended or restated from time to time and (ii) not
prevent the Company from selling any of such real or personal property during
the option period and thus shall not be deemed as an encumbrance or defect with
respect to the Company’s title to such property.  Upon the consummation of the purchase by
Executive contemplated by this Section 4(k), the Company shall be released from
the obligations under the first three sentences of this Section 4(k), and such
provisions shall be of no further force or effect.”

 

9.                                       Amendments
to Section 5 of the Agreement. 
Section 5 of the Agreement is hereby amended and restated in its
entirety by the following:

 

“Early Termination.

 

(a)                                  Notwithstanding the provisions of Section 2
hereof, Executive may be discharged by the Company for Cause (as defined in
Section 5(d) hereof), in which event the Total Period hereunder shall cease and
terminate and the Company shall have no further obligations or duties under
this Agreement, except for obligations accrued under Section 4 at the date of
termination.  In addition, the Total
Period shall cease and terminate upon the earliest to occur of the following
events:  (i) the death of Executive or
(ii) at the election of the Board of Directors (subject to the Americans With
Disabilities Act), the inability of Executive by reason of physical or mental
disability to continue the proper performance of his duties hereunder for a
period of 180 consecutive days.  Upon
termination of the Total Period pursuant to the preceding sentence, the Company
shall continue to pay to Executive or his estate, as the case may be, the
entire compensation otherwise payable to him under Section 4(a) hereof (if during
the Period of Employment) for two years or Section 4(e) hereof if during the
Period of Relationship.

 

(b)                                 In the event Executive is discharged by the
Company other than for Cause (as defined in Section 5(d) hereof) or other than
pursuant to Section 5(a) hereof by reason of physical or mental disability,
Executive shall have no further obligations or duties under this Agreement;
provided, however, that Executive shall continue to be bound by the provisions
of Section 6 hereof if the Company performs its obligations under this Section
5(b).  In the event of termination of the
Total Period pursuant to the preceding sentence, the Company shall continue to
pay Executive the entire compensation otherwise payable to him under the
provisions of Sections 4(a), (b), (c) and (e) hereof for the otherwise
remaining Total Period without any duty on the part of Executive to mitigate
such payments; provided, however, that if Executive should die prior to the end
of such

 

6

 

period, the provisions of Section 5(a) hereof
shall be applicable as though Executive’s employment hereunder had not been so
terminated.

 

(c)                                  Notwithstanding Section 5(b) hereof, in the event
that following a Change in Control (as defined in Section 5(f) hereof)
Executive is discharged by the Company other than for Cause (as defined in
Section 5(d) hereof) or other than pursuant to Section 5(a) hereof by reason of
physical or mental disability, or Executive terminates employment with the
Company for Good Reason (as defined in Section 5(e) hereof), Executive shall
have no further obligations or duties under this Agreement; provided, however,
that Executive shall continue to be bound by the provisions of Section 6 hereof
if the Company performs its obligations under this Section 5(c).  In the event of termination of the Total
Period pursuant to the preceding sentence, the Company shall, in addition to
paying the obligations accrued under Section 4 at the date of termination, (i)
pay Executive, within 30 days of such termination, a cash severance payment,
with no duty by Executive to mitigate such payment, in an amount equal to three
times the annual base salary payable to Executive under Section 4(a) (if during
the Period of Employment) or Section 4(e) (if during the Period of
Relationship) on the day before such termination; provided, however, that the
amount of such severance payment shall be capped to the extent necessary to
avoid an excess parachute payment that would trigger an excise tax; and (ii)
pay on Executive’s behalf the next five annual premium payments for Executive’s
deferred compensation plan then in effect.

 

(d)                                 For purposes of this Section 5, the term “Cause”
shall mean (i) conviction of a felony, (ii) embezzlement or misappropriation of
funds or property of the Company or any of its Affiliates, (iii) Executive’s
consistent refusal to substantially perform, or willful misconduct in the
substantial performance of, his duties and obligations hereunder; or (iv)
Executive’s engaging in activity that the Board of Directors determines in its
reasonable judgment could result in the suspension or revocation of any video
lottery, pari-mutuel, or other gaming license or permit held by the Company or
any of its subsidiaries.

 

(e)                                  For purposes of this Section 5, the term “Good
Reason” shall mean (i) the assignment to Executive of any duties or
responsibilities which in the reasonable judgment of Executive are inconsistent
in any respect with Executive’s position as President, Chief Executive Officer
and Chairman during the Period of Employment, and as Chairman during the Period
of Relationship (including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section 3, or any
other action by the Company which in the reasonable judgment of Executive
results in a substantial diminishment in such position, authority, duties or
responsibilities (provided, however, that the assignment of tasks or
responsibilities previously performed by Executive to Executive’s subordinates
shall not constitute Good Reason); (ii) the Company’s requiring relocation of
Executive, without his prior written consent, to a place of employment other
than Chester, West Virginia, or Las Vegas, Nevada, except for travel reasonably
required in the performance of Executive’s responsibilities (it being
understood that the Company’s obligation to provide Working Facilities only

 

7

 

at its corporate headquarters shall not
constitute relocation for purposes of determining Good Reason); or (iii) the
Company’s failure to substantially comply with the provisions of Section 4 of
this Agreement.

 

(f)                                    For purpose of this Section 5, the term “Change
in Control” shall mean: (i) a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A, as in effect
on the date hereof, under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”); (ii) any person, including a “group” as such term used in Section 13(d)(3)
of the Exchange Act, becoming the beneficial owner, directly or indirectly, of
20% or more of the combined voting power of the Company’s outstanding voting
securities other than a person who was an officer or director of the Company on
the date of this Agreement; or (iii) individuals who, as of the date hereof,
constitute the Board of Directors ceasing for any reason to constitute at least
a majority of the Board of Directors; provided, however, that in the case of a
Change in Control pursuant to this Section 5(f)(iii), Executive may not
terminate this Agreement for Good Reason unless Executive does so by written
notice within five (5) business days after Executive has actual notice that
such Change in Control has occurred.

 

(g)                                 Upon the termination of the Executive’s Period of
Employment or Period of Relationship pursuant to Section 2 or Section 5 (other
than for Cause) hereof, the Executive shall have the right to purchase from the
Company for a price equal to the then-depreciated book value (i) the
furnishings in the Executive’s office at the Company’s headquarters and/or (ii)
any passenger automobiles owned by the Company and generally used by the
Executive; provided, however, that Executive’s right pursuant to this Section
5(g) shall not prevent the Company from selling any of such personal property
during the Period of Employment and thus shall not be deemed as an encumbrance
or defect with respect to the Company’s title to such property.  Further, with respect to any purchases
pursuant to this Paragraph 5(g), the Executive shall have forty-five (45) days
in which to notify the Company of his intent to exercise such right, with
closing to occur within a reasonable time thereafter.  Executive’s rights hereunder shall not be
transferable.”

 

10.                               Amendment
to Section 6(b) of the Agreement. 
Section 6(b) of the Agreement is hereby amended and restated in its
entirety by the following:

 

“Executive agrees that during the
term hereof, and for a period of one year from the termination of the Total
Period for any reason (including, without limitation, as a result of this
Agreement’s termination in accordance with its own terms), he will not become a
stockholder, director, officer, employee or agent of or consultant to any
corporation (other than an Affiliate), or member of or consultant to any
partnership or other entity, or engage in any business as a sole proprietor or
act as a consultant to any business or entity that operates a gaming or
pari-mutuel wagering business, in each case which competes with any gaming business
or gaming activity engaged in, or known by Executive to be contemplated to be
engaged in, by the Company or any of its Affiliates within a state in which the
Company or any of its

 

8

 

Affiliates is so engaged or then contemplates
becoming so engaged; provided, however, that competition
shall not include the ownership (solely as an investor and without any other
participation in or contact with the management of the business) of less than
five percent (5%) of the outstanding shares of stock of any corporation engaged
in any such business, which shares are regularly traded on a national
securities exchange or in an over-the-counter market. Executive agrees that
during the non-compete period referred to in this Section 6, neither Executive
nor any person or enterprise controlled by Executive will solicit for
employment any person employed by the Company or any of its Affiliates at, or
at any time within three months prior to, the time of the solicitation.”

 

11.                               Amendment
to Section 6(c) of the Agreement. 
Section 6(c) is hereby amended by adding the following sentences at the
end thereof:

 

“If any of the provisions of this Section 6 of any part thereof are
hereafter adjudicated by a court of competent jurisdiction to be invalid or
unenforceable, then such court is hereby requested to amend such provision by
deleting or amending the portion thus adjudicated to be invalid or
unenforceable.  Any such deletion or
amendment shall be deemed by the parties to apply only with respect to the
operation of such provision in the particular jurisdiction in which such
adjudication is made, so as to render such provision enforceable as so amended
in such jurisdiction.  Such deletion or
amendment shall not apply with respect to the operation of this Agreement in
any other jurisdiction or geographic area and shall not affect the remainder of
the provision, which shall be given full effect, without regard to the invalid
portions.”

 

B.                                    Miscellaneous.

 

This Amendment is further governed by the following provisions:

 

1.                                       Parties In Interest.  This
Amendment shall be binding upon and inure to the benefit of Executive, and it
shall be binding upon and inure to the benefit of the Company and any
corporation succeeding to all or substantially all of the business and assets
of the Company by merger, consolidation, purchase of assets or otherwise.

 

2.                                       Arbitration.  Any disputes arising under the
terms of this Amendment shall be settled by binding arbitration between the
parties in Hancock County, West Virginia in a proceeding held under the rules
of the American Arbitration Association. 
In such proceeding, each party shall choose one arbitrator and the two
so chosen shall choose a third arbitrator. 
The vote of two of the arbitrators shall be sufficient to determine an
award.

 

3.                                       Governing Law.  This Amendment shall be
governed by and construed in accordance with the laws of the State of Delaware
without giving effect to the choice of law or conflicts of law rules and laws
of such jurisdiction.

 

4.                                       Severability.  In the event that any term or
condition contained in this Amendment shall for any reason be held by a court
of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other

 

9

 

term or
condition of this Amendment, but this Amendment shall be construed as if such
invalid or illegal or unenforceable term or condition had never been contained
herein.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first above written.

 

	
   

  	
   

  	
  MTR GAMING
  GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Edson R. Arneault

  	
   

  	
  /s/ Donald J. Duffy

  
	
  Edson R. Arneault

  	
   

  	
  Donald J.
  Duffy,

  Chairman of the Compensation Committee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ LC Greenwood

  
	
   

  	
   

  	
  LC Greenwood,

  Member of the Compensation Committee

  

 

10

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