Document:

Exhibit 10.2

 

FORBEARANCE
AGREEMENT; WAIVER; AND FIRST AMENDMENT TO THE CREDIT AGREEMENT

 

This FORBEARANCE AGREEMENT; WAIVER; AND FIRST AMENDMENT TO
THE CREDIT AGREEMENT (this “Forbearance Agreement”) is entered into as
of March 2, 2008, by and among Station Casinos, Inc. (the “Borrower”),
certain subsidiaries of the Borrower party hereto (the “Guarantors” and,
together with the Borrower, the “Loan Parties”), FCP Holdings, Inc.
(“FCP Holding”), Fertitta Partners LLC (“Fertitta Partners”), FCP
Voteco, LLC (“FCP Voteco” and, together with FCP Holding and Fertitta
Partners, the “Holding Companies”, with the Holding Companies and the
Loan Parties collectively referred to as the “Credit Parties”), the
Lenders (as defined below) party hereto, and Deutsche Bank Trust Company
Americas, as administrative agent for the Lenders and the other Secured Parties
(in such capacity, the “Administrative Agent”). Capitalized terms used
but not otherwise defined herein shall have the respective meanings ascribed to
such terms in the Credit Agreement. Certain capitalized terms used herein are
defined in Section 2(e) of this Forbearance Agreement.

 

RECITALS

 

WHEREAS, the Borrower and
various financial institutions (the “Lenders”) are parties to that
certain Credit Agreement, dated as of November 7, 2007 (the “Credit
Agreement”), pursuant to which, among other things, the Lenders have
agreed, subject to the terms and conditions set forth in the Credit Agreement,
to make certain loans and other financial accommodations to the Borrower;

 

WHEREAS,
as of the date hereof, one or more of the events listed on Exhibit A
hereto are purported to have occurred (or may occur) during an Applicable
Forbearance Period (as hereinafter defined) (the events described in Exhibit A
hereto being herein collectively called the “Specified Events”); and

 

WHEREAS, upon the Borrower’s
request, the Lenders have agreed, subject to the terms and conditions set forth
herein, to (i) grant a limited waiver with respect to each Potential
Pre-Forbearance Default (as defined below), (ii) forbear from exercising
their default-related rights, remedies, powers and privileges against the
Borrower and the other Credit Parties solely with respect to the Potential
Specified Defaults (as defined below) and (iii) amend certain provisions
of the Credit Agreement, in each case as more fully described herein;

 

NOW, THEREFORE, in
consideration of the foregoing, the terms, covenants and conditions contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1.           Confirmation by the
Borrower of Obligations and Specified Events; Limited Waiver.

 

(a)    Amount of Obligations. The Borrower
and each other Credit Party acknowledge and agree that as of February 25,
2009, the respective aggregate principal balances of the Loans as of such date
and aggregate face amount of Letters of Credit were as follows (such amounts,
in the aggregate, the “Existing Principal and Letters of Credit”):

 

	
  Term Loans:

  	
   

  	
  $

  	
  247,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Revolving Credit Loans:

  	
   

  	
  $

  	
  628,236,586.20

  	
   

  

 

 

	
  Swing Line Loans:

  	
   

  	
  $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Letters of Credit:

  	
   

  	
  $

  	
  10,184,203.00

  	
   

  

 

The Borrower and each other
Credit Party acknowledge and agree that as of February 25, 2009, the
aggregate amount of accrued and unpaid interest on the Term Loans, Revolving
Credit Loans and Swing Line Loans is $1,544,861.20 (the “Existing Interest”),
the aggregate amount of accrued and unpaid commitment fees payable pursuant to Section 2.09(a) of
the Credit Agreement is $8,201.94 (the “Existing Commitment Fees”), the
aggregate amount of accrued and unpaid letter of credit fees payable pursuant
to Section 2.03(h) of the Credit Agreement is $38,190.80 (the “Existing
LC Fees”) and the aggregate amount of accrued and unpaid letter of credit
fronting fees payable pursuant to Section 2.03(i) of the Credit
Agreement is $4,500.00 (the “Existing LC Fronting Fees” and, together
with the Existing Principal and Letters of Credit, the Existing Interest, the
Existing Commitment Fees and the Existing LC Fees, the “Outstanding
Indebtedness”).  The foregoing
amounts do not include other fees, expenses and other amounts which are
chargeable or otherwise reimbursable under the Credit Agreement and the other
Loan Documents.  None of the Borrower or
the other Credit Parties has any rights of offset, defenses, claims or
counterclaims with respect to any of the Obligations and each of the Loan
Parties are jointly and severally obligated with respect thereto (and each of
the Holding Companies are jointly and severally obligated with respect
thereto), in each case in accordance with the terms of the applicable Loan
Documents.

 

(b)    Limited Waiver. The Lenders hereby
waive, at all times during the Waiver Period (as defined below), each Potential
Pre-Forbearance Default (the “Limited Waiver”).  The Borrower and each other Credit Party
acknowledge and agree that but for the Limited Waiver, each Potential
Pre-Forbearance Default would otherwise constitute a Default or an Event of
Default that has occurred and is continuing as of the Forbearance Effective
Date (as hereinafter defined). On and after the Waiver Termination Date (as
defined below), the existence of the Potential Pre-Forbearance Defaults will
permit the Administrative Agent, either itself or at the request of the
Required Lenders, to, among other things, (A) declare the commitment of
each Lender to make Loans and any obligation of the L/C Issuers to make L/C
Credit Extensions to be terminated, whereupon such commitment and obligation shall
be terminated, (B) accelerate all or any portion of the Obligations and (C) exercise
on behalf of itself and the Lenders all rights and remedies available to it and
the Lenders under the Loan Documents or applicable Law.

 

SECTION 2.  Forbearance; Forbearance
Default Rights and Remedies.

 

(a)    The Forbearance.  Effective as of the Forbearance Effective
Date, each of the Administrative Agent and each Lender agrees that (i) until
the expiration or termination of the Borrower Forbearance Period (as defined below),
it will forbear from exercising its rights and remedies (including enforcement
and collection actions) under the Loan Documents against the Borrower or any of
the Collateral or other property owned by the Borrower (including, without
limitation, via set-off or recoupment) solely with respect to the Potential
Specified Defaults, (ii) until the expiration or termination of the
Holding Company Forbearance Period (as defined below), it will forbear from
exercising its rights and remedies (including enforcement and collection
actions) under the Loan Documents against the Holding Companies or any of the
Collateral or other property owned by the Holding Companies (including, without
limitation, via set-off or recoupment) solely with respect to the Potential
Specified Defaults, and (iii) until the expiration or termination of the
Other Credit Party Forbearance Period (as defined below), it will forbear from
exercising its rights and remedies (including enforcement and collection
actions) under the Loan Documents against each Credit Party (other than the
Borrower and the Holding Companies) or any of the Collateral or other property
owned by such Credit Parties (including, without limitation, via set-off or
recoupment) solely with respect to the Potential Specified Defaults.  The Borrower and each other Credit Party
acknowledge and agree that (x) each Potential Specified Default (other
than a Potential Pre-Forbearance Default) that may occur and be continuing
during an Applicable

 

2

 

Forbearance Period would
constitute a Default or an Event of Default upon which action could be taken
but for the forbearance described in the preceding sentence, and (y) the
Administrative Agent and the Lenders shall not be delayed, prohibited or
otherwise stayed on and after the Other Credit Party Forbearance Termination
Date from taking an action or exercising any rights against the Credit Parties
or their respective assets (other than the Borrower, the Holding Companies or
their respective assets) as a result of the commencement of the Borrower
Chapter 11 Case or the Holding Company Chapter 11 Cases prior to the Other
Credit Party Forbearance Termination Date. 
To the extent necessary, each of the Borrower and each Holding Company hereby
grants to the Administrative Agent and the Lenders a limited waiver of the
automatic stay imposed by Section 362 of the Bankruptcy Code (to the
extent applicable in the Borrower Chapter 11 Case or the Holdings Chapter 11
Cases, as the case may be) solely to give effect to clause (y) of the
preceding sentence.

 

(b)    Effect of Forbearance Termination.
From and after the Applicable Forbearance Termination Date (as hereinafter
defined), the agreement of each Lender and the Administrative Agent hereunder
to forbear as set forth in Section 2(a) shall immediately terminate
without the requirement of any demand, presentment, protest, or notice of any
kind, all of which are hereby waived by the Borrower and each other Credit
Party.  The Borrower and each other Credit
Party hereby agree that (i) from and after the Borrower Forbearance
Termination Date (after the giving of any notice and the lapse of any grace
period applicable in the determination thereof), the Administrative Agent,
either itself or at the direction of the Required Lenders, may at any time, or
from time to time, in its (or their) sole and absolute discretion, exercise
against the Borrower (and its properties) any and all of their rights,
remedies, powers and privileges under any or all of the Credit Agreement, any
other Loan Document, applicable law and/or equity, all of which rights,
remedies, powers and privileges are fully reserved by each Lender and the
Administrative Agent, (ii) from and after the Holding Company Forbearance
Termination Date (after the giving of any notice and the lapse of any grace
period applicable in the determination thereof), the Administrative Agent,
either itself or at the direction of the Required Lenders, may at any time, or
from time to time, in its (or their) sole and absolute discretion, exercise
against the Holding Companies (and their properties) any and all of their
rights, remedies, powers and privileges under any or all of the Credit
Agreement, any other Loan Document, applicable law and/or equity, all of which
rights, remedies, powers and privileges are fully reserved by each Lender and
the Administrative Agent, and (iii) from and after the Other Credit Party
Forbearance Termination Date (after the giving of any notice and the lapse of
any grace period applicable in the determination thereof), the Administrative
Agent, either itself or at the direction of the Required Lenders, may at any
time, or from time to time, in its (or their) sole and absolute discretion,
exercise against any Credit Party (and its properties) any and all of their
rights, remedies, powers and privileges under any or all of the Credit
Agreement, any other Loan Document, applicable law and/or equity, all of which
rights, remedies, powers and privileges are fully reserved by each Lender and
the Administrative Agent.

 

(c)    Limitation on Forbearance Extension.
Except as set forth herein, none of the Lenders or the Administrative Agent
shall have any obligation to extend an Applicable Forbearance Period, or enter
into any other waiver, forbearance or amendment, and the Lenders’ and the
Administrative Agent’s agreement to permit any such extension, or enter into
any other waiver, forbearance or amendment shall be subject to the sole
discretion of the Required Lenders (or, if required by Section 10.01 of
the Credit Agreement, each Lender and each applicable Class of Lenders
required thereby).  Any agreement by any
Lender or the Administrative Agent to extend an Applicable Forbearance Period,
if any, or enter into any other waiver, forbearance or amendment, must be set
forth in writing and signed by a duly authorized signatory of the
Administrative Agent and the Required Lenders (or, if required by Section 10.01
of the Credit Agreement, each Lender and each applicable Class of Lenders
required thereby).  The Borrower and the
other Credit Parties each acknowledge that the Lenders and the Administrative
Agent have not made any assurances concerning any possibility of an extension
of an Applicable Forbearance Period or the entering into of any waiver, forbearance
or amendment.

 

3

 

(d)    Limitations on Additional Extensions of
Credit. The Borrower and the other Credit Parties each acknowledge and
agree that no additional Loans or other financial accommodation under the
Credit Agreement shall be made by the Lenders (including the L/C Issuers) to
the Borrower during the Borrower Forbearance Period, other than (i) the
issuance, renewal, extension or replacement of Letters of Credit and (ii) L/C
Borrowings deemed to have been incurred by the Borrower pursuant to Section 2.03(c)(iii) of
the Credit Agreement; provided that (x) the aggregate Revolving
Credit Exposure of the Revolving Credit Lenders shall not increase after giving
effect to any L/C Borrowing, Letter of Credit issuance or other extension of
credit as provided above (it being understood and agreed, however, that L/C
Obligations may in fact increase if accompanied by a repayment of Loans such
that, after giving effect to such Letter of Credit issuance or other extension
of credit as provided above, the aggregate Revolving Credit Exposure of the
Revolving Credit Lenders does not exceed the Revolving Credit Exposure of the
Revolving Credit Lenders on the Forbearance Effective Date) and (ii) the
Borrower shall have Cash Collateralized all L/C Obligations (in an amount equal
to the then Outstanding Amount thereof, after giving effect to the issuance,
renewal, extension or replacement of the respective Letter of Credit) in the
manner contemplated by Section 2.03(g) (but without regard to whether
such Cash Collateralization is expressly required by such Section).  In connection with any financial
accommodations incurred or extended pursuant to the Credit Agreement during the
Borrower Forbearance Period as permitted by clause (i) of the preceding
sentence, the conditions specified in Section 4.02 of the Credit Agreement
shall be required to be satisfied; provided that solely for such
purposes during the Borrower Forbearance Period (x) any representations
and warranties (i) pursuant to Section 5.05(b) of the Credit
Agreement shall not be required to be made and (ii) pursuant to Section 5.07
of the Credit Agreement shall be deemed modified so that the representation
excludes the effects of defaults under the Existing Senior Notes Indentures and
the Existing Senior Subordinated Notes Indentures (collectively, the “Existing
Notes Indentures”) solely as a result of the existence of one or more
Potential Specified Defaults, (y) no Potential Specified Default shall be
deemed to constitute a Default or Event of Default for purposes of the
representation and warranty contained in the second sentence of Section 5.07
of the Credit Agreement, and (z) no Potential Specified Default shall be
deemed to constitute a Default or Event of Default (the items included in (x), (y) and
(z), the “Permitted Exceptions”).

 

(e)    Certain Definitions. As used in this
Forbearance Agreement, the following terms shall have the meanings set forth
below:

 

“Amended and Restated Credit Agreement”
has the meaning provided in the Credit Facilities Term Sheet.

 

“Applicable Forbearance Period” means (i) with
respect to the Borrower, the Borrower Forbearance Period, (ii) with
respect to each Holding Company, the Holding Company Forbearance Period, and (iii) with
respect to each Credit Party (other than the Borrower and the Holding
Companies), the Other Credit Party Forbearance Period.

 

“Applicable Forbearance Termination Date”
means (i) with respect to the Borrower and the Borrower Forbearance
Period, the Borrower Forbearance Termination Date, (ii) with respect to
each Holding Company and the Holding Company Forbearance Period, the Holding
Company Forbearance Termination Date and (iii) with respect to each Credit
Party (other than the Borrower and the Holding Companies) and the Other Credit
Party Forbearance Period, the Other Credit Party Forbearance Termination Date.

 

“Bank Solicitation Statement” means
that certain “Solicitation of Acceptance of a Plan of Reorganization” in
respect of the Credit Agreement in the form circulated to the Lenders on February 10,
2009 (including the “ballot for holders of bank loan claims” and the other
exhibits attached thereto).

 

4

 

“Bankruptcy Code” means United States
Code entitled “Bankruptcy”, as now and/or hereinafter effect or any successor
thereto.

 

“Borrower Forbearance Period” means
the period beginning on the Forbearance Effective Date and ending on the
earliest to occur of (i) the Holding Company Forbearance Termination Date,
(ii) the Other Credit Party Forbearance Termination Date, (iii) the
trustee, agent or any of the holders of the Existing Notes or any other Junior
Financing commence an involuntary bankruptcy proceeding against the Borrower,
and (iv) the commencement of the Borrower Chapter 11 Case (the earliest to
occur of clauses (i), (ii), (iii) or (iv) being the “Borrower
Forbearance Termination Date”).

 

“Borrower Forbearance Termination Date”
has the meaning provided in the definition of Borrower Forbearance Period.

 

“Borrower Chapter 11 Case” means the
case to be, or thereafter that has been, commenced by the Borrower under
chapter 11 of the Bankruptcy Code.

 

“Cash Collateral Stipulation” has the
meaning provided in the definition of Other Credit Party Forbearance Period.

 

“Chapter 11 Cases” means the Borrower
Chapter 11 Case and the Holding Company Chapter 11 Cases.

 

“Confirmation Order” means the
confirmation order in the Borrower Chapter 11 Case confirming the Plan.

 

“Credit Facilities Term Sheet” means
the Summary of Terms and Conditions for the Amended and Restated Secured Credit
Facilities in the form of Exhibit E hereto, as the same may be
amended or modified with the consent of the Borrower and the Required Lenders
(or, to the extent required by the Bankruptcy Code or other applicable law, the
Requisite Lenders).

 

“Existing Notes Indentures” has the
meaning provided in Section 2(d).

 

 “Forbearance
Default” means (i) the occurrence of any Event of Default (including,
without limitation, the failure to pay accrued but unpaid interest on the Loans
and scheduled repayments of the Term Loans when and as due but excluding the
Potential Specified Defaults), or (ii) any representation, warranty or
certification made or deemed made by the Borrower or any other Credit Party in
connection with this Forbearance Agreement (other than the Permitted
Exceptions) shall be false in any material respect on the date as of which made
or deemed made.

 

“Forbearance Effective Date” has the
meaning provided in Section 17.

 

“Holding Company Forbearance Period”
means the period beginning on the Forbearance Effective Date and ending on the
earliest to occur of (i) the Borrower Forbearance Termination Date, (ii) the
Other Credit Party Forbearance Termination Date, and (iii) the
commencement of the Holding Company Chapter 11 Cases (the earliest to occur of
clauses (i), (ii) or (iii) being the “Holding Company Forbearance
Termination Date”).

 

“Holding Company Forbearance Termination
Date” has the meaning provided in the definition of Holding Company Forbearance
Period.

 

5

 

“Holding Company Chapter 11 Cases”
means the cases to be, or thereafter that has been, commenced by the Holding
Companies under chapter 11 of Bankruptcy Code.

 

“Non-Funding Lender” mean each Revolving
Credit Lender that failed to fund Revolving Credit Loans requested by the
Borrower pursuant to that certain Committed Loan Notice, dated December 18,
2008, in respect of a Revolving Credit Borrowing aggregating $11,579,210.90.

 

“Other Credit Party Forbearance Period”
means the period beginning on the Forbearance Effective Date and ending on the
earliest to occur of:

 

(i) any Forbearance Default;

 

(ii) the Administrative Agent’s receipt
from the Borrower of a Payment Notice or the making of any payment (including
interest) on the Existing Notes or any other Junior Financing by the Loan
Parties, any of their Subsidiaries or the Permitted Holders;

 

(iii) the trustee, agent or any of the
holders of the Existing Notes or any other Junior Financing commence an
involuntary bankruptcy proceeding against the Borrower which is neither
dismissed nor converted to a voluntary chapter 11 proceeding of the Borrower
prior to the earlier of (i) entry of an order for relief in such
involuntary proceeding and (ii) the 60th day after the date of filing of
the involuntary petition;

 

(iv) 11:59 p.m. (New York City
time) on March 3, 2009 (or, if the Borrower shall have obtained (and at
all times thereafter maintain) a forbearance (the “Initial Existing Notes
Forbearance”) with respect to all defaults that have arisen (or may arise
prior to March 31, 2009) under the Existing Notes Indentures (as a result
the failure to pay scheduled interest on the Existing Notes when and as due or
otherwise) on terms satisfactory to the Administrative Agent, March 31,
2009), unless the Petition Filing Date shall have occurred at or prior to such
time on March 3, 2009 (or March 31, 2009, as the case may be); provided,
however, that, if (x) the forbearance agreements with respect to
the Existing Notes Indentures provide for continued forbearance on terms
satisfactory to the Administrative Agent to a specified time after March 31,
2009 (the “Additional Existing Notes Forbearance”)  and (y) each of the Solicitation
Materials (as defined in the Credit Facilities Term Sheet), the Credit
Facilities Term Sheet and the Bank Solicitation Statement shall have been
modified prior to 11:59 p.m. (New York City time) on March 2, 2009
(or, if the Initial Existing Notes Forbearance is obtained, March 30,
2009) to reflect an identical deadline for the occurrence of the Petition
Filing Date, such time of termination shall instead be the earlier of (1) such
specified time after March 31, 2009 (the “Extended Forbearance Deadline”)
and (2) 11:59 p.m. (New York City time) on April 15, 2009,
unless the Petition Filing Date shall have occurred at or prior to such time;

 

(v) any amendments or modifications to
the Plan having been made on or after the Petition Filing Date and prior to the
time of the effectiveness of the Plan and the Confirmation Order (such time of
effectiveness, the “Plan Effective Time”), without the consent of the
Administrative Agent (acting at the direction of the Required Lenders), unless
such amendments or modifications are not inconsistent with the terms and
conditions of the Credit Facilities Term Sheet (it being understood that the
foregoing agreements limiting amendments and modifications to the Plan are in
addition to (and do not constitute a waiver of) the Lenders’ rights under
Bankruptcy Code Section 1127,

 

6

 

Bankruptcy Rule 3019, any other applicable Bankruptcy Code
provision or Bankruptcy Rule or applicable law);

 

(vi) 11:59 p.m. (New York City
time) on September 30, 2009, unless the Plan Effective Time has occurred
at or prior to such time;

 

(vii) any amendments or modifications to
the Plan or the Confirmation Order having been made after the Plan Effective
Date (other than technical modifications that are not adverse to the interests
of the Lenders) without the consent of the Required Lenders (or, to the extent
required by the Bankruptcy Code, Bankruptcy Rules or other applicable law,
the Requisite Lenders);

 

(viii) the earlier of (a) 10 days
following the Plan Effective Time and (b) October 10, 2009, unless
the Restructuring Transactions shall have been consummated in accordance with
the terms and conditions therefor set forth in the Credit Facilities Term
Sheet;

 

(ix) 11:59 p.m. (New York City
time) on the third Business Day following the Petition Filing Date, unless the
Loan Parties and the Administrative Agent shall have entered into a stipulation
or form of agreed order for adequate protection and use of cash collateral as
approved on an interim and final order basis and, in each case, in form and
substance reasonably satisfactory to the Administrative Agent (the “Cash
Collateral Stipulation”) at or prior to such time;

 

(x) the occurrence of any event of
default under, and as defined in, the Cash Collateral Stipulation; and

 

(xi) fifteen (15) Business Days after
delivery of written notice by the Administrative Agent (acting at the direction
of Required Lenders (determined for this purpose only as if the reference to
50% in the definition thereof were instead 66-2/3%)) to any Loan Party of the
occurrence of a Material Adverse Effect in respect of the Guarantors, taken as
a whole.

 

“Other Credit Party Forbearance
Termination Date” means the first to occur of the times or events described
in clauses (i) through (xi) in the definition of Other Credit Party
Forbearance Period.

 

“Payment Notice” has the meaning
provided in Section 4(g).

 

“Permitted Exceptions” has the meaning
provided in Section 2(d).

 

“Petition Filing Date” means the date
upon which the Borrower’s Chapter 11 Case and the Holding Company Chapter 11
Cases are commenced by the filing of a voluntary petition or the voluntary
conversion of an involuntary bankruptcy petition.

 

“Plan” means the Plan of
Reorganization of the Borrower attached as Exhibit D hereto.

 

“Plan Effective Time” has the meaning
provided in the definition of “Other Credit Party Forbearance Period”.

 

7

 

“Potential Pre-Forbearance Default”
means any Event of Default described in items (i) and (vi) of Exhibit B
hereto.

 

“Potential Specified Default” means
any Event of Default described on Exhibit B hereto.

 

“Requisite Lenders” means, as of any
date of determination, Lenders (i) which hold at least 66-2/3% of the sum
of (x) the Total Outstandings (with the aggregate amount of each Lender’s
risk participation and funded participation in L/C Obligations and Swing Line
Loans being deemed “held” by such Lender for purposes of this definition) on
such date and (y) the aggregate unused Revolving Credit Commitments (if
any) on such date, in each case that vote in connection with the approval of
Amended and Restated Credit Agreement and the Plan in the Chapter 11 Cases and (ii) represent
more than 50% in number of the Lenders that vote in connection with the
approval of Amended and Restated Credit Agreement and the Plan in the Chapter
11 Cases.

 

“Restructuring Transactions” has the
meaning provided in the Credit Facilities Term Sheet.

 

“Waiver Period” means the period
commencing on December 30, 2008 and ending on the earlier to occur of (i) the
Borrower Forbearance Termination Date, (ii) the Holding Company
Forbearance Termination Date and (iii) the Other Credit Party Forbearance
Termination Date (such earlier date, the “Waiver Termination Date”).

 

“Waiver Termination Date” has the
meaning provided in the definition of Waiver Period.

 

SECTION 3.  Amendments to Credit Agreement.  Effective as of and for the period commencing
on the Forbearance Effective Date, the following provisions of the Credit
Agreement shall be amended as set forth below (which amendments are in addition
to those amendments, modifications and waivers contained in the Forbearance
Agreement, which shall remain in full force and effect).  For the avoidance of doubt, the Credit
Agreement shall remain amended as set forth in this Section 3 after each
Applicable Forbearance Termination Date, and the amendments in this Section 3
shall not operate as a waiver of any Default or Event of Default.

 

(a)    Amendments to Section 1.01. (i) The
definition of “Applicable Rate” is amended by
adding the following sentence at the end of said definition:

 

“Notwithstanding the foregoing, on and after the Borrower Forbearance
Termination Date, the “Applicable Rate” shall mean a percentage per annum equal
to (A) for Eurodollar Loans, 4.50%, (B) for Base Rate Loans, 3.50%, (C) for
Letter of Credit fees, 4.50% and (D) for commitment fees, 0.375% (it being
understood that (x) the “Applicable Rate” (as determined in this Agreement
prior to the Borrower Forbearance Termination Date) shall be applicable for all
periods prior to the Borrower Forbearance Termination Date and (y) the “Applicable
Rate” (as determined in this Agreement after giving effect to the Borrower
Forbearance Termination Date) shall be applicable for all periods on and after
the Borrower Forbearance Termination Date).”

 

(ii)           The
definition of “Base Rate” is deleted in its
entirety and replaced by the following:

 

“Base Rate”
means, for any day, a rate per annum equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on
such day plus 1⁄2

 

8

 

of 1% and (c) on and after the Borrower Forbearance Termination
Date, the Adjusted LIBO Rate for a Eurocurrency Loan denominated in dollars
with a one-month interest period commencing on such day plus 1.0%. For
purposes of this definition, the Adjusted LIBO Rate shall be determined using
the LIBO Rate as otherwise determined by the Administrative Agent in accordance
with the definition of LIBO Rate, except that (x) if a given day is a
Business Day, such determination shall be made on such day (rather than two
Business Days prior to the commencement of an Interest Period) or (y) if a
given day is not a Business Day, the LIBO Rate for such day shall be the rate
determined by the Administrative Agent pursuant to preceding clause (x) for
the most recent Business Day preceding such day.  Any change in the Base Rate due to a change
in the Prime Rate, the Federal Funds Rate or such Adjusted LIBO Rate shall be
effective as of the opening of business on the day of such change in the Prime
Rate, the Federal Funds Rate or such Adjusted LIBO Rate, respectively.”

 

(iii)          The definition of “Cash Management
Obligations” is amended by deleting the text “except to the extent
that any such obligations are not subject to any Lien in favor of any such
Lender or Affiliate of such Lender and such Lender or Affiliate of such Lender
and the Borrower or the applicable Restricted Subsidiary have so notified the
Administrative Agent in writing” appearing in said definition and inserting the
text “, except to the extent that such Lender or Affiliate of such Lender, on
the one hand, and the Borrower or the applicable Restricted Subsidiary, on the
other hand, agree in writing that any such obligations shall not be secured by
any Lien on the Collateral and such Persons shall have delivered such writing
to the Administrative Agent” in lieu thereof.

 

(iv)          The definition of “Default Rate”
is amended by (i) deleting the text “plus (c) 2.0% per annum” appearing
in said definition and (ii) deleting the text “plus 2.0% per annum”
appearing in said definition.

 

(v)           The definition of “Interest Period”
is amended by inserting the text “(or, in the case of any Eurodollar Loan
disbursed or converted or continued as a Eurodollar Loan on or after the
Forbearance Effective Date, one month)” immediately prior to the text “; provided that” appearing in said definition.

 

(vi)          The definition of “Loan Document”
is amended by inserting the text “the Cash Collateral Stipulation and the
Forbearance Agreement” immediately after the words “the Collateral Documents”.

 

(vii)         The definition of “Interest Payment Date”
is amended by (x) deleting the text “three months” in each of the two
places it appears therein and by inserting in lieu thereof the text “one month”
and (y) inserting the text “(or, from and after the Forbearance Effective
Date, the last Business Day of each calendar month, commencing on the first
such date to occur on or after the Forbearance Effective Date)” at the end of
clause (b) of said definition.

 

(viii)        The definition of “Permitted
Equity Issuance” is amended by deleting clause (i) of said
definition and inserting the following new clause (i) in lieu thereof:

 

“(i) an issuance of Qualified Equity Interests (x) by the
Borrower to the Holding Companies or (y) by the Holding Companies (or
after a Qualifying IPO, the Borrower) to managers of the Borrower and its
Restricted Subsidiaries as incentive compensation,”

 

(ix)           The definition of “Threshold Amount”
is amended by deleting the amount “$50,000,000” appearing in said definition
and inserting the amount “$10,000,000” in lieu thereof.

 

9

 

(x)            The following new definitions are hereby added in the
appropriate alphabetical order:

 

“Cash Collateral
Stipulation” has the meaning assigned to that term in the
Forbearance Agreement.

 

“CAO Certification”
means, with respect to the financial statements for which such certification is
required, the certification of the chief accounting officer of the Borrower
that such financial statements fairly present, in all material respects, the
financial condition of the Borrower and its Restricted Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for
the periods indicated, subject to (in the case of unaudited financial
statements) changes resulting from audit and normal year-end adjustments and,
in the case of monthly financial statements, the absence of footnotes and with
respect to the consolidated balance sheet of the Borrower and its Restricted
Subsidiaries for each fiscal month and fiscal quarter ending on or after December 31,
2008, such balance sheet shall not reclassify long-term debt as short-term debt
solely as a result of the existence of the Potential Specified Defaults (as
defined in the Forbearance Agreement).

 

“MD&A”
means, with respect to financial statements to which it pertains, management’s
discussion and analysis of the Borrower’s and its Restricted Subsidiaries’
financial performance for the period covered by such financial statements as
compared to projected financial performance for such period.

 

“Forbearance Agreement”
means the Forbearance Agreement; Waiver; and First Amendment to the Credit
Agreement, dated as of March 2, 2009, by and among the Borrower, the
Holding Companies, the other Loan Parties, the Lenders party thereto and the
Administrative Agent.

 

“Forbearance Effective Date”
has the meaning assigned to that term in the Forbearance Agreement.

 

(b)           Amendments to Section 2.03.  (i) Section 2.03(h) is amended
by inserting the text “(or, from and after the Forbearance Effective Date, the
last Business Day of each calendar month)” immediately after the text “September and
December” appearing in said Section.

 

(ii) Section 2.03(i) is
amended by inserting the text “(or, from and after the Forbearance Effective
Date, the last Business Day of each calendar month)” immediately after the text
“September and December” appearing in said Section.

 

(c)    Amendments to Section 2.05.  (i) Section 2.05(a) is amended
by adding the following new clause (iv) at the end of said Section:

 

“(iv) It is understood and agreed that,
for all periods from and after the Forbearance Effective Date and prior to the
Borrower Forbearance Termination Date, the application of prepayments as
provided in Section 2.05(a) shall be subject to the express
requirements of Section 4(b) of the Forbearance Agreement and, in the
event of any conflict or inconsistency, the provisions of said Section 4(b) of
the Forbearance Agreement shall control. On and after the Borrower Forbearance
Termination Date, cash payments shall be applied in accordance with the
requirements of the Cash Collateral Stipulation.”.

 

10

 

(ii)           Section 2.05(b)(v) is amended by deleting the text “, subject
to clause (vi) of this Section 2.05(b)” appearing in said Section in
its entirety.

 

(d)            Amendment to Section 2.07. Section 2.07(a) is amended by
deleting the text “Section 2.05(b)(v)” appearing in said Section and
inserting the text “Sections 2.05(a)(i) and 2.05(b)(v)” in lieu thereof.

 

(e)             Amendment to Section 2.09. Section 2.09 is amended by inserting
the text “(or, from and after the Forbearance Effective Date, the last Business
Day of each calendar month)” immediately after the text “September and
December” appearing in said Section.

 

(f)               Amendment to Section 2.12.  Section 2.12
is amended by inserting the following new clause (h) at the end of said
Section:

 

“(h) Notwithstanding anything to the
contrary contained above in this Section 2.12 or elsewhere in this
Agreement, on and after the Borrower Forbearance Termination Date and prior to
the Other Creditor Party Forbearance Termination Date, certain cash payments
made by the Loan Parties to the Administrative Agent shall be applied in
accordance with the terms of the Cash Collateral Stipulation as (and to the
extent) required thereby.”.

 

(g)            Amendment to Section 5.18. Section 5.18 is amended by inserting
the following sentence at the end of said Section:

 

“The
Designated Obligations are “Designated Senior Indebtedness” (or any comparable
term) under, and as defined in, the Existing Senior Subordinated Notes
Indentures (and any Junior Financing Documentation entered into in connection
with any Permitted Refinancing thereof)”.

 

(h)            Amendments to Section 6.01. (i) Section 6.01(a) is
amended by inserting the following text at the end of said Section:

 

“provided
that, the certified public accountants’ report relating to the Borrower’s
audited consolidated financial statements for the fiscal year of the Borrower
ended December 31, 2008 may be qualified by a going concern or similar
qualification;”

 

(ii)           The last sentence appearing in Section 6.01 is amended by
inserting the following text at the end of said sentence:

 

“provided
that, the certified public accountants’ report relating to the Borrower’s
audited consolidated financial statements for the fiscal year of the Borrower
ended December 31, 2008 may be qualified by a going concern or similar qualification”.

 

(i)                Amendment to Section 7.01. Section 7.01(f) is amended by
inserting the text “pledges or” immediately prior to the text “deposits to
secure” appearing in said Section.

 

(j)                Amendment to Section 7.03. Section 7.03(e) is amended by
inserting the text “, and all Permitted Refinancing Indebtedness in respect of
Indebtedness set forth in immediately preceding clause (i) of this Section 7.03(e),”
immediately after the text “this Section 7.03(e)” in said Section.

 

(k)             Amendment to Section 7.04. Section 7.04(f) is amended by
deleting said Section in its entirety and inserting the text “(f) [Reserved];”
in lieu thereof.

 

11

 

(l)                Amendments to Section 8.01. (i) Section 8.01(b) is
amended by deleting the text “Sections 6.03(a) or 6.05(a)” appearing
therein and inserting the text “Section 6.05(a)” in lieu thereof.

 

(ii)   Section 8.01(c) is amended by inserting the text “(or,
in the case of any covenant or agreement in Section 6.03(a) only, for
thirty (30) days)” immediately prior to the semi-colon appearing in said
Section.

 

(iii)  Section 8.01(m) is amended by (i) inserting the text
“Designated Senior Indebtedness” (or any comparable term) immediately prior to
the text “or Senior Secured” appearing in said Section and (ii) inserting
the text “or any Loan Party shall contest in writing the validity or
enforceability of such provisions” immediately prior to the semi-colon at the
end of said Section.

 

(iv)  Section 8.01(o) is amended by deleting the period at the
end of said Section and inserting the text “; or” in lieu thereof.

 

(v)   Section 8.01 is further amended by inserting subsection (p) at
the end of said Section:

 

“(p) Forbearance Agreement.
The Borrower or any Loan Party shall fail to comply with any term, covenant or
condition contained in Section 2, 4, 5, 6, 8, 17 or 18 of the Forbearance
Agreement (with time being of the essence);
provided that, with respect to any default in the performance of or
compliance with any term contained in paragraphs (c), (d) and (e) of Section 4
of the Forbearance Agreement, such default shall not have been remedied or
waived within five Business Days after notice of such default from the
Administrative Agent.”

 

SECTION 4.                                            Supplemental Terms, Conditions
and Covenants On and After the Forbearance Effective Date.

 

The Credit Parties hereto hereby agree to
comply with the following terms, conditions and covenants from and after the
Forbearance Effective Date, in each case notwithstanding any provision to the
contrary set forth in this Forbearance Agreement, the Credit Agreement or any
other Loan Document:

 

(a)             Potential Specified Defaults.  Each
of the Potential Pre-Forbearance Defaults shall be deemed to be an Event of
Default from and after the Waiver Termination Date.  Each of the Potential Specified Defaults
(other than (w) the events described in item (ii) on Exhibit B,
until the occurrence of the applicable date specified therein, (x) the
events described in items (iii) and (iv) on Exhibit B,
until the holders of the relevant Existing Notes (or the trustee on behalf of
such holders) shall have the right to accelerate such Existing Notes, (y) the
events described in item (v) on Exhibit B, until the
occurrence the filing of the Borrower Chapter 11 Case and (z) the events
described in item (vii) on Exhibit B, until the occurrence the
filing of the Holding Company Chapter 11 Cases) shall be deemed to be an Event
of Default from and after the Other Credit Party Forbearance Termination Date.

 

(b)            Prepayments.  From and after the Forbearance
Effective Date and prior to the Borrower Forbearance Termination Date, all
voluntary prepayments of the Loans shall be applied ratably to (i) repay
principal of outstanding Revolving Credit Loans and L/C Borrowings (and after
same have been repaid in full, to repay and/or Cash Collateralize L/C
Obligations not then Cash Collateralized) and (ii) repay outstanding
principal of Term Loans, with (x) the amount to be allocated pursuant to
preceding clause (i) to equal the amount of the respective aggregate
amount to be prepaid multiplied by a fraction the numerator of which is the
aggregate Revolving Credit Exposure of all Revolving Credit Lenders at such
time (less the amount of any L/C Obligations which have theretofore been, and
are at that time, Cash 

 

12

 

Collateralized) and the
denominator of which is the sum of such numerator plus the aggregate
principal amount of then outstanding Term Loans, and (y) the amount to be
applied pursuant to preceding clause (ii) to equal the aggregate amount to
be so prepaid multiplied by a fraction the numerator of which is the aggregate
principal amount of then outstanding Term Loans and the denominator of which is
the same as the denominator described in preceding clause (x).  On and after the Borrower Forbearance
Termination Date, cash payments shall be applied in accordance with the
requirements of the Cash Collateral Stipulation.

 

(c)             Cooperation and Access.  The
Borrower shall cooperate reasonably and in good faith with the Administrative
Agent, Blackstone Advisory Services, L.P. (together with any successor or
replacement selected by the Administrative Agent or its counsel, the “Lender
Financial Advisor”) and such other professional advisors retained from time
to time by the Administrative Agent, in providing access to the Loan Parties’
books and records, other information relating to their business and financial
affairs, properties and senior management team upon reasonable prior notice,
during regular business hours and for reasonable durational periods.
Notwithstanding the foregoing, the Lender Financial Advisor shall not have
access to any area or information with respect to which such access is
prohibited or restricted by applicable Gaming Laws, nor shall the Lender
Financial Advisor have access to marketing or patron tracking data or other
similar trade secret data that is not relevant to measurement of the financial
performance of the Borrower or its Subsidiaries and joint ventures.

 

(d)            Financial and Other Information.  In
addition to the financial statements and other reports required to be provided
under the Credit Agreement, the Borrower shall deliver to the Administrative
Agent:

 

(i)              on
Wednesday (or the immediately succeeding Business Day if Wednesday is not a
Business Day) of each week (commencing with the week of March 9, 2009), a
rolling 13-week consolidated cash flow forecast of the Borrower and its
Restricted Subsidiaries, in the form set forth on Exhibit C (the “13-Week
Cash Flow Forecast”), with each delivery of the 13-Week Cash Flow Forecast
to be deemed to be a representation by the Borrower that such 13-Week Cash Flow
Forecast has been prepared based upon good faith estimates and assumptions that
the Borrower believes were reasonable at the time made (it being understood and
agreed that such 13-Week Cash Flow Forecast is not to be viewed as fact and
that actual results during the period or periods covered thereby may differ
from such projected results) and to be accompanied by a certification of the
chief financial officer or such other financial officer that is a Responsible
Officer that such 13-Week Cash Flow Forecast has been prepared based upon good
faith estimates and assumptions that the Borrower believes were reasonable at
the time made (it being understood and agreed that such 13-Week Cash Flow
Forecast is not to be viewed as fact and that actual results during the period
or periods covered thereby may differ from such projected results);

 

(ii)           on
Wednesday (or the immediately succeeding Business Day if Wednesday is not a
Business Day) of each week (commencing with the week of March 9, 2009), a
variance report showing on a line item basis the percentage and dollar variance
of actual cash disbursements and cash receipts for the prior week from the
amounts set forth for such week in the applicable 13-Week Cash Flow Forecast;
and

 

(iii)        as soon
as available and in any event within thirty (30) days (or, in the case of the
MD&A referred to below, forty (40) days) after the end of each month ending
after the Forbearance Effective Date, the unaudited consolidated balance sheet
of the Borrower and its Restricted Subsidiaries as of the end of such month and
the related unaudited consolidated statements of income of the Borrower and its
Restricted Subsidiaries for such month and for the portion of the Borrower’s
fiscal year then elapsed, setting forth in respect of the consolidated 

 

13

 

statements of income in comparative form the corresponding figures for the
preceding fiscal year and commencing with the financial statements for the
month ended February 28, 2009, the corresponding projected statements of
income set forth in the Long-Term Business Plan, together with a CAO
Certification and, with respect to the last month of each fiscal quarter,
MD&A with respect to the foregoing.

 

(e)             Draft of Long-Term Business Plan.  The
Borrower shall deliver a long-term business plan approved by the Borrower’s
Board of Directors (the “Long-Term Business Plan”) to the Administrative
Agent by no later than March 1, 2009, which shall include (i) forecasted
consolidated balance sheets (assuming a static capitalization) and forecasted
consolidated statements of income and cash flows of the Borrower and its
Restricted Subsidiaries for the next succeeding three fiscal years and (ii) forecasted
consolidated statements of income and cash flows of the Borrower and its
Restricted Subsidiaries for each month of the fiscal year ending in 2009.

 

(f)               Prohibition on Assignments and Participations.  From
and after the Forbearance Effective Date, the Credit Parties, the Equity
Investors, the Permitted Holders and each of their respective Affiliates shall
be prohibited from purchasing (by assignment, participation or otherwise), in
whole or in part, any Commitment, Loan, Letter of Credit or any other
Obligation.

 

(g)            Subordinated Indebtedness Payments.  The
Borrower shall give the Administrative Agent 5 Business Days’ prior notice of
its intent to make any payment (including any payment of interest) with respect
to any Existing Notes or any other Junior Financing (the “Payment Notice”).

 

(h)            Restrictions on Cure Rights; Accordion. 
Notwithstanding anything in the Credit Agreement to the contrary, the
Borrower shall not, directly or indirectly, (x) exercise any “equity cure
right” described in Section 8.05 of the Credit Agreement, or (y) request,
effect or incur any Revolving Commitment Increase or any Incremental Term Loans
pursuant to Section 2.14 of the Credit Agreement.

 

(i)                Additional Restrictions. 
Notwithstanding anything in the Credit Agreement to the contrary (but
subject to the additional restrictions in the immediately succeeding sentence),
from and after Forbearance Effective Date, the Borrower shall not, nor shall it
permit any of its Restricted Subsidiaries to, directly or indirectly, (A) incur
any Indebtedness, (B) create or incur any new Liens, (C) make any
Investments, (D) make any Restricted Payments, or (E) consummate any
Disposition, except, in the case of each such clause, in the ordinary course of
business; provided, however, that the Borrower and its Restricted
Subsidiaries shall in any event be permitted to (x) incur Indebtedness
permitted under Sections 7.03(f), (m), (o), (p) and (q) of the Credit
Agreement and (y) create or incur Liens permitted under Sections 7.01(c),
(d), (e), (f), (g), (l) and (t) of the Credit Agreement.  Furthermore, from and after the Forbearance
Effective Date, (i) the Borrower and its Restricted Subsidiaries may not
take any action that would be prohibited by the express terms of the Credit
Agreement at any time while a Default or Event of Default is in existence, (ii) no
payments of the type described in Section 7.08(m) of the Credit
Agreement may be made to the Holding Company or the Equity Investors, (iii) the
Borrower and its Restricted Subsidiaries shall not enter into, or commit to
enter into, any Permitted Acquisition or sale-leaseback transaction, (iv) the
Borrower may not designate any Restricted Subsidiary as an “Unrestricted
Subsidiary” or an “Immaterial Subsidiary” pursuant to Section 6.14 of the
Credit Agreement, (v) no payments of the type described in Sections 7.08(f) and
(h) of the Credit Agreement may be made to employees or principals of the
Equity Investors providing services to the Borrower (including in their
capacity as members of the Borrower’s Board of Directors); provided,
however, that the payment of reasonable
out-of-pocket costs of and provisions of indemnities to such persons shall
continue to be permitted as provided in Section 7.08(h) of the Credit
Agreement and (vi) no Restricted Subsidiary shall make any Investment in,
or Restricted Payment or Disposition to, the Borrower, except for (x) at
any time prior to the entry of the Cash Collateral Stipulation by the
appropriate bankruptcy court, Investments in 

 

14

 

the Borrower in the ordinary
course of business and consistent with past practices and (y) at any time
on and after the entry of the Cash Collateral Stipulation by the appropriate
bankruptcy court, Investments and/or Restricted Payments permitted by the Cash
Collateral Stipulation.

 

(j)                Fees and Expenses.  The
Borrower and, if the Borrower is prohibited from doing so by Applicable Law,
the Guarantors shall pay within 10 days of receipt of an invoice therefor
(subject to redaction to protect privileges or other confidential
communications) all reasonable fees and expenses to be paid to White &
Case LLP and the Lender Financial Advisor.

 

(k)             Special Guarantor Covenants. The Guarantors hereby (i) reaffirm
their guaranty of the due and punctual payment of the Obligations (as defined
in the Guaranty) when the same come due (whether before or after the Borrower
Forbearance Termination Date) pursuant to the Guaranty, (ii) reaffirm their
covenants and agreements in Section 2.11 of the Guaranty (to which they
shall be bound both before and after the Borrower Forbearance Termination
Date), and (iii) covenant and agree (without limiting the generality of
the foregoing) at all times on and after the Borrower Forbearance Termination
Date to perform and comply with all terms, covenants and agreements contained
in this Forbearance Agreement and Articles II and III of the Credit Agreement
directly applicable to the Borrower as if the same were directly applicable to
the Guarantors.

 

(l)                Modification of Bank Solicitation.  If
the Initial Existing Notes Forbearance and/or the Additional Existing Notes
Forbearance are obtained, the Borrower shall cause the Bank Solicitation
Statement to be modified to extend the “voting deadline” described therein for
the Requisite Lenders to March 16, 2009.

 

(m)          Filing of Chapter 11 Cases. If the Borrower elects to commence a
Borrower Chapter 11 Case or the Holding Companies elect to commence a Holding
Company Chapter 11 Case, the Borrower and the Holding Companies shall cause the
Borrower Chapter 11 Case and all Holding Company Chapter 11 Cases to be
commenced on the same day.

 

SECTION 5.                                Representations, Warranties And
Covenants Of The Borrower and The Other Credit Parties.

 

To induce the Lenders and the Administrative
Agent to execute and deliver this Forbearance Agreement, each of the Borrower
and the other Credit Parties represents, warrants and covenants that:

 

(a)             Organization and Powers. Each Credit Party (a) is a
corporation, limited liability company or limited partnership, duly organized
or formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, (b) has all requisite
power and authority to (i) own or lease its assets and carry on its
business and (ii) execute, deliver and perform its obligations under this
Forbearance Agreement, (c) is duly qualified and in good standing under
the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification, (d) is
in compliance with all Laws, orders, writs, injunctions and orders, and (e) has
all requisite governmental licenses, authorizations, consents and approvals to
operate its business as currently conducted; except in each case referred to in
clause (c), (d) or (e), to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

(b)            Authorization of Agreement; No Conflict. The execution, delivery and performance by
each Credit Party of this Forbearance Agreement is within such Credit Party’s
corporate or other powers, has been duly authorized by all necessary corporate
or other organizational action, and does not and will not (a) contravene
the terms of any of such Credit Party’s Organization Documents, (b) conflict

 

15

 

with or result in any breach
or contravention of, or the creation of any Lien under (other than Permitted
Liens), or require any payment to be made under (i) (x) any Existing
Notes Documentation or (y) any other Contractual Obligation to which such
Credit Party is a party or affecting such Credit Party or the properties of
such Credit Party or any of its Subsidiaries or (ii) any material order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Loan Party or its property is subject; or (c) violate any
material Law.

 

(c)             Governmental Consents. No material approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or
enforcement against, any Credit Party of this Forbearance Agreement or (b) the
exercise by the Administrative Agent or any Lender of its rights under this
Forbearance Agreement, except for those approvals, consents, exemptions,
authorizations or other actions, notices and filings which have been duly
obtained, taken, given or made and are in full force and effect.

 

(d)            Binding Obligation. This Forbearance Agreement has been duly
executed and delivered by each Credit Party. 
This Forbearance Agreement constitutes a legal, valid and binding
obligation of such Credit Party, enforceable against each such Credit Party in
accordance with its terms, except as such enforceability may be limited by
Debtor Relief Laws and by general principles of equity.

 

(e)             Incorporation of Representations and
Warranties and Covenants from Loan Documents. Except with respect to the Potential Pre-Forbearance Defaults and the
Permitted Exceptions, the representations and warranties contained in the
Credit Agreement and each of the other Loan Documents are and will be true,
correct and complete in all material respects on and as of the Forbearance
Effective Date to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically relate to an
earlier date, in which case they were true, correct and complete in all
material respects on and as of such earlier date, and each of the agreements
and covenants in the Credit Agreement and the other Loan Documents is hereby
reaffirmed with the same force and effect as if each were separately stated
herein and made as of the date hereof.

 

(f)               Absence of Default.  As
of the Forbearance Effective Date, (x) after giving effect to the Limited
Waiver, no Default or Event of Default has occurred or is continuing under the
Credit Agreement or any other Loan Document and (y) except solely with
respect to the Specified Events described in item (ii) of Exhibit A
as to the 6-1/2% Senior Subordinated Notes and the 7.75% Senior Notes, no “Default”
or “Event of Default” (as those terms are defined in the Existing Notes
Indentures) has occurred or is continuing in respect of the Existing Notes.

 

(g)            Collateral. The Lenders’ and the Administrative Agent’s security interests in the
Collateral (to the extent required pursuant to the Collateral and Guaranty
Requirement) continue to be valid, binding, and enforceable first-priority
security interests which secure the Obligations (subject only to the Permitted
Liens).

 

(h)            Plan. The Borrower acknowledges and agrees that
if any equity commitment letter attached as Exhibit G to the Credit
Facilities Term Sheet is terminated, rescinded, revoked or otherwise modified
without the prior written consent of the Administrative Agent, the Plan shall
be immediately deemed withdrawn and all “ballots” (as described in the Bank
Solicitation Statement) submitted prior thereto (and the Plan support
provisions contained therein) shall be deemed null and void and given no
further force and effect.

 

SECTION 6.                                Ratification of Liabilities, etc.. (a) Each of the Borrower and the other Credit Parties hereby
ratifies and reaffirms all of its payment and performance obligations and
obligations to 

 

16

 

indemnify, contingent or otherwise, under this
Forbearance Agreement and each other Loan Document to which such Person is a
party, and each such party hereby ratifies and reaffirms its grant of Liens on
its properties pursuant to such Loan Documents to which it is a party as
security for the Obligations, and confirms and agrees that such Liens hereafter
secure all of the Obligations.  Each
Guarantor acknowledges the effectiveness and continuing validity of the
Guaranty and its liability for the Obligations pursuant to the terms of the
Guaranty and that such Obligations are without defense, setoff and counterclaim.

 

(b)                                 Each Credit Party (i) acknowledges
receipt of a copy of this Forbearance Agreement and all other agreements,
documents and instruments executed and/or delivered in connection herewith, (ii) consents
to the terms and conditions of same without prejudice to any Credit Party’s
liability pursuant to any of the Loan Documents, (iii) agrees and
acknowledges that each of the Loan Documents remains in full force and effect,
that such Credit Party’s obligations thereunder are without defense, setoff and
counterclaim and that each of the Loan Documents is hereby ratified and
confirmed, and (iv) ratifies and reaffirms each waiver of such Credit
Party set forth in the Loan Documents to which it is a party.

 

SECTION 7.                            Reference To And Effect Upon The Credit
Agreement.  (a) Except as expressly modified hereby,
all terms, conditions, covenants, representations and warranties contained in
the Credit Agreement and other Loan Documents, and all rights of the Lenders
and the Administrative Agent and all of the Obligations, shall remain in full
force and effect.  Each of the Borrower
and the other Credit Parties hereby confirms that no such party has any right
of setoff, recoupment or other offset with respect to any of the Obligations.

 

(b)            Except as expressly set forth herein, the
effectiveness of this Forbearance Agreement shall not directly or indirectly (i) create
any obligation to make any further Loans or issue any Letters of Credit after
the Forbearance Effective Date, (ii) create any obligation to continue to
defer any enforcement action after the occurrence of any Forbearance Default, (iii) constitute
a consent or waiver of any past, present or future violations, including
Defaults and Events of Default, of any provisions of the Credit Agreement or
any other Loan Documents, (iv) amend, modify, prejudice or operate as a
waiver of any provision of the Credit Agreement or any other Loan Documents or
any right, remedy, power or privilege of the Lenders and/or the Administrative
Agent, (v) constitute a consent to any merger or other transaction or to
any sale, restructuring or refinancing transaction, or (vi) constitute a
course of dealing or other basis for altering any Obligations or any other
contract or instrument.  Except as
expressly set forth herein, each of the Administrative Agent and each Lender
reserves all of its rights, remedies, powers and privileges under the Credit
Agreement, the other Loan Documents, applicable law and/or equity. All of the
provisions of the Credit Agreement and the other Loan Documents are hereby
reiterated, and if ever waived (other than pursuant to the Limited Waiver or
hereafter in writing), are hereby reinstated. 
Notwithstanding any other provision in this Forbearance Agreement, it is
understood and agreed that during the Borrower Forbearance Period,
notwithstanding the Borrower’s inability to make the statements required by Section 4.02
of the Credit Agreement (or in any Request for Credit Extension required
thereby), solely to the extent excused pursuant to the last sentence of Section 2(d) of
this Forbearance Agreement, but subject to all other terms and conditions
contained in the Credit Agreement and Section 2(d) hereof (including
the Cash Collateralization of Letters of Credit), any L/C Issuer may issue,
renew, extend or replace Letters of Credit and the Borrower shall be permitted
to incur L/C Borrowings (and the Revolving Credit Lenders agree to make such
L/C Advances), provided that the Revolving Credit Exposure of the
Revolving Credit Lenders is not increased after giving effect to such issuance,
renewal, extension or replacement of any such Letter of Credit or the
incurrence of such L/C Borrowings.

 

(c)             From and after the Forbearance Effective
Date, (i) the term “Agreement” in the Credit Agreement, and all references
to the Credit Agreement in any Loan Document shall mean the 

 

17

 

Credit Agreement, and (ii) the
term “Loan Document” in the Credit Agreement and the other Loan Documents shall
include, without limitation, this Forbearance Agreement and any agreements,
instruments and other documents executed and/or delivered in connection
herewith.

 

(d)            This Forbearance Agreement shall not be
deemed or construed to be a satisfaction, reinstatement, novation or release of
the Credit Agreement or any other Loan Document.

 

SECTION 8.                                The Borrower’s Release and Duty to Indemnify for Assigned Claims.  By
its execution hereof and in consideration of the mutual covenants contained
herein and other accommodations granted to the Credit Parties hereunder, each
Credit Party, on behalf of itself and each of its Subsidiaries, and its or
their successors, assigns and agents, hereby expressly forever waives, releases
and discharges any and all claims (including, without limitation, cross-claims,
counterclaims, and rights of setoff and recoupment), causes of action (whether
direct or derivative in nature), demands, suits, costs, expenses and damages
(collectively, the “Claims”) any of them may have or allege to have as
of the date of this Forbearance Agreement (and all defenses that may arise out
of any of the foregoing) of any nature, description, or kind whatsoever, based
in whole or in part on facts, whether actual, contingent or otherwise, now
known, unknown, or subsequently discovered, whether arising in law, at equity
or otherwise, against the Administrative Agent or any Lender that has executed
this Forbearance Agreement (other than a Non-Funding Lender), their respective
affiliates, agents, principals, managers, managing members, members,
stockholders, “controlling persons” (within the meaning of the United States
federal securities laws), directors, officers, employees, attorneys,
consultants, advisors, agents, trusts, trustors, beneficiaries, heirs,
executors and administrators of each of the foregoing (collectively, the “Released
Parties”) arising out of this Forbearance Agreement, the Credit Agreement,
the other Loan Documents, the Credit Facilities Term Sheet, the Bank
Solicitation Statement and any or all of the actions and transactions
contemplated hereby or thereby, including any actual or alleged performance or
non-performance of any of the Released Parties (other than a Non-Funding
Lender) hereunder or under the Loan Documents. 
Each Credit Party hereby acknowledges that the agreements in this Section 8
are intended to be in full satisfaction of all or any alleged injuries or
damages arising in connection with the Claims. 
In entering into this Forbearance Agreement, each Credit Party expressly
disclaims any reliance on any representations, acts, or omissions by any of the
Released Parties and hereby agrees and acknowledges that the validity and
effectiveness of the releases set forth above does not depend in any way on any
such representation, acts and/or omissions or the accuracy, completeness, or
validity thereof.  Notwithstanding the
foregoing, (x) no Non-Funding Lender shall have any rights or benefits
under this Section 8 and none of the releases, waivers or other assurances
provided by the Credit Parties shall apply to any Claims of the Credit Parties
against Non-Funding Lenders, who shall remain fully liable for their
obligations to the Credit Parties thereunder and (y) nothing set forth in
this Section 8 is intended to, nor shall anything set forth in this Section 8
be construed to, release any Claim that any Credit Party may hold against any
Released Party in its capacity as a lender, adviser or agent under: (i) the
Casino Sale Leaseback Transaction, (ii) the CMBS Facility and CMBS Loan
Documents, including the loans made thereunder, (iii) Land Loan Documents,
including the loans made thereunder, or (iv) the Head Office Sale
Leaseback Transaction.  The provisions of
this paragraph shall survive the termination or expiration of each Applicable
Forbearance Period and the termination of the Loan Documents and the payment in
full of all Obligations of the Credit Parties under or in respect of the Credit
Agreement and other Loan Documents and all other amounts owing thereunder.

 

SECTION 9.                                Construction.  This Forbearance Agreement and all other
agreements and documents executed and/or delivered in connection herewith have
been prepared through the joint efforts of all of the parties hereto. Neither
the provisions of this Forbearance Agreement or any such other agreements and
documents nor any alleged ambiguity therein shall be interpreted or resolved
against any party on the ground that such party or its counsel drafted this
Forbearance Agreement or such other agreements and documents, or based on any
other rule of strict construction. 
Each of the parties hereto

 

18

 

represents and declares that such party has
carefully read this Forbearance Agreement and all other agreements and
documents executed in connection therewith, and that such party knows the
contents thereof and signs the same freely and voluntarily.  The parties hereto acknowledge that they have
been represented by legal counsel of their own choosing in negotiations for and
preparation of this Forbearance Agreement and all other agreements and
documents executed in connection herewith and that each of them has read the
same and had their contents fully explained by such counsel and is fully aware
of their contents and legal effect.

 

SECTION 10.                          Counterparts.  This
Forbearance Agreement 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, and all signatures need not
appear on any one counterpart. Any party hereto may execute and deliver a
counterpart of this Forbearance Agreement by delivering by facsimile or other
electronic transmission a signature page of this Forbearance Agreement
signed by such party, and any such facsimile or other electronic signature
shall be treated in all respects as having the same effect as an original
signature.

 

SECTION 11.                          Severability.  The invalidity, illegality, or
unenforceability of any provision in or obligation under this Forbearance
Agreement in any jurisdiction shall not affect or impair the validity,
legality, or enforceability of the remaining provisions or obligations under
this Forbearance Agreement or of such provision or obligation in any other
jurisdiction.

 

SECTION 12.         Further Assurances.  The Borrower and each other Credit Party
agrees to, and to cause any other Credit Party to, take all further actions and
execute all further documents as the Administrative Agent may from time to time
reasonably request to carry out the transactions contemplated by this Forbearance
Agreement and all other agreements executed and delivered in connection
herewith. Any failure to comply with the agreements in this Section 12
shall be an Event of Default for all purposes of the Credit Agreement if such
failure has not been remedied or waived within 5 Business Days after the
Borrower’s receipt of notice from the Administrative Agent.

 

SECTION 13.                          Section Headings.  Section headings in this
Forbearance Agreement are included herein for convenience of reference only and
shall not constitute part of this Forbearance Agreement for any other purpose.

 

SECTION 14.                          Notices.  All notices, requests, and demands to or upon
the respective parties hereto shall be given in accordance with the Credit
Agreement.

 

SECTION 15.                          Governing Law.
This Forbearance Agreement and the rights and obligations of the parties under
this Forbearance Agreement shall be governed by, and construed and interpreted
in accordance with, the law of the State of New York.

 

SECTION 16.                          Acknowledgements.  Each Credit Party hereby acknowledges that:

 

(a)             it
has carefully read and fully understood all of the terms and conditions of this
Forbearance Agreement;

 

(b)            it
has consulted with, or had a full and fair opportunity to consult with, and has
been advised by fully competent counsel in the negotiation, execution and
delivery of this Forbearance Agreement;

 

(c)             it
has had a full and fair opportunity to participate in the drafting of this
Forbearance Agreement and that no provision of this Forbearance Agreement shall
be construed against or 

 

19

 

interpreted to the disadvantage of any party hereto by any court or
other governmental or judicial authority by reason of any party hereto having
or being deemed to have structured, dictated or drafted such provision;

 

(d)            it
is freely, voluntarily, knowingly and intelligently entering into this
Forbearance Agreement;

 

(e)             none
of the Lenders or the Administrative Agent has a fiduciary relationship to any
Credit Party, and the relationship between the Administrative Agent and the
Lenders, on the one hand, and the Credit Parties, on the other, is solely that
of creditor and debtor; and

 

(f)               no
joint venture exists among the Credit Parties, the Administrative Agent and the
Lenders.

 

SECTION 17.                          Effectiveness.  This
Forbearance Agreement shall become effective at the time (the “Forbearance
Effective Date”) that all of the following conditions precedent have been
satisfied as determined by the Administrative Agent in its sole discretion:

 

(a)             Agreement. The Administrative Agent shall have
received duly executed signature pages for this Forbearance Agreement
signed by the Borrower, each other Credit Party, the Required Lenders and the
Revolving Credit Lenders (which shall be at least three in number) holding more
than 50% of the Revolving Credit Commitments.

 

(b)            Due
Authorization. The
Administrative Agent shall have received resolutions from each Credit Party
evidencing the corporate or similar authority of such Credit Party to execute,
deliver and perform its obligations under this Forbearance Agreement and, as
applicable, all other agreements and documents executed in connection
therewith.

 

(c)             Accuracy
of Representations. The
representations and warranties contained in Section 5 of this Forbearance
Agreement are and will be true, correct and complete in all material respects
on and as of the Forbearance Effective Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.

 

(d)            Opinions.  The
Administrative Agent shall have received opinions of counsel to the Credit
Parties as to the transactions contemplated hereby in form and substance
reasonably acceptable to the Administrative Agent.

 

(e)             Designated
Senior Indebtedness.  The Borrower shall have designated the
Designated Obligations as “Designated Senior Indebtedness” pursuant to an
Officer’s Certificate (as defined in each of the Existing Senior Subordinated
Notes Indentures) of the Borrower and delivered the same to the trustee under
each Existing Senior Subordinated Notes Indenture.

 

(f)               L/C
Cash Collateral. The
Borrower shall have Cash Collateralized all L/C Obligations (in an amount equal
to the Outstanding Amount thereof) in the manner contemplated by Section 2.03(g) (without
regard to whether such Cash Collateralization is expressly required by such Section on
the date hereof).

 

(g)            Other
Fees.  The Borrower shall have paid (x) all the
reasonable fees, expenses and disbursements of White & Case LLP, the
Lender Financial Advisor and a single legal counsel to 

 

20

 

each Lender which delivers its original or
facsimile signature page to this Forbearance Agreement to the
Administrative Agent or its designee no later than 5:30 p.m. (New York
City time) on February 27, 2009, and for which invoices (subject to
redaction to protect privileges or other confidential communications) have been
presented to the Borrower and (y) an “evergreen” retainer of $250,000 to
White & Case LLP.

 

SECTION 18.                          Assignments; No Third Party Beneficiaries.  This Forbearance Agreement shall
be binding upon and inure to the benefit of the Borrower, the other Credit
Parties, the Lenders, the Administrative Agent and their respective successors
and assigns; provided, that neither the Borrower nor any other Credit
Party shall be entitled to delegate any of its duties hereunder and shall not
assign any of its rights or remedies set forth in this Forbearance Agreement
without the prior written consent of the Administrative Agent in its sole
discretion. No Person other than the parties hereto and their permitted
successors and assigns, shall have any rights hereunder or be entitled to rely
on this Forbearance Agreement and all third-party beneficiary rights are hereby
expressly disclaimed.

 

SECTION 19.                          Amendments.  This
Forbearance Agreement constitutes a “Loan Document” for purposes of the Credit
Agreement and the other Loan Documents. 
No provision of this Forbearance Agreement may be amended, modified,
waiver or supplemented, except as provided in Section 10.01 of the Credit
Agreement.

 

SECTION 20.                          Final Agreement.  This Forbearance Agreement, the Credit
Agreement, the other Loan Documents, and the other written agreements,
instruments, and documents entered into in connection herewith and therewith
(collectively, the “Credit Support Documents”) set forth in full the
terms of agreement between the parties hereto and thereto and are intended as
the full, complete, and exclusive contracts governing the relationship between
such parties, superseding all other discussions, promises, representations,
warranties, agreements, undertakings and understandings between the parties
with respect thereto.  No term of the
Credit Support Documents may be amended, restated, waived or otherwise modified
except in a writing signed by the party against whom enforcement of the
modification, amendment, or waiver is sought, unless otherwise provided in the
applicable Credit Support Documents.  Any
waiver of any condition in, or breach of, any of the foregoing in a particular
instance shall not operate as a waiver of other or subsequent conditions or
breaches of the same or a different kind. 
The Lenders’ and/or the Administrative Agent’s exercise or failure to
exercise any rights or remedies under any of the foregoing in a particular
instance shall not operate as a waiver of its right to exercise the same or
different rights, remedies, powers and privileges in any other instances.  There are no oral agreements among the
parties hereto.

 

SECTION 21.                          Special Reservations.  (a) The confirmation of the Existing Commitment Fees
in Section 1(a) of this Forbearance Agreement shall not be construed
to be (x) a waiver of any rights any Credit Party may have against a
Non-Funding Lender on grounds that such Non-Funding Lender is a Defaulting
Lender or otherwise or (y) an acknowledgment by the Credit Parties that a
Non-Funding Lender is entitled to the payment of the Existing Commitment Fees
pursuant to Section 2.09(a) of the Credit Agreement.

 

(b) Nothing contained in, or arising out
of the execution and delivery of, this Forbearance Agreement shall be construed
as a waiver of any of the rights of the Administrative Agent, the Lenders, the
Swing Line Lender and the L/C Issuers reserved pursuant to that certain
Reservation of Rights Letter, dated January 16, 2009, from the
Administrative Agent to the Borrower, with respect to the Designation described
therein (and its effectiveness), all of which rights remain expressly reserved
as described therein.

 

[Signature
pages to follow]

 

21

 

IN WITNESS WHEREOF, this
Forbearance Agreement has been executed by the parties hereto as of the date
first written above.

 

 

	
   

  	
  STATION CASINOS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Thomas M. Friel

  
	
   

  	
   

  	
  Name:
  Thomas M. Friel

  
	
   

  	
   

  	
  Title:  

  	
  Executive
  Vice President, Chief Accounting Officer & Treasurer

  

 

 

	
   

  	
  FCP HOLDING, INC.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Lorenzo J. Fertitta

  
	
   

  	
  Name:

  	
  Lorenzo J. Fertitta

  
	
   

  	
  Title:

  	
  Vice President, Secretary & Treasurer

  
				

 

 

	
   

  	
  FERTITTA PARTNERS LLC,

  
	
   

  	
  a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lorenzo J. Fertitta

  
	
   

  	
  Name:

  	
  Lorenzo J. Fertitta

  
	
   

  	
  Title:

  	
  Vice President, Secretary & Treasurer

  
				

 

 

	
   

  	
  FCP VOTECO, LLC,

  
	
   

  	
  a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lorenzo J. Fertitta

  
	
   

  	
  Name:

  	
  Lorenzo J. Fertitta

  
	
   

  	
  Title:

  	
  Vice President, Secretary & Treasurer

  
				

 

 

	
   

  	
  BOULDER STATION, INC.

  CENTERLINE HOLDINGS, LLC

  CHARLESTON STATION, LLC

  FIESTA STATION, INC.

  FRESNO LAND ACQUISITIONS, LLC

  GOLD RUSH STATION, LLC

  LAKE MEAD STATION, INC.

  LML STATION, LLC

  MAGIC STAR STATION, LLC

  PALACE STATION HOTEL & CASINO, INC.

  RANCHO STATION, LLC

  SANTA FE STATION, INC.

  STATION HOLDINGS, INC.

  STN AVIATION, INC.

  SUNSET STATION, INC.

  TEXAS STATION, LLC

  TROPICANA STATION, INC.

  TROPICANA STATION, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas M. Friel

  
	
   

  	
  Name:

  	
  Thomas M. Friel

  
	
   

  	
  Title:

  	
  Senior Vice President and Treasurer

  
				

 

 

	
   

  	
  SC BUTTE DEVELOPMENT, LLC

  SC BUTTE MANAGEMENT, LLC

  SC MADERA DEVELOPMENT, LLC

  SC MADERA MANAGEMENT, LLC

  SC SONOMA DEVELOPMENT, LLC

  SC SONOMA MANAGEMENT, LLC

  STATION CALIFORNIA, LLC

  STATION DEVELOPMENT, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas M. Friel

  
	
   

  	
  Name:

  	
  Thomas M. Friel

  
	
   

  	
  Title:

  	
  Authorized Signatory

  
				

 

 

	
   

  	
  RIVER CENTRAL, LLC,

  
	
   

  	
  a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Station Casinos, Inc., a Nevada
  corporation, its Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas M. Friel

  
	
   

  	
  Name:

  	
  Thomas M. Friel

  
	
   

  	
  Title:

  	
  Executive Vice President, Chief Accounting Officer &
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STATION CONSTRUCTION, LLC,

  
	
   

  	
  a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  Station
  Casinos, Inc., a Nevada corporation, its Sole Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas M. Friel

  
	
   

  	
  Name:

  	
  Thomas M. Friel

  
	
   

  	
  Title:

  	
  Executive Vice President, Chief Accounting Officer &
  Treasurer

  
				

 

 

	
   

  	
  PAST ENTERPRISES, INC.,

  
	
   

  	
  an Arizona corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas M. Friel

  
	
   

  	
  Name:

  	
  Thomas M. Friel

  
	
   

  	
  Title:

  	
  President and Treasurer

  
				

 

 

	
   

  	
  SONOMA LAND HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas M. Friel

  
	
   

  	
  Name:

  	
  Thomas M. Friel

  
	
   

  	
  Title:

  	
  President, Chief Financial Officer & Treasurer

  
				

 

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY
  AMERICAS, 

  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marcy Kay Coyle

  
	
   

  	
  Name:

  	
  Mary Kay Coyle

  
	
   

  	
  Title:

  	
   Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark B. Cohen

  
	
   

  	
  Name:

  	
  Mark B. Cohen

  
	
   

  	
  Title:

  	
   Managing Director

  
				

 

 

	
   

  	
  JPMorgan Chase Bank, NA.

  
	
   

  	
  as Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marc E. Costantino

  
	
   

  	
  Name: Marc E. Costantino

  
	
   

  	
  Title:   Executive Director

  

 

 

	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  Deutsche Bank Trust Company
  Americas

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Kay Coyle

  
	
   

  	
  Name: Mary Kay Coyle

  
	
   

  	
  Title:   Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark B. Cohen

  
	
   

  	
  Name: Mark B. Cohen

  
	
   

  	
  Title:   Managing Director

  
	
   

  	
  Head of Workout

  

 

 

	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  JPMorgan Chase Bank, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marc E. Costantino

  
	
   

  	
  Name: Marc E. Costantino

  
	
   

  	
  Title:   Executive Director

  

 

 

	
   

  	
  Bank of America N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick Honey

  
	
   

  	
  Name: Patrick Honey

  
	
   

  	
  Title:   Senior Vice President

  

 

 

	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  Bank of Nevada

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Todd Skadberg

  
	
   

  	
  Name: Todd Skadberg

  
	
   

  	
  Title:   Senior Vice President

  

 

 

	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  Bank of Scotland plc

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julia R. Franklin

  
	
   

  	
  Name: Julia R Franklin

  
	
   

  	
  Title:   Assistant Vice President

  

 

 

	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
  Wachovia Bank, National
  Association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Reginald T. Dawson

  
	
   

  	
  Name: Reginald T. Dawson

  
	
   

  	
  Title:   Managing Director

  

 

 

	
   

  	
  WELLS FARGO BANK N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernie Pinder

  
	
   

  	
  Name: Ernie Pinder

  
	
   

  	
  Title:   Vice President Principal

  

 

 

EXHIBIT A (Specified
Events)

 

(i) The failure of the Borrower and its
Restricted Subsidiaries to comply with the financial covenants contained in Section 7.11
of the Credit Agreement as of the last day of the Test Periods ended December 31,
2008, March 31, 2009, June 30, 2009 and September 30, 2009.

 

(ii) The failure of the Borrower, on or after February 1,
2009, to pay regular scheduled interest payments with respect to any Existing
Notes when and as due in accordance with the terms of the Existing Notes Indenture
governing such Existing Notes.

 

(iii) The failure of the Borrower to furnish
certain periodic reports pursuant to, and in accordance with the time periods
required by, each Existing Notes Indenture.

 

(iv) The filing of the Borrower Chapter 11 Case.

 

(v)  The occurrence of a default under the
Borrower’s Completion Guaranty, dated October 7, 2007, arising by reason
of a demand for performance by the Borrower thereunder or a cross default
thereunder to Aliante’s Credit Agreement, dated October 5, 2007 (“Aliante
Credit Agreement”), which demand or cross default arises as a consequence
of the alleged existence of a cross-default under the Aliante Credit Agreement
to the alleged existence of an Event of Default under the Credit Agreement.

 

(vi) The filing of the Holding Company Chapter
11 Cases.

 

 

EXHIBIT B (Potential
Specified Defaults)

 

(i) Any Event of Default arising under Section 8.01(b) of
the Credit Agreement solely as a result of the failure of the Borrower and its
Restricted Subsidiaries to comply with the financial covenants contained in Section 7.11(a),
(b) and (c) of the Credit Agreement as of the last day of the Test
Period ended December 31, 2008.

 

(ii) Any Event of Default arising under Section 8.01(b) of
the Credit Agreement as a result of the failure of the Borrower and its
Restricted Subsidiaries to comply with the financial covenants contained in Section 7.11
of the Credit Agreement as of the last day of the Test Periods ended March 31,
2009, June 30, 2009 and September 30, 2009.

 

(iii) Any Event of Default pursuant to Section 8.01(e) of
the Credit Agreement occurring on or after February 1, 2009 arising solely
as a result of an “Event of Default” under (and as defined in) any Existing
Notes Indenture which occurs as a result of the Borrower’s failure to pay
regular scheduled interest payments with respect to the Existing Notes when and
as due in accordance with the terms of the Existing Notes Indenture governing
such Existing Notes.

 

(iv) Any Event of Default pursuant to Section 8.01(e) of
the Credit Agreement solely as a result of a default each Existing Notes
Indenture arising in connection with the failure of the Borrower to furnish
certain periodic reports pursuant thereto.

 

(v) Any Event of Default under Section 8.01(a),
(f) or (g) of the Credit Agreement arising on March 3, 2009 (or,
if the Borrower shall have obtained (and at all times thereafter maintain) (x) the
Initial Existing Notes Forbearance, arising on and after March 3, 2009 and
on or prior to March 31, 2009 or (y) the Additional Existing Notes
Forbearance, arising on and after March 31, 2009 and on or prior to the
Extended Forbearance Deadline), in any case solely as a result of the filing of
the Borrower Chapter 11 Case.

 

(vi) Any Event of Default pursuant to Section 8.01(e) of
the Credit Agreement arising solely as a result of the occurrence of a default
under the Borrower’s Completion Guaranty, dated October 7, 2007, arising
by reason of a demand for performance by the Borrower thereunder or a cross
default thereunder to the Aliante Credit Agreement, which demand or cross
default arises as a consequence of the alleged existence of a cross-default
under the Aliante Credit Agreement to the alleged existence of an Event of
Default under the Credit Agreement.

 

(vii)  Any Event of Default under Section 8.01(f) or
(g) of the Credit Agreement arising on March 3, 2009 (or, if the
Borrower shall have obtained (and at all times thereafter maintain) (x) the
Initial Existing Notes Forbearance, arising on and after March 3, 2009 and
on or prior to March 31, 2009 or (y) the Additional Existing Notes
Forbearance, arising on and after March 31, 2009 and on or prior to the
Extended Forbearance Deadline), in any case solely as a result of the filing of
the Holding Company Chapter 11 Case.

 

 

EXHIBIT C

 

13-Week
Cash Flow Forecast

 

(Attached)

 

 

EXHIBIT D

 

Plan of
Reorganization

 

(Attached)

 

 

EXHIBIT E

 

Credit
Facilities Term Sheet

 

(Attached)Exhibit 10.1

 

TERMINATION AGREEMENT

 

February 27, 2009

 

	
  To:

  	
  Montpelier
  Re Holdings Ltd.

  	
   

  
	
   

  	
  Montpelier
  House

  	
   

  
	
   

  	
  94 Pitts Bay
  Road

  	
   

  
	
   

  	
  Pembroke HM
  08

  	
   

  
	
   

  	
  Bermuda

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  William
  Pollett, Treasurer and Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
  From:

  	
  Credit
  Suisse International

  	
   

  
	
   

  	
  One
  Cabot Square

  	
   

  
	
   

  	
  London
  E14 4QJ England

  	
   

  

 

This letter agreement (the “Termination Agreement”) relates to the Transactions (the “Transactions”) entered into between Credit Suisse
International (“CS”) and Montpelier Re Holdings
Ltd. (“Counterparty”), pursuant to (i) a
letter agreement dated May 31, 2006, as amended on December 6, 2007,
between CS and Counterparty (the “Confirmation”),
relating to an aggregate Number of Shares equal to 7,920,000 and (ii) a
Share Issuance Agreement dated May 31, 2006 among CS, Counterparty and
Credit Suisse Securities (USA) LLC, as collateral agent (the “SIA”).  Capitalized
terms used herein without definition shall have the meanings assigned to them
in the Confirmation or the SIA, as applicable.

 

1.  Termination of
Transactions.  The parties
agree that:

 

(a)                                  upon
the effectiveness of this Termination Agreement, all the Transactions shall be
terminated in their entirety;  and

 

(b)                                 effective upon payment
by CS to Counterparty of $32,000,000 and delivery by Counterparty to CS of
2,000,000 Shares (the “Settlement Shares”),
each on March 4, 2009 (the “Early Settlement Date”),
both CS and Counterparty shall have satisfied in full their obligations under
the Confirmation; and

 

(c)                                  effective upon
delivery by CS to Counterparty of 7,920,000 Shares on the Early Settlement
Date, CS shall have satisfied in full its obligations under the SIA.

 

2.  Representations and Warranties.

 

(a) Each party represents to the other party that:

 

(i)                 It
is duly organized and validly existing under the laws of the jurisdiction of
its organization or incorporation and, if relevant under such laws, in good
standing.

 

(ii)              It
has the power to execute and deliver this Termination Agreement and to perform
its obligations under this Termination Agreement and has taken all necessary
action to authorize such execution, delivery and performance.

 

(iii)           Such
execution, delivery and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional documents, any order or
judgment of any court or other agency of government applicable to it or any of
its assets or any contractual restriction binding on or affecting it or any of
its assets.

 

 

(iv)          All
governmental and other consents that are required to have been obtained by it
with respect to this Termination Agreement have been obtained and are in full
force and effect and all conditions of any such consents have been complied
with.

 

(v)             Its
obligations under this Termination Agreement constitute its legal, valid and
binding obligations, enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors’ rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or at law)).

 

(b) CS represents to, and agrees with, Counterparty that the
Settlement Shares shall be used solely to satisfy its obligations under the SIA.

 

3.  Counterparts.  This Termination Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if all of the signatures thereto and hereto were upon the same
instrument.

 

4.  Waiver of Trial by Jury. 
EACH OF COUNTERPARTY AND CS HEREBY IRREVOCABLY
WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON
BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS TERMINATION AGREEMENT OR THE ACTIONS OF
COUNTERPARTY OF ITS AFFILIATES OR CS OR ITS AFFILIATES IN THE NEGOTIATION,
PERFORMANCE OR ENFORCEMENT HEREOF.

 

5.  Governing Law.  THIS TERMINATION AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK.  THE PARTIES HERETO
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN
CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE
LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE
COURTS.

 

 

Please confirm that the foregoing correctly
sets forth the terms of our agreement by executing this Termination Agreement
and returning it in the manner indicated in the attached cover letter.

 

 

	
   

  	
  Yours faithfully,

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE INTERNATIONAL

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE, NEW YORK BRANCH,

  AS AGENT FOR CREDIT SUISSE

  INTERNATIONAL

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE SECURITIES (USA) LLC,
 AS COLLATERAL AGENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed and
  Accepted By:

  	
   

  
	
   

  	
   

  
	
  MONTPELIER
  RE HOLDINGS LTD.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

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