0001104659-06-079040.txt : 20061204 0001104659-06-079040.hdr.sgml : 20061204 20061204073656 ACCESSION NUMBER: 0001104659-06-079040 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20061204 DATE AS OF CHANGE: 20061204 GROUP MEMBERS: BLAKE L SARTINI GROUP MEMBERS: DELISE F SARTINI GROUP MEMBERS: LORENZO J FERTITTA SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: STATION CASINOS INC CENTRAL INDEX KEY: 0000898660 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 880136443 STATE OF INCORPORATION: NV FISCAL YEAR END: 0714 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-48915 FILM NUMBER: 061252716 BUSINESS ADDRESS: STREET 1: 2411 W SAHARA AVE CITY: LAS VEGAS STATE: NV ZIP: 89102 BUSINESS PHONE: 7023672411 MAIL ADDRESS: STREET 1: P.O. BOX 295000 CITY: LAS VEGAS STATE: NV ZIP: 89126 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FERTITTA FRANK J III CENTRAL INDEX KEY: 0000941343 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: BUSINESS PHONE: 7023672411 MAIL ADDRESS: STREET 1: 2411 W SAHARA AVE CITY: LAS VEGAS STATE: NV ZIP: 89102 SC 13D/A 1 a06-24946_1sc13da.htm BENEFICIAL OWNERSHIP OF 5% OR MORE

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

	SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 21, 23, and 24)*

STATION CASINOS, INC.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

857689103

(CUSIP Number)

Frank J. Fertitta, III

Chief Executive Officer

STATION CASINOS, INC.

10973 West Summerlin Centre Drive,

Las Vegas, Nevada 89135

(702) 367-2411

with a copy to:

Kenneth J. Baronsky, Esq.

Milbank, Tweed, Hadley & McCloy LLP

601 S. Figueroa Street, 30TH Floor

Los Angeles, California 90017

(213) 892-4000

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

December 2, 2006

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 857689103

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Frank J. Fertitta, III

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization United States

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 5,719,344

			8.	Shared Voting Power 0

			9.	Sole Dispositive Power 5,719,344

			10.	Shared Dispositive Power 0

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 15,576,995

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 27%

	14.	Type of Reporting Person (See Instructions) IN

CUSIP No. 857689103

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Lorenzo J. Fertitta

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization United States

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 5,734,694

			8.	Shared Voting Power 0

			9.	Sole Dispositive Power 5,734,694

			10.	Shared Dispositive Power 0

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 15,576,995

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 27%

	14.	Type of Reporting Person (See Instructions) IN

CUSIP No. 857689103

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Blake L. Sartini

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization United States

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 41,863

			8.	Shared Voting Power 4,081,094

			9.	Sole Dispositive Power 41,863

			10.	Shared Dispositive Power 4,081,094

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 15,576,995

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 27%

	14.	Type of Reporting Person (See Instructions) IN

CUSIP No. 857689103

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Delise F. Sartini

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization United States

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 3,960

			8.	Shared Voting Power 4,081,094

			9.	Sole Dispositive Power 3,960

			10.	Shared Dispositive Power 4,081,094

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 15,576,995

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 27%

	14.	Type of Reporting Person (See Instructions) IN

EXPLANATORY NOTES: This statement on Schedule 13D (this “Schedule 13D”), among other things, amends and supplements (1) the Schedule 13D originally filed by Frank J. Fertitta, III (“Mr. Frank Fertitta”) on June 10, 1993, and all amendments thereto (the “Frank Fertitta Schedule 13D”), (2) the Schedule 13D originally filed by Lorenzo J. Fertitta (“Mr. Lorenzo Fertitta”) on June 10, 1993, and all amendments thereto (the “Lorenzo Fertitta Schedule 13D”) and (3) each of the Schedules 13D originally filed by Blake L. Sartini (“Mr. Sartini”) and Delise F. Sartini (“Mrs. Sartini”) on June 10, 1993, and all amendments thereto (collectively, the “Sartini Schedules 13D”). Each of Mr. Frank Fertitta, Mr. Lorenzo Fertitta and Mr. and Mrs. Sartini is a Reporting Person hereunder (together, the “Reporting Persons”). Except as provided herein, this Schedule 13D does not modify any of the information previously reported on any such Schedule 13D or any amendment thereto.

The Reporting Persons, along with affiliates of Colony Capital, LLC (the “Sponsor”) and Fertitta Colony Partners LLC (the “Acquirer”), are participants in the Proposal discussed in Item 4 below (the “Proposal”).

As a result of the matters described in Item 4 below, the Reporting Persons may be deemed to constitute a “group” within the meaning of Section 13(d)-5(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a member of a group, each Reporting Person may be deemed to beneficially own any Common Stock, par value $0.01 per share, of Station Casinos, Inc. (“Station Common Stock”) that may be beneficially owned by the members of the group as a whole. This Schedule 13D will be amended, or one or more additional statements on Schedule 13D will be filed, as necessary and appropriate.

Item 1.	Security and Issuer
The class of equity securities to which this Schedule 13D relates is Station Common Stock. Station Casinos, Inc. (the “Issuer”) is a Nevada corporation with its principal executive offices located at 10973 West Summerlin Centre Drive, Las Vegas, Nevada 89135.
Item 2.	Identity and Background
(a) and (b) This Schedule 13D is being filed jointly on behalf of the Reporting Persons. A Joint Filing Agreement among the Reporting Persons is attached hereto as Exhibit 7.01. The business address of each of Mr. Frank Fertitta and Mr. Lorenzo Fertitta is 10973 West Summerlin Centre Drive, Las Vegas, Nevada 89135. The business address of Mr. Sartini is 6595 South Jones Boulevard, Las Vegas, Nevada 89118. Paragraph (b) of Item 2 does not apply to Mrs. Sartini. (c) The present principal occupation of Mr. Frank Fertitta is Chief Executive Officer and Chairman of the Board of Directors of the Issuer. The present principal occupation of Mr. Lorenzo Fertitta is President and Vice Chairman of the Board of Directors of the Issuer. The present principal occupation of Mr. Sartini is Chief Executive Officer of Golden Gaming, Inc. Paragraph (c) of Item 2 does not apply to Mrs. Sartini. (d) and (e) During the last five years, none of the Reporting Persons has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) The Reporting Persons are all United States citizens. This Item 2 shall be deemed to amend and restate Item 2 of each of the Frank Fertitta Schedule 13D, the Lorenzo Fertitta Schedule 13D and each of the Sartini Schedules 13D in its entirety.
Item 3.	Source and Amount of Funds or Other Consideration
The shares of Station Common Stock that each of the Reporting Persons beneficially owns were acquired (i) through the ownership of shares prior to the initial public offering of Station Common Stock, (ii) through grants of restricted stock and stock options pursuant to their employment with the Issuer and (iii) indirectly through the ownership of shares in family trusts over which the Reporting Persons have voting or dispositive power. With respect to the proposed transaction described in Item 4 of this Schedule 13D, the Acquirer has available through equity commitments from the Reporting Persons and the Sponsor, and debt commitments provided by Deutsche Bank Trust Company Americas, Deutsche Bank Securities, Inc., Deutsche Bank AG, New York Branch and German American Capital Corporation, sufficient funds to consummate the proposed transaction. The Acquirer intends to finance the proposed transaction with borrowings. The information set forth in response to this Item 3 is qualified in its entirety by reference to the Proposal, the Rollover Commitment Letters, the Equity Commitment Letter and the Debt Commitment Letters, which are being filed herewith as Exhibits 7.02, 7.03, 7.04, 7.05, 7.06, 7.07 and 7.08, respectively, each of which is incorporated herein by reference. The information set forth in this Item 3 shall be deemed to amend and restate Item 3 of each of the Frank Fertitta Schedule 13D, the Lorenzo Fertitta Schedule 13D and each of the Sartini Schedules 13D in its entirety.
Item 4.	Purpose of Transaction
On December 2, 2006, the Acquirer submitted to a special committee of the Issuer’s Board of Directors (the “Special Committee”) the Proposal to acquire all of the outstanding Station Common Stock at a purchase price of $82 per share. Each of the Reporting Persons intends to participate in the Proposal. The Proposal contemplates that the proposed transaction would be effected through a merger. As part of the financing of the transaction, the Proposal contemplates that certain real property of certain subsidiaries of the Issuer would be sold to a special purpose entity owned by Acquirer and that such real property would be immediately leased back to the Issuer and its subsidiaries. If the proposed merger is consummated, the Station Common Stock will no longer be traded on the New York Stock Exchange and the registration of the Station Common Stock under Section 12 of the Exchange Act will be terminated. Other than as set forth herein or in the Proposal, the Rollover Commitment Letters, the Equity Commitment Letter and the Debt Commitment Letters, the Reporting Persons have no plans or proposals that relate to or would result in any of the events set forth in Item 4 of Schedule 13D. The Reporting Persons may, from time to time, determine to increase or decrease their respective ownership of Station Common Stock, pursue or propose an extraordinary corporate transaction (including the Proposal) with regard to the Issuer or take action relating to or that would result in any of the events set forth in Item 4 of Schedule 13D. Except as otherwise provided herein, the Reporting Persons currently have no intention of selling any shares of Station Common Stock.

No assurances can be given that any agreement with the Issuer relating to the proposed acquisition by the Acquirer will be entered into or that the proposed merger will be consummated. The Proposal provides that no binding obligation on the part of the Issuer, the Acquirer, the Reporting Persons or the Sponsor shall arise with respect to the proposed merger unless and until mutually acceptable definitive documentation has been executed and delivered.

The information set forth in response to this Item 4 is qualified in its entirety by reference to the Proposal, the Rollover Commitment Letters, the Equity Commitment Letter and the Debt Commitment Letters, which are incorporated herein by reference.

The information set forth in this Item 4 shall be deemed to amend and restate Item 4 of each of the Frank Fertitta Schedule 13D, the Lorenzo Fertitta Schedule 13D and each of the Sartini Schedules 13D in its entirety.

Item 5.

Interest in Securities of the Issuer

(a) and (b) The respective percentages set forth below are based on 57,207,653 shares of the Station Common Stock outstanding as of October 31, 2006.

Mr. Frank Fertitta has direct beneficial ownership of 5,719,344 shares of Station Common Stock representing approximately 9.9% of the outstanding Station Common Stock.

Mr. Lorenzo Fertitta has direct beneficial ownership of 5,734,694 shares of Station Common Stock representing approximately 9.9% of the outstanding Station Common Stock.

Mr. Sartini has direct beneficial ownership of 4,122,957 shares of Station Common Stock representing approximately 7.2% of the outstanding Station Common Stock.

Mrs. Sartini has direct beneficial ownership of 4,085,054 shares of Station Common Stock representing approximately 7.1% of the outstanding Station Common Stock.

The Cover Pages of this Schedule 13D are incorporated herein by reference.

By virtue of the relationships among the Reporting Persons described herein, the Reporting Persons may be deemed to constitute a “group” within the meaning of Rule 13d-5(b) under the Exchange Act. As a member of a group, each Reporting Person may be deemed to beneficially own the Station Common Stock beneficially owned by the members of the group as a whole. As of December 2, 2006, the Reporting Persons beneficially owned in the aggregate 15,576,995 shares of Station Common Stock, which represents approximately 27% of the outstanding Station Common Stock.

(c) Except as set forth herein, Mr. Frank Fertitta and Mr. Lorenzo Fertitta have not effected any transactions in Station Common Stock in the past 60 days. With respect to Mr. and Mrs. Sartini, within the call writing program described in Item 6 below, the sale of 660 January 60 call options settled on November 7, 2006.

(d) Not applicable.

(e) Not applicable.

This Item 5 shall be deemed to amend and restate Item 5 of each of the Frank Fertitta Schedule 13D, the Lorenzo Fertitta Schedule 13D and each of the Sartini Schedules 13D in its entirety.

Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
Items 3 and 4 of this Schedule 13D are incorporated herein by reference. The information set forth in response to this Item 6 is qualified in its entirety by reference to the Proposal, the Rollover Commitment Letters, the Equity Commitment Letter and the Debt Commitment Letters, which are incorporated herein by reference. In addition to the arrangements described above in this Item 6, in February of 2006, Mr. and Mrs. Sartini entered into a covered call writing program with Rampart Investment Management Co., Inc. known as “ROMS”, a customized call writing discretionary management service. The ROMS program involves the systematic sale of call options in exchange for cash premiums. Initially, 150,000 shares were entered into the program. Presently, 650,000 shares have been entered into the program. Currently, Mr. and Mrs. Sartini have sold 2,390 January 60 call options which are covered by 239,000 shares of Common Stock. The information set forth in this Item 6 shall be deemed to amend and restate Item 6 of each of the Frank Fertitta Schedule 13D, the Lorenzo Fertitta Schedule 13D and each of the Sartini Schedules 13D in its entirety.
Item 7.	Material to Be Filed as Exhibits
Exhibit 7.01		Joint Filing Agreement by and among the Reporting Persons, dated as of December 4, 2006.

Exhibit 7.02		Proposal Letter to the Special Committee of the Board of Directors of Station Casinos, Inc., dated December 2, 2006.

Exhibit 7.03		Rollover Commitment Letter, dated December 2, 2006, from Mr. Frank Fertitta to the Acquirer.

Exhibit 7.04		Rollover Commitment Letter, dated December 2, 2006, from Mr. Lorenzo Fertitta to the Acquirer.

Exhibit 7.05		Rollover Commitment Letter, dated December 2, 2006, from Mr. and Mrs. Sartini to the Acquirer.

Exhibit 7.06		Equity Commitment Letter, dated December 2, 2006, from the Sponsor to the Acquirer.

Exhibit 7.07		Revolver Debt Commitment Letter, dated December 2, 2006, from Deutsche Bank Trust Company Americas and Deutsche Bank Securities, Inc. to the Acquirer.

Exhibit 7.08		CMBS Debt Commitment Letter, dated December 2, 2006, from Deutsche Bank AG, New York Branch and German American Capital Corporation to the Acquirer.

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	December 4, 2006
	Date
	/s/ Frank J. Fertitta, III
	Signature
	Frank J. Fertitta, III
	Name/Title

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	December 4, 2006
	Date
	/s/ Lorenzo J. Fertitta
	Signature
	Lorenzo J. Fertitta
	Name/Title

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	December 4, 2006
	Date
	/s/ Blake L. Sartini
	Signature
	Blake L. Sartini
	Name/Title

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	December 4, 2006
	Date
	/s/ Delise F. Sartini
	Signature
	Delise F. Sartini
	Name/Title

EX-7.01 2 a06-24946_1ex7d01.htm EX-7.01

Exhibit 7.01

JOINT FILING AGREEMENT

This Agreement is made this 4th day of December, 2006, by and between each of the undersigned.

WHEREAS, each of the undersigned is required to file a Schedule 13D with respect to ownership of securities in Station Casinos, Inc.;

NOW, THEREFORE, the undersigned agree to file only one Schedule 13D reflecting their combined beneficial ownership of securities in Station Casinos, Inc., and each of the undersigned hereby designates and appoints the other as his attorney-in-fact with full power of substitution for each of them, each acting singly, to sign, file and make any amendments to such Schedule 13D.

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

[Signature Pages Follow]

IN WITNESS WHEREOF, each of the undersigned has executed this Joint Filing Agreement as of the date first written above.

	/s/ Frank J. Fertitta, III
	Signature

	Frank J. Fertitta, III
	Name


	/s/ Lorenzo J. Fertitta
	Signature

	Lorenzo J. Fertitta
	Name


	/s/ Blake L. Sartini
	Signature

	Blake L. Sartini
	Name


	/s/ Delise F. Sartini
	Signature

	Delise F. Sartini
	Name

[Signature Page to Joint Filing Agreement]

EX-7.02 3 a06-24946_1ex7d02.htm EX-7.02

Exhibit 7.02

FERTITTA COLONY PARTNERS LLC
2960 West Sahara Avenue
Las Vegas, NV 89102

December 2, 2006

PERSONAL AND CONFIDENTIAL

The Special Committee of the
Board of Directors of Station Casinos, Inc.
c/o Station Casinos, Inc.
10973 West Summerlin Centre Drive
Las Vegas, NV 89135

Dear Sirs:

On behalf of Fertitta Colony Partners LLC (the “Acquirer”), we are pleased to submit this proposal to acquire all of the outstanding shares of capital stock of Station Casinos, Inc. (“Station Casinos” or the “Company”). The Acquirer is a limited liability company organized by Frank and Lorenzo Fertitta and by affiliates of Colony Capital, LLC (including investment vehicles managed and to be designated by Colony Capital, LLC, “Colony”).

As you know, Station Casinos was founded by the Fertitta family. In the early 1990’s, Frank and Lorenzo Fertitta assumed management of the Company and took it public in 1993. Since that time, Station Casinos has grown from one property to 16 and is now one of the largest publicly-traded gaming corporations.

Founded in 1991 by Chairman and Chief Executive Officer Thomas J. Barrack, Jr., Colony is a private, international investment firm focusing primarily on real estate-related assets and operating companies. From inception, Colony has invested some $20 billion through various corporate, portfolio and complex property transactions. The firm has significant experience in gaming properties, having led the acquisition of such assets and companies as Kerzner International, Resorts Atlantic City, Accor Casinos, Harveys Casino Resorts, the Atlantic City Hilton and the Las Vegas Hilton. Colony’s additional investing experience in the broader leisure and hospitality sector includes Fairmont Hotels, Raffles Hotels & Resorts, the legendary Costa Smeralda resort in Sardinia, Italy, the Hotel Guanahani in St. Barts, the Amanresorts hotel group, London’s Savoy Group, the Orchid at Mauna Lani on Hawaii’s Big Island, The Stanhope Hotel in New York City and the “W” in Honolulu. Colony has a staff of 160 and is headquartered in Los Angeles,

with offices in Beirut, Boston, Hawaii, Hong Kong, London, Madrid, New York, Paris, Rome, Seoul, Shanghai, Singapore, Taipei, and Tokyo.

Following the proposed transaction, Frank and Lorenzo Fertitta would continue to run Station Casinos in their current roles. We are confident that this continuity will provide a stable environment for the Company’s valuable team members, customers, tribal relationships and joint venture partners going forward.

The details of our proposal will be set forth in a draft Merger Agreement and are summarized below. We expect to provide you and your counsel with a draft of the Merger Agreement shortly.

1. Amount and Form of Consideration.

We are proposing that the Acquirer acquire the Company through a merger transaction for cash consideration of $82 per share for all of the outstanding Common Stock (the “Acquisition”). This price represents an 18.7% premium to the closing price of the Common Stock on Friday, December 1, 2006, and a 26.5% and 32.0% premium to the average closing price of the Common Stock for the last thirty and sixty days, respectively. This price also exceeds the highest price at which the stock has ever traded.

2. Sources of Capital.

The Acquirer has received financing commitments which are sufficient to consummate the proposed Acquisition. Frank and Lorenzo Fertitta, Blake and Delise Sartini, and Colony have provided equity funding commitments. Deutsche Bank Trust Company Americas and German American Capital Corporation have provided debt financing commitments. Our financing commitments and our proposal are structured such that the Company’s existing public debt would remain outstanding. The existing Revolving Credit Facility would be refinanced at the closing. Copies of the equity funding and debt financing commitment letters are enclosed.

3. Conditions.

Our proposal is conditioned only upon final negotiation and execution of a mutually acceptable definitive Merger Agreement and any other transaction documents and satisfaction at closing of the conditions therein. We are confident that our experience in completing transactions of this nature will enable us to cause these conditions to be satisfied on a timely basis.

The Acquisition would be subject to minimal representations and warranties and closing conditions as set forth in the draft Merger Agreement. The

closing of the Acquisition pursuant to the Merger Agreement will NOT be subject to a financing condition.

4. Necessary Approvals.

The applicable principals of the Acquirer are already licensed in Nevada by the Nevada Gaming Commission. In addition, Frank and Lorenzo Fertitta are already licensed by the National Indian Gaming Commission. As a result, we anticipate that all gaming licensing requirements can be satisfied expeditiously. The only other regulatory approval that would be required are the expiration or earlier termination of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976 (the “HSR Act”). We believe that there are no facts or circumstances that would present any impediment to receiving early termination of the waiting period under the HSR Act. We also believe that these factors will provide the Special Committee with a high degree of comfort that the proposed Acquisition can be closed quickly and with certainty.

5. Binding Effect.

This letter is not intended to, and does not, constitute an agreement to consummate the transactions described herein or to enter into a definitive Merger Agreement or any other agreement related to the transactions and neither the Acquirer or its affiliates nor the Company will have any rights or obligations of any kind whatsoever relating to the transaction by virtue of this letter or any other written or oral expression by our respective representatives unless and until definitive agreements are executed and delivered.

* * *

We look forward to working with the Special Committee and its legal and financial advisors to complete a transaction that is attractive to the Company’s shareholders. I encourage you to contact our financial advisor, Monte Koch of Deutsche Bank Securities Inc. at (212) 250-0285, or our legal counsel, Ken Baronsky of Milbank, Tweed, Hadley & McCloy LLP at (213) 892-4333 to discuss this proposal further.

	Sincerely,

	FERTITTA COLONY PARTNERS LLC


	By:	/s/ Frank J. Fertitta, III
		Frank J. Fertitta, III
		Authorized Member

cc:	Lorenzo J. Fertitta
	Thomas J. Barrack, Jr.
	Jonathan H. Grunzweig

EX-7.03 4 a06-24946_1ex7d03.htm EX-7.03

Exhibit 7.03

December 2, 2006

Fertitta Colony Partners LLC
2960 West Sahara Avenue
Las Vegas NV 89102

Ladies and Gentlemen:

Reference is made to that certain Agreement and Plan of Merger (the “Agreement”) to be entered into by and among Station Casinos, Inc. (the “Company”), a Nevada corporation, Fertitta Colony Partners LLC, a Nevada limited liability company (“FCP”), and a wholly-owned subsidiary of FCP. A draft of the Agreement is being furnished to the Company. Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Agreement.

This letter agreement shall become effective concurrently with the execution and delivery of the Agreement by each party thereto.

In the event of the satisfaction or waiver of the conditions precedent to FCP’s obligation to consummate the Merger set forth in Article VIII of the Agreement (it being agreed for purposes of this letter agreement that any condition precedent the satisfaction of which is dependent upon the contribution contemplated by this paragraph and which shall become satisfied upon the making of such contribution shall be deemed to have been satisfied), the undersigned agrees immediately prior to the Closing to transfer, contribute and deliver to FCP 3,898,852 shares of Company Common Stock (the “Committed Shares”), which shares will be cancelled and retired in the Merger and will not be entitled to receive the Merger Consideration. The undersigned will not be under any obligation pursuant to the preceding sentence unless and until the conditions precedent to FCP’s obligation to consummate the Merger set forth in Article VIII of the Agreement are satisfied or waived. The undersigned will not be under any obligation under any circumstances to contribute or cause to be contributed to FCP a number of shares in excess of the Committed Shares.

The undersigned hereby represents and warrants as follows:

(a) This letter agreement has been duly and validly executed and is a valid and binding obligation of the undersigned enforceable against the undersigned in accordance with its terms, except as may be limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally or by general principles or equity.

(b) Other than filing by the undersigned of any reports with the SEC required by

Section 13(d) or 16(a) of the Exchange Act, none of the execution and delivery of this letter agreement by the undersigned, the consummation by the undersigned of the transactions contemplated hereby or compliance by the undersigned with any of the provisions hereof (i) requires any consent or other permit of, or filing with or notification to, any Governmental Entity or any other Person by the undersigned, (ii) violates any applicable Law or court or governmental order to which the undersigned or the Committed Shares is subject, or (iii) constitutes a default (or an event that with notice or lapse of time or both would become a default) under, result in any breach or give rise to any right of termination, cancellation, amendment or acceleration of, any right or obligation of the undersigned.

(c) The undersigned, or an affiliate controlled by the undersigned, is, and as of the Closing Date will be, the beneficial owner of the Committed Shares and will, as of the Closing Date, own such shares free and clear of any Lien or encumbrance (other than those arising under this letter agreement) and has full and unrestricted power to dispose of all such Committed Shares as contemplated by this letter agreement without the consent or approval of, or any other action on the part of, any other Person.

In the event that the Agreement is terminated pursuant to Article IX of the Agreement, this letter agreement shall automatically terminate and be of no further force or effect without further action by the parties hereto on the date that is ten (10) Business Days subsequent to the termination of the Agreement if no claim for performance or monetary damages has been made hereunder prior to the tenth (10th) Business Day subsequent to the termination of the Agreement. If such a claim has been made prior to the date that is ten (10) Business Days subsequent to the termination of the Agreement, this letter agreement shall terminate upon final resolution of such claim. In addition, this letter agreement shall automatically terminate and be of no further force or effect if the Agreement has not been executed by the date on which the operating agreement of FCP terminates.

Notwithstanding any other term or condition of this letter agreement, liability under this letter agreement shall be limited to a willful and material breach of this letter agreement and under no circumstances shall the maximum liability for any reason, including the willful and material breach by the undersigned of any of the commitments set forth herein exceed $31,970,586 (which liability may be satisfied, at the option of the undersigned, in cash or by delivery of Committed Shares valued at the closing price of such shares on the day prior to such delivery), nor shall the undersigned be liable for any special, indirect, or consequential damages.

If the express third party beneficiary hereof determines to enforce the terms of this letter agreement as a result of a willful and material breach of this letter agreement, such third party beneficiary must do so on a pro rata basis against any other party to Equity Financing Commitments and Equity Rollover Commitments that have willfully and materially breached their obligations thereunder.

intended to, and does not and will not, confer upon any Person, other than FCP and, if applicable, the Company, rights or remedies hereunder or in connection herewith.

This letter agreement may not be terminated (except as otherwise provided herein), amended, and no provision waived or modified, except by an instrument in writing signed by the each of the undersigned and FCP; provided that any termination, amendment, waiver or modification that would reasonably be expected to be adverse to the Company in any material respect (after taking into account any other amendments, waivers or modifications proposed to be made to the other Financing Commitments) shall require the consent of the Company.

This letter agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada. In addition, each party hereto (i) irrevocably and unconditionally consents and submits to the personal jurisdiction of the state and federal courts of the United States of America located in the State of Nevada solely for the purposes of any suit, action or other proceeding between any of the parties hereto, or between any of the parties hereto and the express third-party beneficiary hereof, arising out of this letter agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from such court, (iii) waives any claim of improper venue or any claim that the state and federal courts of the United States of America located in the State of Nevada are an inconvenient forum for any action, suit or proceeding between any of the parties hereto, or between any of the parties hereto and the express third-party beneficiary hereof, arising out of this letter agreement, (iv) agrees that it will not bring any action relating to this letter agreement in any court other than the state and federal courts of the United States of America located in the State of Nevada and (v) to the fullest extent permitted by Law, consents to service being made through the notice procedures set forth in Section 10.1 of the Agreement (with the address of the undersigned being the address set forth in the first page of this letter agreement).

EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS LETTER AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY.

	Very truly yours,


	/s/ Frank J. Fertitta, III
	Frank J. Fertitta, III

AGREEMENT AND ACCEPTANCE ON FOLLOWING PAGE

Agreed and Accepted, this 2nd day of December, 2006

FERTITTA COLONY PARTNERS LLC

By:	/s/ Frank J. Fertitta, III
	Frank J. Fertitta, III
	Authorized Member

EX-7.04 5 a06-24946_1ex7d04.htm EX-7.04

Exhibit 7.04

December 2, 2006

Fertitta Colony Partners LLC
2960 West Sahara Avenue
Las Vegas NV 89102

Ladies and Gentlemen:

This letter agreement shall become effective concurrently with the execution and delivery of the Agreement by each party thereto.

In the event of the satisfaction or waiver of the conditions precedent to FCP’s obligation to consummate the Merger set forth in Article VIII of the Agreement (it being agreed for purposes of this letter agreement that any condition precedent the satisfaction of which is dependent upon the contribution contemplated by this paragraph and which shall become satisfied upon the making of such contribution shall be deemed to have been satisfied), the undersigned agrees immediately prior to the Closing to transfer, contribute and deliver to FCP 3,956,702 shares of Company Common Stock (the “Committed Shares”), which shares will be cancelled and retired in the Merger and will not be entitled to receive the Merger Consideration. The undersigned will not be under any obligation pursuant to the preceding sentence unless and until the conditions precedent to FCP’s obligation to consummate the Merger set forth in Article VIII of the Agreement are satisfied or waived. The undersigned will not be under any obligation under any circumstances to contribute or cause to be contributed to FCP a number of shares in excess of the Committed Shares.

The undersigned hereby represents and warrants as follows:

(b) Other than filing by the undersigned of any reports with the SEC required by

In the event that the Agreement is terminated pursuant to Article IX of the Agreement, this letter agreement shall automatically terminate and be of no further force or effect without further action by the parties hereto on the date that is ten (10) Business Days subsequent to the termination of the Agreement if no claim for performance or monetary damages has been made hereunder prior to the tenth (10^th) Business Day subsequent to the termination of the Agreement. If such a claim has been made prior to the date that is ten (10) Business Days subsequent to the termination of the Agreement, this letter agreement shall terminate upon final resolution of such claim. In addition, this letter agreement shall automatically terminate and be of no further force or effect if the Agreement has not been executed by the date on which the operating agreement of FCP terminates.

Notwithstanding any other term or condition of this letter agreement, liability under this letter agreement shall be limited to a willful and material breach of this letter agreement and under no circumstances shall the maximum liability for any reason, including the willful and material breach by the undersigned of any of the commitments set forth herein exceed $32,444,956 (which liability may be satisfied, at the option of the undersigned, in cash or by delivery of Committed Shares valued at the closing price of such shares on the day prior to such delivery), nor shall the undersigned be liable for any special, indirect, or consequential damages.

intended to, and does not and will not, confer upon any Person, other than FCP and, if applicable, the Company, rights or remedies hereunder or in connection herewith.

	Very truly yours,


	/s/ Lorenzo J. Fertitta
	Lorenzo J. Fertitta

AGREEMENT AND ACCEPTANCE ON FOLLOWING PAGE

Agreed and Accepted, this 2nd day of December, 2006

FERTITTA COLONY PARTNERS LLC

By:	/s/ Frank J. Fertitta, III
	Frank J. Fertitta, III
	Authorized Member

EX-7.05 6 a06-24946_1ex7d05.htm EX-7.05

Exhibit 7.05

December 2, 2006

Fertitta Colony Partners LLC
2960 West Sahara Avenue
Las Vegas NV 89102

Ladies and Gentlemen:

This letter agreement shall become effective concurrently with the execution and delivery of the Agreement by each party thereto.

In the event of the satisfaction or waiver of the conditions precedent to FCP’s obligation to consummate the Merger set forth in Article VIII of the Agreement (it being agreed for purposes of this letter agreement that any condition precedent the satisfaction of which is dependent upon the contribution contemplated by this paragraph and which shall become satisfied upon the making of such contribution shall be deemed to have been satisfied), the undersigned agree immediately prior to the Closing to transfer, contribute and deliver to FCP 1,436,426 shares of Company Common Stock (the “Committed Shares”), which shares will be cancelled and retired in the Merger and will not be entitled to receive the Merger Consideration. The undersigned will not be under any obligation pursuant to the preceding sentence unless and until the conditions precedent to FCP’s obligation to consummate the Merger set forth in Article VIII of the Agreement are satisfied or waived. The undersigned will not be under any obligation under any circumstances to contribute or cause to be contributed to FCP a number of shares in excess of the Committed Shares.

The undersigned hereby jointly represent and warrant as follows:

(b) Other than filing by the undersigned of any reports with the SEC required by

(c) The undersigned, or an affiliate controlled by the undersigned, are, and as of the Closing Date will be, the beneficial owners of the Committed Shares and will, as of the Closing Date, own such shares free and clear of any Lien or encumbrance (other than those arising under this letter agreement) and has full and unrestricted power to dispose of all such Committed Shares as contemplated by this letter agreement without the consent or approval of, or any other action on the part of, any other Person.

Notwithstanding any other term or condition of this letter agreement, liability under this letter agreement shall be limited to a willful and material breach of this letter agreement and under no circumstances shall the maximum liability for any reason, including the willful and material breach by the undersigned of any of the commitments set forth herein exceed $11,778,693 (which liability may be satisfied, at the option of the undersigned, in cash or by delivery of Committed Shares valued at the closing price of such shares on the day prior to such delivery), nor shall the undersigned be liable for any special, indirect, or consequential damages.

Upon the execution and delivery of the Agreement by each party thereto, the undersigned acknowledge that the Company will be relying on this letter agreement and will be an express third party beneficiary hereof and will be entitled to enforce obligations of the undersigned hereunder directly against the undersigned to the full extent thereof. This letter agreement is not

intended to, and does not and will not, confer upon any Person, other than FCP and, if applicable, the Company, rights or remedies hereunder or in connection herewith.

	Very truly yours,


	BLS Family Investments, LLC, a Nevada
	limited liability company

		/s/ Blake L. Sartini
		By: Blake L. Sartini, Manager

		/s/ Delise F. Sartini
		By: Delise F. Sartini, Manager


	The Blake L. Sartini and Delise F. Sartini Family
	Trust

		/s/ Blake L. Sartini
		By: Blake L. Sartini, Trustee

		/s/ Delise F. Sartini
		By: Delise F. Sartini, Trustee

AGREEMENT AND ACCEPTANCE ON FOLLOWING PAGE

Agreed and Accepted, this 2nd day of December, 2006

FERTITTA COLONY PARTNERS LLC

By:	/s/ Frank J. Fertitta, III
	Frank J. Fertitta, III
	Authorized Member

EX-7.06 7 a06-24946_1ex7d06.htm EX-7.06

Exhibit 7.06

FC INVESTOR, LLC
c/o Colony Capital, LLC
1999 Avenue of the Stars
Suite 1200
Los Angeles, CA 90067

December 2, 2006

Fertitta Colony Partners LLC
2960 West Sahara Avenue
Las Vegas, NV 89102

Ladies and Gentlemen:

Reference is made to that certain Agreement and Plan of Merger (the “Agreement”) to be entered into by and among Station Casinos, Inc. (the “Company”), a Nevada corporation, Fertitta Colony Partners, LLC, a Nevada limited liability company (“FCP”), and a wholly-owned subsidiary of FCP. A draft of the Agreement is being furnished to the Company. Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Agreement.

This letter agreement shall become effective concurrently with the execution and delivery of the Agreement by each party thereto.

In the event of the satisfaction or waiver of the conditions precedent to FCP’s obligation to consummate the Merger set forth in Article VIII of the Agreement (it being agreed for purposes of this letter agreement that any condition precedent the satisfaction of which is dependent upon the contribution contemplated by this paragraph and which shall become satisfied upon the making of such contribution shall be deemed to have been satisfied), we agree that at the Closing we will contribute or cause to be contributed to FCP an aggregate amount of $2,220,000,000 (such sum, the “Commitment Amount”), which amount shall be used by FCP, together with the financing proceeds from the Debt Financing Commitments and the equity proceeds from the other Equity Financing Commitments to fund the Merger Consideration, pay any other amounts to be paid by FCP to any person on the Closing Date on the terms set forth in the Agreement and pay for related expenses. We will not be under any obligation pursuant to the preceding sentence unless and until the conditions precedent to FCP’s obligation to consummate the Merger set forth in Article VIII of the Agreement are satisfied or waived. We will not be under any obligation under any circumstances to contribute or cause to be contributed more than the Commitment Amount to FCP.

Notwithstanding anything that may be expressed or implied in this letter agreement, FCP, by its acceptance of the benefits hereof, covenants, agrees and acknowledges that, no person other than the undersigned shall have any obligation hereunder and that, notwithstanding that the undersigned is a partnership, no recourse hereunder or any documents or instruments delivered in connection herewith shall be had against any current or future officer, agent or employee of the undersigned, against any current or future general or limited partner of the undersigned or any

current or future director, officer, employee, general or limited partner, member, Affiliate or assignee of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or future officer, agent or employee of the undersigned or any current or future general or limited partner of the undersigned or any current or future director, officer, employee, general or limited partner, member, Affiliate or assignee of any of the foregoing, as such, for any obligations of the undersigned under this letter agreement or any documents or instruments delivered in connection herewith or for any claim based on, in respect of or by reason of such obligations or their creation.

The undersigned hereby represents and warrants as follows:

(a) The undersigned is a limited liability company duly formed, validly existing and in good standing under the laws of its jurisdiction of formation.

(b) The execution, delivery and performance of this letter agreement by the undersigned is within its limited liability company powers and has been duly authorized by all necessary action, and no other proceedings or actions on the part of the undersigned are necessary to perform its obligations hereunder. This letter agreement is a valid and binding obligation of the undersigned enforceable against it in accordance with its terms, except as may be limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally or by general principles or equity.

(c) The execution, delivery and performance by the undersigned of this letter agreement do not and will not (i) violate the organizational documents of the undersigned, (ii) violate any applicable Law or court or governmental order to which the undersigned or any of its assets are subject or (iii) require any consent or other action by any Person under, constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in any breach of or give rise to any right of termination, cancellation, amendment or acceleration of, any right or obligation of the undersigned.

In the event that the Agreement is terminated pursuant to Article IX of the Agreement, this letter agreement shall automatically terminate and be of no further force or effect without further action by the parties hereto on the date that is (10) Business Days subsequent to the termination of the Agreement if no claim for performance or monetary damages has been made hereunder prior to the tenth (10th) Business Day subsequent to the termination of the Agreement. If such a claim has been made prior to the date that is ten (10) Business Days subsequent to the termination of the Agreement, this letter agreement shall terminate upon final resolution of such claim. In addition, this letter agreement shall automatically terminate and be of no further force or effect if the Agreement has not been executed and delivered by each party thereto prior to the date on which the operating agreement of FCP terminates.

We shall be entitled to assign all or a portion of our obligations hereunder to any Person that agrees to assume our obligations hereunder, provided that we shall remain obligated to perform

our obligations hereunder to the extent not performed by such Person(s).

Notwithstanding any other term or condition of this letter agreement, our liability under this letter agreement shall be limited to monetary damages only, shall be limited to a willful and material breach of this letter agreement and under no circumstances shall our maximum liability for any reason, including our willful and material breach of any of our commitments set forth herein, exceed $222,000,000 such damages shall not include any special, indirect, or consequential damages.

Upon the execution and delivery of the Agreement by each party thereto, the undersigned acknowledges that the Company will be relying on this letter agreement and will be an express third party beneficiary hereof and will be entitled to enforce obligations of the undersigned hereunder directly against the undersigned to the full extent thereof. This letter agreement is not intended to, and does not and will not, confer upon any Person, other than FCP and, if applicable, the Company, rights or remedies hereunder or in connection herewith.

This letter agreement may not be terminated (except as otherwise provided herein), amended, and no provision waived or modified, except by an instrument in writing signed by us and FCP; provided that any termination, amendment, waiver or modification that would reasonably be expected to be adverse to the Company in any material respect (after taking into account any other amendments, waivers or modifications proposed to be made to the other Financing Commitments) shall require the consent of the Company.

This letter agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada. In addition, each party hereto (i) irrevocably and unconditionally consents and submits to the personal jurisdiction of the state and federal courts of the United States of America located in the State of Nevada solely for the purposes of any suit, action or other proceeding between any of the parties hereto, or between any of the parties hereto and the express third-party beneficiary hereof, arising out of this letter agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from such court, (iii) waives any claim of improper venue or any claim that the state or federal courts of the United States of America located in the State of Nevada are an inconvenient forum for any action, suit or proceeding between any of the parties hereto, or between any of the parties hereto and the express third-party beneficiary hereof, arising out of this letter agreement, (iv) agrees that it will not bring any action relating to this letter agreement in any court other than the state or federal courts of the United States of America located in the State of Nevada and (v) to the fullest extent permitted by Law, consents to service being made through the notice procedures set forth in Section 10.1 of the Agreement (with the address of the undersigned being the address set forth in the first page of this letter agreement).

Very truly yours,

FC INVESTOR, LLC

By:	/s/ Jonathan H. Grunzweig
	Name: Jonathan H. Grunzweig
	Title: Vice President

ACCEPTED AND AGREED,
this 2nd day of December 2006

FERTITTA COLONY PARTNERS LLC


By:	/s/ Frank J Fertitta, III
	Name: Frank J Fertitta, III
	Title: Authorized Member

EX-7.07 8 a06-24946_1ex7d07.htm EX-7.07

Exhibit 7.07

DEUTSCHE BANK SECURITIES INC.
60 Wall Street
New York, New York 10005

DEUTSCHE BANK TRUST COMPANY
AMERICAS
60 Wall Street
New York, New York 10005

December 2, 2006

Fertitta Colony Partners LLC
2960 West Sahara Avenue
Las Vegas, NV 89102

Re: Acquisition Financing - Financing Commitment Letter

Ladies and Gentlemen:

You have informed Deutsche Bank Securities Inc. (“DBSI”) and Deutsche Bank Trust Company Americas (“DBTCA”, and together with DBSI, the “Commitment Parties”) that one or more affiliates of Colony Capital, LLC (collectively, “Colony”), Mr. Frank J. Fertitta III and his personal investment vehicles (collectively, “Frank Fertitta”) and Mr. Lorenzo J. Fertitta and his personal investment vehicles (collectively, “Lorenzo Fertitta” and together with Colony and Frank Fertitta, the “Principal Investors”), together with other co-investors that are reasonably acceptable to the Commitment Parties prior to the Closing Date (defined below) and their respective affiliates (collectively, the “Sponsors”) and other members of the management team of Station Casinos, Inc. (the “Target” or “Borrower”) and other persons reasonably acceptable to the Commitment Parties (collectively, the “Management Investors” and, together with the Sponsors, the “Equity Investors”) have caused the formation of Fertitta Colony Partners LLC, a newly formed limited liability company (“Sponsor LLC”). Sponsor LLC will be the parent of a new Nevada corporation (“Sponsor Holdco”) which would (i) acquire, through a newly formed Nevada corporation wholly-owned by Sponsor Holdco (“Sponsor Merger Sub”), all of the equity interests in the Target, by way of a merger of Sponsor Merger Sub and an entity that will hold all of the outstanding shares of Target (the “Acquisition” or the “Merger”) and (ii) concurrently with the consummation of the Acquisition, refinance (the “Refinancing”) the existing senior secured revolving credit facility of Target and its subsidiaries. After giving effect to the Acquisition, on the Closing Date, the Principal Investors, collectively, will beneficially own and control, with unrestricted voting power, at least 70% of the voting equity of Sponsor LLC, and Sponsor Holdco will be a holding company that indirectly owns all of the equity interests in the Target.

Investors shall elect to contribute in their sole discretion, (ii) the procurement by the Borrower of senior secured revolving credit facilities in the aggregate amount of $500.0 million (the “Revolving Credit Facility”) and (iii) the procurement by a subsidiary of Sponsor Holdco of a first lien mortgage loan in the aggregate amount of $2,725.0 million (the “CMBS Loan”).

The transactions described in clauses (i) through (iii) above, as more fully described in the Term Sheets (as defined below), are collectively referred to herein as the “Financing Transactions.” The Financing Transactions, the Refinancing and the Acquisition are collectively referred to herein as the “Transaction.” All funds required to finance the Acquisition and Refinancing, and to pay all fees and expenses incurred in connection with the Transaction, shall be provided pursuant to the Financing Transactions.

A summary of the principal terms and the conditions of the Revolving Credit Facility is set forth in Exhibit A attached hereto (the “Term Sheet”). A summary of the conditions precedent to the Revolving Credit Facility is set forth in Exhibit B attached hereto.

DBTCA is pleased to confirm that, subject to the terms and conditions set forth herein and in the Term Sheets, it hereby commits to provide 100% of the Revolving Credit Facility. It is agreed that (i) DBTCA will act as sole Administrative Agent (in such capacity, the “Administrative Agent”) for a syndicate of banks, financial institutions and other institutional lenders reasonably satisfactory to you who will participate in each of the Revolving Credit Facility (together with DBSI, the “Senior Secured Lenders”), (ii) DBSI will act as Lead Arranger and Book Running Manager for the Revolving Credit Facility (in such capacities, the “Lead Arranger”) and (iii) DBSI will act as syndication agent for the Revolving Credit Facility (in such capacity, the “Syndication Agent”). Each of DBTCA and DBSI in such capacity will perform the duties customarily performed by it in such roles. You agree that, as a condition to the commitments set forth herein, no other agents, co-agents or arrangers will be appointed, no other titles will be awarded and no compensation (other than that expressly contemplated by the Term Sheet and the Fee Letter referred to below) will be paid in connection with the Revolving Credit Facility unless you and we shall so agree.

DBTCA reserves the right to syndicate all or part of its commitment hereunder to one or more other Senior Secured Lenders that will become party to the definitive credit documentation for the Revolving Credit Facility pursuant to a syndication to be managed by DBSI in consultation with you. All aspects of the syndication of each of the Revolving Credit Facility, including, without limitation, timing, potential syndicate members to be approached, titles, allocations and division of fees, shall be managed by DBSI in consultation with you. For further clarification, DBSI will manage the physical books for the Revolving Credit Facility, including all of the responsibilities typical of such role (including determining the allocation of commitments among the Senior Secured Lenders and the amount and distribution of fees among the Senior Secured Lenders). You agree to actively assist the Lead Arranger in such syndication, including by (i) using your commercially reasonable efforts to ensure that the Lead Arranger’s syndication efforts benefit from your existing lending relationships and (ii) providing the Lead Arranger and the Senior Secured Lenders, promptly upon request, with all information that is available to you and that is reasonably deemed necessary by the Lead Arranger to complete successfully the syndication, including, but not limited to, (a) assistance in the preparation of a confidential information memorandum for delivery to potential syndicate members and

participants and (b) delivery of projections and other information prepared by you or your affiliates or advisors for delivery to lender(s) in respect of the transactions described herein. You agree to prepare or assist in the preparation of a version of the information memorandum and presentation consisting exclusively of information and documentation that is either publicly available or not material. You also agree to make available your representatives, and to cause the officers and representatives of the Sponsors and the senior officers and representatives of Sponsor Holdco, the Borrower and their respective subsidiaries to be available, in each case from time to time on reasonable notice, and to attend and make presentations regarding the business and prospects of Sponsor Holdco, the Borrower and their respective subsidiaries to ratings agencies identified by the Lead Arranger and at a meeting or meetings of Senior Secured Lenders or prospective Senior Secured Lenders at such times and places as the Lead Arranger may reasonably request. The provisions of the preceding two sentences shall remain in full force and effect until the earlier of (i) 60 days after the delivery of a confidential information memorandum with respect to the Revolving Credit Facility to DBSI for syndication and (ii) completion of the successful syndication of the Revolving Credit Facility. For purposes of this paragraph, a “successful syndication” shall mean that the Commitment Parties, collectively, hold no more than $175,000,000 of the commitments under the Revolving Credit Facility. Furthermore, you agree to use your best commercial efforts to obtain ratings for each of the Revolving Credit Facility (which may be of any level) from Standard & Poor’s Ratings Services (“S&P”) and Moody’s Investor’s Services, Inc. (“Moody’s”); provided that obtaining a rating shall not be a condition to close the Revolving Credit Facility. Notwithstanding the Lead Arranger’s rights to syndicate the Revolving Credit Facility and receive commitments with respect thereto, the Commitment Parties may not assign all or any portion of their respective commitments hereunder prior to the initial funding under the Revolving Credit Facility on the Closing Date. It is agreed that, notwithstanding the foregoing, the Commitment Parties’ obligation to fund the commitments hereunder on the Closing Date is not subject to the syndication of the Revolving Credit Facility.

You represent and warrant that, to the best of your knowledge, (i) no written information which has been or is hereafter furnished by you or on your behalf in connection with the transactions contemplated hereby and (ii) no other information given at information meetings for potential syndicate members and supplied or approved by you or on your behalf (such written information and other information being referred to herein collectively as the “Information”) taken as a whole contains (or, in the case of Information furnished after the date hereof, will contain), any untrue statement of material fact or omitted (or will omit) to state any material fact necessary to make the statements therein taken as a whole not misleading, in the light of the circumstances under which they were (or hereafter are) made; provided that, with respect to Information consisting of statements, estimates and projections regarding the future performance of Sponsor Holdco, the Borrower and their respective subsidiaries (collectively, the “Projections”), no representation or warranty is made other than that the Projections have been (and, in the case of Projections furnished after the date hereof, will be) prepared in good faith based on assumptions believed to be reasonable at the time of preparation thereof (it being understood that the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control and that no assurance can be given that such Projections will be realized). You agree to supplement the Information and the Projections from time to time until the date of the initial borrowing under the Revolving Credit Facility to the extent necessary to cause the representations and warranties in the preceding sentence to remain correct. You

understand that, in syndicating the Revolving Credit Facility, the Lead Arranger will use and rely primarily on the Information and the Projections without independent verification thereof. You agree that unless it is specifically labeled “Private – Contains Non-Public Information” by you when delivered to us, no information, documentation or other data delivered by you to us for use with prospective Senior Secured Lenders in connection with the syndication of the Revolving Credit Facility, whether through an internet site (including, without limitation, an IntraLinks workspace), electronically, in presentations at bank meetings or otherwise, will contain any material non-public information.

The Commitment Parties’ commitments and agreements hereunder are subject solely to the conditions set forth in the Term Sheet. Notwithstanding anything in this Commitment Letter (as defined below), the Fee Letter (as defined below), the definitive credit documentation for the Revolving Credit Facility or any other letter agreement or other undertaking concerning the Transaction to the contrary, the only representations relating to the Borrower, its subsidiaries and their businesses the making of which shall be a condition to the closing of the Revolving Credit Facility on the Closing Date shall be (A) such of the representations made by the Target in the Acquisition Agreement as are material to the interests of the Senior Secured Lenders, but only to the extent that you have the right to terminate your obligations under the Acquisition Agreement as a result of a breach of such representations in the Acquisition Agreement (the “Acquisition Agreement Representations”), and (B) the Specified Representations (as defined below). In addition, the terms of the definitive credit documentation for the Revolving Credit Facility shall be in a form such that they do not impair availability of the Revolving Credit Facility on the Closing Date if the conditions set forth herein and in the Term Sheet are satisfied; provided, however, that with respect to any collateral the security interest in which may not be perfected by filing of a UCC financing statement, recordation of a mortgage (or deed of trust) or delivery to Administrative Agent (or, if delivery to Administrative Agent cannot be made on or prior to the Closing Date because gaming approval of the relevant pledge has not yet been obtained, delivery into escrow) of a physical stock certificate (or other equity interest certificate), if the perfection of the Administrative Agent’s security interest in such collateral may not be accomplished prior to the Closing Date without undue delay, burden or expense, then delivery of documents and instruments for perfection of such security interest shall not constitute a condition precedent to the initial borrowings under the Revolving Credit Facility if the Borrower agrees to deliver or cause to be delivered such documents and instruments, and take or cause to be taken such other actions as may be required to perfect such security interests, within 90 days after the Closing Date (or within 180 days after the Closing Date in respect of delivery of stock certificates (or other equity interest certificates) that requires gaming approval). You agree to use your reasonable efforts to procure, in respect of each mortgage (or deed of trust) a lenders title insurance policy in form and substance reasonably satisfactory to the Lead Arranger on or prior to the Closing Date, but the procurement of such title insurance shall not be a condition to the Closing Date. “Specified Representations” means the representations of the Borrower and the Guarantors (as defined in the Term Sheet) set forth in the Term Sheets and relating to corporate power and authority to enter into the documentation relating to the Revolving Credit Facility, due authorization, execution, delivery and enforceability of such documentation, such documentation not conflicting with charter documents, law or material contracts, Federal Reserve margin regulations, the Investment Company Act and, subject to the preceding sentence, the perfection and priority of the security interests granted in the proposed collateral.

As consideration for the commitments and agreements of the Commitment Parties hereunder, you agree to cause to be paid the nonrefundable fees described in the Fee Letter dated the date hereof and delivered herewith (the “Fee Letter”). To further induce the Commitment Parties to issue this letter (together with the Term Sheet, this “Commitment Letter”) and to proceed with the documentation of the proposed Revolving Credit Facility, you hereby agree to reimburse the Commitment Parties and their affiliates on the earlier to occur of the Closing Date and the date on which this Commitment Letter terminates pursuant to the last paragraph hereof for all reasonable out-of-pocket costs and expenses (including, without limitation, reasonable legal fees and expenses of counsel to DBSI and DBTCA, appraisal, consulting and audit fees, and printing, reproduction, document delivery, travel, communication and publicity costs) incurred in connection with the syndication and execution of the Revolving Credit Facility, and the preparation, review, negotiation, execution and delivery of this Commitment Letter, the Fee Letter, the financing documentation related to the Revolving Credit Facility and the administration, amendment, modification or waiver thereof (or any proposed amendment, modification or waiver), whether or not the Closing Date occurs or any financing documentation related to the Revolving Credit Facility is executed and delivered or any extensions of credit are made under the Revolving Credit Facility. You further agree to indemnify and hold harmless each Commitment Party, and each other agent or co-agent (if any) with respect to the Revolving Credit Facility (including the Administrative Agent, and the Lead Arranger), each Senior Secured Lender (including in any event DBSI and DBTCA) and their respective affiliates and each director, officer, employee, representative and agent thereof (each, an “indemnified person”) from and against any and all actions, suits, proceedings (including any investigations or inquiries), claims, losses, damages, liabilities or expenses of any kind or nature whatsoever which may be incurred by or asserted against or involve any Commitment Party, any Senior Secured Lender or any other such indemnified person as a result of or arising out of or in any way related to or resulting from the Transaction or this Commitment Letter and, upon demand, to pay and reimburse each indemnified person for any reasonable legal or other out-of-pocket expenses paid or incurred in connection with investigating, defending or preparing to defend any such action, suit, proceeding (including any inquiry or investigation) or claim (whether or not such indemnified person is a party to any action or proceeding out of which any such expenses arise); provided, however, that you shall not have to indemnify any indemnified person or any person to whom liabilities for the actions of such indemnified person are imputed under applicable employment law or agency law against any loss, claim, damage, expense or liability to the extent same resulted from the gross negligence or willful misconduct of such indemnified person (as determined by a court of competent jurisdiction in a final and non-appealable judgment). Neither any Commitment Party nor any other indemnified person shall be responsible or liable to you or any other person or entity for (x) any determination made by it pursuant to this Commitment Letter in the absence of gross negligence or willful misconduct on the part of such person or entity (as determined by a court of competent jurisdiction in a final and non-appealable judgment), (y) any damages arising from the use by others of information or other materials obtained through electronic, telecommunications or other information transmission systems or (z) any indirect, special, incidental, punitive or consequential damages (including, without limitation, any loss of profits, business or anticipated savings) which may be alleged as a result of this Commitment Letter or the financing contemplated hereby.

Each Commitment Party (including in its capacities as an agent or arranger hereunder) reserves the right to employ the services of its affiliates in providing services

contemplated by this Commitment Letter and to allocate, in whole or in part, to its affiliates certain fees payable to each Commitment Party in such manner as such Commitment Party and its affiliates may agree in their sole discretion. You also agree that the Commitment Parties may at any time and from time to time assign all or any portion of its commitments hereunder to one or more of its affiliates; provided, that the Commitment Parties agree not to assign their commitments hereunder to any principal investment portfolios of the Commitment Parties or their branches or subsidiaries. You further acknowledge that (i) each Commitment Party may share with any of its affiliates, and such affiliates may share with the Commitment Parties, any information related to the Transaction, Sponsor Holdco, the Borrower, the Sponsors (and your and their respective subsidiaries and affiliates), or any of the matters contemplated hereby, and (ii) each Commitment Party and its affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which you or the Target may have conflicting interests regarding the transactions described herein and otherwise; provided, however, that notwithstanding the foregoing, in consideration of the payments made by you under the Fee Letter and the covenants and undertakings by you in our favor under this Commitment Letter, DBSI and DBTCA, for themselves and on behalf of their affiliates, agree, for a period of one year from the date hereof and so long as you are not in material breach of any of your material obligations hereunder, that none of DBSI, DBTCA or any of their respective affiliates shall provide financing to any other person or group that seeks to make a competing bid to purchase or otherwise take control of the Target. Consistent with each Commitment Party’s policy to hold in confidence the affairs of its clients, each Commitment Party agrees (as to itself only) to treat, and cause any such affiliate of such Commitment Party to treat, all non-public information provided to it by Sponsor Holdco and the Borrower as confidential information.

You agree that this Commitment Letter and the Fee Letter are for your confidential use only and that, unless each Commitment Party has otherwise consented, neither their existence nor the terms hereof or thereof will be disclosed by you to any person or entity other than (a) your officers, directors, employees, accountants, attorneys and other advisors, and then only on a “need to know” basis in connection with the transactions contemplated hereby and on a confidential basis, (b) potential co-investors who agree to be subject to the confidentiality provisions set forth herein, (c) as reasonably required in connection with regulatory matters and (d) the Target and its advisors on a confidential basis in connection with the proposed Acquisition.

You hereby represent and acknowledge that, to the best of your knowledge, neither any Commitment Party nor any employees or agents of, or other persons affiliated with, any Commitment Party have directly or indirectly made or provided any statement (oral or written) to you or to any of your employees or agents, or other persons affiliated with or related to you (or, so far as you are aware, to any other person), as to the potential tax consequences of the Transaction.

The reimbursement, indemnification, jurisdiction and confidentiality provisions contained herein and in the Fee Letter shall survive any termination of this Commitment Letter.

In order to comply with the USA PATRIOT Act, each Commitment Party must obtain, verify and record information that sufficiently identifies each entity (or individual) that

enters into a business relationship with such Commitment Party. As a result, in addition to your corporate name and address, each Commitment Party will obtain your corporate tax identification number and certain other information. Any Commitment Party may also request relevant corporate resolutions and other identifying documents.

This Commitment Letter and the Fee Letter (and your rights and obligations hereunder and thereunder) shall not be assignable by any of the parties hereto to any person or entity without the prior written consent of the other parties (and any purported assignment without such consent shall be null and void). This Commitment Letter and the Fee Letter may not be amended or modified, or any provision hereof and thereof waived, except by an instrument in writing signed by you and each Commitment Party. Each of this Commitment Letter and the Fee Letter may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this Commitment Letter or the Fee Letter by facsimile (or other electronic) transmission shall be effective as delivery of a manually executed counterpart hereof or thereof, as the case may be. This Commitment Letter and the Fee Letter shall be governed by, and construed in accordance with, the laws of the State of New York. This Commitment Letter and the Fee Letter set forth the entire agreement between the parties hereto as to the matters set forth herein and supersede all prior communications, written or oral, with respect to the matters herein. Matters that are not covered or made clear herein, in the Term Sheet or in the Fee Letter are subject to mutual agreement of the parties hereto. This Commitment Letter and the Fee Letter are intended to be solely for the benefit of the parties hereto and thereto and are not intended to confer any benefits upon, or create any rights in favor of, any person or entity other than the parties hereto or thereto (and indemnified persons) and may not be relied upon by any person or entity other than you. Neither this Commitment Letter nor the Fee Letter are intended to create a fiduciary relationship among the parties hereto or thereto.

Each of the parties hereto hereby waives any right to trial by jury with respect to any claim, action, suit or proceeding arising out of or contemplated by this Commitment Letter or the Fee Letters. Each of the parties hereto hereby submits to the non-exclusive jurisdiction of the federal and New York state courts located in the county of New York in connection with any dispute related to this Commitment Letter, the Fee Letter or any matters contemplated hereby or thereby.

Each Commitment Party’s willingness, and commitments, with respect to the Revolving Credit Facility as set forth above will terminate on the first to occur of (x) February 28, 2007, unless on or prior to such date a definitive agreement with respect to the Acquisition (the “Acquisition Agreement”) has been entered into (with the seller or its relevant affiliates), (y) the date that is twelve months after the date of execution of the Acquisition Agreement, unless on or prior to such date the Transaction has been consummated and a definitive credit agreement evidencing the Revolving Credit Facility, shall have been entered into and the initial borrowings shall have occurred thereunder, or (z) any time after the execution of the Acquisition Agreement and prior to the consummation of the Transaction, the date of the termination of the Acquisition Agreement (other than with respect to ongoing indemnities, confidentiality provisions and similar provisions).

* * *

If you are in agreement with the foregoing, please sign and return to the Commitment Parties the enclosed copy of this Commitment Letter, together with a copy of the enclosed Fee Letter, no later than 11:59 p.m., New York time, on December 4, 2006. Unless this Commitment Letter and the Fee Letter are signed and returned by the time and date provided in the immediately preceding sentence, this Commitment Letter shall terminate at such time and date.

Very truly yours,

DEUTSCHE BANK TRUST COMPANY AMERICAS


By:	/s/ Steven Lapham
	Name:	Steven Lapham
	Title:	Managing Director


By:	/s/ James Rollison
	Name:	James Rollison
	Title:	Director

DEUTSCHE BANK SECURITIES INC.


By:	/s/ Steven Lapham
	Name:	Steven P. Lapham
	Title:	Managing Director


By:	/s/ David Flannery
	Name:	David Flannery
	Title:	Managing Director

Agreed to and Accepted this
2nd day of December, 2006:

FERTITTA COLONY PARTNERS LLC

By:	/s/ Frank J. Fertitta, III
	Name: Frank J. Fertitta, III
	Title: Authorized Member

EX-7.08 9 a06-24946_1ex7d08.htm EX-7.08

Exhibit 7.08

December 2, 2006

CONFIDENTIAL

FERTITTA COLONY PARTNERS LLC

2960 West Sahara Avenue

Las Vegas, NV 89102

Re: Acquisition Financing - Financing Commitment Letter

Ladies and Gentlemen:

You have informed German American Capital Corporation (“GACC”) and Deutsche Bank AG, New York Branch (“DB” and, together with GACC, the “Commitment Parties”) that one or more affiliates of Colony Capital, LLC (collectively, “Colony”), Mr. Frank J. Fertitta III and his personal investment vehicles (collectively, “Frank Fertitta”) and Mr. Lorenzo J. Fertitta and his personal investment vehicles (collectively, “Lorenzo Fertitta” and together with Colony and Frank Fertitta, the “Principal Investors”), together with other co-investors that are reasonably acceptable to, the Commitment Parties prior to the Closing Date (defined below) and their respective affiliates (collectively, the “Sponsors”) and other members of the management team of Station Casinos, Inc. (the “Target”) and other persons reasonably acceptable to the Commitment Parties (collectively, the “Management Investors” and, together with the Sponsors, the “Equity Investors”) have caused the formation of Fertitta Colony Partners LLC, a newly formed limited liability company (“Sponsor LLC”). Sponsor LLC will be the parent of a new Nevada corporation (“Sponsor Holdco”) which would (i) acquire, through a newly formed Nevada corporation wholly-owned by Sponsor Holdco (“Sponsor Merger Sub”), all of the equity interests in the Target, by way of a merger of Sponsor Merger Sub and an entity that will hold all of the outstanding shares of the Target (the “Acquisition” or the “Merger”) and (ii) concurrently with the consummation of the Acquisition, refinance (the “Refinancing”) the existing senior secured revolving credit facility of the Target and its subsidiaries. After giving effect to the Acquisition, on the Closing Date, the Principal Investors, collectively, will beneficially own and control, with unrestricted voting power, at least seventy percent (70%) of the voting equity of Sponsor LLC and Sponsor Holdco will be a holding company that indirectly owns all of the equity interests in the Target. In addition, Sponsor Holdco will own, directly or indirectly, 100% of the equity interests in the Mezzanine Borrowers and Senior Borrower (collectively, “Borrower”) described in the term sheet attached hereto as Exhibit B (the “Term Sheet”) as well as certain other assets currently owned by the Target. Senior Borrower shall use the cash proceeds of the CMBS Loan contemplated herein, inter alia, to purchase real estate assets of certain operating subsidiaries of the Target. These real estate assets will be leased to the Target, which will in turn sublease the same back to the existing operating subsidiaries of the Target (“Subsidiary OpCos”).

In order to effect the Acquisition, the Refinancing, to pay all fees and expenses incurred in connection with the Transaction (as defined below) and to provide for the working capital needs and general corporate requirements of the Borrower and its subsidiaries after giving effect to the Acquisition, you have advised us that you intend to implement the following transactions: (i) the contribution of equity to Sponsor Holdco by the Equity Investors in an aggregate amount equal to at least 32.5% of the consideration payable under the Acquisition Agreement defined below (a portion of which in an amount to be agreed may be in the form of rollover equity provided by Frank Fertitta, Lorenzo Fertitta and certain other Sponsors and/or Management Investors) (the “Equity Financing”) or such additional amount as the Equity Investors shall elect to contribute in their sole discretion, (ii) the procurement by the Target of senior secured revolving credit facilities in the aggregate amount of $500.0 million (the “Revolving Credit Facility”) and (iii) the procurement by Borrower of a first lien mortgage loan in the aggregate amount of $2,725.0 million (the “CMBS Loan”).

The transactions described in clauses (i) through (iii) above, as more fully described in the Term Sheet, are collectively referred to herein as the “Financing Transactions.” The Financing Transactions, the Refinancing and the Acquisition are collectively referred to herein as the “Transaction.” All funds required to finance the Acquisition and Refinancing, and to pay all fees and expenses incurred in connection with the Transaction, shall be provided pursuant to the Financing Transactions.

1. Commitment. DB and GACC (in such capacity, collectively “Initial Lender”) are pleased to confirm to Sponsors and Sponsor LLC that, subject to the terms set forth herein and in the Term Sheet, Initial Lender hereby commits (the “Commitment”) to provide, either directly through GACC or DB, or through one or more of their affiliates, the CMBS Loan to Borrower in an aggregate amount equal to $2.725 billion (the “Aggregate Commitment”), subject to (i) Sponsor LLC’s acceptance of this letter (together with all Exhibits and Schedules attached hereto, the “Commitment Letter”); (ii) satisfaction (or waiver by the appropriate party) of the terms and conditions set forth herein; and (iii) the prior satisfaction of the Loan Closing Conditions set forth in Exhibit A attached hereto. Upon satisfaction of the Loan Closing Conditions, the CMBS Loan shall be made available on the Closing Date by Initial Lender in accordance with the terms set forth in the Term Sheet. The “Closing Date” shall be a date prior to the Termination Date (as defined in Exhibit A) mutually acceptable to Initial Lender and Sponsor LLC and at which time all the applicable conditions to closing the CMBS Loan (the “Closing”) shall have been satisfied.

2. Fees. Sponsor LLC agrees to pay the fees set forth in the separate fee letter (the “Fee Letter”) dated the date hereof with Initial Lender in accordance with the terms of the Fee Letter (the “Agreed Fees”). The effectiveness of this Commitment is subject to the payment of the Commitment Fees specified in the Fee Letter in immediately available funds, which payment shall occur on or before the date specified in the Fee Letter.

3. Indemnification; Expenses. Sponsor LLC agrees to indemnify and hold harmless Initial Lender, all other lenders, any arranger, bookrunner or agent acting on behalf of any lender, and each of the other Indemnified Persons identified in accordance with and as set

forth in the indemnification provisions attached as Exhibit C hereto (the “Indemnification Provisions”) and hereby made a part hereof as though fully set forth herein.

In further consideration of the issuance of this Commitment Letter, and recognizing that in connection herewith Initial Lender is incurring substantial costs and expenses in connection with the documentation of the Commitment and the CMBS Loan, due diligence, loan closing, syndication, securitization and underwriting with respect to the proposed CMBS Loan, including, without limitation, fees and expenses of counsel, accounting fees, transportation, duplication and printing, third party consultant costs, appraisals, environmental reports, regulatory database searches, engineering reports, search fees, and other reasonable out-of-pocket third-party expenses, Sponsor LLC agrees to pay such reasonable out-of-pocket costs and expenses (whether incurred before or after the date hereof), upon the occurrence of the Closing of the transactions contemplated hereunder.

4. Disclosure. Sponsor LLC agrees that this Commitment Letter is for its confidential use only and will not be disclosed by Sponsor LLC to any person other than its accountants, attorneys and other advisors, its potential equity investors and their accountants, attorneys and advisors, and Target and its advisors, and then only on a “need to know” basis in connection with the CMBS Loan and on a confidential basis. Notwithstanding the foregoing, Sponsors and Sponsor LLC may: (i) make public disclosure of the existence of the Commitment, (ii) file a copy of this Commitment Letter in any public record in which it is required by law to be filed, and (iii) make such other public disclosures of the terms and conditions hereof as Sponsors and Sponsor LLC are required by law (including any applicable SEC regulations), in the opinion of its counsel, to make.

Sponsor LLC represents and warrants that all information that has been or will hereafter be made available by Initial Sponsors or any of their representatives in connection with the CMBS Loan to Initial Lender or any of their representatives or any potential lender, taken as a whole, are and will be correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, taken as a whole, not misleading in light of the circumstances under which such statements were or are made; provided that with respect to all statements, estimates and projections regarding future performance of Sponsor Holdco, the Borrower, Target and their respective subsidiaries, if any, that have been or will be prepared by the Borrower Parties or any of their representatives and made available to Initial Lender or any of their representatives or any potential Lender in connection with the financing contemplated hereby have been or will be prepared in good faith based upon assumptions believed to be reasonable at the time of preparation thereof (it being understood that the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control and that no assurance can be given that such Projections will be realized). Initial Sponsors agree to supplement the information and projections from time to time to the extent necessary to cause the representations and warranties contained in this paragraph to remain correct.

Initial Lender shall take normal and reasonable precautions and exercise due care to maintain the confidentiality of information provided to them by the Borrower Parties in

connection with this Commitment Letter, except to the extent such information (i) was or becomes generally available to the public other than as a result of a disclosure by Initial Lender, or (ii) was or becomes available from a source other than the Borrower Parties not known to Initial Lender to be in breach of an obligation of confidentiality to the Borrower Parties in the disclosure of such information. The foregoing shall not be deemed to restrict Initial Lender from disclosing such information (a) at the request or pursuant to any requirement of any governmental authority; (b) pursuant to subpoena or other court process, provided that Initial Lender will provide the Borrower parties with prior notice of such court process to the extent reasonably feasible; (c) when required to do so in accordance with the provisions of applicable law; (d) to the extent required in connection with any litigation or proceeding to which Initial Lender or their affiliates may be a party, provided that Initial Lender will provide the Borrower parties with prior notice of such court process to the extent reasonably feasible; (e) to the extent required in connection with the exercise of any remedy hereunder or under any loan document; (f) to Initial Lender’s independent auditors, rating agencies, and other professional advisors; and (g) to any prospective participant, investor, or assignee in connection with a syndication or securitization, subject to the confidentiality provisions contained herein.

5. Expiration and Termination of Commitment. The Commitment shall: (i) expire if this Commitment Letter is not countersigned and returned to the undersigned prior to 11:59 p.m. Los Angeles time (the “Expiration Time”) on December 4, 2006 (the “Expiration Date”); and (ii) terminate if the Closing does not occur prior to the Termination Date. In addition, the Commitment will terminate on the first to occur of (x) the Expiration Time on February 28, 2007, unless on or prior to such date a definitive agreement with respect to the Acquisition (the “Acquisition Agreement”) has been entered into (with the Target or its relevant affiliates), or (y) any time after the execution of the Acquisition Agreement and prior to the consummation of the Transaction, the date of the termination of the Acquisition Agreement (other than with respect to ongoing indemnities, confidentiality provisions and similar provisions). Sponsor LLC’s obligations under Sections 2, 3, and 4 relating to fees, indemnification, costs and expenses and confidentiality shall survive the expiration or termination of the Commitment.

6. Representations and Warranties. The Initial Lender’s commitments and agreements hereunder are subject solely to the conditions set forth in the attachments to this Commitment Letter. Notwithstanding anything in this Commitment Letter, the Fee Letter, the definitive documentation for the CMBS Loan or any other letter agreement or other undertaking concerning the Transaction to the contrary, the only representations relating to the Borrower, the Target, its subsidiaries and their businesses the making of which shall be a condition to the closing of the CMBS Loan on the Closing Date shall be (A) such of the representations made by the Target in the Acquisition Agreement as are material to the interests of the Lenders, but only to the extent that you have the right to terminate your obligations under the Acquisition Agreement as a result of a breach of such representations in the Acquisition Agreement (the “Acquisition Agreement Representations”), and (B) the Specified Representations (as defined below). “Specified Representations” means the representations of the Borrower Parties set forth in the Term Sheet and relating to entity power and authority to enter into the documentation relating to the CMBS Loan, due authorization, execution, delivery and enforceability of such

documentation, single purpose entity requirements, such documentation not conflicting with charter documents, law or material contracts, Federal Reserve margin regulations, the Investment Company Act, Property Specific Representations (provided, however, the making of such Property Specific Representations shall only be a condition to the closing of the CMBS Loan on the Closing Date, to the extent a breach thereof would result in a “Material Adverse Effect on the Company” (as defined in the Acquisition Agreement)), and the perfection and priority of the security interests granted in the proposed collateral. In addition, in the event a breach of Property Specific Representations results in a Portfolio MAE, Initial Lender shall have the right to implement a Property Substitution. As used herein: (A) a Portfolio MAE shall mean a material adverse effect on the Properties taken as a whole, or the operations, business or condition (financial or otherwise) of Borrower, taken as a whole; and (B) Property Substitution shall mean that Initial Lender may designate Real Property Interests comprising one or more casino and hotel projects owned by Target (through its subsidiaries) (“Substituted Properties”), which would be conveyed to Senior Borrower in lieu of one or more of the Properties so as to avoid the Portfolio MAE; provided, however, that (i) the designation and conveyance of the Substituted Properties shall be subject to compliance with the other terms and conditions of this Commitment; (ii) all parties shall act reasonably in implementing the Property Substitution consistent with the objective of avoiding the Portfolio MAE while preserving the material terms set forth in the Term Sheet; and (iii) in no event shall such Property Substitution result in an inability to render the opinions contemplated in Section 10 of Exhibit A attached hereto.

7. Miscellaneous: The following provisions shall be applicable both to this Commitment Letter and to the Fee Letter.

(a) Reliance on Information. In undertaking the Commitment, Initial Lender is relying and will continue to rely, without independent verification, thereof, on the accuracy of the information furnished to it by the Borrower Parties, or on their behalf, and the representations and warranties made by Initial Sponsors herein. Initial Lender may also rely on any publicly available information issued or authorized to be issued by Borrower Parties or any of their subsidiaries or affiliates. Initial Lender has no obligation to investigate, and have not undertaken any independent investigation of, any information or materials, public or otherwise, made available by Borrower Parties or any of their subsidiaries or affiliates. The obligations of Initial Lender under this Commitment Letter are made solely for the benefit of Sponsors and Sponsor LLC and may not be relied upon or enforced by any other person or entity.

(b) Complete Agreement; Waivers and Other Changes to be in Writing. This Commitment Letter (together with the Fee Letter) supersedes all previous negotiations, agreements and other understandings relating to the CMBS Loan, including, without limitation, previous discussions regarding the terms contained on the attached Exhibits. Please note, however, that the terms and conditions to be set forth in the Loan Documents are not limited to those set forth herein or in the attached Exhibits, provided that unless specifically agreed by the Borrower Parties, they shall not be inconsistent with any provision of this Commitment Letter or the attached Exhibits. Those matters that are not covered or made clear herein or in the attached Exhibits are subject to further mutual agreement of the parties. No alteration, waiver, amendment or supplement of or to this Commitment Letter or the Fee Letter

shall be binding or effective unless the same is set forth in a writing signed by a duly authorized representative of each party hereto or thereto.

(c) Power, Authority and Binding Effect. Each of the parties hereto represents and warrants to each of the other parties hereto that (i) it has all requisite power and authority to enter into this Commitment Letter and the Fee Letter and (ii) each of this Commitment Letter and the Fee Letter has been duly and validly authorized by all necessary corporate action on the part of such party, has been duly executed and delivered by such party and constitutes a legally valid and binding agreement of such party, enforceable against it in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally.

(d) Time of Essence. Time shall be of the essence whenever and wherever a date or period of time is prescribed or referred to in this Commitment Letter.

(e) Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Commitment Letter shall be governed by and construed in accordance with the laws of the State of New York. The Initial Lender’s obligations as set forth herein shall be subject to all regulatory requirements applicable to them (but such requirements shall not permit Initial Lender to terminate this Commitment).

EACH PARTY HERETO IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS COMMITMENT OR THE TRANSACTIONS OR THE MATTERS CONTEMPLATED BY THIS COMMITMENT. EACH PARTY HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS COMMITMENT, THE TRANSACTIONS CONTEMPLATED BY THIS COMMITMENT OR ANY MATTERS RELATED TO THIS COMMITMENT. IN THE EVENT OF LITIGATION, THIS LETTER MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(f) No Rights or Liability. Neither this Commitment Letter nor the Fee Letter create, nor shall any of them be construed as creating, any rights enforceable by a person or entity not a party hereto, except as provided in the indemnification provisions. Initial Sponsors, on behalf of themselves and each other Borrower Party, acknowledge and agree that: (i) none of the Initial Lender, any arranger, bookrunner or agent acting on behalf of Initial Lender is, nor shall any one of them be construed as, a fiduciary or agent of any Borrower Party or any other person and except as expressly set forth herein, shall have no duties or liabilities to any such person’s equity holders or creditors by virtue of this Commitment Letter or the Fee Letter, all of which are hereby expressly waived; (ii) none of the Initial Lender, any arranger, bookrunner or agent acting on behalf of the Initial Lender shall have any liability (including, without limitation, liability for any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements resulting from any negligent act or omission

of any of them), whether direct or indirect, in contract, tort or otherwise, to any Borrower Party (including, without limitation, their respective equity holders and creditors) or any other person for or in connection with this Commitment Letter, the Fee Letter or the CMBS Loan, except that a claim in contract for damages recoverable in a contract action that were caused by a breach of any contractual obligation expressly set forth in any written agreement signed by the party against which enforcement of such claim is sought shall not be impaired hereby (provided that no punitive damages are permitted hereunder) and (iii) Initial Lender was induced to enter into this Commitment Letter and the Fee Letter by, inter alia, the provisions in Sections 3, 4, and 7 herein.

(g) No Liability for Special or Punitive Damages. To the fullest extent that a claim for punitive damages may lawfully be waived, no party hereto shall ever be liable for any punitive damages on any claim (whether founded in contact, tort, legal duty or any other theory of liability) arising from or related in any manner to this Commitment Letter or the negotiation, execution, administration, performance, breach, or enforcement of this Commitment Letter or the instruments and agreements evidencing, governing or relating to the CMBS Loan contemplated hereby or any amendment thereto or the consummation of, or any failure to consummate, the CMBS Loan or any act, omission, breach or wrongful conduct in any manner related thereto.

(h) Counterparts. This Commitment Letter may be executed in one or more counterparts, each of which shall constitute an original, and all of which together shall constitute one and the same agreement. Delivery of an executed counterpart of this Commitment Letter by facsimile shall be effective as delivery of a manually executed counterpart of this Commitment Letter.

Please evidence your acceptance of the provisions of this Commitment Letter, including, without limitation, the attached Exhibits, by (i) signing the enclosed copy of this Commitment Letter; and (ii) returning the signed Commitment Letter and Fee Letter to the undersigned at or before the Expiration Date, the time at which the Commitment (if not so accepted prior thereto) will expire.

	Very truly yours,

	DEUTSCHE BANK AG, NEW YORK BRANCH

	By:	/s/ Todd Sammann
	Todd Sammann
	Managing Director

	By:	/s/ Tobin Cobb
	Tobin Cobb
	Managing Director

	GERMAN AMERICAN CAPITAL CORPORATION

	By:	/s/ Todd Sammann
	Todd Sammann
	Vice President

	By:	/s/ Tobin Cobb
	Tobin Cobb
	Vice President


	[SIGNATURES CONTINUED ON NEXT PAGE]

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ACCEPTED this 2nd day of December, 2006

FERTITTA COLONY PARTNERS LLC

By:	/s/ Frank J. Fertitta, III

Name:		Frank J. Fertitta, III

Title:		Authorized Member

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Under the Securities Exchange Act of 1934 (Amendment No. 21, 23, and 24)*

Signature

Signature

Signature

Signature

Under the Securities Exchange Act of 1934
(Amendment No. 21, 23, and 24)*