Document:

Exhibit 10.1

 

Execution
Copy

EMPLOYMENT
AGREEMENT

AGREEMENT,
dated as of this 12th day of April, 2007, by and between the Seneca Gaming
Corporation (the “Parent”), a
governmental instrumentality of the Seneca Nation of Indians of New York (the “Nation”) with its principal place of business in the State
of New York and E. Brian Hansberry (“Executive”).

WHEREAS,
Executive and the Seneca Niagara Falls Gaming Corporation, a wholly-owned
subsidiary of Parent (“SNFGC”)
entered into an employment agreement, effective as of August 28, 2006 (the “Original Employment Agreement”), pursuant to which
Executive served as the General Manager of the Seneca Niagara Casino and Hotel;

WHEREAS,
Parent and Executive now desire that Executive serve as the interim President
and Chief Executive Officer of Parent and each of its wholly-owned subsidiaries
(collectively, the “Subsidiaries”
and together with Parent, the “Employer”);

WHEREAS,
Employer is in the process of conducting a limited search for an individual to
serve as its permanent President and Chief Executive Officer, which search
includes Employer’s consideration of Executive for such position;

WHEREAS,
in the event that Parent does not select Executive as its permanent President
and Chief Executive Officer, then Executive shall, at the time such permanent
President and Chief Executive Officer takes office, resume his position as
General Manager or assume the role of Chief Operating Officer (as mutually
agreed upon by the parties) unless otherwise agreed upon; and

WHEREAS,
the parties desire to amend and restate the Original Employment Agreement to
set forth the terms and conditions of Executive’s continued relationship with
and new position with the Employer as set forth in this Agreement.

IT
IS HEREBY AGREED AS FOLLOWS:

1.             Employment.  Employer hereby employs Executive as its
Interim President and Chief Executive Officer. 
Executive shall be responsible for the day-to-day operations of the
Company, and shall have such authority and perform such duties as the Board of
Directors may from time to time determine.

2.             Term.  The term of this Agreement shall commence on
February 7, 2007 (the “Commencement Date”)
and terminate on September 30, 2009 (the “Termination Date”),
unless renewed by a subsequent written agreement of the parties.

3.             Compensation.

(a)                                  Employer
shall pay Executive an initial salary of Three Hundred Sixty Thousand Dollars
($360,000) per year (“Base Compensation”).  Employer shall review said salary on an
annual basis (prior to or in connection with the close of its fiscal year) at
which time the Board of Directors shall determine in its sole discretion

                                                whether
or not said salary shall be increased and the timing thereof.  Said salary shall be payable in periodic
payments in accordance with Employer’s regular payroll practices.

(b)                                 Executive
shall also receive a retention bonus for serving as interim President and Chief
Executive Officer at an annual rate of Four Hundred Ninety-Five Thousand
Dollars ($495,000) for the fiscal year ending September 30, 2007 and Five Hundred
Thirty-Two Thousand Five Hundred Dollars ($532,500) for the fiscal year ending
September 30, 2008, until such time as the permanent President and Chief
Executive Officer takes office.  Such
bonus amounts shall be prorated for periods shorter than twelve (12) months in
duration and shall be payable in accordance with Employer’s regular payroll
practices (but not less frequently than monthly).

(c)                                  Executive
shall be provided with coverage under Employer’s employee benefit insurance
programs and retirement programs, if any, at least equal to the coverage
provided to other senior executive officers of Employer.

(d)                                 In
the event that Employer selects Executive to be its permanent President and
Chief Executive Officer, then the parties shall amend this Agreement or enter
into a new agreement to reflect the change in Executive’s position, together
with any other applicable changes to the terms and conditions of Executive’s
employment, including compensation.

(e)                                  In
the event that Employer does not select Executive to be its permanent President
and Chief Executive Officer, then Executive shall, at the time such permanent
President and Chief Executive Officer takes office, resume his duties as the
General Manager of the Seneca Niagara Casino and Hotel or assume the position
of Chief Operating Officer or such other senior executive position, with such
duties and compensation as agreed upon by the parties, and as reflected in a
new or amended employment agreement.

(f)                                    Should
Executive become unable to perform the duties required under this Agreement as
a result of temporary, documented medical disability, he shall be eligible to
continue to receive his Base Compensation for a period of up to one hundred and
eighty (180) days.

4.             Licensing
Issues.  Executive represents to
Employer that he shall maintain in good standing such licenses as may be
required pursuant to the Nation-State Gaming Compact between the Seneca
Nation of Indians and the State of New York (the “Compact”) and/or the Nation’s
or Employer’s gaming ordinances as in effect on the date hereof, as may be
necessary to enable him to engage in his employment hereunder.

5.             Termination.

(a)                                  Executive’s
employment hereunder may be terminated by Parent only under the following
circumstances and such termination by Parent shall be a termination

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                                                with
respect to each of the Subsidiaries, unless otherwise determined by the Board:

(i)                                     upon
revocation or disapproval of the license required pursuant to the Compact, or
upon disapproval by the National Indian Gaming Commission of the issuance of
any license by the Nation pursuant to its own gaming ordinances, if either such
action renders it unlawful for Executive to perform as Interim President and
Chief Executive Officer of Employer, or if any event renders it unlawful for
the Nation and/or Employer to continue to conduct casino gaming on Nation
Territory.  For purposes of this
Agreement, “Nation Territory”
shall include current or future Nation territory where the Employer conducts or
will conduct its gaming operations as of the date Executive’s employment is
terminated.

(ii)                                  upon
revocation or disapproval of such licenses for Executive as are required
pursuant to the Compact and/or by the Nation’s or Employer’s gaming ordinances;

(iii)                               Executive
shall commit an act constituting “Cause,” which is defined to mean an act of
dishonesty by Executive intended to result in gain or personal enrichment of
Executive or others at Employer’s expense, or the deliberate and intentional
refusal by Executive (except by reason of disability) to perform his duties
hereunder, or by acts constituting gross negligence in the performance of such
duties;

(iv)                              Executive
shall die or Employer shall for any reason within Employer’s or the Nation’s
control permanently cease to conduct casino gaming on Nation Territory; or

(v)                                 Executive
shall become unable to perform the duties and responsibilities set forth in
this Agreement for a period of 180 days in any 365 day period by reason of
long-term physical or mental disability.

(b)                                 If
Executive’s employment should be terminated under Section 5(a) above (or any
subsection), then Employer shall at that time pay Executive (or his estate, as
applicable) Base Compensation earned through the date Executive is terminated,
whereupon Employer shall have no further liability or obligation to Executive
under this Agreement or otherwise.

(c)                                  If
Executive’s employment should be terminated by Parent for any reason other than
those specified in Section 5(a) above (it being understood that a purported
termination for Cause which is contested by Executive and finally determined
not to have been proper shall be treated as a termination under this Section
5(c)), then Employer shall: (i) pay Executive his Base Compensation earned, but
unpaid,

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                                                through
the date Executive is terminated, (ii)  continue to pay Executive his Base
Compensation in effect as of the date of termination for a period following his
termination (the “Severance Period”)
equal to the lesser of (A) eighteen (18) months or (B) the remainder of the
period ending on the Termination Date, and (iii) to the extent elected by
Executive, pay for the cost of (A) Executive’s premiums for continuation
healthcare coverage under Section 4980B of the Internal Revenue Code of 1986,
as amended (“COBRA”), and
(B) the premiums for Exec-u-Care® or any similar executive medical
reimbursement insurance plan maintained by Employer on the date Executive’s
employment is terminated, for the lesser of (1) the Severance Period,
(2) until Executive is no longer eligible for COBRA continuation coverage,
or (3) until Executive obtains comparable healthcare benefits from any
other employer during the Severance Period, whereupon Employer shall have no
further liability or obligation to Executive under this Agreement or otherwise;
provided, however, that Executive shall have a duty to mitigate
damages as follows: during the Severance Period, Executive shall endeavor to
mitigate damages by seeking employment with duties and salary comparable to
those provided for herein, and if he shall obtain such employment, he shall
reimburse Employer the amount of the compensation he has received from such
other entity for such period, but not to exceed the amount of the compensation
the Employer shall have paid him for such period.

(d)                                 Executive
may terminate his employment for any reason upon one-hundred-twenty (120) days
written notice to Parent.  If Executive
terminates his employment pursuant to this Section 5(d), Employer shall pay
Executive the Base Compensation earned through the date of termination, whereupon
the Employer shall have no further liability or obligation to Executive under
this Agreement or otherwise.

(e)                                  Executive
acknowledges and agrees that the payments set forth in this Section 5
constitute liquidated damages for termination of his employment during the
employment term and such liquidated damages shall be his only remedy with
respect to any claim, including, without limitation, breach of contact, he may
have under this Agreement and that prior to receiving any such payments under
Section 5 and as a material condition thereof, Executive shall sign and agree
to be bound by a general release of claims against Employer related to
Executive’s employment (and termination of employment) with Employer in
substantially the form as attached hereto as Exhibit A as may be
modified by Employer in good faith to reflect changes in law or its employment
practices.  Notwithstanding any other
provision of this Agreement to the contrary, Executive acknowledges and agrees
that other than any claim for the liquidated damages contemplated hereunder, he
waives any rights to be awarded any other damages with respect to any claim he
may have under this Agreement, including, without limitation, compensatory or
punitive damages.

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6.             Restrictive Covenants.

(a)                                  Executive
acknowledges that:  (i) as a result of
Executive’s employment  with the
Employer, he will obtain secret, proprietary and confidential information
concerning the business of the Employer, including, without limitation,
business and marketing plans, strategies, employee lists, patron lists,
operating procedures, business relationships (including persons, corporations
or other entities performing services on behalf of or otherwise engaged in
business transactions with the Employer), accounts, financial data, know-how,
computer software and related documentation, trade secrets, processes, policies
and/or personnel, and other information relating to the Employer (“Confidential Information”); (ii) the Confidential
Information has been developed and created by Employer at substantial expense
and the Confidential Information constitutes valuable proprietary assets and
Employer will suffer substantial damage and irreparable harm which will be
difficult to compute if, during the Restricted Period, Executive should enter a
Competitive Business (as defined herein) in violation of the provisions of this
Agreement; (iii) Employer will suffer substantial damage which will be
difficult to compute if, during the Restricted Period, Executive should solicit
or interfere with Employer’s employees or patrons, or should divulge
Confidential Information relating to the business of Employer; (iv) the
provisions of this Section 6 are reasonable and necessary for the protection of
the business of Employer; (v) Employer would not have hired or employed
Executive unless he signed this Agreement; and (vi) the provisions of this
Agreement will not preclude Executive from other gainful employment.  “Competitive Business”
shall mean any gaming establishment which provides to its patrons games of
chance such as slot machines, card games, roulette, and similar games in the
State of New York or within the 100 mile radius of Nation Territory.

(b)                                 Executive
acknowledges and agrees that the unauthorized disclosure or misuse of
Confidential Information will cause substantial damage to Employer.  Therefore, Executive agrees not to, at any
time, either during the term of the Agreement or thereafter, divulge, use,
publish or in any other manner reveal, directly or indirectly, to any person,
firm or corporation any Confidential Information obtained or learned by
Executive during the course of his employment with Employer, with regard to the
operational, financial, business or other affairs and activities of Employer,
their officers, directors or employees and the entities with which they have
business relationships, except (i) as may be necessary to the performance of
Executive’s duties with Employer, (ii) with Parent’s express written consent,
(iii) to the extent that any such information is in the public domain other
than as a result of Executive’s breach of any of obligations hereunder, or (iv)
where required to be disclosed by court order, subpoena or other government
process and, in such event, Executive shall cooperate with Employer in
attempting to keep such information confidential.

(c)                                  During
Executive’s employment with Employer and for eighteen (18) months after his
termination of employment for any reason (the “Restricted
Period”),

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                                                Executive,
without the prior written permission of Parent, shall not, directly or
indirectly, (i) enter into the employ of or render any services to any person,
engaged in a Competitive Business; or (ii) become associated with or interested
in any Competitive Business as an individual, partner, shareholder, member, creditor,
director, officer, principal, agent, employee, trustee, consultant, advisor or
in any other relationship or capacity.  
This paragraph 6(c) shall not prevent Executive from owning common stock
in a publicly traded corporation which owns or manages a casino provided
Executive does not take an active role in the ownership or management of such
corporation and his ownership interest represents less than 3% of the voting
securities and/or economic value of such corporation.

(d)                                 By
executing this Agreement, Executive acknowledges that he understands that
Employer’s ability to operate its business depends upon its ability to attract
and retain skilled people and that Employer has and will continue to invest
substantial resources in training such individuals.  Therefore, during the Restricted Period,
Executive shall not, without the prior written permission of the Parent,
directly or indirectly solicit, employ or retain, or have or cause any other
person or entity to solicit, employ or retain, any person who is employed or is
providing personal services to the Employer.

(e)                                  By
executing this Agreement, Employee acknowledges that Executive understands that
Employer’s ability to operate its business depends upon its ability to attract
and retain vendors and patrons. 
Therefore, during the Restricted Period, Executive shall not, directly
or indirectly, solicit, contact, interfere with, or endeavor to entice away
from Employer any of its current or potential patrons or any such persons or
entities that were patrons of Employer within the one year period immediately
prior to Executive’s termination of employment. 
Executive further agrees that, during the Restricted Period, Executive
shall not, directly or indirectly, endeavor to entice away from Employer any of
its current or potential vendors or any such persons or entities that were
vendors of Employer within the one year period immediately prior to Employee’s
termination of employment.

(f)                                    Executive
acknowledges and agrees during his employment and for all time thereafter that
he will not defame or publicly criticize the services, business, integrity,
veracity or personal or professional reputation of the Employer and its
officers, directors, employees, affiliates, or agents thereof in either a
professional or personal manner. 
Employer acknowledges and agrees that during Executive’s employment and
for all time thereafter, Employer will not defame or publicly criticize
Executive either in a professional or personal manner, except as may be
necessary to defend the Employer from comments made by or on behalf of
Executive.

(g)                                 If
Executive commits a breach, or threatens to commit a breach, of any of the
provisions of this paragraph 6 of the Agreement, Employer shall have the right
and remedy to have the provisions specifically enforced by any court having
jurisdiction, it being acknowledged and agreed by Executive that the services

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                                                being
rendered hereunder to Employer are of a special, unique and extraordinary
character and that any such breach or threatened breach will cause irreparable
injury to Employer and that money damages will not provide an adequate remedy
to Employer.  Such right and remedy shall
be in addition to, and not in lieu of, any other rights and remedies available
to the Employer at law or in equity. 
Accordingly, Executive consents to the issuance of an injunction,
whether preliminary or permanent, consistent with the terms of this Agreement.

(h)                                 If,
at any time, the provisions of this Agreement shall be determined to be invalid
or unenforceable under any applicable law, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Agreement shall be
considered divisible and shall become and be immediately amended to only such
area, duration and scope of activity as shall be determined to be reasonable
and enforceable by the court or other body having jurisdiction over the matter
and Executive and Employer agree that this Agreement as so amended shall be
valid and binding as though any invalid or unenforceable provision had not been
included herein.

7.             Miscellaneous.

(a)                                  Executive
agrees that during the term of this
Agreement  unless earlier
terminated, he will commit his full time and energies to the duties imposed
hereby; provided, that, with the prior written approval of the
Board, Executive may expend as much of his personal time on his own ventures or
investments, so long as: (i) such time is not substantial and does not
interfere with his ability to perform his duties hereunder; (ii) such
activities do not compete or conflict with the business of Employer or create a
personal conflict of interest to Executive and (iii) such venture or investment
does not transact any business with Employer without prior disclosure to, and
approval by, the Board.

(b)                                 Executive
represents to Employer that there are no restrictions or agreements to which he
is a party which would be violated by his execution of this Agreement and his
employment hereunder.

(c)                                  No
provisions of this Agreement may be amended, modified, or waived unless such
amendment or modification is agreed to in writing signed by Executive and by a
duly authorized officer of the Parent, and such waiver is set forth in writing
and signed by the party to be charged. 
No waiver by any party hereto at any time of any breach by the other
party hereto of any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this
Agreement.  The respective rights and
obligations of the parties hereunder of this Agreement shall survive Executive’s
termination of employment and the termination of this Agreement to the extent
necessary for the intended preservation of such rights and obligations.

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(d)                                 The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of New York without regard to its
conflicts of law principles.

(e)                                  Except
as provided in paragraph 6(g) of this Agreement, any dispute, controversy or
claim arising out of or relating to this Agreement shall be settled by binding
arbitration in Niagara Falls, New York in accordance with the Rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrator(s) may be entered in the United States District Court for the
Western District of New York.  The
parties agree that the only remedies available to Executive under this
Agreement are those that are set forth in paragraph 5 and the arbitrator shall
have no authority to award any other damages, including, without limitation,
punitive and/or compensatory damages.

(f)                                    For
the purposes of this Agreement, notices, demands and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered either personally or by United States certified
or registered mail, return receipt requested, postage prepaid, addressed as
follows:

If
to Executive:

________________________

________________________

________________________

If to the Parent:

310 4th Street

P.O. Box 77

Niagara Falls, New York (Seneca Nation Territory) 14303

Attn:  General Counsel

or to such other address as any party may have furnished to the others
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.

(g)                                 The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

(h)                                 This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.

(i)                                     Except
as otherwise provided herein, this Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein

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                                                and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in respect of such
subject matter.  Except as otherwise
provided herein, the Original Employment Agreement and any other prior
agreement of the parties hereto in respect of the subject matter contained
herein is hereby terminated and cancelled.

(j)                                     All
payments hereunder shall be subject to any required withholding of federal,
state and local taxes pursuant to any applicable law or regulation.

(k)                                  The
section headings in this Agreement are for convenience of reference only, and
they form no part of this Agreement and shall not affect its interpretation.

8.             Waiver
of Sovereign Immunity.

(a)                                  The
Parent grants a waiver of its sovereign immunity from suit exclusively to
Executive (and his estate in the event of his death) for the purpose of
enforcing this Agreement, or permitting or compelling arbitration and other
remedies as provided herein.  This waiver
is solely for the benefit of the aforesaid parties and for no other person or
entity.  For this limited purpose, the
Parent consents to be sued solely with respect to the enforcement of any
decision by an arbitrator relating to this Agreement as provided in paragraph
7(e) of this Agreement in the United States District Court for the Western
District of New York.

(b)                                 The
Parent hereby waives any requirement of exhaustion of tribal remedies, and
agrees that it will not present any affirmative defense in any dispute based on
any alleged failure to exhaust such remedies. 
Without in any way limiting the generality of the foregoing, the Parent
expressly authorizes any governmental authorities who have the right and duty
under applicable law to take any action authorized or ordered by any court, to
take such action, including, without limitation, repossessing any property and
equipment subject to a security interest or otherwise giving effect to any
judgment entered; provided, however that the Parent does not
hereby waive the defense of sovereign immunity with respect to any action by
third parties.

(c)                                  The
Parent’s waiver of immunity from suit is irrevocable and specifically limited
to the remedies provided in paragraph 5 of this Agreement regarding liquidated
damages.  Any monetary award related to
any such action shall be satisfied solely from the net income of the Parent.

(d)                                 Notwithstanding
anything in this Agreement to the contrary, this waiver is to be interpreted in
a manner consistent with the Parent’s ability to enter into this Agreement,
including, without limitation, this paragraph 8, as provided in the Charter of
the Parent, as it may be amended from time to time.  Accordingly, the Nation shall not be liable
for the debts or obligations of the Parent, and the Parent shall have no power
to pledge or encumber the assets of the Nation. 
Furthermore, this paragraph 8 does not constitute a waiver of any
immunity of the Nation or a 

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delegation to the
Parent of the power to make any such waiver. This paragraph 8 shall be strictly
construed with a view toward protecting the Nation’s assets from the reach of
creditors and others.

[Remainder
of Page Intentionally Left Blank]

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Execution Copy

EXECUTED, as of the date
first written above.

	
  SENECA GAMING CORPORATION

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: Barry E.
  Snyder, Sr.

  	
   

  	
   

  	
   

  	
   

  
	
  Title: Chairman
  of the Board of Directors

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXECUTIVE

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: E. Brian
  Hansberry

  	
   

  	
   

  	
   

  	
   

  

 

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Execution Copy

 

Exhibit A

Form of Release

 

See Attached.

 12

 

MUTUAL RELEASE OF ALL CLAIMS

Release of Claims by Executive.

It is understood and agreed by the Seneca Gaming Corporation (the “Company”),
a governmental instrumentality of the Seneca Nation of Indians of New York, and
___________________ (“Executive”), that in consideration of the mutual promises
and covenants contained in this general release of all claims (the “Release
Agreement”), Executive, on behalf of Executive and Executive’s agents,
representatives, administrators, receivers, trustees, estates, heirs, devisees,
assignees, legal representatives, and attorneys, past or present (as the case
may be), hereby irrevocably and unconditionally releases, discharges, and
acquits all the Released Parties (as defined below) from any and all claims,
promises, demands, liabilities, contracts, debts, losses, damages, attorneys’
fees and causes of action of every kind and nature, known and unknown, up to
and including the Effective Date (as defined below), provided, however, that
any claims arising after the Effective Date from the then present effect of
acts or conduct occurring on or before the Effective Date shall be deemed
released under this agreement, including but not limited to causes of action,
claims or rights arising out of, or which might be considered to arise out of
or to be connected in any way with (i) Executive’s employment or service with
the Company and, to the extent applicable, a Released Party, or the termination
thereof; (ii) the Employment Agreement dated as of _______________ between
the Company and Executive, or the termination thereof; (iii) any treatment of
Executive by any of the Released Parties, which shall include, without
limitation, any treatment or decisions with respect to hiring, placement,
promotion, discipline, work hours, demotion, transfer, termination,
compensation, performance review, or training; (iv) any statements or alleged
statements by the Company or any of the Released Parties regarding Executive,
whether oral or in writing; (v) any damages or injury that Executive may have
suffered, including without limitation, emotional or physical injury,
compensatory damages, or lost wages; (vi) employment discrimination, which
shall include, without limitation, any individual or class claims of
discrimination on the basis of age, disability, sex, race, religion, national
origin, citizenship status, marital status, sexual preference, or any other
basis whatsoever; or (vii) all such other claims that Executive could assert
against any, some, or all of the Released Parties in any forum, whether such
claims are known or unknown, accrued or unaccrued, liquidated or contingent,
direct or indirect.

Said release shall be construed as broadly as possible and shall also
extend to release the Released Parties, without limitation, from any and all
claims that Executive has alleged or could have alleged, whether known or
unknown, accrued or unaccrued, against any Released Party for violation(s) of
any of the following, to the extent applicable: 
the National Labor Relations Act, as amended; Title VII of the Civil
Rights Act of 1964, as amended; the Age Discrimination in Employment Act; the
Civil Rights Act of 1991; Sections 1981-1988 of Title 42 of the United States
Code; the Equal Pay Act; the Employee Retirement Income Security Act of 1974,
as amended; the Immigration Reform Control Act, as amended; the Americans with
Disabilities Act of 1990, as amended; the Fair Labor Standards Act, as amended;
the Occupational Safety and Health Act, as amended; the New York Human Rights

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Law;
the New York City Human Rights Law; the New York Labor Law; the New York
Whistleblower Protection Law; the New York Wage and Hour Laws; the New York
City Administrative Code; any other tribal, federal, state, or local law or
ordinance; any public policy, whistleblower, contract, tort, or common law; and
any demand for costs or litigation expenses, including but not limited to
attorneys’ fees.

The term “Released Parties” or “Released Party” as used herein shall
mean and include: the Company and the Company’s parents, subsidiaries,
affiliates, and all of their predecessors and successors (collectively, the “Released
Entities”), and with respect to each such Released Entity, all of its former,
current, and future officers, directors, agents, representatives, employees,
servants, owners, shareholders, partners, joint venturers, attorneys, insurers,
administrators, and fiduciaries, and any other persons acting by, through,
under, or in concert with any of the persons or entities listed herein.

Pursuant to the Older Workers Benefit Protection Act of 1990, Executive
understands and acknowledges that by executing this Release Agreement and
releasing all claims against any of the Released Parties, Executive has waived
any and all rights or claims that Executive has or could have against any
Released Party under the Age Discrimination in Employment Act, which includes
any claim that any Released Party discriminated against Executive on account of
Executive’s age.  Executive also
acknowledges the following:

(a)                                  The Company, by this written
Release Agreement, has advised Executive to consult with an attorney prior to
executing this Release Agreement;

(b)                                 This Release Agreement does
not include claims arising after the Effective Date, provided, however, that
any claims arising after the Effective Date from the then present effect of
acts or conduct occurring on or before the Effective Date shall be deemed
released under this Release Agreement;

(c)                                  The Company has provided
Executive the opportunity to review and consider this Release Agreement for
twenty-one (21) days from the date Executive receives this Release
Agreement.  At Executive’s option and
sole discretion, Executive may waive the twenty-one (21) day review period and
execute this Release Agreement before the expiration of twenty-one (21)
days.  If Executive elects to waive the
twenty-one (21) day review period, Executive acknowledges and admits that
Executive was given a reasonable period of time within which to consider this
Release Agreement and Executive’s waiver is made freely and voluntarily,
without duress or any coercion by any other person; and

(d)                                 Executive may revoke this
Release Agreement within a period of seven (7) days after execution of the
agreement.  Executive agrees that any
such revocation is not effective unless it is made in writing and delivered to
the Company, to the attention of the General Counsel of the Seneca Gaming
Corporation, 310 Fourth Street, Niagara Falls, New York (Seneca Nation
Territory) 14303, by the end of the seventh (7th) calendar day.  Under any such valid revocation, Executive
shall not be entitled to any benefits under this Release Agreement and this
Release Agreement shall become null and

 14
 

                                                void.  This Release Agreement becomes effective on
the eighth (8th) calendar day after it is executed by both parties (the “Effective
Date”).

Executive confirms that no claim, charge, or complaint against any of
the Released Parties, brought by Executive, exists before any federal, state,
or local court or administrative agency. 
Executive hereby waives Executive’s right to accept any relief or
recovery, including costs and attorney’s fees, from any charge or complaint
before any federal, state, or local court or administrative agency against any
of the Released Parties, except as such waiver is prohibited by law.

Executive agrees that Executive will not, unless otherwise prohibited
by law, at any time hereafter, participate in as a party, or permit to be filed
by any other person on  Executive’s
behalf or as a member of any alleged class of persons, any action or proceeding
of any kind, against the Released Parties or any past, present or future
employee benefit and/or pension plans or funds of the Released Entities with
respect to any act, omission, transaction or occurrence up to and including the
date of the execution of this Release Agreement.  Executive further agrees that Executive will
not seek or accept any award or settlement from any source or proceeding with
respect to any claim or right covered by this paragraph or by the Release
Agreement and that this Release Agreement shall act as a bar to recovery in any
such proceedings.

Executive agrees that neither this Release Agreement nor the furnishing
of the consideration for the general release set forth in this Release
Agreement shall be deemed or construed at any time for any purpose as an
admission by the Released Parties of any liability or unlawful conduct of any
kind.  Executive further acknowledges and
agrees that the consideration provided for herein is adequate consideration for
Executive’s obligations under this Release Agreement.

Release
of Claims by Company.

Subject to the provisions of this Release Agreement and subject to
Executive not exercising Executive’s revocation rights hereunder, the Company
hereby irrevocably and unconditionally releases, waives and fully and forever
discharges Executive, from and against any and all claims, liabilities,
obligations, covenants, rights, demands and damages of any nature whatsoever,
whether known or unknown, anticipated or unanticipated, arising from, by reason
of or in any way related to any transaction, event or circumstance which
occurred or existed prior to and including the date of this Release Agreement
arising out of or in any way related to Executive’s employment with the Company
and, to the extent applicable, a Released Party, or the termination
thereof.  Notwithstanding the provisions
of this paragraph, nothing in this waiver or release shall be construed to
constitute any release or waiver by the Company of its rights or claims against
Executive arising out of any intentional or willful misconduct or fraudulent or
criminal acts engaged in by Executive while in the course of Executive’s
employment or service.

Miscellaneous.

This Agreement and all questions relating to its
validity, interpretation, performance and enforcement shall be governed by and
construed in accordance with the laws of the Seneca Nation of Indians.  If any provision of the Release Agreement
other than the general release set

 15
 

forth above, is declared legally or factually invalid or unenforceable
by any court of competent jurisdiction and if such provision cannot be modified
to be enforceable to any extent or in any application, then such provision
immediately shall become null and void, leaving the remainder of this Release
Agreement in full force and effect.  If
any portion of the general release set forth in this Release Agreement is
declared to be unenforceable by a court of competent jurisdiction in any action
in which Executive participates or joins, Executive agrees that all consideration
paid to Executive under this Release Agreement shall be offset against any
monies that Executive may receive in connection with any such action.

This Release Agreement sets forth the entire agreement between
Executive and the Released Parties and it supersedes any and all prior
agreements or understandings with respect to the subject matter hereof, whether
written or oral, between the parties, except as otherwise specified in this
Release Agreement.  Executive
acknowledges that Executive has not relied on any representations, promises, or
agreements of any kind made to her in connection with Executive’s decision to
sign this Release Agreement, except for those set forth in this Release
Agreement.

This Release Agreement may not be amended except by a written agreement
signed by both parties, which specifically refers to this Release Agreement.

EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE CAREFULLY HAS READ THIS RELEASE
AGREEMENT; THAT EXECUTIVE HAS HAD THE OPPORTUNITY TO THOROUGHLY DISCUSS ITS
TERMS WITH COUNSEL OF EXECUTIVE’S CHOOSING; THAT EXECUTIVE FULLY UNDERSTANDS
ITS TERMS AND ITS FINAL AND BINDING EFFECT; THAT THE ONLY PROMISES MADE TO SIGN
THIS RELEASE AGREEMENT ARE THOSE STATED AND CONTAINED IN THIS RELEASE
AGREEMENT; AND THAT EXECUTIVE IS SIGNING THIS RELEASE AGREEMENT KNOWINGLY AND
VOLUNTARILY.  EXECUTIVE STATES THAT
EXECUTIVE IS IN GOOD HEALTH AND IS FULLY COMPETENT TO MANAGE EXECUTIVE’S
BUSINESS AFFAIRS AND UNDERSTANDS THAT EXECUTIVE MAY BE WAIVING SIGNIFICANT
LEGAL RIGHTS BY SIGNING THIS RELEASE AGREEMENT.

[Signature
Page Follows]

 16
 

IN WITNESS
WHEREOF, Executive has executed this Release Agreement as of the date set forth
below.

	
  

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Date:

  	
   

  

 

Sworn to and subscribed before me

this ___ day of _____________, 20___.

_____________________________

                 Notary Public

	
  

  	
   

  	
  ACCEPTED AND ACKNOWLEDGED BY

  
	
   

  	
   

  	
  SENECA GAMING CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
  Date:

  	
   

  

 

 17EXHIBIT 10.1

	
  

  	
  Detroit New York
  Chicago Dallas

  

 

02 April 2007

Mr. Robert MacKenzie

President and Chief Executive Officer

Sea Containers Limited

Canon’s Court

22 Victoria Street

PO Box H1179

Hamilton HMEX

Bermuda

Dear Mr. MacKenzie:

Re: Agreement for the Provision of Interim Management
and Restructuring Services

This letter, together with the attached Schedule(s),
Exhibit and General Terms and Conditions, sets forth the agreement (“Agreement”)
between AP Services, LLC, a Michigan limited liability company (“APS”), and Sea
Containers Ltd. (the “Company”), for the engagement of APS to provide certain
temporary employees to the Company to assist it in its restructuring as
described below.

All defined terms shall have the meanings ascribed to
them in this letter and in the attached Schedule(s), Exhibit and General Terms
and Conditions.

Generally, the engagement of APS, including any APS
employees who serve in Executive Officer positions, shall be under the
supervision of the Board of Directors of the Company and the direct supervision
of its Chief Executive Officer.

OBJECTIVE
AND TASKS

APS will provide Laura Barlow to serve as the Company’s
Chief Financial Officer/Chief Restructuring Officer (“CFO/CRO”), reporting to
the Company’s President and Chief Executive Officer. Working collaboratively
with the senior management team, the Board of Directors and other Company
professionals, Ms. Barlow will oversee the Company’s evaluation and
implementation of strategic and tactical options through the restructuring
process.

Ms Barlow will also serve as Chief Financial
Officer/Chief Restructuring Officer (“CFO/CRO”) of Sea Containers Services
Limited (“SCSL”). In respect to significant intercompany claims, particularly
claims of the Company and SCSL against each other, the CFO/CRO intends to
maintain a position as a neutral facilitator and mediator to resolve such
claims of the estates and other necessary parties.

2000 Town Center | Suite
2400 | Southfield, MI | 48075 | 248.358.4420 | 248.358.1969 fax |
www.alixpartners.com

APS acknowledges the Company’s concern to minimize any
duplication of services with advisors retained by the Company, and will take
reasonable measures to avoid duplication. In addition to the ordinary course
duties of CFO/CRO, the Temporary Staff (as defined below) roles will include
working with the Company and its team to undertake the following:

·                             Manage
the Company’s financial, treasury and tax functions.

·                             Oversee
negotiations with potential acquirers of Company assets.

·                             Oversee
management of the “working group” professionals who are assisting the Company
in the reorganization process or who are working for the Company’s various
stakeholders to improve coordination of their effort and individual work
product to be consistent with the Company’s overall restructuring goals.

·                             Work
with the Company and its team to further identify and implement both short-term
and long-term liquidity generating initiatives.

·                             Oversee
the Company’s execution of its planned disposal programme in respect of various
non-core assets and associated activities;

·                             Oversee
the Company’s management of the relationship with its stakeholders and their
advisers and in meeting its requirements to provide information to those
stakeholders;

·                             Oversee
the Company’s negotiation and restructuring of its current indebtedness with
its key stakeholders including liaising and negotiating with the different
stakeholders; and

·                             Manage
such other matters as may be requested by the Company that fall within APS’
expertise and that are mutually agreeable.

The principal contact for the Company at AlixPartners
shall be Laura Barlow, Managing Director. Ms. Barlow will draw on other
AlixPartners personnel as is appropriate, and after conferring with the
Company.

 2
 

STAFFING

APS will provide the Company with the individuals set
forth on Exhibit A (“Temporary Staff”), subject to the terms and conditions of
this Agreement, with the titles, pay rates and other descriptions set forth
therein.

The Temporary Staff may be assisted by or replaced by
other professionals at various levels, as required, who shall also become
Temporary Staff. APS will keep the Company informed as to APS’ staffing and
will not add additional Temporary Staff to the assignment without first
consulting with the Company to obtain Company concurrence that such additional
resources are required and do not duplicate the activities of other employees
or professionals.

APS commits to provide services under this Agreement
for the latter of (i) six months from the date of this letter or (ii) at such
date on which a plan of restructuring is confirmed. APS reserves its right to
terminate this Agreement for cause.

In the event that either Ms. Barlow or Mr. Cavin
become unavailable to complete this engagement, APS will notify the Company to
provide a mutually agreeable replacements.

TIMING, FEES AND RETAINER

APS will commence this engagement on or about 2 April
2007 after receipt of a copy of the Agreement executed by the Company
accompanied by the Retainer, as set forth on Schedule 1. Ms Barlow’s
appointment as CRO will be effective immediately. Following a transition
period, her appointment as CFO will be effective from 1 May 2007.

The Company shall compensate APS for its services, and
reimburse APS for expenses, as set forth on Schedule 1.

*         *         *

The Company will promptly apply to the Bankruptcy
Court to obtain approval of APS’ retention and Retainer nunc pro tune to the
date of this Agreement.

The terms and conditions set out in the attached
Schedule(s), Exhibit and the General Terms and Conditions form part of the
Agreement and are incorporated by reference herein.

 3
 

If these terms meet with your approval, please sign and return the
enclosed copy of the Agreement and wire transfer the amount to establish the
Retainer.

 4
 

We
look forward to working with you.

Sincerely yours,

	
  AP SERVICES, LLC

  	
   

  
	
   

  	
   

  
	
  /s/ Laura Barlow

  	
   

  	
   

  
	
   

  	
   

  
	
  Laura Barlow

  	
   

  
	
  Managing Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and Agreed to:

  	
   

  
	
   

  	
   

  
	
  SEA CONTAINERS LTD.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ Bob MacKenzie

  	
   

  
	
  Its:

  	
   President & CEO

  	
   

  
	
  Dated:

  	
      12th April 2007

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and Agreed to:

  	
   

  
	
   

  	
   

  
	
  SEA CONTAINERS SERVICES LTD.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ Bob MacKenzie

  	
   

  
	
  Its:

  	
      Director

  	
   

  
	
  Dated:

  	
      12th April 2007

  	
   

  
					

 

 5

AP Services, LLC

Employment by Sea Containers, Ltd.

Exhibit A

Temporary Staff

Individuals with Executive Officer Positions

	
  Name

  	
   

  	
  Description

  	
   

  	
  Monthly
 Rate

  	
   

  	
  Commitment

  Full1 or Part Time

  
	
  Laura Barlow

  	
   

  	
  Chief Financial Officer/ Chief Restructuring Officer

  	
   

  	
  £

  	
  75,000

  	
   

  	
  Full Time

  
								

 

Additional Temporary Staff

	
  Name

  	
   

  	
  Description

  	
   

  	
  Monthly

  Rate

  	
   

  	
  Commitment

  Full1 or Part2Time

  
	
  Craig Cavin

  	
   

  	
  Restructuring Manager

  	
   

  	
  £

  	
  50,000

  	
   

  	
  Full Time

  
								

 

The parties agree that Exhibit A can be amended by APS from time to
time to add, replace or delete staff, and the Monthly Staffing Reports shall be
treated by the parties as such amendments.

1                              Full time is defined as
substantially full time.

2                              Part time is defined as
approximately 2-3 days per week, with some weeks more or less depending on the
needs and issues facing the Company at that time.

SCHEDULE 1

FEES AND EXPENSES

1.                         Fees:
APS’ fees will be based on the hours worked by APS personnel at APS’ hourly
rates, which are:

	
  Managing Directors

  	
   

  	
  £

  	
  485-545

  	
   

  
	
  Directors

  	
   

  	
  £

  	
  415-440

  	
   

  
	
  Vice Presidents

  	
   

  	
  £

  	
  315-360

  	
   

  
	
  Associates

  	
   

  	
  £

  	
  220-285

  	
   

  

 

APS reviews and revises its billing rates on January 1
of each year.

Fees will be invoiced monthly in US dollars in
accordance with our General Terms and Conditions Section 2 Retainer, Billing
and Payments. The Fees and Retainer will be determined in British pounds and
converted to US dollars using the spot buy conversion rate as listed on FX.com
on the day of invoice.

Notwithstanding the above, the Fees due to
AlixPartners for the provision of the Services shall be payable in accordance
with the terms reflected on Exhibit A.

2.                       Success Fee:
In addition to monthly Fees, APS will be compensated for its efforts by the
payment of a Success Fee. The Company understands and acknowledges that the
Success Fee is an integral part of APS’ compensation for the engagement. In
accordance with the AlixPartners’ Protocol with the United States Trustee, the
Success Fee will not be applied for or approved at the time of retention, but
will be applied for at such time as the contingency that triggers the Success
Fee has occurred.

The Company shall pay to AlixPartners a Success Fee,
not exceeding £500,000, for the first six-month period of AlixPartners’
engagement. The basis and amount of the Success Fee shall be agreed in writing
between AlixPartners and the Company within 30 days of the Commencement Date
(the “Success Fee”). The Company will discuss the basis and amount of the
Success Fee with the Court Appointed Committees.

The Success Fee shall be due and payable when the
objectives have been achieved. In the event of the termination of this
engagement other than for cause prior to the earlier of confirmation of a plan
of reorganisation or achievement of the objectives as determined by the Board
of Directors, the Success Fee shall be due and payable on termination.

3.                         Expenses:
In addition to the fees set forth herein, the Company shall pay directly, or
reimburse APS upon receipt of periodic billings, for all reasonable
out-of-pocket expenses incurred in connection with this assignment, such as
travel, lodging, and postage.

4.                         Break
Fee: APS does not seek a Break Fee in connection with this engagement.

5.                         Retainer:
The Company shall pay APS a retainer of £100,000 to be applied against Fees and
Expenses as set forth in this Schedule and in accordance with Section 2 of the
attached General Terms and Conditions.

SCHEDULE 2

DISCLOSURES

APS has caused to be submitted for review, by its
conflicts check system, the names of significant parties in interest in this
case. APS completed a search of its client database for the past five years to
determine whether it has had or has any relationships with the following
entities:

a)                         The
Company and its affiliates;

b)                        The
Company’s current directors and officers and certain of their most significant
business affiliations, as provided to APS by the Company;

c)                         The
Company’s largest unsecured creditors, as identified in the lists filed with
the Company’s Chapter 11 petitions;

d)                        The
Company’s pre- and post-petition lenders; and,

e)                         Various
other potential parties in interest, as identified by the Company.

Based on this search, APS knows of no fact or
situation that would represent a conflict of interest for APS with regard to
the Company. However, APS wishes to disclose the following:

·                             Pursuant
to the Recapitalization Agreement, dated as of August 3, 2006, among
AlixPartners Holdings, Inc.,
AlixPartners, LLC, Jay Alix individually, H&F Astro LLC and those other persons
that may become bound thereto, three private equity funds (collectively, “HFCP
V”) sponsored by Hellman & Friedman, LLC (“H&F LLC”) acquired,
indirectly through H&F Astro LLC, a controlling stake in AlixPartners as of
October 12, 2006. Hellman & Friedman Investors V, LLC and H&F LLC
(collectively, “H&F”) control HFCP V. No material nonpublic information
about Debtors has been furnished by AlixPartners to H&F. In conjunction
with this transaction AlixPartners, LLC was converted to AlixPartners, LLP, a
Delaware limited liability partnership. AlixPartners’ conflict checking system
has searched the parties to the Recapitalization Agreement against the lists of
creditors, shareholders, and other parties in interest in this case that is
maintained for purposes of conflict checks, and AlixPartners has determined to the
best of its knowledge that there are no disclosures otherwise than as noted
herein

·                             AIG/National
Union Fire, insurance providers of the Debtors, are affiliated with entities
that are limited partners, litigation counterparties, adverse parties, lenders and
bondholders to current and former AlixPartners and/or APS clients in matters
unrelated to the Debtors. AIG is a related party to a current AlixPartners
client in matters unrelated to the Debtors. AIG has also provided various types
of insurance to AlixPartners in matters unrelated to the Debtors.

·                             Bank
of New York, a creditor of the Debtors, is a lender, bondholder, creditor and
indenture trustee to current and former AlixPartners and/or APS clients in
matters unrelated to the Debtors. In addition, Bank of New York previously
employed a current AlixPartners employee.

·                             Barclays
Bank, a lender to a Non-Debtor subsidiary, and affiliated entities, are
creditors, significant shareholders, adverse parties, lenders and bondholders
to current and former AlixPartners and/or APS clients in matters unrelated to
the Debtors.

·                             Bingham
McCutchen, a professional of the Debtors, is a professional to a current
AlixPartners and/or APS client in matters unrelated to the Debtors.

·                             BMC,
a professional of the Debtors, was a professional to a former AlixPartners
and/or APS client in matters unrelated to the Debtors.

·                             Chubb,
an insurance provider of the Debtors, is a vendor to AlixPartners and an
adverse party and executory contract counterparty to current and former AlixPartners
and/or APS clients in matters unrelated to the Debtors. In addition, Federal
Insurance, the parent of Chubb, was an adverse party to a former AlixPartners
client in matters unrelated to the Debtors.

·                             CitiCapital,
a creditor of the Debtors, and affiliated entities, are creditors, lenders,
bondholders, shareholders, adverse parties, professionals and lessors to
current and former AlixPartners and/or APS clients in matters unrelated to the
Debtors. In addition, an affiliate of CitiCapital is a related party to a
current AlixPartners client in matters unrelated to the Debtors.

·                             Deloitte
& Touche, a professional of the Debtors, is affiliated with entities that
are vendors to AlixPartners, adverse to a former AlixPartners client, as well
as professionals to current and former AlixPartners and/or APS clients in
matters unrelated to the Debtors. Deloitte & Touche is also a current
client of AlixPartners in matters unrelated to the Debtors. Additionally,
Deloitte & Touche affiliated entities previously employed several current
AlixPartners employees.

·                             GE
Seaco is a 50/50 joint venture between Debtor and GE Leasing or a subsidiary.
There is litigation pending between GE and Debtors regarding the alleged change
of control at GE SeaCo (and other matters in connection with the joint
venture). General Electric and affiliated entities are members of a bank group
for which AlixPartners performed services, as well as creditors, customers,
lenders, lessors and bondholders to current and former AlixPartners and/or APS
clients in matters unrelated to the Debtors.

·                             Houlihan
Lokey, a professional of the Debtors, was an affiliated entity and client
professional to former AlixPartners and/or APS clients in matters unrelated to
the Debtors.

·                             HSH
Nordbank AG, a lender to a non-Debtor subsidiary of the Debtors, is a former
client of AlixPartners in matters unrelated to the Debtors.

·                             JP
Morgan Chase, a creditor of the Debtors and a lender to a non-Debtor subsidiary
of the Debtors, is affiliated with entities that are lenders, shareholders,
vendors, bondholders and creditors to current and former AlixPartners and/or
APS clients in matters unrelated to the Debtors. JP Morgan Chase affiliated
entities previously employed several AlixPartners employees.

·                             KPMG,
a professional of the Debtors, is a current client of AlixPartners as well as a
professional, adverse party and creditor to current and former AlixPartners
and/or APS clients in matters unrelated to the Debtors. Additionally, KPMG
previously employed several current AlixPartners employees.

·                             Liberty
Mutual, an insurer of the Debtors, was a creditor, adverse party, executory
contract counterparty, insurer and lender to current and former AlixPartners
and/or APS clients in matters unrelated to the Debtors.

·                             Lloyd’s
of London, an insurer of the Debtors, was a former client of AlixPartners in
matters unrelated to the Debtors. Lloyd’s of London was also an executory
contract counterparty and adverse party to former AlixPartners and/or APS
clients in matters unrelated to the Debtors.

·                             PricewaterhouseCoopers
(“PWC”), a professional of the Debtors, is a professional to current and former
AlixPartners clients in matters unrelated to the Debtors. PWC previously
employed several current AlixPartners employees. PWC is the auditor for AlixPartners
and will provide tax and other consulting services. PWC was opposing
professional and creditor to current and former AlixPartners and/or APS clients
in matters unrelated to the Debtors.

·                             Sidley
Austin, a professional of the Debtors, is a professional to current and former
AlixPartners and/or APS clients in matters unrelated to the Debtors. In
addition, Sidley Austin is adverse counsel to current and former AlixPartners
and/or APS clients in matters unrelated to the Debtors.

·                             SilverPoint
Capital, a creditor of the Debtors, is a current client of AlixPartners in
matters unrelated to the Debtors.

·                             St.
Paul Travelers Companies and affiliates, insurance providers of the Debtors,
are affiliated with entities that are creditors, bondholders, and were adverse
parties to former AlixPartners and/or APS clients in matters unrelated to the
Debtors.

·                             Towers
Perrin, a professional of the Debtors, is a creditor and professional to
current and former AlixPartners and/or APS clients in matters unrelated to the
Debtors. Towers Perrin was the previous employer of current AlixPartners
employees.

·                             Wachovia
Bank, a lender to a non-Debtor subsidiary of the Debtors, and affiliated
entities, were lenders, bondholders, creditors and professionals to former and
current AlixPartners and/or APS clients in matters unrelated to the Debtors.

·                             Young
Conaway, a professional of the Debtors, was a professional to a former
AlixPartners and/or APS client in matters unrelated to the Debtors.

·                             XL
Insurance, an insurance provider of the Debtors, and affiliated entities, are
current and former AlixPartners and/or APS clients in matters unrelated to the
Debtors. XL Insurance affiliated entities are executory contract counterparties
to former and current AlixPartners and/or APS clients in matters unrelated to
the Debtors.

·                             Zurich,
an insurer of the Debtors, is affiliated with entities that are creditors,
vendors, executory contract counterparties and adverse parties to current and
former AlixPartners and/or APS clients in matters unrelated to the Debtors. In
addition, Zurich is affiliated with a current client of AlixPartners in matters
unrelated to the Debtors. Zurich was a former client of AlixPartners in matters
unrelated to the Debtors.

This Schedule 2 may be updated by APS from time to
time to disclose additional connections or relationships between APS and the
interested parties.

AP SERVICES,
LLC

GENERAL TERMS AND CONDITIONS

These General Terms and Conditions (“Terms”) are incorporated into the
letter agreement (“Agreement”) between the Company and APS to which these Terms
are attached.

Section 1. Company Responsibilities

The Company will undertake responsibilities as set
forth below:

1.                          Provide
reliable and accurate detailed information, materials, documentation and

2.                          Make
decisions and take future actions, as the Company determines in its sole
discretion, on any recommendations made by APS in connection with this
Agreement.

APS’ delivery of the services and the fees charged are
dependent on (i) the Company’s timely and effective completion of its
responsibilities; and (ii) timely decisions and approvals made by the Company’s
management. The Company shall be responsible for any delays, additional costs
or other deficiencies caused by not completing its responsibilities.

Section 2. Retainer, Billing and Payments

Retainer and Billing.
APS will submit monthly invoices for services rendered and expenses incurred
and will offset such invoices against the Retainer. Payment will be due upon
receipt of the invoices to replenish the Retainer to the agreed-upon amount.
Any unearned portion of the Retainer will be returned to the Company at the
termination of the engagement.

Payments. All
payments to be made by the Company to APS shall be payable upon receipt of
invoice via wire transfer to APS’ bank account, as follows:

	
   

  	
  Receiving Bank:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Receiving Account:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Funds:

  	
   

  

 

Section 3. Relationship of the Parties

The parties intend that an independent contractor
relationship will be created by the Agreement. As an independent contractor,
APS will have complete and exclusive charge of the management and operation of
its business, including hiring and paying the wages and other compensation of
all its employees and agents, and paying all bills, expenses and other charges
incurred or payable with respect to the operation of its business. Of course,
neither the Temporary Staff nor APS will be entitled to receive from the
Company any vacation pay, sick leave, retirement, pension or social security
benefits, workers’ compensation, disability, unemployment insurance benefits or
any other employee benefits. APS will be responsible for all employment,
withholding, income and other taxes incurred in connection with the operation
and conduct of its business.

The Company shall not solicit, recruit or hire any
employees or agents of APS for a period of two years subsequent to the
expiration or termination of the Agreement.

Section 4. Confidentiality

APS
shall keep confidential all non-public confidential or proprietary
information obtained from the Company during the performance of its services
hereunder (the “Information”), and neither APS nor the Temporary Staff will
disclose any Information to any other person or entity. “Information” includes
non-public confidential and proprietary data, plans, reports, schedules,
drawings, accounts, records, calculations, specifications, flow sheets,
computer programs, source or object codes, results, models or any work product
relating to the business of the Company,
its subsidiaries, distributors, affiliates, vendors, customers, employees,
contractors and consultants.

The foregoing is not intended to prohibit, nor shall
it be construed as prohibiting, APS or the Temporary Staff from disclosure
pursuant to a valid subpoena or court order, but neither APS nor the Temporary
Staff shall encourage, suggest, invite or request, or assist in securing, any
such subpoena or court order; and the Temporary Staff shall promptly give
notice of any such subpoena or court order by fax transmission to the Company.
APS and the Temporary Staff may make reasonable disclosures of Information to
third parties in connection with the performance of APS’ obligations and
assignments hereunder. In addition, APS will have the right to disclose to
others in the normal course of business its involvement with the Company.

The Company acknowledges that all information (written
or oral), including advice and Work Product (as defined in Section 5),
generated by APS and the Temporary Staff in connection with this engagement is
intended solely for the benefit and use of the Company (limited to its
management and its Board of Directors) in connection with the transactions to
which it relates. The Company agrees that no such information shall be used for
any other purpose or reproduced, disseminated, quoted or referred to with
attribution to APS at any time in any manner or for any purpose without APS’
prior approval except as required by law.

Section 5. Intellectual Property

All methodologies, processes, techniques, ideas,
concepts, know-how, procedures, software, tools, writings and other
intellectual property that APS has created, acquired or developed prior to the
date of this Agreement are, and shall remain, the sole and exclusive property
of APS, and the Company shall not acquire any interest therein. APS shall be
free to use all methodologies, processes, techniques, ideas, concepts,
know-how, procedures, software, tools, writings and other intellectual property
that APS may create or develop in connection with this engagement, subject to
its duty of confidentiality to the extent that the same contain information or
materials furnished to APS by the Company that constitute Information referred
to in Section 4 above. Except as provided above, all information, reports,
materials, software and other work product that APS creates or develops
specifically for the Company as part of this engagement (collectively known as “Work
Product”) shall be owned by the Company and shall constitute Information
referred to in Section 4 above. APS may retain copies of the Work Product
subject to its obligations under Section 4 above.

Section 6. Framework of the Engagement

The Company acknowledges that it is retaining APS to
provide the Temporary Staff solely to assist and advise the Company as
described in the Agreement. This engagement shall not constitute an audit,
review or compilation, or any other type of financial statement reporting
engagement.

Section 7. Indemnification and Other Matters

The Company shall indemnify,
hold harmless and defend Temporary Staff serving as officers
(collectively, the “indemnitees”) from and against all claims, liabilities,
losses, expenses and damages to the extent of the most favorable indemnities
provided by the Company to any of its directors or officers, provided, however,
that to the extent any matter for which indemnification is called for hereunder
arises while the Company is under the protection of the Bankruptcy Code,
indemnification of APS personnel who are not directors or officers of the
Company shall be subject to the approval of the Board of

Directors of the Company. The Company shall pay
damages and expenses as incurred, including reasonable legal fees and
disbursements of counsel and the costs of APS’ professional time (APS’
professional time will be reimbursed at APS’ rates in effect when such future
time is required), relating to or arising out of the engagement, including any
legal proceeding in which an indemnitee may be required or agree to participate
but in which it is not a party. The indemnitees may, but are not required to,
engage a single firm of separate counsel of their choice in connection with any
of the matters to which this indemnification agreement relates.

The Company shall use its best efforts to specifically
include and cover, as a benefit for their protection, Temporary Staff serving
as directors or officers of the Company or affiliates from time to time with
direct coverage as named insureds under the Company’s policy for directors’ and
officers’ (“D&O”) insurance. The Company will maintain such D&O
insurance coverage for the period through which claims can be made against such
persons. The Company disclaims a right to distribution from the D&O
insurance coverage with respect to such persons. In the event that the Company
is unable to include Temporary Staff under the Company’s policy or does not
have first dollar coverage acceptable to APS in effect for at least $10 million
(e.g., such policy is not reserved based on actions that have been or are
expected to be filed against officers and directors alleging prior acts that
may give rise to a claim),  APS
may, at its option, attempt to purchase a separate D&O policy that will
cover the Temporary Staff only. The cost of same shall be invoiced to the
Company as an out -of -pocket cash expense. If APS is unable to purchase such
D&O insurance, then APS reserves the right to terminate the Agreement.

APS is not responsible for any third-party products or
services. The Company’s sole and exclusive rights and remedies with respect to
any third party products or services are against the third-party vendor and not
against APS, whether or not APS is instrumental in procuring the third-party
product or service.

APS shall not be liable to the Company except for
actual damages resulting from bad faith, self-dealing, gross negligence, or
intentional misconduct.

Section 8. Governing Law

The Agreement is governed by and shall be construed in
accordance with the laws of the State of Michigan with respect to contracts
made and to be performed entirely therein and without regard to choice of law
or principles thereof.

Any controversy or claim arising out of or relating to
the Agreement, or the breach thereof, shall be settled by arbitration. Each
party shall appoint one non-neutral arbitrator. The two party arbitrators shall
select a third arbitrator. If within 30 days after their appointment the two
party arbitrators do not select a third arbitrator, the third arbitrator shall
be selected by the American Arbitration Association (AAA). The arbitration
shall be conducted in Southfield, Michigan under the AAA’s Commercial
Arbitration Rules, and the arbitrators shall issue a reasoned award. The
arbitrators may award costs and attorneys’ fees to the prevailing party.
Judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. However, in the event the Company is under the
protection of the Bankruptcy Code, the arbitration provisions shall apply only
to the extent that the Bankruptcy Court, or the U.S. District Court if the
reference is withdrawn, does not retain jurisdiction over a controversy or
claim.

Section 9. Termination and Survival

The Agreement may be terminated at any time by written
notice by one party to the other; provided, however, that notwithstanding such
termination APS will be entitled to any fees and expenses due under the
provisions of the Agreement, including Success Fee and Break Fee in accordance
with Schedule 1. Such payment obligation shall inure to the benefit of any
successor or assignee of APS.

Additionally, unless the Agreement is terminated by
the Company for Cause (as defined below) or due to circumstances described in
the Success Fee provision in the Agreement, APS shall remain entitled to the
Success Fee(s) that otherwise would be payable for the greater of 12 months
from the date of termination or the period of time that that has elapsed from
the date of the Agreement to the date of termination. Cause shall mean:

(a) a Temporary Staff member acting on behalf of the
Company is convicted of a felony, or

(b) it is determined in good faith by the Board of
Directors of the Company after 30 days notice and opportunity to cure, that
either (i) a Temporary Staff member is engaging in misconduct injurious to the
Company, or (ii) a Temporary Staff member is breaching any of his or her
material obligations under this Agreement, or (iii) a Temporary Staff member is
willfully disobeying a lawful direction of the Board of Directors or senior
management of the Company.

Sections 2, 4, 5, 7, 8, 9 and 10 of these Terms, the
provisions of Schedule 2 and the obligation to pay accrued fees and expenses  shall survive the expiration or
termination of the Agreement.

Section 10. General

Severability. If
any portion of the Agreement shall be determined to be invalid or
unenforceable, the remainder shall be valid and enforceable to the maximum
extent possible.

Entire Agreement.
These Terms, the letter agreement into which they are incorporated and the
Schedule(s) and Exhibit to such letter agreement contain the entire
understanding of the parties relating to the services to be rendered by APS and
the Temporary Staff and may not be amended or modified in any respect except in
a writing signed by the parties. APS is not responsible for performing any
services not specifically described herein or in a subsequent writing signed by
the parties. If there is a conflict between these Terms and the balance of the
Agreement, these Terms shall govern.

Joint and Several.
If more than one Company signs this Agreement, the liability of each Company
shall be joint and several.

Notices. All
notices required or permitted to be delivered under the Agreement shall be
sent, if to APS, to:

AP Services, LLC

2000 Town Center, Suite 2400

Southfield, MI 48075

Attention: Mr.
Melvin R. Christiansen

and if to the Company, to
the address set forth in the Agreement, to the attention of the Company’s
General Counsel, or to such other name or address as may be given in writing to
the other party. All notices under the Agreement shall be sufficient if
delivered by facsimile or overnight mail. Any notice shall be deemed to be
given only upon actual receipt.

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