-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Tr4lFFkwtXg58wJ5/jZPQt//Kc1XnRCXpu6BfO88aFzjStlBOy5wYgz15Ejyat8V ZkGY/W/gIlEcY+UtGqSC1g== 0001104659-07-014381.txt : 20070227 0001104659-07-014381.hdr.sgml : 20070227 20070227152210 ACCESSION NUMBER: 0001104659-07-014381 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 20070227 DATE AS OF CHANGE: 20070227 GROUP MEMBERS: BLAKE L. SARTINI GROUP MEMBERS: DELISE F. SARTINI GROUP MEMBERS: FERTITTA COLONY PARTNERS LLC GROUP MEMBERS: LORENZO J. FERTITTA 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 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: 07653092 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 SC 13D/A 1 a07-6707_1sc13da.htm SC 13D/A

 

 

UNITED STATES

 

 

SECURITIES AND EXCHANGE
COMMISSION

 

 

Washington, D.C. 20549

 

 

SCHEDULE 13D

 

 

Under the Securities Exchange Act of 1934
(Amendment No. 25, 26 and 27)*

 

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.

2411 West Sahara Ave,

Las Vegas, Nevada 89102

(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)

 

February 23, 2007

(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).

 



SCHEDULE 13D

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
15,341,955

 

 

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)
26.7%

 

 

14.

Type of Reporting Person (See Instructions)
IN

 

2



SCHEDULE 13D

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
15,341,955

 

 

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)
26.7%

 

 

14.

Type of Reporting Person (See Instructions)
IN

 

3



SCHEDULE 13D

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
3,842,094

 

9.

Sole Dispositive Power
41,863

 

10.

Shared Dispositive Power
3,842,094

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person
15,341,955

 

 

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)
26.7%

 

 

14.

Type of Reporting Person (See Instructions)
IN

 

4



SCHEDULE 13D

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
3,842,094

 

9.

Sole Dispositive Power
3,960

 

10.

Shared Dispositive Power
3,842,094

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person
15,341,955

 

 

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)
26.7%

 

 

14.

Type of Reporting Person (See Instructions)
IN

 

5



SCHEDULE 13D

CUSIP No.   857689103

 

 

1.

Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
Fertitta Colony Partners LLC

 

 

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
0

 

8.

Shared Voting Power
15,341,955

 

9.

Sole Dispositive Power
0

 

10.

Shared Dispositive Power
0

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person
15,341,955

 

 

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)
26.7%

 

 

14.

Type of Reporting Person (See Instructions)
OO

 

6



SCHEDULE 13D

EXPLANATORY NOTES: This amendment to 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”).  This Schedule 13D is also filed by Fertitta Colony Partners LLC, a Nevada limited liability company (“FCP”).  Each of Mr. Frank Fertitta, Mr. Lorenzo Fertitta, Mr. and Mrs. Sartini and FCP 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 the Frank Fertitta Schedule 13D, the Lorenzo Fertitta Schedule 13D or the Sartini Schedules 13D or any amendment thereto.  Capitalized terms used but not defined in this Schedule 13D shall have the meanings ascribed thereto in the Frank Fertitta Schedule 13D, the Lorenzo Fertitta Schedule 13D or the Sartini Schedules 13D.

ITEM 1. SECURITY AND ISSUER.

The class of equity securities to which this Schedule 13D relates is the Common Stock, par value $0.01 per share (the “Station Common Stock”), of Station Casinos, Inc., a Nevada corporation (“Station” or “Issuer”).  The principal executive offices of the Issuer are located at 2411 West Sahara Ave, Las Vegas, Nevada 89102.

ITEM 2. IDENTITY AND BACKGROUND.

(a)   (c)  This Schedule 13D is being filed jointly on behalf of Mr. Frank Fertitta, Mr. Lorenzo Fertitta, Mr. Sartini, Mrs. Sartini and FCP.  A Joint Filing Agreement among the Reporting Persons is attached hereto as Exhibit 7.01.  FCP is a limited liability company that was formed for the purpose of engaging in the transaction described in Item 4 below.   The Members of FCP are Frank J. Fertitta, III, Lorenzo J. Fertitta and FC Investor, LLC (“FC Investor”).

The business address of each of Mr. Frank Fertitta, Mr. Lorenzo Fertitta, and FCP 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. The business address of FC Investor, Colony Acquisitions, Colony Capital and each of the managing member and officers of Colony Capital is 1999 Avenues of the Stars, Suite 1200, Los Angeles, California 90067.

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.

Colony Capital Acquisitions, LLC, a Delaware limited liability company (“Colony Acquisitions”), is the sole member of FC Investor.  The managing member of Colony Acquisitions is Colony Capital, LLC, a Delaware limited liability company (“Colony Capital”).  The managing member and officers of Colony Capital are as follows:

Thomas J. Barrack, Jr. — Sole Managing Member and Chief Executive Officer
Richard B. Saltzman — President

 



Jonathan H. Grunzweig — Senior Vice President
Mark M. Hedstrom — Senior Vice President, Secretary and Treasurer
Joy Mallory — Assistant Secretary

FC Investor was formed for the purpose of engaging in the transaction described in Item 4 below.  The principal business of Colony Capital and Colony Acquisitions is to provide investment advice and management services to institutional and individual investors.

(d) and (e) During the last five years, none of the Reporting Persons, nor, to the best knowledge of FCP any of its members or controlling persons of its member, 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 and each of the managing member and officers of Colony Capital are all United States citizens.

This Item 2 shall be deemed to amend and restate Item 2 of each of Frank Fertitta Schedule 13D, the Lorenzo Fertitta Schedule 13D and the Sartini Schedules 13D in their entirety.

ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

The aggregate value of the transactions (the “Transactions”) contemplated by the Agreement and Plan of Merger, dated as of February 23, 2007, among FCP, FCP Acquisition Sub, a Nevada corporation and a wholly-owned subsidiary of FCP (“Merger Sub”), and the Issuer (the “Merger Agreement”), which are described in Item 4 below, is approximately $8.8 billion.

In a Sponsor Equity Commitment Letter, dated February 23, 2007 (the “Sponsor Equity Commitment Letter”), FC Investor agreed, subject to certain conditions, to contribute an aggregate of $2.6 billion in cash to FCP, solely for the purpose of funding the merger consideration pursuant to the Merger Agreement and to pay related expenses. This summary of the Sponsor Equity Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the Sponsor Equity Commitment Letter, which is attached hereto as Exhibit 7.10 and incorporated by reference in its entirety into this Item 3.

In addition, the Reporting Persons entered into separate Rollover Equity Commitment Letters, dated as of February 23, 2007 (the “Rollover Equity Commitment Letters”), pursuant to which Mr. Frank Fertitta, Mr. Lorenzo Fertitta and Mr. and Mrs. Sartini agreed, subject to certain conditions, to contribute up to approximately 4.0 million, 4.0 million and 1.7 million shares of Station Common Stock, respectively,  to FCP (the “Rollover Shares”). This summary of the Rollover Equity Commitment Letters does not purport to be complete and is qualified in its entirety by reference to the Rollover Equity Commitment Letters, which are attached hereto as Exhibits 7.11, 7.12 and 7.13 and incorporated by reference in their entirety into this Item 3.

In addition, FCP entered into Debt Commitment Letters with Deutsche Bank Trust Company Americas and Deutsche Bank Securities, Inc. (the “Revolver Debt Commitment Letter”) and JPMorgan Chase Bank, N.A. and German American Capital Corporation and Deutsche Bank AF, New York (the “CMBS Debt Commitment Letter”) (collectively, the “Lenders”), dated as of February 23, 2007 (the “Revolver Debt Commitment Letter” together with the “CMBS Debt Commitment Letter,” the “Debt Commitment Letters”), pursuant to which the Lenders committed to provide, subject to certain conditions, up to $3.2



billion in debt financing, through a combination of a senior secured revolving credit facilities and a first lien mortgage loan to FCP, which financing will be used to fund the merger consideration under the Merger Agreement, repay certain existing debt and pay certain expenses, and for general corporate purposes for the operation of the Issuer following the closing of the Transactions.  This summary of the Debt Commitment Letters does not purport to be complete and is qualified in its entirety by reference to the Debt Commitment Letters, which are attached hereto as Exhibit 7.14 and 7.15 and incorporated by reference in their entirety into this Item 3.

Pursuant to a limited guaranty dated as of February 23, 2007 (the “Limited Guarantee”), Colony Investor VII, L.P., a Delaware limited partnership, Colony Investor VIII, L.P., a Delaware limited partnership, and Colony Parallel Investors VIII, L.P., a Delaware limited partnership (collectively, the “Guarantors”), guaranteed to the Issuer, subject to certain conditions, FCP’s payment obligations under the Merger Agreement, subject to an aggregate cap of $175 million.  This summary of the Limited Guarantee does not purport to be complete and is qualified in its entirety by reference to the Limited Guarantee, which is attached hereto as Exhibit 7.16 and incorporated by reference in its entirety into this Item 3.

As previously disclosed, FCP’s financing commitments and the Transaction are structured such that the Issuer’s existing public debt would remain outstanding.  The Issuer’s existing revolving credit facility would be refinanced at closing.

The information set forth in this Item 3 shall be deemed to supplement Item 3 of each of the Frank Fertitta Schedule 13D, the Lorenzo Fertitta Schedule 13D and the Sartini Schedules 13D.

ITEM 4. PURPOSE OF TRANSACTION.

On February 26, 2007, the Issuer announced in a press release (the “Press Release”) that it had entered into the Merger Agreement, pursuant to which all of the outstanding shares of Station Common Stock (other than any shares of Station Common Stock owned by the FCP or Issuer, including Rollover Shares contributed to FCP or by Mr. Frank Fertitta, Mr. Lorenzo Fertitta and Mr. and Mrs. Sartini) would be converted into the right to receive $90.00 per share in cash. The Press Release is attached hereto as Exhibit 7.17 and is incorporated by reference in its entirety into this Item 4. The foregoing summary of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is attached hereto as Exhibit 7.09 and incorporated by reference in its entirety into this Item 4.

In connection with the Transactions, the Reporting Persons, FCP and the Issuer entered into a Voting Agreement dated as of February 23, 2007 (the “Voting Agreement”), pursuant to which the Reporting Persons agreed, subject to certain conditions, to vote their Station Common Stock in favor of the adoption of the Merger Agreement and against any competing takeover proposal that may be submitted by the Issuer for a vote of its stockholders. This summary of the Voting Agreement does not purport to be complete and is qualified in its entirety by reference to the Voting Agreement, which is attached hereto as Exhibit 7.18 and incorporated by reference in its entirety into this Item 4.

Mr. Frank Fertitta, Mr. Lorenzo Fertitta and FC Investor entered into the First Amended and Restated Operating Agreement of Fertitta Colony Partners LLC (the “Interim Operating Agreement”),  which will, among other things, govern their conduct in respect of the Transactions between the time of the signing of the Merger Agreement and the effective time of the merger contemplated thereby or the termination of the Merger Agreement, whichever is earlier, including matters such as determining whether any closing condition contained in the Merger Agreement has been satisfied or shall be waived by FCP. This summary of the Interim Operating Agreement does not purport to be complete and is qualified in its entirety by reference to the Interim Operating Agreement, which is attached hereto as Exhibit 7.19 and



incorporated by reference in its entirety into this Item 4.

The purpose of the Transactions is to acquire all of the outstanding Station Common Stock (other than Rollover Shares). If the Transactions are consummated, the Station Common Stock will be delisted from the New York Stock Exchange and will cease to be registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Issuer will be privately held by FCP.

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

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.

(a) and (b) The respective percentages set forth below are based on 57,260,989 shares of the Station Common Stock outstanding as of January 31, 2007.

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 10.0% of the outstanding Station Common Stock.

Mr. Sartini has direct beneficial ownership of 3,883,957 shares of Station Common Stock representing approximately 6.7% of the outstanding Station Common Stock.

Mrs. Sartini has direct beneficial ownership of 3,846,054 shares of Station Common Stock representing approximately 6.7% of the outstanding Station Common Stock.

By virtue of the Voting Agreement described in Item 4 above, FCP may be deemed to beneficially own an aggregate of 15,341,955 shares of Station Common Stock representing approximately 26.7% 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 Securities and Exchange Act of 1934, as amended (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 February 26, 2007, the Reporting Persons beneficially owned in the aggregate 15,341,955 shares of Station Common Stock, which represents approximately 26.7% of the outstanding Station Common Stock.

In addition, as a result of the transaction described in Item 4 above, the Reporting Persons and affiliates of FC Investor may be deemed to constitute a “group” within the meaning of Section 13(d)-5(b) of the Exchange Act.  The Reporting Persons disclaim beneficial ownership of any Station Common Stock that may be owned by FC Investor or its affiliates.

(c) Except as set forth herein, Mr. Frank Fertitta, Mr. Lorenzo Fertitta and FCP 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 2,390 January 60 call options were settled on January 24, 2007.



(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 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 in its entirety into this Item 6.

In addition to the arrangements described above in this Item 6, in February 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.  Mr. and Mrs. Sartini have sold 2,390 January 60 call options which are covered by 239,000 shares of Common Stock.  On December 5, 2006, Mr. and Mrs. Sartini became ineligible for the ROMS program and on such date terminated their relationship with ROMS.  On January 24, 2007, the 239,000 shares of Common Stock for the 2,390 January 60 call option were settled.

The information set forth in this Item 6 shall be deemed to supplement Item 6 of each of the Frank Fertitta Schedule 13D, the Lorenzo Fertitta Schedule 13D and the Sartini Schedules 13D.

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.

Exhibit 7.01

Joint Fining Agreement by and among Mr. Frank Fertitta, Mr. Lorenzo J. Fertitta, Mr. and Mrs. Sartini and FCP, dated as of February 23, 2007.

Exhibit 7.09.

Agreement and Plan of Merger by and among Issuer, FCP and Merger Sub, dated as of February 23, 2007.

Exhibit 7.10.

Equity Commitment Letter, dated February 23, 2007, from FC Investor to FCP.

Exhibit 7.11

Rollover Commitment Letter, dated February 23, 2007, from Mr. Lorenzo Fertitta to FCP.

Exhibit 7.12

Rollover Commitment Letter, dated February 23, 2007, from Mr. Frank Fertitta to FCP.

Exhibit 7.13

Rollover Commitment Letter, dated February 23, 2007, from Mr. and Mrs. Sartini to FCP.

Exhibit 7.14

Revolver Debt Commitment Letter, dated February 23, 2007, from Deutsche Bank Trust Company Americas and Deutsche Bank Securities, Inc. to FCP.

Exhibit 7.15

CMBS Debt Commitment Letter, dated February 23, 2007, from JPMorgan Chase Bank, N.A., German American Capital Corporation and Deutsche Bank AG, New York to FCP.

Exhibit 7.16

Limited Guaranty Agreement, dated February 23, 2007, from Guarantors to Issuer.

 



 

Exhibit 7.17

Press Release

Exhibit 7.18

Voting Agreement, dated February 23, 2007, by and among FCP, Mr. Frank Fertitta, Mr. Lorenzo Fertitta and Mr. and Mrs. Sartini.

Exhibit 7.19

First Amended and Restated Operating Agreement, dated February 23, 2007, by and among Mr. Frank Fertitta, Mr. Lorenzo Fertitta and FC Investor.

 



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.

Date:  February 26, 2007

By:

/s/ Frank J. Fertitta, III

 

 

Name: Frank J. Fertitta, III

 



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.

Date:  February 26, 2007

By:

/s/ Lorenzo J. Fertitta

 

 

Name: Lorenzo J. Fertitta

 



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.

Date:  February 26, 2007

By:

/s/ Blake L. Sartini

 

 

Name: Blake L. Sartini

 



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.

Date:  February 26, 2007

By:

/s/ Delise F. Sartini

 

 

Name: Delise F. Sartini

 



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.

Date:  February 26, 2007

FERTITTA COLONY PARTNER LLC

 

 

 

 

By:

/s/ Frank J. Fertitta, III

 

 

Name: Frank J. Fertitta, III

 

 

Title: Authorized Member

 


 EX-7.01 2 a07-6707_1ex7d01.htm EX-7.01

Exhibit 7.01

JOINT FILING AGREEMENT

This Agreement is made this 23rd day of February, 2007, by and among each of the undersigned.

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

NOW, THEREFORE, the undersigned agree to file only one amendment to 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 further 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.

By:

/s/ Frank J. Fertitta, III

 

 

Name: Frank J. Fertitta, III

 

 

 

 

 

 

 

By:

/s/ Lorenzo J. Fertitta

 

 

Name: Lorenzo J. Fertitta

 

 

 

 

 

 

 

By:

/s/_Blake L. Sartini

 

 

Name: Blake L. Sartini

 

 

 

 

 

 

 

By:

/s/ Delise F. Sartini

 

 

Name: Delise F. Sartini

 

 

 

 

 

 

 

FERTITTA COLONY PARTNERS LLC

 

 

 

 

By:

/s/ Frank J. Fertitta, III

 

 

Name: Frank J. Fertitta, III

 

 

Title:  Authorized Member

 


 EX-7.09 3 a07-6707_1ex7d09.htm EX-7.09

Exhibit 7.09

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

STATION CASINOS, INC.,

FERTITTA COLONY PARTNERS LLC

AND

FCP ACQUISITION SUB

February 23, 2007

 



 

TABLE OF CONTENTS

ARTICLE I DEFINITIONS

2

 

Section 1.1.

Definitions

 

2

 

Section 1.2.

Terms Generally

 

10

 

 

 

 

 

ARTICLE II THE MERGER

10

 

 

Section 2.1.

The Merger

 

10

 

Section 2.2.

Conversion of Securities

 

11

 

Section 2.3.

Payment of Cash for Merger Shares and Company Options

 

12

 

Section 2.4.

Treatment of Company Options

 

14

 

 

 

 

 

ARTICLE III THE SURVIVING CORPORATION

15

 

 

Section 3.1.

Articles of Incorporation

 

15

 

Section 3.2.

Bylaws

 

15

 

Section 3.3.

Directors and Officers

 

15

 

 

 

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY

15

 

 

Section 4.1.

Corporate Existence and Power

 

15

 

Section 4.2.

Corporate Authorization

 

16

 

Section 4.3.

Governmental Authorization

 

16

 

Section 4.4.

Non-Contravention

 

17

 

Section 4.5.

Capitalization

 

17

 

Section 4.6.

Reports and Financial Statements

 

18

 

Section 4.7.

Undisclosed Liabilities

 

19

 

Section 4.8.

Disclosure Documents

 

19

 

Section 4.9.

Absence of Certain Changes or Events

 

20

 

Section 4.10.

Finders’ Fees

 

20

 

Section 4.11.

Opinion of Financial Advisor

 

20

 

Section 4.12.

Anti-Takeover Provisions

 

20

 

Section 4.13.

Compliance With Laws

 

20

 

 

 

 

 

ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

21

 

 

Section 5.1.

Corporate Existence and Power

 

21

 

Section 5.2.

Corporate Authorization

 

21

 

Section 5.3.

Governmental Authorization

 

21

 

Section 5.4.

Non-Contravention

 

22

 

Section 5.5.

Disclosure Documents

 

22

 

Section 5.6.

Finders’ Fees

 

22

 

Section 5.7.

Financing

 

22

 

Section 5.8.

Equity Rollover Commitments; Management Agreements

 

23

 

Section 5.9.

Parent and Merger Sub

 

23

 

Section 5.10.

Ownership of Shares

 

23


 

 

Section 5.11.

Interest in Competitors

 

24

 

Section 5.12.

No Other Representations and Warranties

 

24

 

Section 5.13.

Guarantee

 

24

 

Section 5.14.

Solvency

 

24

 

Section 5.15.

Disclosure

 

24

 

 

 

 

 

ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER

25

 

 

Section 6.1.

Conduct of the Company and Subsidiaries

 

25

 

Section 6.2.

Conduct of Parent and Merger Sub

 

28

 

Section 6.3.

No Control of Other Party’s Business

 

28

 

 

 

 

 

ARTICLE VII ADDITIONAL AGREEMENTS

28

 

 

Section 7.1.

Stockholder Meeting; Proxy Material

 

28

 

Section 7.2.

Reasonable Best Efforts

 

29

 

Section 7.3.

Access to Information

 

32

 

Section 7.4.

Solicitation

 

32

 

Section 7.5.

Director and Officer Liability

 

36

 

Section 7.6.

Takeover Statutes

 

37

 

Section 7.7.

Public Announcements

 

37

 

Section 7.8.

Employee Matters

 

37

 

Section 7.9.

Financing

 

38

 

Section 7.10.

Debt Tender Offers

 

41

 

Section 7.11.

Notices of Certain Events

 

42

 

Section 7.12.

Confidentiality Agreements

 

43

 

Section 7.13.

Vesting of Company Equity Awards

 

43

 

Section 7.14.

Rule 16b-3

 

43

 

 

 

 

 

ARTICLE VIII CONDITIONS TO THE MERGER

44

 

 

Section 8.1.

Conditions to the Obligations of Each Party

 

44

 

Section 8.2.

Conditions to the Obligations of Parent and Merger Sub

 

44

 

Section 8.3.

Conditions to the Obligations of the Company

 

45

 

 

 

 

 

ARTICLE IX TERMINATION

45

 

 

Section 9.1.

Termination

 

45

 

Section 9.2.

Termination Fee

 

47

 

Section 9.3.

Effect of Termination

 

49

 

 

 

 

 

ARTICLE X MISCELLANEOUS

49

 

 

Section 10.1.

Notices

 

49

 

Section 10.2.

Survival of Representations and Warranties

 

50

 

Section 10.3.

Expenses

 

51

 

Section 10.4.

Amendment

 

51

 

Section 10.5.

Waiver

 

51

 

Section 10.6.

Successors and Assigns

 

51

 

Section 10.7.

Governing Law

 

51

 

Section 10.8.

Counterparts; Effectiveness; Third Party Beneficiaries

 

51

 

Section 10.9.

Severability

 

52

ii



 

 

Section 10.10.

Entire Agreement

52

 

 

Section 10.11.

Jurisdiction

52

 

 

Section 10.12.

Authorship

53

 

 

Section 10.13.

Remedies

53

 

 

iii



 

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into as of this 23rd day of February, 2007 by and among Station Casinos, Inc., a Nevada corporation (the “Company”), Fertitta Colony Partners LLC, a Nevada limited liability company (“Parent”), and FCP Acquisition Sub, a Nevada corporation and a wholly-owned subsidiary of Parent (“Merger Sub”).

RECITALS

A.            The parties intend that Merger Sub be merged with and into the Company (the “Merger”), with the Company surviving the Merger as a direct or indirect wholly-owned subsidiary of Parent (the “Surviving Corporation”).  The Surviving Corporation shall retain the name of the Company.

B.            The Board of Directors of the Company, acting upon the unanimous recommendation of the Special Committee, has (i) determined that the Merger and this Agreement are fair to and in the best interests of the Company and its stockholders, (ii) approved this Agreement and (iii) resolved to recommend that stockholders of the Company approve this Agreement.

C.            The respective Boards of Directors of Parent and Merger Sub have unanimously approved this Agreement.

D.            In the Merger, subject to the terms of Article II hereof, each share of common stock, $.01 par value per share, of the Company, including any Rights associated therewith (the “Shares”), other than those shares held by Parent, will be converted into the right to receive $90.00 per share in cash.

E.             Certain existing stockholders of the Company desire to contribute Shares to Parent immediately prior to the Effective Time in exchange for equity interests in Parent.

F.             Concurrently with the execution of this Agreement, as a condition and inducement to the Company’s and Parent’s willingness to enter into this Agreement, the Company, Parent and the Contributing Stockholders are entering into a voting agreement, of even date herewith (the “Voting Agreement”), pursuant to which each of the Contributing Stockholders has agreed, subject to the terms thereof, to vote their respective Shares in favor of adoption of this Agreement.

G.            The Company, Parent and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe certain conditions to the Merger, as set forth herein.



 

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, intending to be legally bound, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1.            Definitions.  For purposes of this Agreement, the following terms have the respective meanings set forth below:

“6% Notes” has the meaning set forth in Section 7.10.

“6% Notes Indenture” has the meaning set forth in Section 7.10.

“6 ½% Notes” has the meaning set forth in Section 7.10.

“6 ½% Notes Indenture” has the meaning set forth in Section 7.10.

“6 ⅝% Notes” has the meaning set forth in Section 7.10.

“6 ⅝% Notes Indenture” has the meaning set forth in Section 7.10.

“6 ⅞% Notes” has the meaning set forth in Section 7.10.

“6 ⅞% Notes Indenture” has the meaning set forth in Section 7.10.

“7 ¾% Notes” has the meaning set forth in Section 7.10.

“7 ¾% Notes Indenture” has the meaning set forth in Section 7.10.

“Affiliate” means, with respect to any Person, any other Person, directly or indirectly, controlling, controlled by, or under common control with, such Person.  For purposes of this definition, the term “control” (including the correlative terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.  For purposes of this Agreement, Parent and Merger Sub shall be deemed not to be Affiliates of the Company.

“Agreement” has the meaning set forth in the Preamble.

“Articles of Merger” has the meaning set forth in Section 2.1(b).

“Book-Entry Share” has the meaning set forth in Section 2.2(c).

“Business Day” means any day other than the days on which banks in Las Vegas, Nevada or New York, New York are required or authorized to close.

2



“Certificate” has the meaning set forth in Section 2.2(c).

“Closing” has the meaning set forth in Section 2.1(d).

“Closing Date” has the meaning set forth in Section 2.1(d).

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in the Preamble.

“Company Acquisition Proposal” has the meaning set forth in Section 7.4(g)(i).

“Company Benefit Plan” means each Employee Benefit Plan (other than any multiemployer plan within the meaning of ERISA Section 3(37)) and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and other material employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA, under which any Company Employee has any present or future right to benefits, maintained or contributed to by the Company or any of its Subsidiaries or under which the Company or any of its Subsidiaries has any present or future liability.

“Company Disclosure Letter” has the meaning set forth in the preamble to Article IV.

“Company Employees” means any current, former or retired employee, officer, consultant, independent contractor or director of the Company or any of its Subsidiaries.

“Company Equity Awards” means Company Options and Company Restricted Shares.

“Company Joint Venture” means, with respect to the Company, any corporation or other entity (including partnerships, limited liability companies and other business associations and joint ventures) in which the Company, directly or indirectly, owns an equity interest that does not have voting power under ordinary circumstances to elect a majority of the board of directors or other person performing similar functions but in which the Company has rights with respect to the management of such Person.

 “Company Options” means outstanding options to acquire Shares from the Company granted to Company Employees under the Company Stock Plans or otherwise.

“Company Proxy Statement” means the proxy statement, together with any amendments or supplements thereto and any other related proxy materials, relating to the approval of this Agreement by the Company’s stockholders prepared in accordance with applicable Law and including the information required to be included in the Schedule 13E-3.

“Company Restricted Shares” has the meaning set forth in Section 2.2(e).

“Company SEC Reports” has the meaning set forth in Section 4.6(a).

“Company Securities” has the meaning set forth in Section 4.5(b).

3



 

“Company Stockholder Meeting” has the meaning set forth in Section 7.1(a).

“Company Stock Plans” means the 2005 Stock Compensation Plan, the Incentive Stock Option Plan, the Compensatory Stock Option Plan, the Restricted Share Plan, the Non-employee Director Stock Option Plan, the 1999 Compensatory Stock Option Plan, and the 1999 Share Plan.

“Compensation” has the meaning set forth in Section 7.8(a).

“Confidentiality Agreements” means, collectively, the Confidentiality Agreement, dated October 12, 2006, between the Company and Colony Capital Acquisitions, LLC, and the Confidentiality Agreement, dated as of December 1, 2006, between the Company and Fertitta Colony Partners LLC.

“Contract” has the meaning set forth in Section 4.4.

“Contributing Stockholders” means, individually or collectively, Frank J. Fertitta III, Lorenzo J. Fertitta, Blake L. Sartini and Delise F. Sartini and their respective Affiliates which contribute Shares to Parent pursuant to the Equity Rollover Commitments.

“Current Employee” has the meaning set forth in Section 7.8(a).

“Current Policies” has the meaning set forth in Section 7.5(a).

“Damages” has the meaning set forth in Section 7.5(a).

“Debt Financing” has the meaning set forth in Section 5.7.

“Debt Financing Commitments” has the meaning set forth in Section 5.7.

“Debt Tender Offers” has the meaning set forth in Section 7.10.

“Disbursing Agent” has the meaning set forth in Section 2.3(a).

“Disinterested Director” means a member of the Board of Directors of the Company who is independent within the meaning of Section 303A.02 of the New York Stock Exchange Listing Standards and who, accordingly, does not have a direct or indirect material relationship with the Company.

“DOJ” has the meaning set forth in Section 7.2(b).

“Effective Time” has the meaning set forth in Section 2.1(b).

“Employee Benefit Plan” has the meaning set forth in Section 3(3) of ERISA.

“Employment Agreement” means any employment, severance, retention, termination, indemnification, change in control or similar agreement between the Company or any of its Subsidiaries, on the one hand, and any current or former employee of the Company or any of its Subsidiaries, on the other hand.

4



 

“End Date” has the meaning set forth in Section 9.1(b)(i).

“Equity Financing” has the meaning set forth in Section 5.7.

“Equity Financing Commitment” has the meaning set forth in Section 5.7.

“Equity Rollover Commitments” has the meaning set forth in Section 5.8.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Excluded Party” has the meaning set forth in Section 7.4(b).

“Expected Date” has the meaning set forth in Section 7.9(a).

“Fertittas” means Frank J. Fertitta III and Lorenzo J. Fertitta.

“Financing” has the meaning set forth in Section 5.7.

“Financing Commitments” has the meaning set forth in Section 5.7.

 “FTC” has the meaning set forth in Section 7.2(b).

“Gaming Approvals” has the meaning set forth in Section 7.2(e).

“Gaming Authority” means any Governmental Authority with regulatory control or jurisdiction over casino or other gaming activities and operations, including, without limitation, the Nevada Gaming Commission, the Nevada State Gaming Control Board and the National Indian Gaming Commission.

“Gaming Law” means, with respect to any Person, any Law governing or relating to any current or contemplated casino or other gaming activities and operations of such Person and its Subsidiaries, including, without limitation, the rules and regulations established by any Gaming Authority.

“GAAP” means United States generally accepted accounting principles.

“Governmental Authority” means any nation or government or any agency, public or regulatory authority, instrumentality, department, commission, court, arbitrator, ministry, tribunal or board of any nation or government or political subdivision thereof, in each case, whether foreign or domestic and whether national, supranational, federal, tribal, provincial, state, regional, local or municipal.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Indentures” has the meaning set forth in Section 7.10.

5



 

“Interim  LLC Agreement” has the meaning set forth in Section 6.2.

“Law” means applicable statutes, common laws, rules, ordinances, regulations, codes, licensing requirements, orders, judgments, injunctions, writs, decrees, licenses, governmental guidelines or interpretations having the force of law, permits, rules and bylaws, in each case, of a Governmental Authority.

“Lease” means the lease of certain real property assets by PropCo to the Company, as set forth in the form of Master Lease Agreement, to be dated as of the Closing Date (the “Lease Agreement”), by and between the Company and PropCo.

“Lease Agreement” has the meaning set forth in the definition of “Lease”.

“Liens” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset.

“Limited Guarantee” has the meaning set forth in Section 5.13.

“Majority-Minority Vote” has the meaning set forth in Section 4.2(a).

“Marketing Period” has the meaning set forth in Section 7.9(a).

“Material Adverse Effect on the Company” means a material adverse effect on the assets or liabilities, business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole; provided, however, that in no event shall any of the following, alone or in combination, be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been, a Material Adverse Effect on the Company:  (A) any fact, change, development, circumstance, event, effect or occurrence (an “Effect”) in general economic or political conditions, whether locally, nationally or internationally, or in the financial or securities markets, or any outbreak or escalation of hostilities or declared or undeclared acts of terrorism; (B) any Effect generally affecting, or resulting from general changes or developments in, the travel, hospitality or gaming industries; (C) any failure to meet internal or published projections, forecasts or revenue or earnings predictions for any period (provided that the underlying causes of such failures shall not be excluded); (D) any change in the price or trading volume of the Shares in and of itself (provided that the underlying causes of such changes shall not be excluded); (E) any Effect that is demonstrated to have resulted from the announcement of the proposal of the Merger or this Agreement and the transactions contemplated hereby, or the identity of Parent or any of its Affiliates as the acquiror of the Company; (F) any Effect arising from any action taken by the Company to comply with its obligations under this Agreement; or (G) any changes in Law or GAAP (or the interpretation thereof), except, in the case of clauses (A) and (B), to the extent such Effects referred to therein have had a materially disproportionate impact on the assets or liabilities, business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole, relative to other participants in the travel, hospitality or gaming industries.

“Merger” has the meaning set forth in the Recitals.

“Merger Consideration” has the meaning set forth in Section 2.2(c).

6



 

“Merger Shares” has the meaning set forth in Section 2.2(c).

“Merger Sub” has the meaning set forth in the Preamble.

“Merger Sub Shares” means the shares of common stock of Merger Sub, par value $0.001 per share.

“New Financing Commitments” has the meaning set forth in Section 7.9(c).

“NewCo” means FCP NewCo, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company.

“Notes” has the meaning set forth in Section 7.10.

“No-Shop Period Start Date” has the meaning set forth in Section 7.4(a).

“NRS” has the meaning set forth in Section 2.1(a).

“Operating Subsidiaries” has the meaning set forth in the definition of “Sale”.

“Parent” has the meaning set forth in the Preamble.

“Parent Disclosure Letter” has the meaning set forth in the preamble to Article V.

“Parent Expenses” has the meaning set forth in Section 9.2(e).

“Parent Plan” has the meaning set forth in Section 7.8(b).

“Permits” means any licenses, franchises, permits, certificates, consents, approvals or other similar authorizations of, from or by a Governmental Authority (including any Gaming Authority) possessed by or granted to or necessary for the ownership of the material assets or conduct of the business of the Company or its Subsidiaries.

“Permitted Liens” means (i) Liens for Taxes, assessments and governmental charges or levies not yet due and payable or that are being contested in good faith and by appropriate proceedings; (ii) mechanics’, carriers’, workmen’s, repairmen’s, materialmen’s or other Liens or security interests that secure a liquidated amount that are being contested in good faith and by appropriate proceedings or with respect to which there remains an opportunity to contest; or (iii) leases, subleases and licenses (other than capital leases and leases underlying sale and leaseback transactions); (iv) Liens imposed by applicable Law; (v) pledges or deposits to secure obligations under workers’ compensation Laws or similar legislation or to secure public or statutory obligations; (vi) pledges and deposits to secure the performance of bids, trade contracts, leases, surety and appeal bonds, performance bonds and other obligations of a similar nature, in each case in the ordinary course of business; (vii) easements, covenants and rights of way (unrecorded and of record) and other similar restrictions of record, and zoning, building and other similar restrictions, in each case that do not adversely affect in any material respect the current use of the applicable property owned, leased, used or held for use by the Company or any of its Subsidiaries; (viii) Liens the existence of which are specifically disclosed in the notes to

7



the consolidated financial statements of the Company included in any Company SEC Report filed prior to the date of this Agreement; and (ix) any other Liens that do not secure a liquidated amount, that have been incurred or suffered in the ordinary course of business and that would not, individually or in the aggregate, have a material adverse effect on the Company or the ability of Parent to obtain the Debt Financing.

“Person” means any individual, corporation, company, limited liability company, partnership, association, trust, joint venture or any other entity or organization, including any government or political subdivision or any agency or instrumentality thereof.

“PropCo” means FCP PropCo, LLC, a Delaware limited liability company and a wholly owned-subsidiary of the Company.

“Purchase Agreement” has the meaning set forth in the definition of “Sale”.

“Recommendation” has the meaning set forth in Section 7.1(a).

“Recommendation Withdrawal” has the meaning set forth in Section 7.4(d).

“Regulatory Termination Fee” means $106,000,000.

“Replacement Policies” has the meaning set forth in Section 7.5(a).

“Representatives” has the meaning set forth in Section 7.4(a).

“Required Financial Information” has the meaning set forth in Section 7.9(a).

“Requisite Stockholder Vote” has the meaning set forth in Section 4.2(a).

“Restraint” has the meaning set forth in Section 8.1(c).

“Rights” has the meaning set forth in the Rights Agreement.

“Rights Agreement” has the meaning set forth in Section 4.12.

“Reverse Termination Fee” means $160,000,000.

“Sale” means the sale of certain real property assets by Boulder Station, Inc., Fiesta Station Holdings, LLC, Lake Mead Station Holdings, LLC, Palace Station Hotel & Casino, Inc., Santa Fe Station, Inc., and Sunset Station, Inc. (collectively, the “Operating Subsidiaries”) to NewCo, as set forth in the Purchase and Sale Agreement, dated as of even date herewith (the “Purchase Agreement”), by and among the Operating Subsidiaries and NewCo.

“Sale and Lease-Back Agreements” means, collectively, (i) the Purchase Agreement, (ii) the Lease Agreement, and (iii) the form of Sublease Agreements, to be dated as of the Closing Date, by and among the Company and each of the Operating Subsidiaries.

“Schedule 13E-3” means a Rule 13e-3 Transaction Statement on Schedule 13E-3, together with any amendments or supplements thereto, relating to the Merger.

8



 

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Share” has the meaning set forth in the Recitals.

“Special Committee” means a committee of the Company’s Board of Directors, the members of which are not affiliated with Parent or Merger Sub and are not members of the Company’s management, formed for the reasons set forth in the resolution establishing such committee.

“Subsidiary” means, with respect to any Person, any other Person of which the first Person owns, directly or indirectly, securities or other ownership interests having voting power to elect a majority of the board of directors or other persons performing similar functions (or, if there are no such voting interests, 50% or more of the equity interests of the second Person).

“Superior Proposal” has the meaning set forth in Section 7.4(g)(ii).

“Superior Proposal Effective Time” has the meaning set forth in Section 7.13.

“Surviving Corporation” has the meaning set forth in the Recitals.

“Takeover Statute” has the meaning set forth in Section 4.12.

“Tax” means (i) all U.S. Federal, state, local, foreign and other taxes (including withholding taxes), fees and other governmental charges of any kind or nature whatsoever, together with any interest, penalties or additions imposed with respect thereto, (ii) any liability for payment of amounts described in clause (i) whether as a result of transferee liability or joint and several liability for being a member of an affiliated, consolidated, combined or unitary group for any period, and (iii) any liability for the payment of amounts described in clause (i) or (ii) as a result of any tax sharing, tax indemnity or tax allocation agreement or any other express or implied agreement to pay or indemnify any other Person for the payment of Taxes.

“Tax Return” means any return, declaration, report, statement, information statement or other document filed or required to be filed with respect to Taxes, including any amendments or supplements to any of the foregoing.

“Termination Fee” means $160,000,000, except in the event that any third party has made a bona fide Company Acquisition Proposal before the No-Shop Period Start Date, which Company Acquisition Proposal then constituted a Superior Proposal, and this Agreement is terminated by the Company pursuant to Section 9.1(c)(ii) in order to enter into a definitive agreement with respect to such Company Acquisition Proposal with such third party, the Termination Fee shall mean $106,000,000.

“Voting Agreement” has the meaning set forth in the Recitals.

9



Section 1.2.            Terms Generally.  The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, unless the context expressly provides otherwise.  All references herein to Sections, paragraphs, subparagraphs, clauses, Exhibits or Schedules shall be deemed references to Sections, paragraphs, subparagraphs or clauses of, or Exhibits or Schedules to this Agreement, unless the context requires otherwise.  Unless otherwise expressly defined, terms defined in this Agreement have the same meanings when used in any Exhibit or Schedule hereto, including the Company Disclosure Letter.  Unless otherwise specified, the words “herein”, “hereof”, “hereto” and “hereunder” and other words of similar import refer to this Agreement as a whole (including the Schedules and Exhibits) and not to any particular provision of this Agreement.  The term “or” is not exclusive.  The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”.  Any Contract, instrument or Law defined or referred to herein or in any Contract or instrument that is referred to herein means such Contract, instrument or Law as from time to time amended, modified or supplemented, including (in the case of Contracts or instruments) by waiver or consent and (in the case of Laws) by succession of comparable successor Laws and references to all attachments thereto and instruments incorporated therein.  References to a Person are also to its permitted successors and assigns.

ARTICLE II

THE MERGER

Section 2.1.            The Merger.

(a)           At the Effective Time, in accordance with the Nevada Revised Statutes (the “NRS”), and upon the terms and subject to the conditions set forth in this Agreement, Merger Sub shall be merged with and into the Company, at which time the separate existence of Merger Sub shall cease and the Company shall survive the Merger as a direct or indirect wholly-owned subsidiary of Parent.

(b)           Subject to the provisions of this Agreement, with respect to the Merger, as soon as practicable after 10:00 a.m., Las Vegas time, on the Closing Date, Merger Sub shall file the Articles of Merger (the “Articles of Merger”) executed in accordance with, and containing such information as is required by, the relevant provisions of the NRS with the Secretary of State of the State of Nevada.  The Merger shall become effective at such time as the Articles of Merger are duly filed with the Secretary of State of the State of Nevada or at such other date and time as is agreed between the parties and specified in the Articles of Merger in accordance with the relevant provisions of the NRS (such date and time is hereinafter referred to as the “Effective Time”).

(c)           The Merger shall generally have the effects set forth in Section 92A.250, and any other applicable provisions, of the NRS and this Agreement.  Without limiting the generality of the foregoing, and subject thereto, from and after the Effective Time, all property, rights, privileges, immunities, powers, franchises, licenses and authority of the Company and

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Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions and duties of each of the Company and Merger Sub shall become the debts, liabilities, obligations, restrictions and duties of the Surviving Corporation.

(d)           The closing of the Merger (the “Closing”) shall take place (i) at the offices of Milbank, Tweed, Hadley & McCloy LLP, located in Los Angeles, California, or (ii) at such other place and time or on such other date as the Company and Parent may agree in writing (the actual date of the Closing, the “Closing Date”), as soon as reasonably practicable but in any event, no later than the later to occur of (i) the second Business Day after the day on which the last condition to the Merger set forth in Article VIII is satisfied or validly waived (other than those conditions that by their nature cannot be satisfied until the Closing Date, but subject to the satisfaction or valid waiver of such conditions), or (ii) the date of completion of the Marketing Period (or, if Parent so notifies the Company, a date during the Marketing Period not less than three Business Days following such notice to the Company).

Section 2.2.            Conversion of Securities.  At the Effective Time, pursuant to this Agreement and by virtue of the Merger and without any action on the part of the Company, Parent, Merger Sub or the holders of the Shares:

(a)           Each Share held by the Company as treasury stock or otherwise owned by Parent, Merger Sub or any wholly-owned Subsidiary of the Company immediately prior to the Effective Time (including Shares acquired by Parent immediately prior to the Effective Time), if any, shall be canceled and retired and shall cease to exist, and no payment or distribution shall be made or delivered with respect thereto.

(b)           Each Merger Sub Share issued and outstanding immediately prior to the Effective Time shall be converted into and become one newly issued, fully paid and non-assessable share of common stock of the Surviving Corporation.

(c)           Each Share (including any Company Restricted Shares) issued and outstanding immediately prior to the Effective Time (other than Shares to be canceled pursuant to Section 2.2(a)) automatically shall be canceled and converted into the right to receive $90.00 in cash, without interest (the “Merger Consideration”), payable to the holder thereof upon surrender of the certificate (a “Certificate”) or the book-entry share (a “Book-Entry Share”) formerly representing such Share in the manner provided in Section 2.3.  Such Shares (including any Company Restricted Shares), other than those canceled pursuant to Section 2.2(a), sometimes are referred to herein as the “Merger Shares.”

(d)           If between the date of this Agreement and the Effective Time the number of outstanding Shares is changed into a different number of shares or a different class, by reason of any stock dividend, subdivision, reclassification, recapitalization, split-up, combination, exchange of shares or the like, other than pursuant to the Merger, the amount of Merger Consideration payable per Share and any other dependent items shall be appropriately adjusted to provide the holders of the Shares the same economic effect as contemplated by this Agreement prior to such action and as so adjusted shall, from and after the date of such event, be the Merger Consideration or other dependent items, subject to further adjustment in accordance with this Section 2.2(d).

 

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(e)           Each Share (other than those canceled pursuant to Section 2.2(a)) outstanding immediately prior to the Effective Time, granted subject to vesting or other lapse restrictions pursuant to the Company Stock Plans or any applicable restricted stock award agreements (collectively, the “Company Restricted Shares”) shall, by virtue of this Agreement and in accordance with Section 2.4(b), vest and become free of such restrictions immediately prior to the Effective Time and shall be canceled, retired and shall cease to exist and shall be converted into the right to receive the Merger Consideration in accordance with Section 2.2(c).

(f)            The Company Options outstanding immediately prior to the Effective Time shall be treated as provided in Section 2.4.

(g)           For the avoidance of doubt, the parties acknowledge and agree that the contribution or sale of Shares (including Company Restricted Shares, if any) to Parent by the Contributing Stockholders shall be deemed to occur immediately prior to the Effective Time and prior to any other above-described event and shall not be converted into the right to receive the Merger Consideration.

Section 2.3.            Payment of Cash for Merger Shares and Company Options.

(a)           Prior to the Closing Date, Parent shall designate a bank or trust company that is reasonably satisfactory to the Company to serve as the disbursing agent for the Merger Consideration and payments, if applicable, in respect of the Company Options, unless another agent is designated as provided in Section 2.4(a) (the “Disbursing Agent”).  Prior to or substantially simultaneously with the filing of the Articles of Merger with the Secretary of State of the State of Nevada, Parent will deposit, or will cause to be deposited, with the Disbursing Agent cash in the aggregate amount sufficient to pay the Merger Consideration in respect of all Merger Shares outstanding immediately prior to the Effective Time plus any cash necessary to pay for Company Options outstanding immediately prior to the Effective Time pursuant to Section 2.4 and pay any declared and unpaid dividends in respect of the Shares.  Pending distribution of the cash deposited with the Disbursing Agent, such cash shall be held in trust for the benefit of the holders of Merger Shares and Company Options outstanding immediately prior to the Effective Time and shall not be used for any other purposes; provided, however, that Parent may direct the Disbursing Agent to invest such cash in (i) obligations of or guaranteed by the United States of America or any agency or instrumentality thereof, (ii) money market accounts, certificates of deposit, bank repurchase agreement or banker’s acceptances of, or demand deposits with, commercial banks having a combined capital and surplus of at least $500,000,000, or (iii) commercial paper obligations rated P-1 or A-1 or better by Standard & Poor’s Corporation or Moody’s Investor Services, Inc.  Any profit or loss resulting from, or interest and other income produced by, such investments shall be for the account of Parent.

(b)           As promptly as practicable after the Effective Time, the Surviving Corporation shall send, or cause the Disbursing Agent to send, to each record holder of Merger Shares as of immediately prior to the Effective Time a letter of transmittal and instructions for exchanging their Merger Shares for the Merger Consideration payable therefor.  The letter of transmittal will be in customary form and will specify that delivery of Certificates or Book-Entry Shares will be effected, and risk of loss and title will pass, only upon delivery of the Certificates or Book-Entry Shares to the Disbursing Agent.  Upon surrender of such Certificate(s) or Book-

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Entry Share(s) to the Disbursing Agent together with a properly completed and duly executed letter of transmittal and any other documentation that the Disbursing Agent may reasonably require, the record holder thereof shall be entitled to receive the Merger Consideration payable in exchange therefor, without interest.  Until so surrendered and exchanged, each such Certificate or Book-Entry Share shall, after the Effective Time, be deemed to represent only the right to receive the Merger Consideration and any declared and unpaid dividend in respect of such Certificate or Book-Entry Share, and until such surrender and exchange, no cash shall be paid to the holder of such outstanding Certificate or Book-Entry Share in respect thereof.

(c)           If payment is to be made to a Person other than the registered holder of the Merger Shares formerly represented by the Certificate(s) or Book-Entry Share(s) surrendered in exchange therefor, it shall be a condition to such payment that the Certificate(s) or Book-Entry Share(s) so surrendered shall be properly endorsed or otherwise be in proper form for transfer and that the Person requesting such payment shall pay to the Disbursing Agent any applicable stock transfer taxes required as a result of such payment to a Person other than the registered holder of such Merger Shares or establish to the satisfaction of the Disbursing Agent that such stock transfer taxes have been paid or are not payable.

(d)           After the Effective Time, there shall be no further transfers on the stock transfer books of the Company of the Shares that were outstanding immediately prior to the Effective Time.  If, after the Effective Time, Certificates or Book-Entry Shares are presented to the Surviving Corporation, Parent or the Disbursing Agent, such shares shall be canceled and exchanged for the consideration provided for, and in accordance with the procedures set forth, in this Article II.

(e)           If any cash deposited with the Disbursing Agent remains unclaimed twelve months after the Effective Time, such cash shall be returned to Parent or the Surviving Corporation upon demand, and any holder who has not surrendered such holder’s Certificate(s) or Book-Entry Share(s) for the Merger Consideration payable in respect thereof prior to that time shall thereafter look only to the Surviving Corporation for payment of the Merger Consideration.  Notwithstanding the foregoing, none of Parent, Merger Sub, the Company, the Surviving Corporation, the Disbursing Agent or any of their respective directors, officers, employees and agents shall be liable to any holder of Certificates or Book-Entry Shares for an amount paid to a public official pursuant to any applicable unclaimed property laws.  Any amounts remaining unclaimed by holders of Certificates or Book-Entry Shares as of two years after the Effective Time (or immediately prior to such earlier date on which such amounts would otherwise escheat to or become property of any Governmental Authority) shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation on such date, free and clear of any claims or interest of any Person previously entitled thereto.

(f)            No dividends or other distributions with respect to capital stock of the Surviving Corporation with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate or Book-Entry Share.

(g)           Except as provided in Section 2.2(a), from and after the Effective Time, the holders of Shares outstanding immediately prior to the Effective Time shall cease to have any

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rights with respect to such Shares, other than the right to receive the Merger Consideration as provided in this Agreement.

(h)           In the event that any Certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed, in addition to the posting by such holder of any bond in such reasonable amount as the Surviving Corporation or the Disbursing Agent may direct as indemnity against any claim that may be made against the Surviving Corporation or the Disbursing Agent with respect to such Certificate, the Disbursing Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration in respect thereof entitled to be received pursuant to this Agreement.

(i)            Notwithstanding the provisions of Section 2.2(c) or 2.2(e), Parent, Surviving Corporation and the Disbursing Agent shall be entitled to deduct and withhold from the Merger Consideration otherwise payable hereunder any amounts required to be deducted and withheld under any applicable Tax Law.  To the extent any amounts are so withheld, such withheld amounts shall be treated for all purposes as having been paid to the holder from whose Merger Consideration the amounts were so deducted and withheld.

Section 2.4.            Treatment of Company Options.

(a)           As of the Effective Time, each Company Option that is outstanding immediately prior to the Effective Time will be canceled and extinguished, and the holder thereof will be entitled to receive an amount in cash equal to the product of (i) the number of Shares subject to such Company Option and (ii) the excess, if any, of the Merger Consideration over the exercise price per share of such Company Option, without interest.  All payments with respect to canceled Company Options shall be made by the Disbursing Agent (or such other agent reasonably acceptable to the Company as Parent shall designate prior to the Effective Time) as promptly as reasonably practicable after the Effective Time from funds deposited by or at the direction of Parent for the purpose of paying such amounts in accordance with Section 2.3(a).

(b)           Prior to the Effective Time, the Company and Parent will adopt such resolutions and take such other commercially reasonable actions as are reasonably necessary in order to effectuate the actions contemplated by Section 2.2(e) and this Section 2.4, without paying any consideration or incurring any debts or obligations on behalf of the Company or the Surviving Corporation, provided that such resolutions and actions shall expressly be conditioned upon the consummation of the Merger and the other transactions contemplated hereby and shall be of no effect if this Agreement is terminated.

(c)           Notwithstanding the provisions of Section 2.4(a), Parent, the Surviving Corporation and the Disbursing Agent (or such other agent designated pursuant to Section 2.4(a) hereof), shall be entitled to deduct and withhold from any amounts to be paid hereunder in respect of Company Options amounts required to be deducted and withheld under any applicable Tax Law.  To the extent any amounts are so withheld, such withheld amounts shall be treated for all purposes as having been paid to the holder of Company Options from whose payments in respect of Company Options the amounts were so deducted and withheld.

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ARTICLE III

THE SURVIVING CORPORATION

Section 3.1.            Articles of Incorporation.  The Amended and Restated Articles of Incorporation of the Company, as amended to read in its entirety as the articles of incorporation of Merger Sub as in effect immediately prior to the Effective Time, shall be the articles of incorporation of the Surviving Corporation until thereafter amended in accordance with the terms thereof or as provided by applicable Law; provided, however, that Article I thereof shall read as follows:  “The name of the Corporation is Station Casinos, Inc.”

Section 3.2.            Bylaws.  The bylaws of the Company, as amended to read in its entirety as the bylaws of Merger Sub as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation until thereafter amended in accordance with the terms thereof, in the articles of incorporation of the Surviving Corporation or as provided by applicable Law.

Section 3.3.            Directors and Officers.  From and after the Effective Time, (i) the directors of Surviving Corporation at the Effective Time shall be the Fertittas and Thomas Barrack (and such other directors as may be designated by Parent) and (ii) the officers of the Company at the Effective Time (other than those who Parent determines shall not remain as officers of the Surviving Corporation) shall be the officers of the Surviving Corporation, in each case until their respective successors are duly elected or appointed and qualified in accordance with applicable Law or any contractual commitments with respect to the foregoing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except (x) as set forth in the corresponding sections or subsections of the disclosure letter delivered to Parent and Merger Sub by the Company concurrently with the execution and delivery of this Agreement (the “Company Disclosure Letter”) (provided that the listing of an item in one section of the Company Disclosure Letter shall be deemed to be a listing in each section of the Company Disclosure Letter to which such item relates only to the extent that it is reasonably apparent from a reading of such disclosure that it also qualifies or applies to such other section), (y) as may be disclosed in the Company SEC Reports filed prior to the date of this Agreement or (z) as otherwise known to any of the Fertittas on or prior to the date of this Agreement, the Company hereby represents and warrants to Parent and Merger Sub that:

Section 4.1.            Corporate Existence and Power.  Each of the Company and its Subsidiaries is duly organized, validly existing and in good standing under the laws of its jurisdiction, except, in the case of its Subsidiaries, where the failure to be so organized, existing and in good standing has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.  Each of the Company, its Subsidiaries and, to the knowledge of the Company, the Company Joint Ventures has all corporate or similar powers and authority required to own, lease and operate its respective properties and to carry on its business as now conducted, except, in the case of its Subsidiaries,

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where the failure to have such power and authority has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.  Each of the Company and its Subsidiaries is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such qualification necessary, except where the failure to be so licensed or qualified has not had, and would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the Company.  Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any Company Joint Venture, is in violation of its organizational or governing documents in any material respect.

Section 4.2.            Corporate Authorization.

(a)           The Company has full corporate power and authority to execute and deliver this Agreement and, subject to receipt of the Requisite Stockholder Vote, to consummate the Merger and to perform each of its obligations hereunder.  The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Merger and the transactions contemplated by the Sale and Lease-Back Agreements have been duly and validly authorized by the Board of Directors of the Company.  Except for the approval of this Agreement by (i) 66 2/3% of the outstanding Shares entitled to vote thereon, and (ii) a majority of the outstanding Shares (excluding the Shares held by Parent, Merger Sub, the Contributing Stockholders or any of their respective Affiliates) present, in person or by proxy, and voting at the Company Stockholder Meeting (the “Majority-Minority Vote” and, together with the approval described in clause (i), the “Requisite Stockholder Vote”), no other corporate proceedings on the part of the Company are necessary to approve this Agreement.  The Board of Directors of the Company, acting upon the unanimous recommendation of the Special Committee, at a duly held meeting has (i) determined that the Merger and this Agreement are fair to and in the best interests of the Company and its stockholders (other than the Contributing Stockholders), (ii) approved the Merger and the execution, delivery and performance of this Agreement, and (iii) resolved to recommend that the Company stockholders (other than the Contributing Stockholders) approve this Agreement and directed that such matter be submitted for the consideration of the stockholders of the Company at the Company Stockholder Meeting.

(b)           This Agreement has been duly and validly executed and delivered by the Company and, assuming the due and valid authorization, execution and delivery of this Agreement by Parent and Merger Sub, constitutes a legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the enforcement of creditors’ rights generally and general equitable principles.

Section 4.3.            Governmental Authorization.  The execution, delivery and performance by the Company of this Agreement and the consummation of the Merger by the Company do not require any consent, approval, authorization or permit of, action by, filing with or notification to any Governmental Authority, other than (i) those required by the Secretary of State of the State of Nevada as contemplated hereby; (ii) compliance with the applicable requirements of the HSR Act; (iii) filings with, and approvals by, Gaming Authorities; (iv) compliance with the applicable requirements of the Exchange Act including the filing of the Schedule 13E-3; (v) compliance with the rules and regulations of the New York Stock Exchange;

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(vi) compliance with any applicable foreign or state securities or Blue Sky laws; and (vii) any such consent, approval, authorization, permit, action, filing or notification the failure of which to make or obtain would not (A) be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the Company or (B) prevent or materially delay the consummation of the Merger or the Company’s ability to observe and perform its material obligations hereunder.

Section 4.4.            Non-Contravention.  The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Merger and the other transactions contemplated hereby do not and will not (i) contravene or conflict with the organizational or governing documents of (A) the Company or (B) any of its Subsidiaries or Company Joint Ventures; (ii) assuming compliance with the matters referenced in Section 4.3 and the receipt of the Requisite Stockholder Vote, contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to the Company or any of its Subsidiaries or Company Joint Ventures or any of their respective properties or assets; (iii) except as set forth in Section 4.4 of the Company Disclosure Letter, require the consent, approval or authorization of, or notice to or filing with any third party with respect to, result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would become a default) or result in the loss of benefit under, or give rise to any right of termination, cancellation, amendment or acceleration of any right or obligation of the Company or any of its Subsidiaries, or result in the creation of any Lien on any of the properties or assets of the Company or its Subsidiaries under any loan or credit agreement, note, bond, mortgage, indenture, contract, agreement, lease, license, permit or other instrument or obligation (each, a “Contract”) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or its or any of their respective properties or assets are bound, except in the case of clauses (i)(B), (ii) and (iii) above, which would not (A) be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the Company or (B) prevent or materially delay the consummation of the Merger or the Company’s ability to observe and perform its material obligations hereunder.

Section 4.5.            Capitalization.

(a)           As of December 31, 2006, the authorized capital stock of the Company consists of:

(i)            135,000,000 Shares, of which 57,261,676 shares were issued and outstanding (including 3,027,354 outstanding Company Restricted Shares);

(ii)           5,000,000 shares of preferred stock, par value $.01 per share, none of which were issued and outstanding; and

(iii)          outstanding Company Options to purchase an aggregate of 2,187,107 Shares, with a weighted average exercise price of $12.07 per share.

All outstanding Shares are duly authorized, validly issued, fully paid and non-assessable, and are not subject to and were not issued in violation of any preemptive or similar right, purchase option, call or right of first refusal or similar right.  As of December 31, 2006, 23,245,751 Shares were held in the treasury of the Company.

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(b)           Except as set forth in Section 4.5(a) and except for 1,108,632 Shares reserved for issuance pursuant to the Company Stock Plans and except for the Rights, as of the date of this Agreement, there have not been reserved for issuance, and there are no outstanding (i) shares of capital stock or other voting securities of the Company; (ii) securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or voting securities of the Company; (iii) Company Options or other rights or options to acquire from the Company, or obligations of the Company to issue, any shares of capital stock, voting securities or securities convertible into or exchangeable for shares of capital stock or voting securities of the Company; or (iv) equity equivalent interests in the ownership or earnings of the Company or other similar rights in respect of the Company (the securities described in clauses (i) through (iv) are collectively referred to herein as the “Company Securities”).  There are no outstanding obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any Company Securities.  There are no preemptive rights of any kind which obligate the Company or any of its Subsidiaries to issue or deliver any Company Securities.  There are no stockholder agreements, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party or by which it is bound relating to the voting or registration of any shares of capital stock of the Company or preemptive rights with respect thereto.

(c)           From September 30, 2006 to the date of this Agreement, (i) other than the issuance of Shares upon the exercise of Company Options, the Company has not declared or paid any dividend or distribution in respect of any Company Securities, other than (x) the dividend of $0.2875 per Share paid on December 4, 2006 to stockholders of record on November 13, 2006 and (y) the dividend of $0.2875 per Share payable on March 12, 2007 to stockholders of record on February 26, 2007, and (ii) other than, as of January 31, 2007,  the redemption of 8,659 Shares by the Company in lieu of employee tax obligations upon the vesting of certain Company Restricted Shares, neither the Company nor any Subsidiary of the Company has issued, sold or repurchased any Company Securities, and their respective Boards of Directors have not authorized any of the foregoing.

(d)           No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which Company stockholders may vote are outstanding.

Section 4.6.            Reports and Financial Statements.

(a)           The Company has filed all forms, reports, statements, certifications and other documents (including all exhibits, amendments and supplements thereto) required to be filed by it with the SEC since January 1, 2005 (all such forms, reports, statements, certificates and other documents filed with or furnished to the SEC since January 1, 2005, with any amendments thereto, collectively, the “Company SEC Reports”), each of which, including any financial statements or schedules included therein, as finally amended prior to the date hereof, has complied as to form in all material respects with the applicable requirements of the Securities Act and Exchange Act as of the date filed with the SEC.  None of the Company’s Subsidiaries is required to file periodic reports with the SEC.  None of the Company SEC Reports contained, when filed with the SEC and, if amended, as of the date of such amendment, any untrue statement of a material fact or omitted to state a material fact required to be stated or incorporated by reference therein or necessary in order to make the statements therein, in the

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light of the circumstances under which they were made, not misleading.  As of the date of this Agreement, (i) there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to the Company SEC Reports, and (ii) to the knowledge of the Company, none of the Company SEC Reports is the subject of ongoing SEC review, outstanding SEC comment or outstanding SEC investigation.

(b)           Each of the consolidated financial statements of the Company and its Subsidiaries included (or incorporated by reference) in the Company SEC Reports (including the related notes and schedules, where applicable) fairly present in all material respects (subject, in the case of the unaudited statements, to normal year-end auditing adjustments, none of which are expected to be material in nature or amount) the results of the consolidated operations and changes in stockholders’ equity and consolidated financial position of the Company and its Subsidiaries for the respective fiscal periods or as of the respective dates therein set forth.  Each of such consolidated financial statements (including the related notes and schedules, where applicable) complied, as of the date of filing, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC applicable thereto and each of such financial statements (including the related notes and schedules, where applicable) were prepared in accordance with GAAP (except, in the case of unaudited statements, as permitted by the rules and regulations of the SEC) consistently applied during the periods involved, except in each case as indicated in such statements or in the notes thereto.

Section 4.7.            Undisclosed Liabilities.  Except (i) for those liabilities that are fully reflected or reserved against on the consolidated balance sheets (as restated, or the related notes thereto) of the Company included in the Company SEC Reports, (ii) for liabilities incurred in the ordinary course of business consistent with past practice since the date of such balance sheets, (iii) for liabilities that have been discharged or paid in full prior to the date hereof in the ordinary course of business consistent with past practice and (iv) for transactions contemplated by this Agreement, neither the Company nor any of its Subsidiaries has incurred any liability of any nature whatsoever (whether absolute, accrued or contingent or otherwise and whether due or to become due) that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.

Section 4.8.            Disclosure Documents.  The Schedule 13E-3 and the Company Proxy Statement will not, at the date it is filed with the SEC (in the case of the Schedule 13E-3), at the date it is first mailed to stockholders of the Company (in the case of the Company Proxy Statement), at the time of any amendments thereof or supplements thereof, and at the time of the Company Stockholder Meeting (other than as to information supplied by Parent, Merger Sub or any of their respective Affiliates, for inclusion therein), contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.  The Company will cause the Company Proxy Statement and the Schedule 13E-3 to comply as to form in all material respects with the requirements of the Exchange Act applicable thereto and any other applicable Law as of the date of such filing.  No representation is made by the Company with respect to statements made in the Company Proxy Statement or the Schedule 13E-3 based on information supplied by Parent, Merger Sub or their respective Affiliates specifically for inclusion therein.

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Section 4.9.            Absence of Certain Changes or Events.  Since December 31, 2005, no change, circumstance, event or effect has occurred which has had or would be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the Company.  Except as disclosed in Section 4.9 of the Company Disclosure Letter, between December 31, 2005 and the date hereof the Company and its Subsidiaries have conducted their respective businesses in all material respects only in the ordinary course consistent with past practice.

Section 4.10.          Finders’ Fees.  No agent, broker, investment banker, financial advisor or other firm or person retained by the Company, except Bear, Stearns & Co. Inc. (“Bear Stearns”), is or will be entitled to any broker’s or finder’s fee or any other similar commission or fee payable by the Company or any Subsidiary of the Company in connection with any of the transactions contemplated by this Agreement.  Prior to the date hereof, the Company furnished Parent with a true and complete copy of the engagement letter entered into between Company and Bear Stearns.

Section 4.11.          Opinion of Financial Advisor.  Bear Stearns has delivered to the Special Committee an opinion to the effect that, as of the date of this Agreement, the Merger Consideration to be received by the stockholders of the Company (other than the Contributing Stockholders) is fair, from a financial point of view, to such stockholders.

Section 4.12.          Anti-Takeover Provisions.  No “fair price,” “merger moratorium,” “control share acquisition,” or other anti-takeover or similar statute or regulation (each, a “Takeover Statute”) applies or purports to apply to this Agreement, the Merger or the other transactions contemplated hereby, except for those which have been made not applicable to this Agreement, the Merger and the other transactions contemplated hereby by valid action of the Board of Directors of the Company prior to the execution and delivery hereof.  Prior to the execution and delivery hereof, the Board of Directors of the Company took all action necessary to ensure that Parent, Merger Sub and their respective Affiliates and Associates, as defined in the rights agreement (the “Rights Agreement”), dated as of October 6, 1997, entered into by and between the Company and Continental Stock Transfer & Trust Company, are excepted from the definition of Acquiring Person in the Rights Agreement only to the extent each is a Beneficial Owner (as defined in the Rights Agreement) as a result of the approval, execution and delivery of this Agreement or consummation of the transactions contemplated hereby.

Section 4.13.          Compliance With Laws.

(a)           Except as set forth in Section 4.13 of the Company Disclosure Letter, the Company and each of its Subsidiaries is in compliance with all Laws (including Gaming Laws) applicable to the Company, its Subsidiaries and their respective businesses and activities, except for such noncompliance that has not had, and would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the Company.

(b)           The Company and each Subsidiary of the Company has and maintains in full force and effect, and is in compliance with, all Permits and all orders from Governmental Authorities necessary for the Company and each Subsidiary to carry on their respective businesses as currently conducted and currently proposed to be conducted, except as has not had,

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and would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the Company.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

Except as set forth in the corresponding sections or subsections of the disclosure letter delivered to the Company by Parent and Merger Sub concurrently with the execution and delivery of this Agreement (the “Parent Disclosure Letter”) (provided that the listing of an item in one section of the Parent Disclosure Letter shall be deemed to be a listing in each section of the Parent Disclosure Letter to which such item relates only to the extent that it is reasonably apparent from a reading of such disclosure that it also qualifies or applies to such other section), Parent and Merger Sub jointly and severally hereby represent and warrant to the Company that:

Section 5.1.            Corporate Existence and Power.  Each of Parent, a limited liability company, and Merger Sub, a corporation, is duly organized, validly existing and in good standing under the laws of Nevada. Parent has all limited liability company power and authority, and Merger Sub has all corporate power and authority, required to execute and deliver this Agreement and to consummate the Merger and the other transactions contemplated hereby and to perform each of its obligations hereunder.

Section 5.2.            Corporate Authorization.  The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the Merger and the other transactions contemplated hereby have been duly and validly authorized by the Board of Directors of Parent and Merger Sub.  No other corporate proceedings other than those previously taken or conducted on the part of Parent or Merger Sub are necessary to approve this Agreement or to consummate the other transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by Parent and Merger Sub and, assuming the due and valid execution and delivery of the Agreement by the Company, constitutes a legal, valid and binding agreement of Parent and Merger Sub, respectively, enforceable against Parent and Merger Sub in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the enforcement of creditors’ rights generally and general equitable principles.

Section 5.3.            Governmental Authorization.  The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the Merger and other transactions contemplated by this Agreement do not require any consent, approval, authorization or permit of, action by, filing with or notification to any Governmental Authority, other than (i) the filing of the Articles of Merger; (ii) compliance with the applicable requirements of the HSR Act; (iii) filings with, and approvals by, Gaming Authorities specified in Section 5.3(iii) of the Parent Disclosure Letter, (iv) compliance with the applicable requirements of the Exchange Act including the filing of the Schedule 13E-3; (v) compliance with any applicable state securities or Blue Sky laws; and (vi) any such consent, approval, authorization, permit, action, filing or notification the failure of which to make or obtain would not be reasonably likely to adversely effect in any material respect, or prevent or

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materially delay, the consummation of the Merger or Parent’s or Merger Sub’s ability to observe and perform its material obligations hereunder.

Section 5.4.            Non-Contravention.  The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the Merger and the other transactions contemplated hereby do not and will not (i) contravene or conflict with the organizational or governing documents of Parent or Merger Sub, (ii) assuming compliance with the items specified in Section 5.3, contravene, conflict with or constitute a violation of any provision of any Law binding upon or applicable to Parent or Merger Sub or any of their respective properties or assets, or (iii) require the consent, approval or authorization of, or notice to or filing with any third party with respect to, result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would become a default), or give rise to any right of termination, cancellation, amendment or acceleration of any right or obligation of Parent or Merger Sub or to a loss of any material benefit to which Parent or Merger Sub is entitled under any Contract.

Section 5.5.            Disclosure Documents.  None of the information supplied or to be supplied by Parent or Merger Sub or any of their respective Affiliates specifically for inclusion in the Company Proxy Statement or Schedule 13E-3 will, at the date it is filed with the SEC (in the case of the Schedule 13E-3), at the date it is first mailed to stockholders of the Company (in the case of the Company Proxy Statement), at the time of any amendments thereof or supplements thereof and at the time of the Company Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

Section 5.6.            Finders’ Fees.  No agent, broker, investment banker, financial advisor or other firm or person except Deutsche Bank Securities Inc. is or will be entitled to any broker’s or finder’s fee or any other similar commission or fee payable by Parent or Merger Sub in connection with any of the transactions contemplated by this Agreement.

Section 5.7.            Financing.  Parent has delivered to the Company true and complete copies of (i) the commitment letter with respect to the senior credit facilities, dated as of the date hereof, among Parent and Deutsche Bank Securities Inc., Deutsche Bank Trust Company Americas and JPMorgan Chase Bank and (ii) the commitment letter with respect to the first lien mortgage loan, dated as of the date hereof, among Parent and German American Capital Corporation, Deutsche Bank AG, New York Branch and JPMorgan Chase Bank (collectively, the “Debt Financing Commitments”), pursuant to which the lenders party thereto committed, subject to the terms thereof, to lend the amounts set forth therein (the “Debt Financing”), and (iii) the equity commitment letter, dated as of the date hereof, from FC Investor, LLC (the “Equity Financing Commitment” and, together with the Debt Financing Commitments, the “Financing Commitments”), pursuant to which such parties have committed, subject to the terms thereof, to invest the cash amounts set forth therein (the “Equity Financing” and, together with the Debt Financing, the “Financing”).  The Financing Commitments are in full force and effect and are legal, valid and binding obligations of Parent and, to the knowledge of Parent, the other parties thereto.  None of the Financing Commitments has been or will be amended or modified, except as consistent with Section 7.9(c), and the respective commitments contained in the

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Financing Commitments have not been withdrawn or rescinded in any respect as of the date hereof.  As of the date of this Agreement, no event has occurred which, with or without notice, lapse of time or both, would constitute a default or breach on the part of Parent or Merger Sub under any Financing Commitment and subject to the accuracy of the representations and warranties of the Company set forth in Article IV and the satisfaction of the conditions set forth in Sections 8.1 and 8.2 hereof, neither Parent nor Merger Sub has any reason to believe that it will be unable to satisfy on a timely basis any term or condition of closing to be satisfied by it in any of the Financing Commitments on or prior to the Closing Date.  The funds contemplated to be provided by the Financing Commitments would be sufficient to enable Parent to make or cause to be made payments of the Merger Consideration as provided herein (including for the Company Options as provided herein), all other necessary payments by it, Merger Sub or the Surviving Corporation in connection with the Merger (including the repayment of outstanding indebtedness of the Surviving Corporation) and all of the related fees and expenses.  There are no conditions precedent or other contingencies to the funding of the Financing other than as set forth in the Financing Commitments.  There are no side letters or other agreements, contracts or arrangements (except for customary fee letters and engagement letters) related to the funding or investing, as applicable, of the full amount of the Debt Financing other than as expressly set forth in or contemplated by the Debt Financing Commitments.  As of the date hereof, Parent or Merger Sub has fully paid, or caused to be fully paid, any and all commitment fees which are due and payable with respect to the Debt Financing Commitments.

Section 5.8.            Equity Rollover Commitments; Management Agreements.  Parent has delivered to the Company true and complete copies of (i) the equity rollover letters, dated as of the date hereof, from the Contributing Stockholders (the “Equity Rollover Commitments”), pursuant to which such parties have committed to contribute to Parent that number of Shares set forth in such letters for shares of capital stock of Parent immediately prior to the Effective Time, and (ii) the Voting Agreement.  As of the date hereof, other than the Equity Rollover Commitments, the Voting Agreement and the Interim LLC Agreement, there are no Contracts between Parent or Merger Sub or any of their Affiliates, on the one hand, and any member of the Company’s management or the Board of Directors of the Company, on the other hand.  On the Closing Date, it is anticipated that the Interim LLC Agreement will be amended and restated and that Parent will enter into employment agreements with each of the Fertittas.

Section 5.9.            Parent and Merger Sub.  Each of Parent and Merger Sub has been formed solely for the purpose of engaging in the transactions contemplated hereby and prior to the Effective Time will have engaged in no other material business activities and will have incurred no liabilities or obligations other than as contemplated herein or in connection with the transactions contemplated hereby, including in connection with arranging the Financing.  As of the date hereof, there were 100 shares of common stock of Merger Sub issued and outstanding, representing the only shares of capital stock of Merger Sub outstanding and entitled to vote on the Merger.

Section 5.10.          Ownership of Shares.  Except as disclosed on Schedule 5.10 of the Parent Disclosure Letter, none of Parent, Merger Sub or their respective Affiliates owns (directly or indirectly, beneficially or of record) any Shares, and none of Parent, Merger Sub or their respective Affiliates has any rights to acquire any Shares except pursuant to this Agreement or the Equity Rollover Commitments.

 

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Section 5.11.          Interest in Competitors.  Except as disclosed on Schedule 5.11 of the Parent Disclosure Letter, none of Parent, Merger Sub or the Contributing Stockholders owns any interest(s), nor do any of their respective Affiliates insofar as such Affiliate-owned interests would be attributed to Parent or Merger Sub under the HSR Act or the Gaming Laws, in any entity or Person doing business in the United States that derives a substantial portion of its revenues from a line of business within the Company’s principal line of business.

Section 5.12.          No Other Representations and Warranties.  Parent and Merger Sub acknowledge that the Company makes no representations or warranties as to any matter whatsoever except as expressly set forth in this Agreement and specifically (but without limiting the generality of the foregoing) that the Company makes no representations or warranties with respect to (i) any projections, estimates or budgets delivered to or made available to Parent or Merger Sub (or any of their respective Affiliates or Representatives) of future revenues, results of operations (or any component thereof), cash flows or financial condition (or any component thereof) of the Company and its Subsidiaries or (ii) the future business and operations of the Company and its Subsidiaries.

Section 5.13.          Guarantee.  Concurrently with the execution of this Agreement, Parent has delivered to the Company the guarantee of Colony Investor VII, L.P., a Delaware limited partnership, Colony Investor VIII, L.P., a Delaware limited partnership, and Colony Parallel Investors VIII, L.P., a Delaware limited partnership, with respect to certain matters as specified therein (the “Limited Guarantee”).

Section 5.14.          Solvency.  Immediately following the Effective Time and after giving effect to the Merger, the Surviving Corporation and each of its Subsidiaries will not (i) be insolvent (either because its financial condition is such that the sum of its debts, including contingence and unliquidated debts, is greater than its assets, at a fair valuation, or because the present fair saleable value of its assets is less than the amount required to pay its probable liability on its existing debts, including contingent and unliquidated debts, as they become absolute and matured); (ii) have unreasonably small capital with which to engage in its business; or (iii) have intended to incur, or believed or reasonably should have believed that it would incur, debts beyond its ability to pay them as they become due.

Section 5.15.          Disclosure.

(a)           No material plans for the business or operations of the Company or any of its Subsidiaries (including any properties for which the Company or any such Subsidiaries owns an option, right of first refusal or other similar right to purchase) have been delivered or made available by or on behalf of the Company or its Subsidiaries or the Fertittas to Parent and Merger Sub which are not reflected in the plans or records of the Company or any such Subsidiaries and which have not been provided to the Board of Directors or the Special Committee.

(b)           Parent and Merger Sub have delivered, or caused to be delivered, to the Special Committee or its Representatives the most current projections, estimates or forecasts received or prepared by, or for the benefit of, Parent and Merger Sub, any of their Affiliates or their respective Representatives (including any projections, estimates or forecasts provided to

 

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the Financing sources of Parent) relating to the Company (it being understood that Parent and Merger Sub need not deliver any information relating to Parent’s or Merger Sub’s pricing of, or expected return on, the Company’s securities or assets).

ARTICLE VI

CONDUCT OF BUSINESS PENDING THE MERGER

Section 6.1.            Conduct of the Company and Subsidiaries.  Except for matters (x) set forth in Section 6.1 of the Company Disclosure Letter or as otherwise contemplated by or specifically provided in this Agreement, or (y) consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from the date hereof until the Effective Time, the Company shall, and shall cause its Subsidiaries to, conduct their respective businesses in the ordinary and usual course consistent with past practice and use all commercially reasonable efforts to maintain and preserve intact its business organization, including the services of its key employees on terms and conditions substantially comparable to those currently in effect and the goodwill of any Governmental Authority, customers, lenders, distributors, suppliers and other Persons with which it has material business relationships.  Without limiting the generality of the foregoing, and except as required by Law or except for matters set forth in Section 6.1 of the Company Disclosure Letter or as otherwise contemplated by or specifically provided in this Agreement, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit its Subsidiaries to:

(a)           propose or adopt any change in its organizational or governing documents;

(b)           merge or consolidate the Company or any of its Subsidiaries with any Person, other than the Merger and other than any mergers or consolidations among the Company and its Subsidiaries or among the Company’s Subsidiaries;

(c)           sell, lease or otherwise dispose of a material amount of assets or securities, including by merger, consolidation, asset sale or other business combination (including formation of a Joint Venture), other than the transactions contemplated by the Sale and Lease-Back Agreements;

(d)           redeem, repurchase, prepay, defease, cancel, incur or otherwise acquire, or modify in any material respect the terms of, indebtedness for borrowed money or assume, guarantee or endorse or otherwise become responsible for, whether directly, contingently or otherwise, the obligations of any Person, other than the incurrence, assumption or guarantee of indebtedness in the ordinary course consistent with past practice, including any borrowings under the existing credit facilities of the Company and its Subsidiaries to fund working capital needs, and such other actions taken in the ordinary course of business consistent with past practice;

(e)           offer, place or arrange any issue of debt securities or commercial bank or other credit facilities that could be reasonably expected to compete with or impede the Debt

 

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Financing or cause the breach of any provisions of the Debt Financing Commitments or cause any condition set forth in the Debt Financing Commitments not to be satisfied;

(f)            make any material loans, advances or capital contributions to, acquisitions or licenses of, or investments in, any other Person, except as required by existing Contracts;

(g)           authorize any capital expenditures in excess of $25,000,000 per project or in excess of $30,000,000 per related series of projects, other than expenditures necessary to maintain existing assets in good repair and expenditures contemplated by the Company’s 2007 budget and approved development plans, as delivered to Parent prior to the date hereof, or the Company’s 2008 budget and development plans approved by the Board of Directors;

(h)           pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its Subsidiaries;

(i)            mortgage or pledge any of its material assets, tangible or intangible, or create, assume or suffer to exist any material Lien thereupon (other than Permitted Liens);

(j)            enter into or amend any Contract with any executive officer, director or other Affiliate of the Company or any of its Subsidiaries or any Person beneficially owning 5% or more of the Shares;

(k)           (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a wholly owned Subsidiary of the Company to its parent corporation, (B) the dividend of $0.2875 per share payable on March 12, 2007 to stockholders of record on February 26, 2007 or (C) commencing with the quarter ending June 30, 2007, regular quarterly cash dividends in respect of the Shares not to exceed $0.2875 per share (provided that, with respect to the quarter ending September 30, 2007, the record date and payment date shall not be earlier than September 21 and October 2, respectively, and, with respect to the quarter ending December 31, 2007, the record date and payment date shall not be earlier than December 21 and January 2, respectively, and with respect to the quarter ending March 31, 2008, the record date and payment date shall not be earlier than March 21 and April 2, respectively), (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) the exercise of Company Options, (B) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (C) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, and (E) the issuance of Company Securities as required to comply with any Company Benefit Plan or Employment Agreement as in effect on the date of this Agreement;

(l)            except (i) as required pursuant to existing written agreements or any Company Benefit Plan, Employment Agreement or collective bargaining agreement in effect on the date hereof, (ii) as effected in the ordinary course of business or (iii) as required by

 

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applicable Law (including Section 409A of the Code), (A) adopt, amend or terminate any Company Benefit Plan or enter into or amend any collective bargaining agreement or any Employment Agreement with any officer or director of the Company, other than entry into Employment Agreements with persons who are not executive officers or directors or (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan;

(m)          other than in the ordinary course of business consistent with past practice, settle or compromise any litigation, or release, dismiss or otherwise dispose of any claim or arbitration, other than settlements or compromises of litigation, claims or arbitration that do not exceed $25,000,000 in the aggregate and do not involve any material injunctive or other non-monetary relief or impose material restrictions on the business or operations of the Company;

(n)           other than in the ordinary course of business and except as are not, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole, or their respective businesses, make or change any material Tax election, or settle or compromise any material Tax liability of the Company or any of its Subsidiaries, agree to an extension of the statute of limitations with respect to the assessment or determination of Taxes of the Company or any of its Subsidiaries, file any amended Tax Return with respect to any material Tax, enter into any closing agreement with respect to any Tax or surrender any right to claim a Tax refund;

(o)           make any change in financial accounting methods or method of Tax accounting, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company and its Subsidiaries, except insofar as may have been required by a change in GAAP or Law;

(p)           adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger and consolidations, mergers or reorganizations among the Company and its Subsidiaries or among the Company’s Subsidiaries), or a letter of intent or agreement in principle with respect thereto;

(q)           take any action that is intended to or would result in any of the conditions to effecting the Merger set forth in Sections 8.1 and 8.2 becoming incapable of being satisfied;

(r)            take any action or fail to take any action which would, or would be reasonably likely to, individually or in the aggregate, prevent, materially delay or materially impede the ability of the Company to consummate the Merger or the other transactions contemplated by this Agreement; or

(s)           authorize, agree or commit to do any of the foregoing.

Notwithstanding the foregoing, in no event shall any action taken by, with the written consent of, or at the written direction of, any of the Fertittas (and not also at the direction or with the concurrence of the Board of Directors of the Company (acting with the concurrence of the Special Committee) or the Special Committee) constitute a violation by the Company of this Section 6.1.

 

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Section 6.2.            Conduct of Parent and Merger Sub.

Each of Parent and Merger Sub agrees that, from the date hereof to the Effective Time, it shall not (i) take any action (including by way of amendment to the First Amended and Restated Operating Agreement, dated as of the date hereof, among Parent and the investors named therein (the “Interim LLC Agreement”)) that is intended to or would reasonably be likely to result in any of the conditions to effecting the Merger set forth in Sections 8.1 and 8.3 becoming incapable of being satisfied; or (ii) take any action or fail to take any action which would, or would reasonably be likely to, individually or in the aggregate, prevent, materially delay or materially impede the ability of Parent and Merger Sub to consummate the Merger or the other transactions contemplated by this Agreement.

Section 6.3.            No Control of Other Party’s Business.  Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations.  Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries respective operations.

ARTICLE VII

ADDITIONAL AGREEMENTS

Section 7.1.            Stockholder Meeting; Proxy Material.

(a)           The Company shall (i) take all action necessary to duly call, give notice of, convene and hold a meeting of its stockholders (the “Company Stockholder Meeting”) for the purpose of obtaining the approval of this Agreement by the Company stockholders in accordance with applicable Law as promptly as reasonably practicable after the SEC confirms that it has no further comments on the Company Proxy Statement and the Schedule 13E-3, (ii) subject to Section 7.4, use commercially reasonable efforts to solicit the approval of this Agreement by the Company stockholders, and (iii) except to the extent that the Board of Directors of the Company (acting through the Special Committee, if such committee still exists) shall have withdrawn or modified its approval or recommendation of this Agreement as permitted by Section 7.4, include in the Company Proxy Statement the recommendation of the Board of Directors of the Company that the stockholders of the Company approve this Agreement (the “Recommendation”).  Notwithstanding the foregoing, the Company shall not be obligated to convene the Company Stockholders Meeting in the event that the Board of Directors shall have effected a Recommendation Withdrawal.

(b)           In connection with the Company Stockholder Meeting, the Company will (i) as promptly as reasonably practicable prepare the Company Proxy Statement and the Schedule 13E-3 and file, jointly with Parent and Merger Sub, the Schedule 13E-3 with the SEC as promptly as reasonably practicable, (ii) respond as promptly as reasonably practicable to any comments received from the SEC with respect to such filing and will provide copies of such comments to Parent and Merger Sub promptly upon receipt and copies of proposed responses to

 

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Parent and Merger Sub a reasonable time prior to filing to allow meaningful comment, (iii) as promptly as reasonably practicable prepare and file (after Parent and Merger Sub have had a reasonable opportunity to review and comment on) any amendments or supplements necessary to be filed in response to any SEC comments or as required by Law, (iv) use commercially reasonable efforts to mail to the Company stockholders as promptly as reasonably practicable the Company Proxy Statement and all other customary proxy or other materials for meetings such as the Company Stockholder Meeting (provided that the Company shall be under no obligation to mail the Company Proxy Statement to its stockholders prior to the No-Shop Period Start Date), (v) to the extent required by applicable Law, as promptly as reasonably practicable prepare, file and distribute to the Company stockholders any supplement or amendment to the Company Proxy Statement if any event shall occur which requires such action at any time prior to the Company Stockholder Meeting and (vi) otherwise use commercially reasonable efforts to comply with all requirements of Law applicable to the Company Stockholder Meeting.  Parent and Merger Sub shall cooperate with the Company in connection with the preparation of the Company Proxy Statement and the preparation and filing of the Schedule 13E-3, including promptly furnishing the Company upon request with any and all information as may be required to be set forth in the Company Proxy Statement and the Schedule 13E-3 under applicable Law. The Company will provide Parent and Merger Sub a reasonable opportunity to review and comment upon the Company Proxy Statement and the Schedule 13E-3, or any amendments or supplements thereto, prior to mailing the Company Proxy Statement to its stockholders and filing the Schedule 13E-3 with the SEC.

Section 7.2.            Reasonable Best Efforts.

(a)           Subject to the terms and conditions of this Agreement, each party will use its reasonable best efforts to take, or cause to be taken, all actions, to file, or cause to be filed, all documents and to do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated by this Agreement, including preparing and filing as promptly as practicable all documentation to effect all necessary filings, consents, waivers, approvals, authorizations, Permits or orders from all Governmental Authorities (including Gaming Authorities) or other Persons and, in the case of Parent, using reasonable best efforts to enforce any remedies available to Parent in the Interim LLC Agreement; provided, however, that in no event shall the Company or any of its Subsidiaries be required to pay, prior to the Effective Time, any fee, penalty or other consideration to obtain any consent, approval or waiver required for the consummation of the Merger under any Contract other than de minimis amounts or amounts that are advanced or substantially simultaneously reimbursed by Parent.  In furtherance and not in limitation of the foregoing, each party hereto agrees to make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by this Agreement as promptly as reasonably practicable after the date hereof (and in any event within 10 Business Days) and to supply as promptly as reasonably practicable any additional information and documentary material that may be requested pursuant to the HSR Act and use its reasonable best efforts to take or cause to be taken all other actions necessary, proper or advisable consistent with this Section 7.2 to cause the expiration or termination of the applicable waiting periods, or receipt of required authorizations, as applicable, under the HSR Act; provided that in no event shall any member of Parent, or any Affiliate of any member of Parent, as of the date of this Agreement, be required to divest any stock, partnership, membership or other ownership interest in any entity, or agree to undertake any divestiture or

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restrict its conduct with regard to any business to the extent such action or restriction relates to the Las Vegas Hilton.  Subject to the foregoing, Parent agrees, and shall cause any member of Parent or any Affiliate of any member of Parent, to undertake any divestiture or restrict the conduct with respect to its business to obtain any necessary approvals under the HSR Act.  Without limiting the foregoing, the parties shall request and shall use their respective reasonable best efforts to obtain early termination of the waiting period under the HSR Act.

(b)           Each of Parent and Merger Sub, on the one hand, and the Company, on the other hand, shall, in connection with the efforts referenced in Section 7.2(a) to obtain all requisite approvals and authorizations for the transactions contemplated by this Agreement, use its reasonable best efforts to (i) cooperate in all respects with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party; (ii) keep the other party reasonably informed of any communication received by such party from, or given by such party to, the Federal Trade Commission (the “FTC”), the Antitrust Division of the Department of Justice (the “DOJ”) or any other Governmental Authority and of any communication received or given in connection with any proceeding by a private party, in each case regarding any of the transactions contemplated hereby; and (iii) permit the other party to review any communication given by it to, and consult with each other in advance of any meeting or conference with, the FTC, the DOJ or any other Governmental Authority or, in connection with any proceeding by a private party, with any other person, and to the extent permitted by the FTC, the DOJ or such other applicable Governmental Authority or other person, give the other party the opportunity to attend and participate in such meetings and conferences.

(c)           In furtherance and not in limitation of the covenants of the parties contained in Sections 7.2(a) and (b), if any objections are asserted with respect to the transactions contemplated hereby under any Law or if any suit is instituted (or threatened to be instituted) by the FTC, the DOJ or any other applicable Governmental Authority or any private party challenging any of the transactions contemplated hereby as violative of any Law or which would otherwise prevent, materially impede or materially delay the consummation of the transactions contemplated hereby, each of Parent, Merger Sub and the Company shall use its reasonable best efforts to resolve any such objections or suits so as to permit consummation of the transactions contemplated by this Agreement; provided, however, that no party is required to, and the Company may not, without the prior written consent of Parent, become subject to, consent or agree to, or otherwise take any action with respect to any requirement, condition, limitation, understanding, agreement, order to sell, hold separate or otherwise dispose of, or to conduct, restrict, operate, invest or otherwise change the assets or business of the Company or any Subsidiary in any manner which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect on the Company at or after the Effective Time; and provided further that the Company will, upon the request of Parent, become subject to, consent or agree to, or otherwise take any action with respect to any requirement, condition, limitation, understanding, agreement, order to sell, hold separate or otherwise dispose of, or to conduct, restrict, operate, invest or otherwise change the assets or business of the Company or any Subsidiary, so long as such requirement, condition, limitation, understanding, agreement, order is binding on the Company and such Subsidiary only in the event that the Closing occurs; and provided further that in no event shall any member of Parent, or any Affiliate of any member of Parent, as of the date of this Agreement, be required to divest any stock, partnership,

 

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membership or other ownership interest in any entity, or agree to undertake any divestiture or restrict its conduct with regard to any business to the extent such action or restriction relates to the Las Vegas Hilton.  Without excluding other possibilities, the transactions contemplated by this Agreement shall be deemed to be materially delayed if unresolved objections or suits delay or would reasonably be expected to delay the consummation of the transactions contemplated hereby beyond the End Date.

(d)           Subject to the obligations under Section 7.2(c), in the event that any administrative or judicial action or proceeding is instituted (or threatened to be instituted) by a Governmental Authority or private party challenging the Merger or any other transaction contemplated by this Agreement, or any other agreement contemplated hereby, each of Parent, Merger Sub and the Company shall cooperate in all respects with each other and use its respective reasonable best efforts to contest and resist any such action or proceeding and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the transactions contemplated by this Agreement.

(e)           In furtherance and not in limitation of the covenants of the parties contained in Section 7.2(a), Parent and Merger Sub each hereby agrees to use commercially reasonable efforts (i) to as promptly as practicable after the date hereof, obtain all licenses, permits, approvals, authorizations, registrations, findings of suitability, franchises, entitlements, waivers and exemptions issued by any Gaming Authority required to permit the parties hereto to consummate the transactions contemplated by this Agreement or necessary to permit Parent to own and operate the Company (collectively, “Gaming Approvals”), (ii) to avoid any action or proceeding by any Gaming Authority challenging the consummation of the transactions contemplated hereby, (iii) to make or cause to be made all necessary filings, and thereafter make or cause to be made any other required submissions with respect to this Agreement and the transactions contemplated hereby, as required under the Gaming Laws, (iv) to schedule and attend (or cause to be scheduled and attended) any hearings or meetings with Gaming Authorities to obtain the Gaming Approvals as promptly as possible and (v) to comply with the terms and conditions of any and all of the foregoing in all material respects as necessary to obtain the Gaming Approvals.  Parent and its Representatives and Affiliates shall (i) file or cause to be filed (x) within 60 calendar days after the date hereof all required initial applications and documents in respect of officers and directors and Affiliates in connection with obtaining the Gaming Approvals (including where appropriate indications of further information to come by supplementary filing) and (y) as promptly as practicable after the date hereof all other required applications and documents in connection with obtaining the Gaming Approvals, (ii) request or cause to be requested an accelerated review from the Gaming Authorities in connection with such filings, (iii) act diligently and promptly to pursue the Gaming Approvals, (iv) cooperate with the Company in connection with the making of all filings referenced in the preceding sentence and (v) keep the Company reasonably informed of the status of Parent’s application for Gaming Approvals and its activities related to obtaining the Gaming Approvals, as applicable, including  promptly advising the Company upon receiving any communication from any Gaming Authority that causes Parent or Merger Sub to believe that there is a reasonable likelihood that any Gaming Approval required from such Gaming Authority will not be obtained or that the receipt of any such approval will be materially delayed.

 

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Section 7.3.            Access to Information.

(a)           Subject to the restrictions imposed by the Gaming Laws, the HSR Act, federal and state securities Laws and other applicable Laws, the Company will provide and will cause its Subsidiaries and its and their respective Representatives to provide Parent and Merger Sub and their respective authorized Representatives, during normal business hours and upon reasonable advance notice (i) such access to the offices, properties, books and records of the Company and such Subsidiaries (so long as such access does not unreasonably interfere with the operations of the Company or any of its Subsidiaries) as Parent or Merger Sub reasonably may request and (ii) all documents that Parent or Merger Sub reasonably may request.  Notwithstanding the foregoing, Parent, Merger Sub and their Representatives shall not have access to any books, records, documents and other information (i) to the extent that books, records, documents or other information is subject to the terms of a confidentiality agreement with a third party (provided that the Company shall use commercially reasonable efforts to obtain waivers under such agreements or implement requisite procedures to enable reasonable access without violating such agreement), (ii) to the extent that the disclosure thereof would result in the loss of attorney-client privilege or (iii) to the extent required by applicable Law (provided that the Company shall use its reasonable best efforts to enable the provision of reasonable access without violating such Law).  All information exchanged pursuant to this Section 7.3(a) shall be subject to the Confidentiality Agreements.

(b)           No investigation by any of the parties or their respective Representatives shall affect the representations or warranties of the other set forth herein.

Section 7.4.            Solicitation.

(a)           Notwithstanding any other provision of this Agreement to the contrary, during the period beginning on the date of this Agreement and continuing until 11:59 p.m. (PST) on the 30th Business Day thereafter (the “No-Shop Period Start Date”), the Company and its Subsidiaries and their respective officers, directors, employees, consultants, agents, advisors, Affiliates and other representatives (“Representatives”) shall have the right (acting under the direction of the Special Committee) to:

(i)            initiate, solicit and encourage, whether publicly or otherwise, Company Acquisition Proposals (as hereinafter defined), including by way of providing access to non-public information pursuant to (but only pursuant to) one or more confidentiality agreements that are consistent with the Company’s past practice for transactions involving unaffiliated third-parties; and

(ii)           enter into and maintain discussions or negotiations with respect to Company Acquisition Proposals or otherwise cooperate with or assist or participate in, or facilitate any such inquiries, proposals, discussions or negotiations or the making of any Company Acquisition Proposal.

(b)           Subject to Section 7.4(c), from the No-Shop Period Start Date until the Effective Time or, if earlier, the termination of this Agreement in accordance with Article IX, none of the Company, the Company’s Subsidiaries nor any of their respective Representatives

 

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shall, directly or indirectly, (A) initiate, solicit or knowingly encourage (including by way of providing information) the submission of any inquiries, proposals or offers that constitute or may reasonably be expected to lead to, any Company Acquisition Proposal or engage in any discussions or negotiations with respect thereto or otherwise cooperate with or assist or participate in, or knowingly facilitate any such inquiries, proposals, discussions or negotiations, or (B) approve or recommend, or publicly propose to approve or recommend, a Company Acquisition Proposal or enter into any merger agreement, letter of intent, agreement in principle, share purchase agreement, asset purchase agreement or share exchange agreement, option agreement or other similar agreement providing for or relating to a Company Acquisition Proposal or enter into any agreement or agreement in principle requiring the Company to abandon, terminate or fail to consummate the transactions contemplated hereby or breach its obligations hereunder or propose or agree to do any of the foregoing.  Subject to Section 7.4(c) and except with respect to any Company Acquisition Proposal received prior to the No-Shop Period Start Date which constitutes a Superior Proposal or could reasonably be expected to result in a Superior Proposal (the Person making such Company Acquisition Proposal being referred to as an “Excluded Party”) (provided, that any Excluded Party shall cease to be an Excluded Party for all purposes under this Agreement at such time as the Company Acquisition Proposal made by such party fails to constitute a Superior Proposal and could not reasonably be expected to result in a Superior Proposal), on the No-Shop Period Start Date, the Company shall immediately cease and cause to be terminated any solicitation, encouragement, discussion or negotiation with any Persons conducted theretofore by the Company, its Subsidiaries or any Representatives with respect to any Company Acquisition Proposal and shall use its (and will cause its Representatives to use their) reasonable best efforts to require the other parties thereto to promptly return or destroy in accordance with the terms of such agreement any confidential information previously furnished by the Company, the Company’s Subsidiaries or their respective Representatives thereunder.  Within one Business Day of the No-Shop Period Start Date, the Company shall notify Parent of whether or not the Company is participating in discussions or negotiations with an Excluded Party.

(c)           Notwithstanding anything to the contrary contained in Section 7.4(b), if at any time on and following the No-Shop Period Start Date and prior to obtaining the Requisite Stockholder Vote, (i) the Company has otherwise complied in all material respects with its obligations under this Section 7.4 and the Company has received a written Company Acquisition Proposal from a third party (including a Company Acquisition Proposal prior to the No-Shop Start Period from an Excluded Party) that the Board of Directors of the Company (acting through the Special Committee, if such committee still exists, or otherwise by resolution of a majority of its Disinterested Directors) believes in good faith to be bona fide and (ii) the Board of Directors of the Company (acting through the Special Committee, if such committee still exists, or otherwise by resolution of a majority of its Disinterested Directors) determines in good faith, after consultation with its independent financial advisors and outside counsel, that such Company Acquisition Proposal constitutes or could reasonably be expected to result in a Superior Proposal, then the Company may (A) furnish information with respect to the Company and its Subsidiaries to the Person making such Company Acquisition Proposal and (B) participate in discussions or negotiations with the Person making such Company Acquisition Proposal regarding such Company Acquisition Proposal; provided, that the Company will not, and will not allow Company Representatives to, disclose any non-public information to such Person without entering into a confidentiality agreement that is consistent with the Company’s

 

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past practice for transactions involving unaffiliated third-parties.  From and after the No-Shop Period Start Date, the Company shall promptly (within one Business Day) notify Parent and Merger Sub in the event (x) it has received a Company Acquisition Proposal from an Excluded Party or (y) it receives a Company Acquisition Proposal from a Person or group of related Persons (other than an Excluded Party), which notice shall include the material terms and conditions thereof and the identity of the party (other than an Excluded Party) making such proposal or inquiry, and shall keep Parent and Merger Sub reasonably apprised as to the status and any material developments, discussions and negotiations concerning the same.  Notwithstanding anything to the contrary contained in Section 7.4(b) or this Section 7.4(c), prior to obtaining the Requisite Stockholder Vote, the Company will in any event be permitted to take the actions described in clauses (A) and (B) above with respect to any Excluded Party.

(d)           Neither the Board of Directors of the Company nor any committee thereof shall directly or indirectly (i) withdraw or modify in a manner adverse to Parent or Merger Sub, or publicly propose to withdraw or modify in a manner adverse to Parent or Merger Sub, the Recommendation or (ii) take any other action or make any other public statement in connection with the Company Stockholder Meeting inconsistent with such Recommendation; provided, that at any time prior to obtaining the Requisite Stockholder Vote, if the Company receives a Company Acquisition Proposal which the Board of Directors of the Company (acting through the Special Committee, if such committee still exists, or otherwise by resolution of a majority of its Disinterested Directors) concludes in good faith constitutes a Superior Proposal, then the Board of Directors of the Company (acting through the Special Committee, if such committee still exists, or otherwise by resolution of a majority of its Disinterested Directors) may withdraw or modify its Recommendation in a manner adverse to Parent and Merger Sub (“Recommendation Withdrawal”) if such Board of Directors determines in good faith (after consultation with outside counsel) that failure to take such action would be inconsistent with its fiduciary duties under applicable Law, but only after (1) the Company has notified Parent in writing of the determination that such Company Acquisition Proposal constitutes a Superior Proposal and (2) at least three Business Days following receipt by Parent of such notice, the Board of Directors of the Company has determined that such Superior Proposal remains a Superior Proposal.

(e)           Nothing contained in this Section 7.4 or elsewhere in this Agreement shall prohibit the Company from (i) taking and disclosing to its stockholders a position contemplated by Rule 14d-9 and 14e-2(a) promulgated under the Exchange Act or (ii) making any disclosure to the Company’s stockholders if, in the good faith judgment of the Board of Directors (acting through the Special Committee, if such committee still exists, or otherwise by resolution of a majority of its Disinterested Directors), after consultation with its outside counsel, failure so to disclose would be inconsistent with its fiduciary duties under applicable Law or necessary to comply with obligations under federal securities Laws or New York Stock Exchange; provided, any such disclosure made pursuant to clause (i) or (ii) (other than a “stop, look and listen” letter or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange Act) shall be deemed to be a Recommendation Withdrawal unless the Board of Directors of the Company (acting through the Special Committee if such committee still exists) expressly reaffirms in such disclosure the Recommendation.

 

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(f)            The Company agrees that any violations of the restrictions set forth in this Section 7.4 by any Representative of the Company or any of its Subsidiaries, shall be deemed to be a breach of this Section 7.4 by the Company; provided that notwithstanding anything to the contrary set forth in this Section 7.4, in no event shall any action taken by, with the written consent of, or at the written direction of, any of the Fertittas (and not also at the direction or with the concurrence of the Board of Directors of the Company (acting with the concurrence of the Special Committee) or the Special Committee) constitute a violation by the Company of this Section 7.4.  Nothing contained in this Section 7.4 shall prohibit the Company from responding to any unsolicited proposal or inquiry solely by advising the Person making such proposal or inquiry of the terms of this Section 7.4.

(g)           As used in this Agreement, the term:

(i)            “Company Acquisition Proposal” means any inquiry, proposal or offer from any Person or group of Persons other than Parent, Merger Sub or their respective Affiliates relating to any direct or indirect acquisition or purchase (whether in a single transaction or a series of transactions) of a business or businesses that constitutes 30% or more of the cash flow, net revenues, net income or assets of the Company and its Subsidiaries, taken as a whole, or 30% or more of any class or series of Company Securities, any tender offer or exchange offer that if consummated would result in any Person or group of Persons beneficially owning 30% or more of any class or series of Company Securities, or any merger, reorganization, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company (or any Subsidiary or Subsidiaries of the Company whose business or businesses constitute(s) 30% or more of the cash flow, net revenues, net income or assets of the Company and its Subsidiaries, taken as a whole); and

(ii)           “Superior Proposal” means a Company Acquisition Proposal (except the references therein to “30%” shall be replaced by “50%”), which was not obtained in violation of this Section 7.4, and which the Board of Directors of the Company (acting through the Special Committee, if such committee still exists, or otherwise by resolution of a majority of its Disinterested Directors) in good faith determines, would, if consummated, result in a transaction that is more favorable from a financial point of view to the stockholders of the Company (in their capacities as stockholders) (other than the Contributing Stockholders) than the transactions contemplated hereby (x) after consultation with its financial advisor (who shall be a nationally recognized investment banking firm) (it being understood that Bear Stearns shall qualify for such purpose), (y) after taking into account the likelihood of consummation of such transaction on the terms set forth therein (as compared to the terms herein), including, without limitation, the relative likelihood of obtaining the Requisite Stockholder Vote, and (z) after taking into account all appropriate legal (after consultation with its outside counsel), financial (including the financing terms of any such proposal), regulatory (including the relative likelihood of obtaining the requisite approvals under any applicable Gaming Law) or other aspects of such proposal, including, without limitation the identity of the third party making such proposal and the terms of any written proposal by Parent to amend or modify the terms of the Merger and the other transactions contemplated by this Agreement.

 

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Section 7.5.            Director and Officer Liability.

(a)           From and after the Effective Time, the Surviving Corporation shall comply with all of the Company’s and its respective Subsidiaries’ obligations to indemnify and hold harmless (including any obligations to advance funds for expenses) (i) the present and former officers and directors thereof against any and all costs or expenses (including reasonable attorneys’ fees and expenses), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative (“Damages”), arising out of, relating to or in connection with any acts or omissions occurring or alleged to occur prior to or at the Effective Time to the extent provided under the Company’s or such Subsidiaries’ respective organizational and governing documents or agreements in effect on the date hereof, including the approval of this Agreement, the Merger or the other transactions contemplated by this Agreement or arising out of or pertaining to the transactions contemplated by this Agreement; and (ii) such persons against any and all Damages arising out of acts or omissions in connection with such persons serving as an officer, director or other fiduciary in any entity if such service was at the request or for the benefit of the Company or any of its Subsidiaries.  Parent shall, or shall cause the Surviving Corporation to, obtain prior to the Effective Time “tail” insurance policies with a claims period of at least six (6) years from the Effective Time with respect to directors’ and officers’ liability insurance with an amount of coverage equal to 150% of the amount of coverage under the directors’ and officers’ liability insurance policies maintained on the date hereof by the Company and its respective Subsidiaries (the “Current Policies”), and with such other terms that are no less than favorable than those of the Current Policies; provided that the Company shall use its commercially reasonable efforts to increase such amount to 300% prior to the Closing Date.

(b)           This Section 7.5 shall survive the consummation of the Merger and is intended to be for the benefit of, and shall be enforceable by, present or former directors or officers of the Company or its Subsidiaries, their respective heirs and personal representatives and shall be binding on the Surviving Corporation and its successors and assigns.  In the event that the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all its properties and assets to any person (including by dissolution), then, and in each such case, Parent shall cause proper provision to be made so that the successors and assigns of the Surviving Corporation assume and honor the obligations set forth in this Section 7.5.

(c)           The agreements and covenants contained herein shall not be deemed to be exclusive of any other rights to which any such present or former director or officer is entitled, whether pursuant to Law, contract or otherwise.  Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors’ and officers’ insurance claims under any policy that is or has been in existence with respect to the Company or any of its Subsidiaries or their respective officers, directors and employees, it being understood and agreed that the indemnification provided for in this Section 7.5 is not prior to or in substitution for any such claims under any such policies.

 

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Section 7.6.            Takeover Statutes.  The parties shall use their respective reasonable best efforts (i) to take all action necessary so that no Takeover Statute is or becomes applicable to the Merger or any of the other transactions contemplated by this Agreement and (ii) if any such Takeover Statute is or becomes applicable to any of the foregoing, to take all action necessary so that the Merger and the other transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such Takeover Statute on the Merger and the other transactions contemplated by this Agreement.

Section 7.7.            Public Announcements.  Except with respect to any Recommendation Withdrawal or any action taken by the Company or its Board of Directors pursuant to, and in accordance with, Section 7.4, so long as this Agreement is in effect, the parties will consult with each other before issuing any press release or making any public statement with respect to this Agreement or the transactions contemplated hereby and, except for any press release or public statement as may be required by applicable Law, court process or any listing agreement with the New York Stock Exchange, will not issue any such press release or make any such public statement without the consent of the other parties (not to be unreasonably withheld or delayed).

Section 7.8.            Employee Matters.

(a)           Without limiting any additional rights that any Company Employee employed by the Company or any of its Subsidiaries at the Effective Time (“Current Employee”) may have under any Company Benefit Plan, Employment Agreement or collective bargaining agreement, Parent shall cause the Surviving Corporation and each of its Subsidiaries, for the period commencing at the Effective Time and ending on the first anniversary thereof, to maintain for each Current Employee (i) base salary or hourly wage rate, target cash bonus opportunities under annual programs and commissions, but excluding equity and equity equivalents (collectively, “Compensation”), that in the aggregate is no less favorable than, and (ii) welfare benefits that in the aggregate are no less favorable than, in the case of the foregoing clauses (i) and (ii), the Compensation and benefits maintained for and provided to such Current Employee immediately prior to the Effective Time; provided, however, that, subject to the obligations set forth in this Section 7.8, nothing herein shall (A) prevent the amendment or termination of any Company Benefit Plans in accordance with their respective terms, or (B) interfere with the Surviving Corporation’s right or obligation to make such changes as are necessary to conform with applicable Law.  Nothing in this Section 7.8 shall limit the right of Parent, the Surviving Corporation or any of their Subsidiaries to terminate the employment of any Current Employee at any time in a manner consistent with any applicable contractual obligations and any applicable employee benefit plans.

(b)           As of and after the Effective Time, Parent will, or will cause the Surviving Corporation to, give each Current Employee full credit for purposes of eligibility to participate and vesting (but not for benefit accrual purposes, except for purposes of vacation and severance) under any Employee Benefit Plans and any other employee compensation and incentive plans, benefit (including vacation) plans, programs, policies and arrangements, in each case maintained for the benefit of Current Employees as of and after the Effective Time by Parent, its Subsidiaries or the Surviving Corporation (each, a “Parent Plan”) for such Current Employee’s

 

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service prior to the Effective Time with the Company and its Subsidiaries and their predecessor entities, to the same extent such service is recognized by the Company or its Subsidiaries immediately prior to the Effective Time.  With respect to each Parent Plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), Parent or its Subsidiaries shall (i) cause there to be waived any pre-existing condition or eligibility limitations or exclusions and actively-at-work requirements with respect to the Current Employees and their eligible dependents and (ii) give effect, for the year in which the Closing occurs, for purposes of satisfying any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, Current Employees and their eligible dependents under similar plans maintained by the Company and its Subsidiaries in which such Current Employees and their eligible dependents participated immediately prior to the Effective Time.

(c)           From and after the Effective Time, Parent will cause the Surviving Corporation and all of their Subsidiaries to assume and honor, in accordance with their respective terms, (i) each existing employment, change in control, severance and termination plan, policy or agreement of or between the Company or any of its Subsidiaries, on the one hand, and any officer, director or employee of that company, on the other hand, (ii) each equity-based plan, program or agreement and each bonus plan, program or agreement and (iii) all obligations pursuant to existing benefit restoration plans, equity-based plans, programs or agreements, bonus plans, programs or agreements, bonus deferral plans, vested and accrued benefits under any employee benefit plan, program or arrangement of the Company or its Subsidiaries and similar employment compensation and benefit arrangements and agreements in effect as of the Effective Time, in the case of each of the foregoing clauses (i), (ii) and (iii), to the extent legally binding on the Company or any of its Subsidiaries.

(d)           The provisions of this Section 7.8 are for the sole benefit of the parties to this Agreement and nothing herein, expressed or implied, is intended or shall be construed to confer upon or give to any person (including for the avoidance of doubt any Company Employees), other than the parties hereto and their respective permitted successors and assigns, any legal or equitable or other rights or remedies (with respect to the matters provided for in this Section 7.8) under or by reason of any provision of this Agreement.

Section 7.9.            Financing.

(a)           Prior to the Effective Time, the Company shall provide, and shall cause its Subsidiaries to, and shall use its reasonable best efforts to cause their respective Representatives, including legal and accounting, to, provide all cooperation reasonably requested in writing by Parent with reasonable notice in connection with the Financing, including, without limitation (i) participation in meetings, presentations, due diligence sessions, drafting sessions, road shows and sessions with rating agencies, (ii) assisting with the preparation of materials for rating agency presentations, offering documents, private placement memoranda, bank information memoranda, prospectuses, business projections and financial statements (including those required by the SEC) and similar documents required in connection with the Financing, (iii) executing and delivering any pledge and security documents or other similar documents, other definitive financing documents, or other certificates, legal opinions or documents as may be reasonably requested by Parent (including a certificate of the chief financial officer of the Company or any Subsidiary with respect to solvency matters and consents of accountants for use

 

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of their reports in any materials relating to the Debt Financing) and otherwise reasonably facilitating the pledging of collateral, in each case so long as not effective until on or after the Effective Time, (iv) furnishing Parent and its Financing sources with readily-available historical financial and other pertinent information regarding the Company as may be reasonably requested by Parent, including all historical financial statements and financial data of the type required by Regulation S-X and Regulation S-K under the Securities Act and of the type and form customarily included in private placements under Rule 144A of the Securities Act, to consummate the Debt Financing or any other financing transaction executed in connection with the transactions contemplated hereby (the “Required Financial Information”), (v) using commercially reasonable efforts to obtain accountants’ comfort letters, legal opinions, surveys and title insurance as may be requested by Parent or the lenders under the Debt Financing Commitments, (vi) using commercially reasonable efforts to provide monthly financial statements (excluding footnotes) within 25 days of the end of each month prior to the Closing Date, if and in the form now currently prepared by the Company, (vii) taking all actions reasonably necessary to (A) permit the prospective lenders involved in the Financing to evaluate the Company’s current assets, cash management and accounting systems, policies and procedures relating thereto for the purpose of establishing collateral arrangements and (B) so long as not effective until on or after the Effective Time, establish bank and other accounts and blocked account agreements and lock box arrangements in connection with the foregoing, and (viii) taking all corporate actions reasonably necessary to permit the consummation of the Debt Financing and to permit the proceeds thereof to be made available to the Company (it being understood that to the greatest extent practicable, the actions contemplated by this Section 7.9(a)(viii) shall not be required to be taken until immediately prior to the Closing); provided that nothing contained in this Section 7.9 shall require such cooperation to the extent that it would interfere unreasonably with the business or operations of the Company or its Subsidiaries.  The Company shall cause its officers, in their capacities as officers, to deliver such customary management representation letters as any audit firm may request in connection with any comfort letters or similar documents required in connection with the Debt Financing.  The Company hereby consents to the use of its and its Subsidiaries’ logos in connection with the Debt Financing, provided that such logos are used solely in a manner that is not intended to nor reasonably likely to harm or disparage the Company or the reputation or goodwill of the Company and its marks.  Neither the Company nor any of its Subsidiaries shall be required, under the provisions of this Section 7.9 or otherwise in connection with the Debt Financing (x) to pay any commitment or other similar fee prior to the Effective Time that is not advanced or substantially simultaneously reimbursed by Parent or (y) to incur any out-of-pocket expense unless such expense is advanced or substantially simultaneously reimbursed by Parent.  Parent shall indemnify and hold harmless the Company, its Subsidiaries and their respective Representatives from and against any and all losses suffered or incurred by them in connection with (1) any action taken by them at the request of Parent or Merger Sub pursuant to this Section 7.9 or in connection with the arrangement of the Debt Financing or (2) any information utilized in connection therewith (other than information provided by the Company or its Subsidiaries).  Nothing contained in this Section 7.9 or otherwise shall require the Company to be an issuer or other obligor with respect to the Debt Financing prior to the Closing.  All material, non-public information regarding the Company and its Subsidiaries provided to Parent, Merger Sub or their Representatives pursuant to this Section 7.9(a) shall be kept confidential by them in accordance

 

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with the Confidentiality Agreements except for disclosure to potential investors as required in connection with the Financing subject to customary confidentiality protections.

For purposes of this Agreement, “Marketing Period” shall mean the first period of 15 consecutive Business Days after the date hereof throughout which (A) Parent shall have in all material respects the Required Financial Information that the Company is required to provide to Parent pursuant to this Section 7.9, (B) the conditions set forth in Section 8.1 (subject to the immediately following sentence) and Section 8.2 shall be satisfied (or are capable of being satisfied at the Closing), and (C) the applicable auditors shall not have withdrawn their audit opinions for any applicable Required Financial Information; provided, that such 15 Business Day period shall commence no earlier than three Business Days after the condition set forth in Section 8.1(a) has been satisfied; and, provided, further, that the Marketing Period shall end on any earlier date that is the date on which the Debt Financing is consummated.  Notwithstanding the foregoing, it is the intention of the parties to and, to the extent practicable and not commercially inadvisable, the parties shall, if the Required Financial Information is available, begin the Marketing Period on the Expected Date with the view to finish the Marketing Period and complete the Debt Financing contemporaneously with the satisfaction of the condition set forth in Section 8.1(b) relating to Gaming Approvals.  For purposes of this Agreement, the “Expected Date” shall mean the date that Parent’s Nevada counsel reasonably believes in good faith is 30 calendar days prior to the date that the condition set forth in Section 8.1(b) relating to Gaming Approvals will be satisfied.

(b)           Parent shall use its reasonable best efforts to arrange the Debt Financing on the terms and conditions described in the Debt Financing Commitments as promptly as practicable on the terms and conditions described in the Debt Financing Commitments, including using its reasonable best efforts to (i) negotiate definitive agreements with respect thereto on the terms and conditions contained therein or on other terms no less favorable to Parent and Merger Sub and (ii) to satisfy on a timely basis all conditions applicable to Parent in such definitive agreements that are within its control.  In the event that all conditions applicable to the Financing Commitments (other than in connection with the Debt Financing, the availability or funding of any of the Equity Financing) have been satisfied in Parent’s good faith judgment, Parent shall use its reasonable best efforts to cause the lenders and the other Persons providing such Financing to fund the Financing required to consummate the Merger on the Closing Date.  In the event any portion of the Debt Financing becomes unavailable on the terms and conditions contemplated in the Debt Financing Commitments, Parent shall use its best efforts to arrange to obtain alternative financing from alternative sources on terms no less favorable, taken as a whole, to Parent and Merger Sub (as determined in the reasonable judgment of Parent) as promptly as practicable following the occurrence of such event but no later than the last day of the Marketing Period.

(c)           Parent shall not agree to any amendments or modifications to, or grant any waivers of, any condition or other material provision under the Financing Commitments without the consent of the Company if such amendments, modifications or waivers would impose new or additional conditions or otherwise amend, modify or waive any of the conditions to the receipt of the Financing in a manner that would be reasonably likely to cause any material delay in the satisfaction of the conditions set forth in Article VIII.  Notwithstanding anything in this Agreement to the contrary, one or more Debt Financing Commitments may be superseded at the

 

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option of Parent and Merger Sub after the date hereof but prior to the Effective Time by new debt financing commitments (the “New Financing Commitments”) which replace existing Debt Financing Commitments; provided, that the terms of the New Financing Commitments shall not (A) impose new or additional conditions or adversely amend the existing conditions to the receipt of the Financing as set forth in the Debt Financing Commitments in any material respect or (B) be reasonably likely to cause any material delay in the satisfaction of the conditions set forth in Article VIII or commencement of the Marketing Period.  In such event, the term “Financing Commitments” as used herein shall be deemed to include the Financing Commitments that are not so superseded at the time in question and the New Financing Commitments to the extent then in effect.

Section 7.10.          Debt Tender Offers.

(a)           Following the Company Stockholder Meeting, upon the request of Parent (which shall be made no earlier than a reasonable period of time prior to commencement of the Marketing Period), the Company shall promptly commence offers to purchase and related consent solicitations on such terms and conditions as are reasonably acceptable to Parent and the Company (including the related consent solicitations, collectively, the “Debt Tender Offers”) with respect to all of the outstanding aggregate principal amount of the Company’s (i) 6% Senior Notes due 2012 (the “6% Notes”), issued pursuant to the Indenture, dated as of March 17, 2004 (the “6% Notes Indenture”), between the Company and Law Debenture Trust Company of New York, as trustee, (ii) 6 ½% Senior Subordinated Notes due 2014 (the “6 ½% Notes”), issued pursuant to the Indenture, dated as of January 29, 2004 (the “6 ½% Notes Indenture”), between the Company and Law Debenture Trust Company of New York, as trustee, (iii) 6 ⅞% Senior Subordinated Notes due 2016 (the “6 ⅞% Notes”), issued pursuant to the Indenture, dated as of February 27, 2004 (the “6 ⅞% Notes Indenture”), between the Company and Law Debenture Trust Company of New York, as trustee, (iv) 6 ⅝% Senior Subordinated Notes due 2018 (the “6 ⅝% Notes”), issued pursuant to the Indenture, dated as of March 13, 2006 (the “6 ⅝% Notes Indenture”), between the Company and Law Debenture Trust Company of New York, as trustee, (v) 7 ¾% Senior Subordinated Notes due 2016 (the “7 ¾% Notes”, and, together with the 6% Notes, the 6 ½% Notes, the 6 ⅞% Notes and the 6 ⅝% Notes, the “Notes”), issued pursuant to the Base Indenture, dated as of August 1, 2006, and a First Supplemental Indenture, dated as of August 15, 2006 (collectively, the “7 ¾% Notes Indenture”, and, together with the 6% Notes Indenture, the 6 ½% Notes Indenture, the 6 ⅞% Notes Indenture and the 6 ⅝% Notes Indenture, the “Indentures”), between the Company and Law Debenture Trust Company of New York, as trustee.  Parent shall assist the Company in connection with the foregoing.  Promptly following the expiration date of the consent solicitations, assuming the requisite consents are received, the Company shall execute supplemental indentures to the Indentures reflecting the amendments to such Indentures consented to in the Debt Tender Offers, which supplemental indentures shall become operative concurrently with the Effective Time, and shall use commercially reasonable efforts to cause the trustees under the Indentures to promptly enter into such supplemental indentures, as applicable.  The Company shall provide, and shall cause its Subsidiaries to, and shall use commercially reasonable efforts to cause their respective Representatives to, provide all cooperation reasonably requested by Parent in connection with the Debt Tender Offers.  The closing of the Debt Tender Offers shall be conditioned on the occurrence of the Closing, and the parties shall use commercially reasonable efforts to cause the Debt Tender Offers to close on the Closing Date; provided that the consummation of the Debt Tender Offer with respect to any

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series of Notes shall not be a condition to Closing.  Concurrent with the Effective Time, and in accordance with the terms of the Debt Tender Offers, Parent shall cause the Surviving Corporation to accept for purchase and purchase the Notes properly tendered and not properly withdrawn in the Debt Tender Offers using funds provided by or at the direction of Parent sufficient to fund such purchase, including any applicable premiums, and all related fees and expenses.  Parent hereby covenants and agrees to provide (or to cause to be provided) immediately available funds to the Company for the full payment at the Effective Time of all Notes properly tendered and not withdrawn to the extent required pursuant to the terms of the Debt Tender Offer.  The Debt Tender Offers and other actions taken in connection therewith shall be conducted in accordance with the terms of the applicable Indentures and all applicable rules and regulations of the SEC and other applicable Laws.

(b)           Parent shall promptly, upon request by the Company (which may require an advance of the amount of such costs, fees and expenses), reimburse the Company for all reasonable and documented out-of-pocket costs, fees and expenses incurred by or on behalf of the Company in connection with the Debt Tender Offer in respect of any series of Notes.  Notwithstanding anything to the contrary contained in this Agreement, prior to the Effective Time, neither the Company nor any of its Subsidiaries shall be required to (i) make any cash expenditures or (ii) take any action that could obligate the Company or any of its Subsidiaries to repurchase any Notes or incur any additional obligations to the holders of the Notes prior to the consummation of the Debt Tender Offers.  Parent shall indemnify and hold harmless the Company, its Subsidiaries and their respective Representatives for any liabilities incurred by any of them in connection with any action taken by them to the extent pursuant to this Section 7.10 with respect to any Debt Tender Offer (other than as a result of the Company’s fraud or willful misconduct); provided, however, that the Parent shall not have any obligation to indemnify and hold harmless any such party or person to the extent such damages suffered or incurred is attributable to the information provided by the Company that is finally determined by a court of competent jurisdiction to have contained a material misstatement or omission.

(c)           The Company shall be deemed to have satisfied each of its obligations set forth in Section 7.10(a) if the Company shall have used commercially reasonable efforts to comply with such obligations, regardless of the actual outcome of any Debt Tender Offer.

Section 7.11.          Notices of Certain Events.  Each of the parties hereto shall use reasonable efforts to promptly notify the other parties of:

(a)             the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would reasonably be expected to cause any representation or warranty of such party contained in this Agreement to be untrue or inaccurate in any material respect;

(b)             any failure of the Company, Parent or Merger Sub, as the case may be, to comply with or satisfy, or the occurrence or nonoccurrence of any event, the occurrence or nonoccurrence of which would reasonably be expected to cause the failure by such party to comply with or satisfy, any covenant, condition or agreement to be complied with or satisfied by it hereunder in any material respect;

 

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(c)             the receipt by such party of any notice or other communication from any Person alleging that the consent of such Person, which consent is or could reasonably be expected to be material to the Company and its Subsidiaries or the operation of their businesses, is or may be required in connection with the transactions contemplated by this Agreement;

(d)             the receipt by such party of any material notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; and

(e)             its learning of any actions, suits, claims, investigations or proceedings commenced against, or affecting such party that, if they were pending on the date of this Agreement, would have been required to be disclosed pursuant to this Agreement or which relate to the consummation of the transactions contemplated by this Agreement.

The delivery of any notice pursuant to this Section 7.11 shall not limit or otherwise affect the remedies available hereunder to any of the parties receiving such notice.

Section 7.12.          Confidentiality Agreements.  Parent acknowledges on behalf of its Affiliates and each investor in Parent party to any Confidentiality Agreement that such Affiliates and investors continue to be bound by such Confidentiality Agreement (including any “standstill” provisions therein), and the parties hereto acknowledge and agree that this Agreement does not in any manner modify or limit the Company’s or such Affiliate’s rights and obligations under such agreements.

Section 7.13.          Vesting of Company Equity Awards.  As promptly as practicable (and in any event within 30 calendar days from the date of this Agreement), the Company shall take such actions as may be reasonably required to irrevocably amend the terms of the Company Equity Awards to provide that in the event the Company consummates a Superior Proposal which results in the termination of this Agreement, any such Company Equity Awards that are unvested as of the date of such consummation (the “Superior Proposal Effective Time”) shall become fully vested (and, in the case of Company Options, immediately exercisable in full) and all restrictions on such Company Equity Awards shall lapse, in each case at the Superior Proposal Effective Time, provided that (1) such Company Equity Awards are still outstanding at (and have not terminated prior to) the Superior Proposal Effective Time, (2) such Company Equity Awards have not yet become fully vested or exercisable prior to the Superior Proposal Effective Time and (3) such amendments shall expressly be conditioned upon the consummation of a Superior Proposal that results in the termination of this Agreement and shall be of no effect if such Superior Proposal is not consummated.

Section 7.14.          Rule 16b-3.  Prior to the Effective Time, the Company shall take such steps as may be reasonably requested by any party hereto to cause dispositions of Company equity securities (including derivative securities) pursuant to the transactions contemplated by this Agreement by each individual who is a director or officer of the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act in accordance with that certain No-Action Letter dated January 12, 1999 issued by the SEC regarding such matters.

 

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ARTICLE VIII

CONDITIONS TO THE MERGER

Section 8.1.            Conditions to the Obligations of Each Party.  The obligations of the Company, Parent and Merger Sub to consummate the Merger are subject to the satisfaction of the following conditions:

(a)           Stockholder Approval.  This Agreement shall have been approved by the Requisite Stockholder Vote.

(b)           Regulatory Approval.  Any applicable waiting period under the HSR Act (and any extension thereof) relating to the Merger shall have expired or been terminated, and all other required approvals of any Governmental Authority (including any Gaming Approvals) shall have been obtained.

(c)           No Injunctions or Restraints; Illegality.  No temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any court or agency of competent jurisdiction or other Law (each, a “Restraint”) shall be in effect which prohibits, restrains or renders illegal the consummation of the Merger (provided, that prior to asserting this condition, the party asserting this condition shall have used its reasonable best efforts (in the manner contemplated by Section 7.2) to prevent the entry of any such Restraint and to appeal as promptly as possible any judgment that may be entered).

Section 8.2.            Conditions to the Obligations of Parent and Merger Sub.  The obligations of Parent and Merger Sub to consummate the Merger are subject to the satisfaction or valid waiver of the following further conditions:

(a)           Representations and Warranties.  Subject to the preamble to Article IV, the representations and warranties (i) set forth in Section 4.5 shall be true and correct in all material respects as of the date of this Agreement and as of the Effective Time as if made at and as of such time and (ii) set forth in Article IV, other than those described in clause (i) above, shall be true and correct in all respects as of the date of this Agreement and as of the date of the Effective Time as if made at and as of such time, except in the case of this clause (ii) where the failure to be so true and correct, individually or in the aggregate, has not had, and would not be reasonably likely to have, a Material Adverse Effect on the Company, provided that in the case of clauses (i) and (ii), representations made as of a specific date shall be required to be true and correct (subject to the qualifications set forth in clauses (i) and (ii), as applicable) as of such date only.  Parent and Merger Sub shall have received a certificate signed by a senior officer of the Company attesting to the foregoing.

(b)           Performance of Obligations of the Company.  The Company shall have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, required to be performed by or complied with by it hereunder.  Parent and Merger Sub shall have received a certificate signed by a senior officer of the Company attesting to the foregoing.

 

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Section 8.3.            Conditions to the Obligations of the Company  The obligation of the Company to consummate the Merger is subject to the satisfaction or valid waiver of the following further conditions:

(a)           Representations and Warranties.   The representations and warranties of Parent and Merger Sub contained in this Agreement that are qualified as to materiality shall be true and correct as of the date of this Agreement and as of the Effective Time as if made at and as of such time and those which are not so qualified shall be true and correct in all material respects as of the date of this Agreement and as of the Effective Time as if made at and as of such time, provided that representations made as of a specific date shall be required to be true as of such date only.  The Company shall have received a certificate signed by a senior officer of Parent and Merger Sub attesting to the foregoing.

(b)           Performance of Obligations of Parent and Merger Sub.  Each of Parent and Merger Sub shall have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, required to be performed by or complied with by it hereunder.  The Company shall have received a certificate signed by a senior officer of Parent and Merger Sub attesting to the foregoing

ARTICLE IX

TERMINATION

Section 9.1.            Termination.  This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time (notwithstanding any prior approval of this Agreement by the stockholders of the Company):

(a)           by mutual written consent of the Company (acting on the direction of the Special Committee), on the one hand, and Parent and Merger Sub, on the other hand;

(b)           by either the Company (with the prior approval of the Special Committee) or Parent, if:

(i)            the Effective Time shall not have occurred on or before the twelfth month anniversary of the date of this Agreement (the “End Date,” unless extended pursuant to the proviso below), provided that the right to terminate this Agreement pursuant to this Section 9.1(b)(i) shall not be available to any party whose failure to perform any of its obligations under this Agreement has been the principal cause of the failure of the Merger to be consummated by such time; provided, however, that if all of the conditions to the Closing set forth in Article VIII were or were capable of being satisfied on the twelfth month anniversary of the date of this Agreement other than relating to a Gaming Approval, then, upon written notice provided by Parent to the Company prior to such twelfth month anniversary, the “End Date” shall be automatically extended for an additional three months;

(ii)           if any Restraint having the effect set forth in Section 8.1(c) shall be in effect and shall have become final and nonappealable; provided, however, that the right to terminate this Agreement pursuant to this Section 9.1(b)(ii) shall not be available

 

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to any party whose breach of any provision of this Agreement is the principal cause of or resulted in the application or imposition of such Restraint; or

(iii)          at the Company Stockholder Meeting or any adjournment thereof at which this Agreement has been voted upon, the Company stockholders fail to approve this Agreement by the Requisite Stockholder Vote;

(c)           by the Company (with the prior approval of the Special Committee), if:

(i)            a breach of any representation, warranty, covenant or agreement on the part of Parent or Merger Sub set forth in this Agreement shall have occurred which would cause any of the conditions set forth in Sections 8.3(a) or (b) not to be satisfied, and such breach is incapable of being cured or, if capable of being cured, such breach is not cured within sixty (60) calendar days following notice of such breach to Parent; provided, however, that the Company is not then in material breach of this Agreement; or

(ii)           at any time after the date of this Agreement and prior to obtaining the Requisite Stockholder Vote, the Company receives a Company Acquisition Proposal and the Board of Directors (acting through the Special Committee if such committee still exists, or otherwise by resolution of a majority of its Disinterested Directors) shall have concluded in good faith that such Company Acquisition Proposal constitutes a Superior Proposal; provided, however, that the Company shall not terminate this Agreement pursuant to the foregoing clause unless:

(A)          the Company shall have complied in all material respects with Section 7.4 of this Agreement;

(B)           the Company concurrently pays the Termination Fee payable pursuant to Section 9.2(a); and

(C)           the Board of Directors of the Company concurrently approves, and the Company concurrently enters into, a definitive agreement with respect to such Superior Proposal.

(d)           by Parent or Merger Sub, if:

(i)            a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement shall have occurred which would cause any of the conditions set forth in Section 8.2(a) or (b) not to be satisfied, and such breach is incapable of being cured or, if capable of being cured, such breach is not cured within sixty (60) calendar days following notice of such breach to the Company; provided, however, that neither Parent nor Merger Sub is then in material breach of this Agreement;

(ii)           the Board of Directors of the Company or any committee thereof (A) shall have effected a Recommendation Withdrawal, or publicly proposed to effect a Recommendation Withdrawal, or (B) shall have approved or recommended to the

 

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stockholders of the Company a Company Acquisition Proposal other than the Merger, or shall have resolved to effect the foregoing.; or

(iii)          the Company shall have willfully breached the terms of Section 7.4 of this Agreement in any respect materially adverse to Parent and Merger Sub.

Section 9.2.            Termination Fee.  (a)  In the event that this Agreement is terminated by the Company pursuant to Section 9.1(c)(ii) or by Parent pursuant to Section 9.1(d)(ii)(B) or Section 9.1(d)(iii), then the Company shall pay to Parent the Termination Fee, at or prior to the time of termination in the case of a termination pursuant to Section 9.1(c)(ii) or as promptly as possible (but in any event within four Business Days) following termination of this Agreement in the case of a termination pursuant to Section 9.1(d)(ii)(B) or Section 9.1(d)(iii).

(b)           In the event that this Agreement is terminated by Parent pursuant to Section 9.1(d)(ii)(A) and, at any time after the date of this Agreement and prior to the event giving rise to Parent’s right to terminate this Agreement under Section 9.1(d)(ii)(A), a Company Acquisition Proposal shall have been publicly announced or otherwise communicated or made known to the Special Committee (or any person shall have publicly announced, or communicated or made known a bona fide intention, whether or not conditional, to make a Company Acquisition Proposal), then the Company shall pay to Parent the Termination Fee as promptly as possible (but in any event within four Business Days) following termination of this Agreement.

(c)           In the event that this Agreement is terminated by Parent or the Company pursuant to Section 9.1(b)(iii) and, at any time after the date of this Agreement and prior to the Company Stockholder Meeting, a Company Acquisition Proposal shall have been publicly announced or otherwise communicated or made known to the Special Committee (or any person shall have publicly announced, or communicated or made known a bona fide intention, whether or not conditional, to make a Company Acquisition Proposal) and such Company Acquisition Proposal is not withdrawn or terminated prior to the Company Stockholder Meeting, and, if within twelve (12) months after such termination, the Company or any of its Subsidiaries enters into a definitive agreement with respect to, or consummates, any Company Acquisition Proposal (whether or not the same as that originally announced), then the Company shall pay to Parent the Termination Fee, less the amount of any Parent Expenses previously paid to Parent by the Company, on the date of such execution or consummation (provided that solely for purposes of this Section 9.2(c), the term “Company Acquisition Proposal” shall have the meaning set forth in the definition of Company Acquisition Proposal contained in Section 7.4 but references therein to “30%” shall be replaced with “50%”).

(d)           In the event that this Agreement is terminated by the Company pursuant to Section 9.1(c)(i), including as a result of a breach by Parent or Merger Sub of its respective obligations to effect the Closing pursuant to Section 2.1 and satisfy its obligations under Article II, including depositing (or causing to be deposited) with the Disbursing Agent sufficient funds to make all payments pursuant to Section 2.3, then Parent and Merger Sub collectively shall pay the Reverse Termination Fee to the Company or as directed by the Company as promptly as possible (but in any event within four Business Days) following termination of this Agreement.

 

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(e)           If this Agreement is terminated pursuant to Section 9.1(b)(i), and, at the time of such termination, (A) the condition set forth in Section 8.1(b) has not been satisfied due to a failure by Parent or Merger Sub to obtain any and all Gaming Approvals and the conditions set forth in Sections 8.1(a), 8.1(c) and 8.2 have been satisfied (or are capable of being satisfied at the Closing), (B) the Company shall not have meaningfully contributed to the failure of Parent or Merger Sub to obtain any Gaming Approval and (C) the Company is not in material breach of this Agreement, then Parent and Merger Sub collectively shall pay the Regulatory Termination Fee to the Company or as directed by the Company as promptly as reasonably practicable (but in any event within four Business Days) following termination of this Agreement.  For the avoidance of doubt, the disclosure of objective facts (and not opinions or any other subjective statements) by the Company as required by applicable Law or the rules or regulations of any applicable United States securities exchange or Governmental Authority to which the Company is subject that is not made for the purposes of triggering a Regulatory Termination Fee shall not, in and of themselves, constitute a meaningful contribution by the Company as referenced above.

(f)            In the event that this Agreement is terminated (x) by Parent or the Company pursuant to Section 9.1(b)(iii) under circumstances in which (i) the Company stockholders fail to approve this Agreement by the Majority-Minority Vote and (ii) the Termination Fee is not then payable pursuant to this Section 9.2, or (y) by Parent pursuant to Section 9.1(d)(i), then the Company shall pay to Parent as promptly as possible (but in any event within four Business Days) all of Parent’s and Merger Sub’s reasonable out-of-pocket fees and expenses (including reasonable legal fees and expenses) actually incurred by Parent, Merger Sub and their respective Affiliates on or prior to the termination of this Agreement (only to the extent not otherwise previously paid to, or for the benefit of, Parent by the Company prior to the termination of this Agreement) in connection with the transactions contemplated by this Agreement (“Parent Expenses”) following receipt of an invoice therefor, together with a documented itemization setting forth in reasonable detail all of the Parent Expenses for which Parent, Merger Sub and their respective Affiliates are seeking reimbursement; provided that the existence of circumstances which could require the Termination Fee subsequently to become payable pursuant to Section 9.2(c) shall not relieve the Company of its obligations to pay the Parent Expenses pursuant to this Section 9.2(e); and provided, further that the payment by the Company of Parent Expenses pursuant to this Section 9.2(e) shall not relieve the Company of any subsequent obligation to pay the Termination Fee pursuant to Section 9.2(c) except to the extent indicated in such Section 9.2(c); and provided, further, that the reimbursement for Parent Expenses shall in no event exceed $40,000,000 in the aggregate.

(g)           Any amount that becomes payable pursuant to Section 9.2(a), 9.2(b), 9.2(c), 9.2(d), 9.2(e) or 9.2(f) shall be paid by wire transfer of immediately available funds to an account designated by Parent or the Company, as applicable.

(h)           Each of the Company, Parent and Merger Sub acknowledges that the agreements contained in this Section 9.2 are an integral part of the transactions contemplated by this Agreement, that without these agreements the Company, Parent and Merger Sub would not have entered into this Agreement, and that any amounts payable pursuant to this Section 9.2 do not constitute a penalty.  If the Company fails to pay Parent the Termination Fee or Parent Expenses when due or Parent fails to pay the Company the Reverse Termination Fee when due, the Company or Parent, as the case may be, shall pay the costs and expenses (including

 

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reasonable legal fees and expenses) incurred by such other party in connection with the collection under and enforcement of this Section 9.2.

Section 9.3.            Effect of Termination.  If this Agreement is validly terminated pursuant to Section 9.1, this Agreement shall forthwith become null and void and there shall be no liability or obligation on the part of the Company, Parent, Merger Sub or their respective Subsidiaries or Affiliates hereunder, except Sections 7.2(a) (solely with respect to the reimbursement obligations of Parent), 7.9(a) (solely with respect to the indemnification and reimbursement obligations of Parent), 7.10(b), 7.12, 7.13, 9.2, 9.3, 10.1, 10.3, 10.6, 10.11 and 10.13 will survive the termination hereof; provided, however, that Parent’s and Merger Sub’s obligations solely with respect to Sections 7.2(a), 7.9(a) and 7.10(b) shall survive for a period of six (6) months following the termination of this Agreement; provided, further, that in the event that any claim based upon, relating to or arising out of Section 7.2(a), 7.9(a) or 7.10(b) is made by the Company to Parent or Merger Sub in writing prior to expiration of such six month period, then Parent’s and Merger Sub’s obligations under Sections 7.2(a), 7.9(a) and 7.10(b), as applicable, with respect to such claim shall survive the expiration of the six month period until the final resolution of such claim.

ARTICLE X

MISCELLANEOUS

Section 10.1.          Notices.  All notices, requests and other communications to any part hereunder shall be in writing (including facsimile or similar writing) and shall be given:

if to Parent or Merger Sub, to:

Fertitta Colony Partners LLC

2960 West Sahara Avenue, Suite 200

Las Vegas, Nevada 89102

Attention:  Frank J. Fertitta III

Fax:  (702) 367-9675

with copies (which shall not constitute notice) to:

Milbank, Tweed, Hadley & McCloy LLP

601 S. Figueroa Street, 30th Floor

Los Angeles, California 90017

Attention:  Kenneth J. Baronsky

Fax:  (213) 892-4733

Colony Capital Acquisitions, LLC

1999 Avenue of the Stars, Suite 1200

Los Angeles, California 90067

Attention: Jonathan H. Grunzweig

     Joy Mallory

Fax: (310) 407-7407

 

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and

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

Attention: Thomas Cerabino

Fax:  (212) 728-9208

if to the Company, to:

Station Casinos, Inc.

c/o Special Committee of the Board of Directors

10973 West Summerlin Centre Drive

Las Vegas, Nevada  89135

Attention:  General Counsel

Fax:  (702) 221-6613

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

300 South Grand Avenue

Suite 3400

Los Angeles, California 90071

Attention:  Rod Guerra

Fax:  (213) 621-5217

and

Kummer Kaempfer Bonner Renshaw & Ferrario

3800 Howard Hughes Parkway, Seventh Floor

Las Vegas, Nevada  89109

Attention:  Michael Bonner

Fax:  (702) 796-7181

or such other address or facsimile number as such party may hereafter specify by notice to the other parties hereto.  Each such notice, request or other communication shall be effective (i) if given by facsimile, when such facsimile is transmitted to the facsimile number specified above and electronic confirmation of transmission is received or (ii) if given by any other means, when delivered at the address specified in this Section 10.1.

Section 10.2.          Survival of Representations and Warranties.  None of the representations, warranties, covenants and agreements in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time, except for those covenants and agreements contained herein and therein which by their terms apply in whole or in part after the Effective Time and then only to such extent.

 

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Section 10.3.          Expenses.  Except as otherwise expressly provided in this Agreement, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.

Section 10.4.          Amendment.  This Agreement may be amended by the parties hereto by action taken by or on behalf of their respective Boards of Directors (in the case of the Company, acting through the Special Committee, if such committee still exists, or otherwise by resolution of a majority of its Disinterested Directors) at any time prior to the Effective Time, whether before or after approval of this Agreement by the Company stockholders; provided, however, that, after approval of this Agreement by the Company stockholders, no amendment may be made which under applicable Law requires the further approval of the stockholders of the Company without such further approval.  This Agreement may not be amended except by an instrument in writing signed by the parties hereto.

Section 10.5.          Waiver.  At any time prior to the Effective Time, any party hereto may (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) subject to the requirements of applicable law, waive compliance with any of the agreements or conditions for the benefit of such party contained herein, provided, that for so long as the Special Committee exists, the Company may not take any such action unless previously authorized by the Special Committee, or otherwise such action shall be taken by resolution of a majority of its Disinterested Directors.  Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby.  The failure of any party to assert any rights or remedies shall not constitute a waiver of such rights or remedies.

Section 10.6.          Successors and Assigns.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other parties hereto (and any purported assignment without such consent shall be void and without effect), except that Parent may assign all or any of its rights and obligations hereunder to any direct or indirect wholly-owned Subsidiary of Parent; provided, however, that no such assignment shall relieve the assigning party of its obligations hereunder.

Section 10.7.          Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to conflicts of laws principles thereof.

Section 10.8.          Counterparts; Effectiveness; Third Party Beneficiaries.  This Agreement may be executed by facsimile signatures and in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective only when actually signed by each party hereto and each such party has received counterparts hereof signed by all of the other parties hereto.  No provision of this Agreement is intended to or shall confer upon any Person other than the parties hereto any rights or remedies hereunder or with respect hereto, except as otherwise expressly provided in Section 7.5.

 

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Section 10.9.          Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by virtue of any Law, or due to any public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner so that the transactions contemplated hereby are fulfilled to the extent possible.

Section 10.10.        Entire Agreement.  This Agreement, together with the Company Disclosure Letter, the Parent Disclosure Letter, the Voting Agreement, the Equity Financing Commitment, the Equity Rollover Commitments, the Confidentiality Agreements and the Limited Guarantee, constitutes the entire agreement of the parties hereto with respect to its subject matter and supersedes all oral or written prior or contemporaneous agreements and understandings among the parties with respect to such subject matter.  None of the parties shall be liable or bound to any other party in any manner by any representations, warranties or covenants relating to such subject matter hereof except as specifically set forth herein or in the Company Disclosure Letter.

Section 10.11.        Jurisdiction.

(a)           Each party irrevocably submits to the jurisdiction of (i) any Nevada State court, and (ii) any Federal court of the United States sitting in the State of Nevada, solely for the purposes of any suit, action or other proceeding between any of the parties hereto arising out of this Agreement or any transaction contemplated hereby.  Each party agrees to commence any suit, action or proceeding relating hereto either in any Federal court of the United States sitting in the State of Nevada or, if such suit, action or other proceeding may not be brought in such court for reasons of subject matter jurisdiction, in any Nevada State court.  Each party irrevocably and unconditionally waives any objection to the laying of venue of any suit, action or proceeding between any of the parties hereto arising out of this Agreement or any transaction contemplated hereby in (i) any Nevada State court, and (ii) any Federal court of the United States sitting in the State of Nevada, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such suit, action or other proceeding by the mailing of copies thereof by registered mail to such party at its address set forth in this Agreement, such service of process to be effective upon acknowledgment of receipt of such registered mail; provided that nothing in this Section 10.11 shall affect the right of any party to serve legal process in any other manner permitted by law.  The consent to jurisdiction set forth in this Section 10.11 shall not constitute a general consent to service of process in the State of Nevada and shall have no effect for any purpose except as provided in this Section 10.11.  The parties agree that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

52



 

(b)           EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS 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 AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.11.

Section 10.12.        Authorship.  The parties agree that the terms and language of this Agreement were the result of negotiations between the parties and their respective advisors and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against any party.  Any controversy over construction of this Agreement shall be decided without regard to events of authorship or negotiation.

Section 10.13.        Remedies.

(a)           Parent’s and Merger Sub’s right to terminate this Agreement and receive, as applicable, the payment of the Termination Fee pursuant to Section 9.2(a), 9.2(b) or 9.2(c) and the amounts payable pursuant to Section 9.2(f) shall be the sole and exclusive remedy of Parent and Merger Sub against the Company and its Subsidiaries and any of their respective Affiliates, stockholders, partners, members, directors, officers or agents; provided, however, it is agreed that in the event of a breach or threatened breach of this Agreement by the Company, prior to the valid termination of this Agreement by the Parent or Merger Sub, Parent and Merger Sub shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement.  The parties hereto agree that irreparable damage would occur, damages would be difficult to determine and would be an insufficient remedy and no other adequate remedy would exist at law or in equity, in each case in the event that any of the provisions of this Agreement were not performed in all material respects by the Company in accordance with their specific terms or were otherwise materially breached (or the Company were to threaten such a breach).  The Company irrevocably waives any defenses based on adequacy of any other remedy, whether at law or in equity, that might be asserted as a bar to the remedy of specific performance of any of the terms or provisions hereof or injunctive relief in any action brought therefor by Parent or Merger Sub.  Whether or not Parent or Merger Sub seeks specific performance pursuant to the foregoing provisions or otherwise, in no event shall Parent or Merger Sub be entitled to Damages in excess of the Termination Fee.  Upon the payment, as applicable, of the Termination Fee pursuant to Section 9.2(a), 9.2(b) or 9.2(c) and the amounts payable pursuant to Section 9.2(f), none of the Company and its Subsidiaries or any of their respective Affiliates, stockholders, partners, members, directors, officers or agents shall

 

53



 

have any further liability or obligation relating to or arising out of this Agreement or the transactions contemplated by this Agreement.

(b)           Notwithstanding anything to the contrary contained in this Agreement, the Company’s right to terminate this Agreement and receive payment, as applicable, of the Reverse Termination Fee or the Regulatory Termination Fee pursuant to Section 9.2(d) or 9.2(e) and any amounts payable pursuant to Sections 7.2(a), 7.9(a), 7.10(b) and 9.2(h) shall be the sole and exclusive remedy of the Company and its Subsidiaries against Parent, Merger Sub and any of their respective Affiliates, stockholders, partners, members, directors, officers or agents.  The parties acknowledge that the Company shall not be entitled to an injunction or injunctions to prevent breaches of this Agreement by Parent or Merger Sub or to enforce specifically the terms and provisions of this Agreement; provided, however, that the Company shall be entitled to seek specific performance of Parent’s obligation to cause the Equity Financing to be funded at the Closing if all of the conditions to Closing set out in Section 8.1 and Section 8.2 are satisfied (or are capable of being satisfied upon the Closing), the funds contemplated by the Debt Financing shall be available and the Company shall not be in material breach of this Agreement.  Upon the payment, as applicable, of the Reverse Termination Fee or the Regulatory Termination Fee pursuant to Section 9.2(d) or 9.2(e) and any amounts payable pursuant to Sections 7.2(a), 7.9(a), 7.10(b) and 9.2(h), none of the Parent or Merger Sub or any of their respective Affiliates, stockholders, partners, members, directors, officers or agents shall have any further liability or obligation relating to or arising out of this Agreement or the transactions contemplated by this Agreement.

 

 

[SIGNATURE PAGE FOLLOWS]

 

54



 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories as of the day and year first written above.

 

STATION CASINOS, INC.

 

 

 

 

By:

/s/ James E. Nave, D.V.M.

 

Name:

James E. Nave, D.V.M.

 

Title:

Chairman of the Special Committee

 

 

 

 

FERTITTA COLONY PARTNERS LLC

 

 

 

 

By:

/s/ Frank J. Fertitta, III

 

Name:

Frank J. Fertitta, III

 

Title:

Authorized Member

 

 

 

 

FCP ACQUISITION SUB

 

 

 

 

By:

/s/ Frank J. Fertitta, III

 

Name:

Frank J. Fertitta, III

 

Title:

President

 


 EX-7.10 4 a07-6707_1ex7d10.htm EX-7.10

Exhibit 7.10

February 23, 2007

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”), dated as of February 23, 2007, 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.  Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Agreement.

This letter agreement supersedes in its entirety that certain letter agreement delivered to FCP by the undersigned on December 2, 2006 (the “Original Letter”).  Upon execution and delivery of this letter agreement to FCP, the Original Letter shall be of no force or effect.

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 $2,587,900,000 (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 $258,790,000 such damages shall not include 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.

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).



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.

[Signature Page Follows]



Very truly yours,

FC INVESTOR, LLC

By:

/s/ Jonathan H. Grunzweig

 

 

Name:  Jonathan H. Grunzweig

 

 

Title:  Vice President

 

 

 

 

 



ACCEPTED AND AGREED,
this 23 day of February 2007

FERTITTA COLONY PARTNERS LLC

By:

/s/ Frank J. Fertitta, III

 

 

Name:  Frank J. Fertitta, III

 

 

Title:  Authorized Member

 

 

 

 

 


 EX-7.11 5 a07-6707_1ex7d11.htm EX-7.11

Exhibit 7.11

February 23, 2007

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”) dated as of February 23, 2007 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.

This letter agreement supersedes in its entirety that certain letter agreement delivered to FCP by the undersigned on December 2, 2006 (the “Original Letter”).  Upon execution and delivery of this letter agreement to FCP, the Original Letter shall be of no force or effect.

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 4,038,153 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.

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.

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 $36,343,377 (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.

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

2



intended to, and does not and will not, confer upon any Person, other than FCP and, if applicable, the Company, any 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.

3



 

 

Very truly yours,

 

 

 

/s/ Lorenzo J. Fertitta

 

Lorenzo J. Fertitta

 

AGREEMENT AND ACCEPTANCE ON FOLLOWING PAGE

4



 

Agreed and Accepted, this 23 day of February, 2007

FERTITTA COLONY PARTNERS LLC

 

 

 

 

 

By:

 

/s/ Frank J. Fertitta, III

 

 

 

Frank J. Fertitta, III
Authorized Member

 

 

5


 EX-7.12 6 a07-6707_1ex7d12.htm EX-7.12

Exhibit 7.12

February 23, 2007

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”) dated as of February 23, 2007 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.

This letter agreement supersedes in its entirety that certain letter agreement delivered to FCP by the undersigned on December 2, 2006 (the “Original Letter”).  Upon execution and delivery of this letter agreement to FCP, the Original Letter shall be of no force or effect.

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 3,979,884 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.

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.

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 $35,818,956 (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.

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.

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

2



intended to, and does not and will not, confer upon any Person, other than FCP and, if applicable, the Company, any 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.

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Very truly yours,

 

 

 

/s/ Frank J. Fertitta, III

 

Frank J. Fertitta, III

 

AGREEMENT AND ACCEPTANCE ON FOLLOWING PAGE

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Agreed and Accepted, this 23 day of February, 2007

FERTITTA COLONY PARTNERS LLC

 

 

 

 

 

 

 

By:

 

/s/ Frank J. Fertitta, III

 

 

 

 

Frank J. Fertitta, III
Authorized Member

 

 

 

5


 EX-7.13 7 a07-6707_1ex7d13.htm EX-7.13

Exhibit 7.13

February 23, 2007

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”) dated as of February 23, 2007 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.

This letter agreement supersedes in its entirety that certain letter agreement delivered to FCP by the undersigned on December 2, 2006 (the “Original Letter”).  Upon execution and delivery of this letter agreement to FCP, the Original Letter shall be of no force or effect.

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 1,653,984 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.

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.

The undersigned hereby jointly represent and warrant 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, 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.

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 $14,885,856 (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.

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

2



intended to, and does not and will not, confer upon any Person, other than FCP and, if applicable, the Company, any 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.

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Very truly yours,

 

 

 

 

 

 

 

BLS Family Investments, LLC, a Nevada
limited liability company

 

 

 

 

 

 

 

By:

 

/s/ Blake L. Sartini

 

 

 

 

Blake L. Sartini, Manager

 

 

 

 

 

 

 

By:

 

_/s/ Delise F. Sartini

 

 

 

 

Delise F. Sartini, Manager

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

By:

 

/s/ Blake L. Sartini

 

 

 

 

Blake L. Sartini, Trustee

 

 

 

 

 

 

 

By:

 

/s/ Delise F. Sartini

 

 

 

 

Delise F. Sartini, Trustee

 

AGREEMENT AND ACCEPTANCE ON FOLLOWING PAGE

4



 

Agreed and Accepted, this 23 day of February, 2007

FERTITTA COLONY PARTNERS LLC

 

 

 

 

 

 

 

By:

 

/s/ Frank J. Fertitta, III

 

 

 

 

Frank J. Fertitta, III
Authorized Member

 

 

 

5


 EX-7.14 8 a07-6707_1ex7d14.htm EX-7.14

Exhibit 7.14

DEUTSCHE BANK SECURITIES INC.

 

J.P. MORGAN SECURITIES INC.

60 Wall Street

 

270 Park Avenue

New York, New York 10005

 

New York, New York 10017

DEUTSCHE BANK TRUST COMPANY AMERICAS

 

JPMORGAN CHASE BANK, N.A.

60 Wall Street

 

270 Park Avenue

New York, New York 10005

 

New York, New York 10017

 

February 23, 2007

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

Re: Acquisition Financing — Amended and Restated Financing Commitment Letter

Ladies and Gentlemen:

You have informed Deutsche Bank Securities Inc. (“DBSI”), Deutsche Bank Trust Company Americas (“DBTCA”), J.P. Morgan Securities Inc. (“JPMorgan”) and JPMorgan Chase Bank, N.A. (“JPMCB”, and together with DBSI, DBTCA and JPMorgan, 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 provided that Sponsor LLC may instead own Merger Sub directly (rather than indirectly through Sponsor Holdco). 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.



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 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 Sheet (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.

Each of DBTCA and JPMCB is pleased to confirm that, subject to the terms and conditions set forth herein and in the Term Sheets, it hereby severally commits to provide 62.5% and 37.5%, respectively, 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, JPMorgan and JPMCB, the “Senior Secured Lenders”), (ii) DBSI and JPMorgan will act as joint Lead Arrangers and joint Book Running Managers (with DBSI “on the left”) for the Revolving Credit Facility (in such capacities, the “Joint Lead Arrangers”) and (iii) JPMCB will act as syndication agent for the Revolving Credit Facility (in such capacity, the “Syndication Agent”). Each of DBTCA, DBSI, JPMorgan and JPMCB 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.

Each of DBTCA and JPMCB 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 JPMorgan and you. All aspects of the syndication of each of the Revolving Credit Facility, including, without limitation, timing, potential syndicate

2



members to be approached, titles, allocations and division of fees, shall be managed by DBSI in consultation with JPMorgan and 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 Joint Lead Arranger in such syndication, including by (i) using your commercially reasonable efforts to ensure that the Joint Lead Arrangers’ syndication efforts benefit from your existing lending relationships and (ii) providing the Joint Lead Arrangers and the Senior Secured Lenders, promptly upon request, with all information that is available to you and that is reasonably deemed necessary by the Joint Lead Arrangers 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 Joint Lead Arrangers and at a meeting or meetings of Senior Secured Lenders or prospective Senior Secured Lenders at such times and places as the Joint Lead Arrangers 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 Joint Lead Arrangers’ 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, DBSI’s and JPMorgan’s respective obligations to fund the commitments hereunder on the Closing Date are 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

3



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 Joint Lead Arrangers 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 would, but for the application of clause (z) in the lead-in to Article IV of the Acquisition Agreement, 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

4



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 Joint Lead Arrangers 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 or creating a breach or default under charter documents, law or material contracts (it being understood that the non-contravention representation shall not be qualified as set forth in the disclosures to Section 4.4 of the Acquisition Agreement but may be subject to customary qualifications), 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 December 8, 2006 and heretofore delivered (the “Fee Letter”). The Fee Letter remains in full force and effect. 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 Existing Commitment Documents (defined below), 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 Joint Lead Arrangers), each Senior Secured Lender (including in any event DBSI, DBTCA, JPMorgan and JPMCB) 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, this Commitment Letter or the Existing Bank Commitment Letter (defined below) 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

5



(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, the Existing Bank 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, DBTCA, JPMorgan and JPMCB, 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, JPMorgan or JPMCB 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

6



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.

7



This Commitment Letter amends and restates that certain Amended and Restated Financing Commitment Letter, dated as of December 8, 2006 (the “Existing Bank Commitment Letter”), among you, DBSI, DBTCA, JPMorgan and JPMCB and shall be deemed to supersede in its entirety the Existing Bank Commitment Letter, and the Existing Bank Commitment Letter is hereby terminated and of no further force or effect.

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 Letter. 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 no later than 11:59 p.m., New York time, on February 24, 2007. Unless this Commitment Letter is signed and returned by the time and date provided in the immediately preceding sentence, this Commitment Letter shall terminate at such time and date.

8



 

Very truly yours,

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

 

By:

 

/s/ Steven P. Lapham

 

 

 

Name: Steven P. Lapham

 

 

 

Title: Managing Director

 

By:

 

/s/ Alex Johnson

 

 

 

Name: Alex Johnson

 

 

 

Title: Managing Director

 

DEUTSCHE BANK SECURITIES INC.

 

By:

 

/s/ Steven P. Lapham

 

 

 

Name: Steven P. Lapham

 

 

 

Title: Managing Director

 

By:

 

/s/ Alex Johnson

 

 

 

Name: Alex Johnson

 

 

 

Title: Managing Director

 

9



 

J.P. MORGAN SECURITIES INC.

 

By:

 

/s/ Eric Tanjeloff

 

 

 

Name: Eric Tanjeloff

 

 

 

Title: Executive Director

 

JPMORGAN CHASE BANK, N.A.

 

By:

 

/s/ Micah Goodman

 

 

 

Name: Micah Goodman

 

 

 

Title: Vice President

 

Agreed to and Accepted this
23 day of February, 2007:

FERTITTA COLONY PARTNERS LLC

 

 

 

 

By:

 

/s/ Frank J. Fertitta, III

 

 

 

Name: Frank J. Fertitta, III

 

 

 

Title: Authorized Member

 

 

 

 

 

 

10


 EX-7.15 9 a07-6707_1ex7d15.htm EX-7.15

Exhibit 7.15

February 23, 2007

CONFIDENTIAL

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

Re:  Acquisition Financing — Amended and Restated Financing Commitment Letter

Ladies and Gentlemen:

You have informed German American Capital Corporation (“GACC”), Deutsche Bank AG, New York Branch (“DB”) and JPMorgan Chase Bank, N.A. (“JPMorgan” and, together with DB and GACC, collectively, 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, provided that Sponsor LLC may instead own Merger Sub directly (rather than indirectly through Sponsor Holdco).  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 or Target 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 (or all of the equity of newly formed wholly owned indirect subsidiaries of the Target owning such assets).  Senior Borrower shall use the cash proceeds of the CMBS Loan contemplated herein, inter alia,

1



to purchase membership interests of newly formed wholly owned real estate holding subsidiaries that will at closing own the real estate assets used by of certain operating subsidiaries of the Target.  Prior to the closing, these real estate subsidiaries will be wholly owned by such operating subsidiaries of the Target and will be merged into Senior Borrower immediately after the closing.  The real estate assets thereby acquired by Senior Borrower 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, “DB Initial Lender”) are, and JPMorgan (together with DB Initial Lender, in such capacity, collectively, the “Initial Lenders”) is, pleased to confirm to Sponsors and Sponsor LLC that, subject to the terms set forth herein and in the Term Sheet, each of DB Initial Lender and JPMorgan hereby severally commits (each, a “Commitment” and collectively, the “Commitments”) to provide, either directly through GACC or DB or through one or more of their affiliates (in the case of DB Initial Lender), and through JPMorgan or one or more of its affiliates, 62.5% and 37.5%, respectively, of 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 (including, without limitation, the coordinated and concurrent closing of each Commitment); 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 the Initial Lenders in accordance with the terms set forth in the Term Sheet.  The “Closing Date” shall be a

2



date prior to the Termination Date (as defined in Exhibit A) mutually acceptable to the Initial Lenders 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 December 8, 2006 with the Initial Lenders in accordance with the terms of the Fee Letter (the “Agreed Fees”).  The Fee Letter remains in full force and effect. The effectiveness of the Commitments 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 the Initial Lenders, 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 the Initial Lenders are incurring substantial costs and expenses in connection with the documentation of the Commitments 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 Commitments, (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 Sponsor LLC, the Principal Investors, or any of their representatives in connection with the CMBS Loan to the Initial Lenders 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

3



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 the Initial Lenders 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).  Sponsor LLC agrees 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.

The Initial Lenders 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 the Initial Lenders, or (ii) was or becomes available from a source other than the Borrower Parties not known to the Initial Lenders 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 the Initial Lenders 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 the Initial Lenders 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 the Initial Lenders or their affiliates may be a party, provided that the Initial Lenders 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 the Initial Lenders’ 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 Commitments.  The Commitments 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 February 24, 2007 (the “Expiration Date”); and (ii) terminate if the Closing does not occur prior to the Termination Date.  In addition, the Commitments will terminate on the first to occur of (x) 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

4



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 Commitments.

6.             Representations and Warranties.  The Initial Lenders’ 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 would, but for the application of clause (z) in the lead-in to Article IV of the Acquisition Agreement, 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 or creating a breach or default under charter documents, law or material contracts (it being understood that, subject to customary qualifications, the non-contravention representation shall not be qualified as set forth in the disclosures to Section 4.4 of the Acquisition Agreement), 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, the Initial Lenders 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 the Initial Lenders 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 Letter; (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.

5



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

(a)           Reliance on Information.  In undertaking its respective Commitment, each of the Initial Lenders 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 Sponsor LLC herein.  The Initial Lenders may also rely on any publicly available information issued or authorized to be issued by Borrower Parties or any of their subsidiaries or affiliates.  The Initial Lenders have 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 respective obligations of the Initial Lenders 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 Lenders’ respective obligations as set forth herein shall be

6



subject to all regulatory requirements applicable to them (but such requirements shall not permit the Initial Lenders to terminate this Commitment Letter).

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 LETTER.  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 LETTER, THE TRANSACTIONS CONTEMPLATED BY THIS COMMITMENT LETTER OR ANY MATTERS RELATED TO THIS COMMITMENT LETTER.  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.  Sponsor LLC, on behalf of itself, each other Borrower Party and the Sponsors, acknowledges and agrees that: (i) none of the Initial Lenders, any arranger, bookrunner or agent acting on behalf of any of the Initial Lenders 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 Lenders nor any arranger, bookrunner or agent acting on behalf of any of the Initial Lenders 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) the Initial Lenders were induced to enter into this Commitment Letter and the Fee Letter by, inter alia, the provisions in Sections 3, 4, and 7 herein.  Without limiting the foregoing, Sponsor LLC, on behalf of itself, each other Borrower Party and the Sponsors, acknowledges and agrees that (x) DB Initial Lender shall not have any liability to any Sponsor, Sponsor LLC, Borrower or any other person for or in connection with any act or omission of JPMorgan; and (y) JPMorgan shall not have any liability to any Sponsor, Sponsor LLC, Borrower or any other person for in or in connection with any act or omission of DB Initial Lender; it being understood and agreed that the Commitment of each is several and independent of the other.

(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

7



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.

(i)            Amendment and Restatement.  This Commitment Letter amends and restates that certain Amended and Restated Financing Commitment Letter, dated as of December 8, 2006 (the “Existing Bank Commitment Letter”), among you, DB, GACC and JPMorgan, and shall be deemed to supersede in its entirety the Existing Bank Commitment Letter, and the Existing Bank Commitment Letter is hereby terminated and of no further force or effect.

8



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 to the undersigned at or before the Expiration Date, the time at which the Commitments (if not so accepted prior thereto) will expire.

Very truly yours,

 

 

 

DEUTSCHE BANK AG, NEW YORK BRANCH

 

 

 

By:

/s/ Steven P. Lapham

 

Name: Steven P. Lapham

 

Its: Managing Director

 

 

 

By:

/s/ Alex Johnson

 

Name: Alex Johnson

 

Its: Managing Director

 

 

 

 

GERMAN AMERICAN CAPITAL CORPORATION

 

 

 

By:

/s/ Stephen H. Choe

 

Name: Stephen H. Choe

 

Its: Vice President

 

 

 

By:

/s/ David Goodman

 

Name: David Goodman

 

Its: Authorized Signatory

 

 

 

[SIGNATURES CONTINUED ON NEXT PAGE]

9



 

JPMORGAN CHASE BANK, N.A.

 

 

 

 

By:

/s/ Micah Goodman

 

Name: Micah Goodman

 

Its: Vice President

 

 

 

[SIGNATURES CONTINUED ON NEXT PAGE]

10



ACCEPTED this 23 day of February, 2007

FERTITTA COLONY PARTNERS LLC

By:

/s/ Frank J. Fertitta, III

 

Name: Frank J. Fertitta, III

 

Title: Authorized Member

 

 

11


 EX-7.16 10 a07-6707_1ex7d16.htm EX-7.16

Exhibit 7.16

LIMITED GUARANTEE

Limited Guarantee, dated as of February 23, 2007 (this “Limited Guarantee”), by Colony Investor VII, L.P., a Delaware limited partnership (“Colony VII”), Colony Investor VIII, L.P., a Delaware limited partnership (“Colony VIII”) and Colony Parallel Investors VIII Holdings, L.P., a Delaware limited partnership (“Colony Parallel VIII” and together with Colony VII and Colony VIII, the “Guarantors”), in favor of Station Casinos, Inc., a Nevada corporation (the “Guaranteed Party”).  Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement (as defined below).

1.             LIMITED GUARANTEE.  To induce the Guaranteed Party to enter into an Agreement and Plan of Merger, dated as of February 23, 2007 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among Fertitta Colony Partners LLC, a Nevada limited liability company in which each Guarantor proposes to invest (“Parent”), FCP Acquisition Sub, a Nevada corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and the Guaranteed Party, each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably guarantees to the Guaranteed Party, the due and punctual observance, performance and discharge of (i) the payment obligations of Parent and Merger Sub under Section 9.2(d) and 9.2(e) of the Merger Agreement (the “Reverse/Regulatory Termination Fee Obligations”) and (ii) the indemnification and expense reimbursement obligations of Parent under Sections 7.2(a), 7.9(a) and 7.10(b) of the Merger Agreement (the “Indemnification/Reimbursement Obligations” and together with the Reverse/Regulatory Termination Fee Obligations, the “Guaranteed Obligations”); provided that the aggregate maximum amount payable by the Guarantors hereunder, including all amounts paid by Parent or Merger Sub to the Guaranteed Party pursuant to Sections 7.2(a), 7.9(a), 7.10(b), 9.2(d) or 9.2(e), as the case may be, of the Merger Agreement and costs of payment and expense reimbursement obligations of the Guarantors under Section 10 hereof, shall not exceed One Hundred Seventy-Five Million Dollars ($175,000,000) (the “Maximum Amount”).

A payment demand under this Limited Guarantee shall be in writing and shall specify in reasonable detail why a payment is due with a specific statement that the Guaranteed Party is calling upon the Guarantors to pay under this Limited Guarantee.

2.             NATURE OF GUARANTEE.  Except as may be required by applicable law, the Guaranteed Party shall not be obligated to file any claim relating to the Guaranteed Obligations in the event that Parent becomes subject to a bankruptcy, reorganization or similar proceeding, and neither any such filing nor the failure of the Guaranteed Party to so file shall affect the Guarantor’s obligations hereunder.  In the event that any payment to the Guaranteed Party hereunder is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor shall remain liable hereunder with respect to the Guaranteed Obligations as if such payment had not been made (subject to the terms hereof).  This is an unconditional guarantee of payment and not of collectibility and a separate action or actions may be brought and prosecuted against any Guarantor to enforce this Limited Guarantee, irrespective of whether any action is brought against Parent, Merger Sub or any other Guarantor or whether Parent, Merger Sub or any other Guarantor is joined in any such action or actions.



3.             CHANGES IN OBLIGATIONS; CERTAIN WAIVERS.  Each Guarantor agrees that the Guaranteed Party may at any time and from time to time, without notice to or further consent of either Guarantor, extend the time of payment of any of the Guaranteed Obligations (provided that the foregoing shall be subject to the consent of Parent and Merger Sub to the extent such extension involves an amendment of the Merger Agreement), and may also make any agreement with Parent or Merger Sub for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between the Guaranteed Party and Parent and/or Merger Sub without in any way impairing or affecting the Guarantors’ obligations under this Limited Guarantee.  Each Guarantor agrees that the obligations hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (a) the failure (or delay) of the Guaranteed Party to assert any claim or demand or to enforce any right or remedy against Parent, Merger Sub or any other Guarantor; (b) any insolvency, bankruptcy, reorganization or other similar proceeding affecting Parent, Merger Sub or any other Guarantor; (c) the existence of any claim, set-off or other right which a Guarantor may have at any time against Parent or Merger Sub or the Guaranteed Party, whether in connection with the Guaranteed Obligations or otherwise; (d) the adequacy of any other means the Guaranteed Party may have of obtaining repayment of any of the Guaranteed Obligations; (e) any change in the time, place or manner of payment of any of the Guaranteed Obligations or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Merger Agreement or any other agreement evidencing, securing or otherwise executed in connection with any of the Guaranteed Obligations; (f) the addition, substitution or release of any entity or other person interested in the transactions contemplated by the Merger Agreement; or (g) any change in the corporate existence, structure or ownership of Parent or Merger Sub.  To the fullest extent permitted by law, each Guarantor hereby expressly waives any and all rights or defenses arising by reason of any law which would otherwise require any election of remedies by the Guaranteed Party.  Each Guarantor waives promptness, diligence, notice of the acceptance of this Limited Guarantee and of the Guaranteed Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of the Guaranteed Obligations incurred and all other notices of any kind (except for notices to be provided in accordance with the Merger Agreement), all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshalling of assets of Parent or Merger Sub or any other person interested in the transactions contemplated by the Merger Agreement, and all suretyship defenses generally (other than fraud or willful misconduct by the Guaranteed Party or any of its subsidiaries or affiliates, defenses to the payment of the Guaranteed Obligations under the Merger Agreement or otherwise that are available to Parent or Merger Sub or breach by the Guaranteed Party of this Limited Guarantee).  Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers set forth in this Limited Guarantee are knowingly made in contemplation of such benefits.

Each Guarantor hereby unconditionally and irrevocably covenants and agrees not to exercise any rights that it may now have or hereafter acquire against Parent or Merger Sub that arise from the existence, payment, performance, or enforcement of such Guarantor’s obligations under or in respect of this Limited Guarantee, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Guaranteed Party against Parent and/or Merger Sub,

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whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from Parent and/or Merger Sub, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations shall have been paid in full in cash.  If any amount shall be paid to a Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in cash of the Guaranteed Obligations, such amount shall be received and held in trust for the benefit of the Guaranteed Party, shall be segregated from other property and funds of such Guarantor and shall forthwith be paid or delivered to the Guaranteed Party in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations, in accordance with the terms of the Merger Agreement, whether matured or unmatured, or to be held as collateral for any Guaranteed Obligations or other amounts payable under this Limited Guarantee thereafter arising.

Upon payment of the Guaranteed Obligations in full in cash owing to the Guaranteed Party, each Guarantor shall be subrogated to the rights of the Guaranteed Party against Parent and Merger Sub, and the Guaranteed Party agrees to take, at the Guarantors’ expense, such steps as a Guarantor may reasonably request to implement such subrogation.

By acceptance of this Limited Guarantee, the Guaranteed Party hereby covenants and agrees that it shall not institute, and shall cause its subsidiaries and affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby, against any Guarantor or Parent Affiliate (as defined below), except for claims against a Guarantor or a Successor Entity (as defined below) under this Limited Guarantee.  The Guarantor hereby covenants and agrees that it shall not institute, and shall cause its subsidiaries and affiliates not to institute, any proceeding asserting that this Limited Guarantee is illegal, invalid or unenforceable in accordance with its terms.  Notwithstanding anything to the contrary contained in this Limited Guarantee, the Guaranteed Party hereby agrees that to the extent Parent and Merger Sub are relieved (other than by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors’ rights generally, or general equitable principles (whether considered in a proceeding in equity or at law)) of all or any portion of the Guaranteed Obligations under the Merger Agreement, each Guarantor shall be similarly relieved of the Guaranteed Obligations under this Limited Guarantee.

4.             NO WAIVER; CUMULATIVE RIGHTS.  No amendment or waiver of any provision of this Limited Guarantee shall be valid and binding unless it is in writing and signed, in the case of an amendment, by each of the Guarantors and the Guaranteed Party, or in the case of waiver, by the party against whom the waiver is sought to be enforced.  No waiver by a party of any breach or violation of, or default under, this Limited Guarantee shall be deemed to extend to any prior or subsequent breach, violation or default hereunder or to affect in any way any rights arising by virtue of any such prior or subsequent occurrence.  No failure on the part of the Guaranteed Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Guaranteed Party of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power.  Each and every right, remedy and power hereby granted to the

3



Guaranteed Party or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Guaranteed Party at any time or from time to time.

5.             REPRESENTATIONS AND WARRANTIES.  Each Guarantor, severally but not jointly, hereby represents and warrants as to itself that:

(a)           the Guarantor has all limited partnership power and authority to execute and deliver and perform this Limited Guarantee;

(b)           the execution, delivery and performance of this Limited Guarantee have been duly and validly authorized by all necessary action and do not contravene, conflict with or result in any violation of  any provision of the Guarantor’s limited partnership agreement or any Law, regulation, rule, decree, order, judgment or contractual restriction applicable to or binding on the Guarantor or its assets;

(c)           all consents, approvals, authorizations, permits of, filings with and notifications to, any governmental authority necessary for the due execution, delivery and performance of this Limited Guarantee by the Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required in connection with the execution, delivery or performance of this Limited Guarantee;

(d)           this Limited Guarantee constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors’ rights generally, and (ii) general equitable principles (whether considered in a proceeding in equity or at law); and

(e)           the Guarantor has the financial capacity to pay and perform the Guaranteed Obligations under this Limited Guarantee, and all funds necessary for the Guarantor to fulfill the Guaranteed Obligations under this Limited Guarantee shall be available to the Guarantor for so long as this Limited Guarantee shall remain in effect in accordance with Section 8 hereof.

6.             ASSIGNMENT.  Neither this Limited Guarantee nor any rights, interests or obligations hereunder shall be assigned by either party hereto (whether by operation of Law or otherwise) without the prior written consent of the other parties hereto.

7.             NOTICES.  Any notice required to be given hereunder shall be sufficient if in writing, and sent by facsimile transmission (provided that any notice received by facsimile transmission or otherwise at the addressee’s location on any business day after 5:00 p.m. (addressee’s local time) shall be deemed to have been received at 9:00 a.m. (addressee’s local time) on the next business day), by reliable overnight delivery service (with proof of service), hand delivery or certified or registered mail (return receipt requested and first-class postage prepaid), addressed as follows (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7):

4



if to a Guarantor:

c/o Colony Capital, LLC

1999 Avenue of the Stars, Suite 1200

Los Angeles, California  90067

Attention:                                         Jonathan H. Grunzweig

Joy Mallory

Fax:  (310) 407-7407

with a copies (which shall not constitute notice) to:

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

Attention: Thomas M. Cerabino

Fax:  (212) 728-9208

and

Milbank, Tweed, Hadley & McCloy LLP

601 South Figueroa Street, 30th Floor

Los Angeles, California  90017

Attention:  Kenneth J. Baronsky

Fax:  (213) 892-4733

if to the Guaranteed Party:

Station Casinos, Inc.

c/o Special Committee of the Board of Directors

10973 West Summerlin Centre Drive

Las Vegas, Nevada  89135

Attention:  General Counsel

Fax:  (702) 221-6613

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

300 South Grand Avenue, Suite 3400

Los Angeles, California  90071

Attention:  Rod Guerra

Fax:  (213) 621-5217

8.             CONTINUING GUARANTEE.  This Limited Guarantee shall remain in full force and effect and shall be binding on each Guarantor, its successors and assigns until the indefeasible payment and satisfaction in full of the Guaranteed Obligations.  Notwithstanding the foregoing, this Limited Guarantee shall terminate and the Guarantors shall have no further obligation under this Limited Guarantee upon the earliest to occur of (i) the Effective Time and

5



payment of all obligations due by Parent and Merger Sub under the Merger Agreement at such time, (ii) termination of the Merger Agreement by mutual written consent pursuant to Section 9.1(a) thereof, (iii) termination of the Merger Agreement by Parent or the Guaranteed Party on or after the End Date pursuant to Section 9.1(b)(i) unless Parent is obligated to pay the Regulatory Termination Fee pursuant to Section 9.2(e) thereof and then upon the payment in full by Parent of the Regulatory Termination Fee, (iv) termination of the Merger Agreement by the Guaranteed Party pursuant to Section 9.1(c)(ii) thereof, or (v) termination of the Merger Agreement by Parent pursuant to Sections 9.1(b)(ii), 9.1(b)(iii) or 9.1(d) thereof; provided, however, that each Guarantor’s obligations under this Limited Guarantee solely with respect to the Indemnification/Reimbursement Obligations shall survive for a period of six (6) months following the occurrence of any of the termination events set forth in clause (iii), (iv) or (v) of this sentence; provided, further, that in the event any claim based upon, relating to or arising out of the Indemnification/Reimbursement Obligations is made by the Guaranteed Party to Parent, Merger Sub or a Guarantor in writing prior to expiration of such six month period, then such claim shall survive the expiration of the six month period until the final resolution thereof.

9.             NO RECOURSE.  The Guaranteed Party acknowledges that the sole asset of Parent is cash in a de minimis amount, and that no additional funds are expected to be contributed to Parent unless and until the Closing occurs.  Notwithstanding anything that may be expressed or implied in this Limited Guarantee or any document or instrument delivered contemporaneously herewith, and notwithstanding the fact that each of the Guarantors is a limited partnership, by its acceptance of the benefits of this Limited Guarantee, the Guaranteed Party acknowledges and agrees that it has no right of recovery against, and no personal liability shall attach to, any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder, affiliate or assignee of the undersigned or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder, affiliate or assignee of any of the foregoing (collectively, but not including Parent or Merger Sub, each a “Guarantor or Parent Affiliate”), through Parent, Merger Sub or otherwise, whether by or through attempted piercing of the corporate (or limited liability company) veil, by or through a claim by or on behalf of Parent against any Guarantor or Parent Affiliate (including by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable law, or otherwise, except for its rights to recover from a Guarantor (but not any Guarantor or Parent Affiliate (including any general partner or managing member)) under and to the extent provided in this Limited Guarantee and subject to the limitations described herein; provided, however, that in the event a Guarantor (i) consolidates with or merges with any other person and is not the continuing or surviving entity of such consolidation or merger or (ii) transfers or conveys all or a substantial portion of its properties and other assets to any person such that the sum of such Guarantor’s remaining net assets plus uncalled capital is less than the Maximum Amount, then, and in each such case, the Guaranteed Party may seek recourse, whether by enforcement of any judgment or assessment or by any legal or equitable proceeding or by virtue of any statute, regulation or other applicable Law, against such continuing or surviving entity or such person (in either case, a “Successor Entity”), as the case may be, but only to the extent of the liability of such Guarantor hereunder.  Recourse against the Guarantors and a Successor Entity under and pursuant to the terms of this Limited Guarantee shall be the sole and exclusive remedy of the Guaranteed Party and all of its affiliates against the Guarantors and Guarantor or Parent Affiliates in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement or the transactions

6



contemplated thereby.  Nothing set forth in this Limited Guarantee shall affect or be construed to affect any liability of Parent or Merger Sub to the Guaranteed Party or shall confer or give or shall be construed to confer or give to any person other than the Guaranteed Party (including any person acting in a representative capacity) any rights or remedies against any person, including the Guarantors, except as expressly set forth herein.

10.           EXPENSES.  In the event that the a party hereto or any of its affiliates brings an action, suit or proceeding in respect of this Limited Guarantee, the other party in such action, suit or proceeding shall pay all reasonable fees and out-of-pocket expenses (including reasonable attorneys’ fees and disbursements) incurred by the prevailing party and such affiliate in connection therewith.  The Guarantor shall also reimburse the Guaranteed Party and its affiliates for all reasonable fees and out-of-pocket expenses (including reasonable attorneys’ fees and disbursements) incurred by the same in the representation of the Guaranteed Party and any of its affiliates in any bankruptcy, insolvency, reorganization or other debtor-relief proceeding of or relating to Merger Sub, Parent or the Guarantor to the extent that the Guaranteed Party or such affiliate is the prevailing party in the judgment rendered in any such proceeding.

11.           GOVERNING LAW.  This Limited Guarantee, and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this Limited Guarantee or the negotiation, execution or performance of this Limited Guarantee (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in this Limited Guarantee), shall be governed by the internal laws of the State of Nevada, without giving effect to any choice or conflict of laws provision or rule thereof.

12.           WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS LIMITED GUARANTEE OR THE ACTIONS OF EACH OF THE PARTIES HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.

13.           COUNTERPARTS.  This Limited Guarantee may be executed and delivered (including by facsimile transmission) in two (2) or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

14.           ENTIRE AGREEMENT.  This Limited Guarantee constitutes the entire agreement, and supersedes all other prior agreements and understandings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof, except for the Merger Agreement, and this Limited Guarantee is not intended to and shall not confer upon any person other than the parties hereto any rights or remedies hereunder.

15.           JURISDICTION AND VENUE; SERVICE OF PROCESS.  Each of the parties hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of Nevada and to the jurisdiction of any Federal court of the United States sitting in the State of Nevada, for the purpose of any action or proceeding arising out of or relating to this Limited

7



Guarantee and each of the parties hereto hereby irrevocably agrees that all claims in respect to such action or proceeding may be heard and determined exclusively in any Nevada state or federal court.  Each of the parties hereto agrees that a final judgment in any action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.  Each of the parties hereto irrevocably consents to the service of the summons and complaint and any other process in any other action or proceeding relating to the transactions contemplated by this Limited Guarantee, on behalf of itself or its property, by personal delivery of copies of such process to such party.  Nothing in this Section 15 shall affect the right of any party to serve legal process in any other manner permitted by Law.

16.           SEVERABILITY.  If any term or other provision of this Limited Guarantee is invalid, illegal or incapable of being enforced by any rule of Law, or public policy, all other conditions and provisions of this Limited Guarantee shall nevertheless remain in full force and effect; provided, however, that this Limited Guarantee may not be enforced without giving effect to the limitation of the amount payable hereunder to the Maximum Amount provided in Section 1 hereof and to the provisions of Section 3 hereof.  No party hereto shall assert, and each party shall cause its respective affiliates not to assert, that this Limited Guarantee or any part hereof is invalid, illegal or unenforceable.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Limited Guarantee so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

17.           HEADINGS.  Headings are used for reference purposes only and do not affect the meaning or interpretation of this Limited Guarantee.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned have executed and delivered this Limited Guarantee as of the date first above written.

 

GUARANTOR:

 

 

 

COLONY INVESTORS VII, L.P.,

 

by Colony Capital VII, L.P., its general partner

 

by Colony GP VII, LLC, its general partner

 

 

 

 

 

By:

/s/ Jonathan H. Grunzweig

 

 

 

Name: Jonathan H. Grunzweig

 

 

Title:  Vice President

 

 

 

 

 

 

 

COLONY INVESTORS VIII, L.P.,

 

by Colony Capital (US) VIII, LLC, its general
partner

 

 

 

 

 

By:

/s/ Jonathan H. Grunzweig

 

 

 

Name: Jonathan H. Grunzweig

 

 

Title:  Vice President

 

 

 

 

 

 

 

COLONY PARALLEL INVESTORS VIII
HOLDINGS, L.P.,

 

by Colony Capital (Parallel) Holdings VIII, LLC,
its general partner

 

 

 

 

 

By:

/s/ Jonathan H. Grunzweig

 

 

 

Name: Jonathan H. Grunzweig

 

 

Title:  Vice President

 

 

 

 

 

 

 

GUARANTEED PARTY:

 

 

 

STATION CASINOS, INC.

 

 

 

 

 

By:

/s/ Richard J. Haskins

 

 

 

Name: Richard J. Haskins

 

 

Title:  Executive Vice President, General Counsel and Secretary

 


 EX-7.17 11 a07-6707_1ex7d17.htm EX-7.17

Exhibit 7.17

STATION CASINOS AGREES TO BE ACQUIRED BY FERTITTA COLONY PARTNERS LLC

Stockholders to receive $90 per share in cash;

Transaction valued at approximately $8.8 billion

LAS VEGAS, February 26, 2007 — Station Casinos, Inc.  (NYSE: STN; “Station” or the “Company”) today announced that it has entered into a definitive agreement with Fertitta Colony Partners LLC (“FCP”) pursuant to which FCP has agreed to acquire all of Station’s outstanding common stock for $90 per share in cash.  This represents a premium of approximately 30% over the closing share price of Station’s common stock on December 1, 2006, the last trading day before disclosure of the initial offer made by FCP to acquire Station.  The total value of the transaction is approximately $8.8 billion, including the assumption or repayment of approximately $3.4 billion of debt.

The Company’s Board of Directors, acting upon the unanimous recommendation of a special committee comprised entirely of independent directors (the “Special Committee”), has approved the merger agreement and has recommended that Station’s stockholders vote in favor of the merger agreement.

FCP is a new company formed by Frank J. Fertitta III, Chairman and Chief Executive Officer of Station, Lorenzo J. Fertitta, Vice Chairman and President of Station, and Colony Capital Acquisitions, LLC, an affiliate of Colony Capital, LLC (“Colony”).  FCP has received financing commitments which are sufficient to consummate the acquisition.  Frank and Lorenzo Fertitta, Blake and Delise Sartini, and Colony have provided equity funding commitments. Affiliates of Deutsche Bank as lead lender and JPMorgan Chase Bank have provided debt financing commitments.

Under the merger agreement, Station may solicit acquisition proposals from third parties for 30 business days following the signing of the merger agreement. The Special Committee, with the assistance of its independent advisors, intends to solicit acquisition proposals during this period. There can be no assurances that the solicitation of acquisition proposals will result in an alternative transaction. Station does not intend to disclose developments with respect to this solicitation process unless and until the Special Committee has made a decision with respect to the alternative proposals it receives, if any.

The transaction is expected to be completed in approximately six to nine months, subject to regulatory approvals and customary closing conditions.  It is not subject to a financing condition.  The transaction also is subject to the approval of the merger agreement by (i) 66 2/3% of the outstanding shares of common stock entitled to vote at a special meeting of stockholders and (ii) a majority of the outstanding shares of common stock (excluding shares held by FCP, Frank and Lorenzo Fertitta, Blake and Delise Sartini

 



 

and their respective affiliates) present, in person or by proxy, and voting at such meeting.  Such excluded stockholders currently own approximately 25% of the outstanding shares of common stock of the Company.

Station intends to pay stockholders its regular quarterly dividend of $0.2875 per share in accordance with the terms of the merger agreement until the transaction closes.

Skadden, Arps, Slate, Meagher & Flom LLP and Kummer Kaempfer Bonner Renshaw & Ferrario provided legal advice to the Special Committee.  Bear, Stearns & Co. Inc. served as financial advisor to the Special Committee and rendered a fairness opinion to the Board of Directors of Station in connection with the proposed transaction.

Milbank, Tweed, Hadley and McCloy LLP, Brownstein Hyatt Farber Schreck and Willkie Farr & Gallagher LLP are serving as the acquirors’ legal advisors.  Deutsche Bank Securities, Inc. is serving as financial advisor to FCP.

About the Transaction

In connection with the proposed merger, Station will file a proxy statement with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE STRONGLY ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.  Investors and security holders may obtain a free copy of the proxy statement (when available) and other documents filed by Station Casinos, Inc. from the Securities and Exchange Commission’s Web site at http://www.sec.gov. The proxy statement and such other documents may also be obtained for free by directing such request to Station Casinos. Inc. Investor Relations, 2411 West Sahara Avenue, Las Vegas, NV 89102, telephone: (800) 544-2411 or on the Company’s website at http://www.stationcasinos.com.

Station and its directors, executive officers and certain other members of its management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed merger. Information regarding the interests of Station’s participants in the solicitation will be included in the proxy statement relating to the proposed merger when it becomes available.

About Colony Capital

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, securities and operating companies.  The firm has invested approximately $20 billion in over 8,400 assets through various corporate, portfolio and complex property transactions.  One of the few private investment firms licensed in gaming, Colony owns Resorts International Atlantic City, the Las Vegas Hilton, Resorts East Chicago, Resorts Tunica, Atlantic City Hilton and Bally’s.  Colony is also a partner in Accor Casinos in Europe.  Colony has a staff of more than 160 and is headquartered in Los Angeles, with

 



 

offices in New York, Boston, Hawaii, London, Madrid, Paris, Rome, Beirut, Hong Kong, Seoul, Shanghai, Taipei, and Tokyo. For more information visit www.colonyinc.com.

Company Information and Forward Looking Statements

Station Casinos, Inc. is the leading provider of gaming and entertainment to the residents of Las Vegas, Nevada. Station’s properties are regional entertainment destinations and include various amenities, including numerous restaurants, entertainment venues, movie theaters, bowling and convention/banquet space, as well as traditional casino gaming offerings such as video poker, slot machines, table games, bingo and race and sports wagering. Station owns and operates Red Rock Casino Resort Spa, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Casino and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino, Fiesta Henderson Casino Hotel, Magic Star Casino, Gold Rush Casino and Lake Mead Casino in Henderson, Nevada. Station also owns a 50% interest in Green Valley Ranch Station Casino, Barley’s Casino & Brewing Company and The Greens in Henderson, Nevada and a 6.7% interest in a joint venture that owns the Palms Casino Resort in Las Vegas, Nevada. In addition, Station manages Thunder Valley Casino near Sacramento, California on behalf of the United Auburn Indian Community.

This press release contains certain forward-looking statements with respect to the Company and its subsidiaries which involve risks and uncertainties that cannot be predicted or quantified, and consequently, actual results may differ materially from those expressed or implied herein. Such risks and uncertainties include, but are not limited to, the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement with FCP; the outcome of any legal proceedings that have been, or will be, instituted against the Company related to the merger agreement; the inability to complete the merger due to the failure to obtain stockholder approvals for the merger or the failure to satisfy other conditions to complete the merger, including the receipt of all regulatory approvals related to the merger; the failure to obtain the necessary financing arrangements set forth in the debt and equity commitment letters delivered pursuant to the merger agreement; risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the merger; the ability to recognize the benefits of the merger; the amount of the costs, fees, expenses and charges related to the merger and the actual terms of certain financings that will be obtained for the merger; the impact of the substantial indebtedness to be incurred to finance the consummation of the merger; the effects of local and national economic, credit and capital market conditions on the economy in general, and on the gaming and hotel industries in particular; changes in laws, including increased tax rates, regulations or accounting standards, third-party relations and approvals, and decisions of courts, regulators and governmental bodies; litigation outcomes and judicial actions, including gaming legislative action, referenda and taxation; acts of war or terrorist incidents or natural disasters; the effects of competition, including locations of competitors and operating and market competition; and other risks described in the filings of the Company with the Securities and Exchange Commission, including, but not limited

 



 

to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and its Registration Statement on Form S-3ASR File No. 333-134936. All forward-looking statements are based on the Company’s current expectations and projections about future events. All forward-looking statements speak only as of the date hereof and the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Additional financial information, including presentations from recent investor conferences, is available in the “Investors” section of the Company’s website at www.stationcasinos.com. None of the information contained on the Company’s website shall be deemed incorporated by reference or otherwise included herein.

Contact:

Station Casinos, Inc., Las Vegas

Glenn C. Christenson, 800-544-2411 or 702-495-4242

Executive Vice President/Chief Financial Officer/

Chief Administrative Officer

 

Source: Station Casinos, Inc.

 


 EX-7.18 12 a07-6707_1ex7d18.htm EX-7.18

Exhibit 7.18

VOTING AGREEMENT

THIS VOTING AGREEMENT (this “Agreement”) is dated as of February 23, 2007, by and among Station Casinos, Inc., a Nevada corporation (the “Company”) (except with respect to Section 2.01(C), 2.01(D), 2.01(E), 2.01(F) or 4.04 below) Fertitta Colony Partners LLC, a Nevada limited liability company (“Parent”), and the Persons executing this Agreement as “Contributing Stockholders” on the signature page hereto (each, a “Contributing Stockholder” and, collectively, the “Contributing Stockholders”).

RECITALS

WHEREAS, simultaneously with the execution and delivery of this Agreement, Parent and the Company have entered into an Agreement and Plan of Merger, as it may be amended, supplemented, modified or waived from time to time (the “Merger Agreement”), which provides, among other things, for the Merger of a subsidiary of Parent with and into the Company, upon the terms and subject to the conditions set forth therein;

WHEREAS, each Contributing Stockholder or an Affiliate controlled by such Contributing Stockholder is the record and Beneficial Owner of, and has the sole right to vote and dispose of, that number of Shares set forth next to such Contributing Stockholder’s name on Schedule A hereto; and

WHEREAS, as an inducement to Parent and the Company entering into the Merger Agreement and incurring the obligations therein, Parent and the Company have required that each Contributing Stockholder, and each Contributing Stockholder has agreed to, enter into this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual premises, covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE I
CERTAIN DEFINITIONS

Section 1.01           Capitalized Terms.  Capitalized terms used in this Agreement and not defined herein have the meanings ascribed to such terms in the Merger Agreement.

Section 1.02           Other Definitions.  For the purposes of this Agreement:

(a)           “Beneficial Owner” or “Beneficial Ownership” with respect to any securities means having “beneficial ownership” of such securities (as determined pursuant to Rule 13d-3 under the Exchange Act).

(b)           “Expiration Time” has the meaning set forth in Section 2.01.



(c)           “Legal Actions” means any claims, actions, suits, demand letters, judicial, administrative or regulatory proceedings, or hearings, notices of violation, or investigations.

(d)           “Owned Shares” has the meaning set forth in Section 2.01.

(e)           “Permit” means any authorization, license, consent, certificate, registration, approval, order and other permit of any Governmental Entity.

(f)            “Representative” means, with respect to any particular Person, any director, officer, employee, agent or other representative of such Person, including any consultant, accountant, legal counsel or investment banker.

(g)           “Shares” has the meaning ascribed thereto in the Merger Agreement, and will also include for purposes of this Agreement all shares or other voting securities into which Shares may be reclassified, sub-divided, consolidated or converted and any rights and benefits arising therefrom, including any dividends or distributions of securities which may be declared in respect of the Shares and entitled to vote in respect of the matters contemplated by Article II.

(h)           “Transfer” means, with respect to a security, the sale, grant, assignment, transfer, pledge, encumbrance, hypothecation or other disposition of such security or the Beneficial Ownership thereof (including by operation of Law), or the entry into any Contract to effect any of the foregoing, including, for purposes of this Agreement, the transfer or sharing of any voting power of such security or other rights in or of such security, the granting of any proxy with respect to such security, depositing such security into a voting trust or entering into a voting agreement with respect to such security.

ARTICLE II
AGREEMENT TO VOTE

Section 2.01           Agreement to Vote.  Subject to the terms and conditions hereof, each Contributing Stockholder irrevocably and unconditionally agrees that, for the benefit of the Company (in respect of Sections 2.01(A) and 2.01(B) but not Section 2.01(C), 2.01(D), 2.01(E) or 2.01(F)) and Parent, from and after the date hereof and until the earliest to occur of (i) the Effective Time, (ii) the termination of the Merger Agreement in accordance with its terms, and (iii) the written agreement of Parent and the Company to terminate this Agreement (such earliest occurrence being the “Expiration Time”), at any meeting (whether annual or special, and at each adjourned or postponed meeting) of the Company’s stockholders, however called, or in any other circumstances upon which a vote or other consent or approval (including a written consent) is sought (any such meeting or other circumstance, a “Contributing Stockholder’s Meeting”), each Contributing Stockholder will (y) appear at such a meeting or otherwise cause all of such Contributing Stockholder’s Shares Beneficially Owned by such Contributing Stockholder as of the relevant time (“Owned Shares”) to be counted as present thereat for purposes of calculating a quorum and respond to any other request by the Company for written consent, if any, and, (z) vote, or cause to be voted, its Owned Shares (A) in favor of the adoption of the Merger Agreement and the approval of the transactions contemplated thereby, including the Merger, (B) in favor of the approval of any other matter to be approved by the stockholders of the Company to facilitate the transactions contemplated by the Merger Agreement, including the

2



Merger, (C) against any Company Acquisition Proposal or any transaction contemplated by such Company Acquisition Proposal, (D) against any proposal made in opposition to, or in competition or inconsistent with, the Merger or the Merger Agreement, including the adoption thereof or the consummation thereof, including any amendment of the Company’s organizational documents or other proposal or transaction involving the Company or any of its Subsidiaries which amendment or other proposal or transaction would in any manner impede, interfere with, materially delay, frustrate, prevent or nullify or result in a breach of any representation or warranty, covenant, agreement or other obligation of the Company or any of its Subsidiaries under or with respect to the Merger Agreement or any of the transactions contemplated hereby or thereby, (E) against any extraordinary dividend, distribution or recapitalization by the Company or change in the capital structure of the Company (other than pursuant to or as explicitly permitted by the Merger Agreement) and (F) against any action or agreement that would reasonably be expected to result in any condition to the consummation of the Merger set forth in Article VIII of the Merger Agreement not being fulfilled.

Section 2.02           Additional Shares.  Each Contributing Stockholder hereby agrees, while this Agreement is in effect, promptly to notify Parent of the number of any new Shares with respect to which Beneficial Ownership is acquired by such Contributing Stockholder, if any, after the date hereof and before the Expiration Time.  Any such Shares shall automatically become subject to the terms of this Agreement as Owned Shares as though Beneficially Owned by such Contributing Stockholder as of the date hereof.

Section 2.03           Restrictions on Transfer, Etc.  Except as provided for herein, each Contributing Stockholder agrees, from the date hereof until the Expiration Time, not to (i) directly or indirectly Transfer or offer to Transfer any Owned Shares; (ii) tender any Owned Shares into any tender or exchange offer or otherwise; (iii) enter into any voting arrangement, whether by proxy, voting agreement or otherwise, with respect to such Contributing Stockholder’s Owned Shares or (iv) otherwise restrict the ability of such Contributing Stockholder freely to exercise all voting rights with respect thereto.  Any action attempted to be taken in violation of the preceding sentence will be null and void.  Notwithstanding the foregoing, each Contributing Stockholder may make transfers of Owned Shares (a) for estate planning or similar purposes so long as such Contributing Stockholder or another Contributing Stockholder retains control over the voting and disposition of such Owned Shares and agrees in writing to continue to vote such Owned Shares in accordance with this Agreement and (b) pursuant to the Equity Rollover Commitment of such Contributing Stockholder.  Each Contributing Stockholder further agrees to authorize and hereby authorizes Parent and the Company to notify the Company’s transfer agent that there is a stop transfer order with respect to all of the Owned Shares and that this Agreement places limits on the voting of the Owned Shares.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

Section 3.01           Representations and Warranties of Contributing Stockholders.  The Contributing Stockholders, severally and not jointly, represent and warrant to the Company and Parent as of the date of this Agreement and at all times during the term of this Agreement, as follows:

3



(a)           Each Contributing Stockholder has the requisite capacity and authority to execute and deliver this Agreement and to fulfill and perform such Contributing Stockholder’s obligations hereunder.  This Agreement has been duly and validly executed and delivered by such Contributing Stockholder and constitutes a legal, valid and binding agreement of such Contributing Stockholder enforceable by Parent against such Contributing Stockholder in accordance with its terms.

(b)           The number of Shares of Company Common Stock constituting Owned Shares of each Contributing Stockholder as of the date hereof, and the number of votes which the holder of such Shares shall be entitled to cast in respect of any matter as to which holders of Shares are entitled to cast votes, are set forth next to such Contributing Stockholder’s name on Schedule A of this Agreement.  Such Contributing Stockholder or an Affiliate controlled by such Contributing Stockholder is the record and Beneficial Owner and has good, valid and marketable title, free and clear of any Liens (other than those arising under this Agreement or the Equity Rollover Commitment of such Contributing Stockholder or as set forth on Schedule A hereto), of the Owned Shares, and, except as provided in this Agreement, has full and unrestricted power to dispose of and vote all of such Contributing Stockholder’s Owned Shares without the consent or approval of, or any other action on the part of any other Person, and has not granted any proxy inconsistent with this Agreement that is still effective or entered into any voting or similar agreement with respect to, such Contributing Stockholder’s Owned Shares.  The Owned Shares set forth next to such Contributing Stockholder’s name on Schedule A hereto constitute all of the capital stock of the Company that is Beneficially Owned by such Contributing Stockholder as of the date hereof, and, except for such Contributing Stockholder’s Owned Shares and the Owned Shares owned by the other Contributing Stockholders who are parties to this Agreement, such Contributing Stockholder or an Affiliate controlled by such Contributing Stockholder does not Beneficially Own or have any right to acquire (whether currently, upon lapse of time, following the satisfaction of any conditions, upon the occurrence of any event or any combination of the foregoing) any Shares or any securities convertible into Shares (excluding Stock Options, shares of restricted stock and restricted stock units).

(c)           Other than the filing by a Contributing Stockholder 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 Agreement by a Contributing Stockholder, the consummation by a Contributing Stockholder of the transactions contemplated hereby or compliance by a Contributing Stockholder with any of the provisions hereof (i) requires any consent or other Permit of, or filing with or notification to, any Governmental Authority or any other Person by such Contributing Stockholder, (ii) results in a violation or breach of, or constitutes (with or without notice or lapse of time or both) a default (or gives rise to any third party right of termination, cancellation, material modification or acceleration) under any of the terms, conditions or provisions of any organizational document or Contract to which such Contributing Stockholder is a party or by which such Contributing Stockholder or any of such Contributing Stockholder’s properties or assets (including such Contributing Stockholder’s Owned Shares) may be bound, (iii) violates any order or Law applicable to such Contributing Stockholder or any of such Contributing Stockholder’s properties or assets (including such Contributing Stockholder’s Owned Shares), or (iv) results in a Lien upon any of such Contributing Stockholder’s properties or assets (including such Contributing Stockholder’s Owned Shares).

4



ARTICLE IV
ADDITIONAL COVENANTS OF THE STOCKHOLDERS

Section 4.01           Waiver of Appraisal Rights.  Each Contributing Stockholder hereby waives any rights of appraisal or rights of dissent from the Merger that such Contributing Stockholder may have.

Section 4.02           Disclosure.  Each Contributing Stockholder, severally and not jointly, hereby authorizes the Company and Parent to publish and disclose in any announcement or disclosure required by the SEC or other Governmental Authority such Contributing Stockholder’s identity and ownership of the Owned Shares and the nature of such Contributing Stockholder’s obligation under this Agreement.

Section 4.03           Non-Interference; Further Assurances.  Each Contributing Stockholder agrees that, prior to the termination of this Agreement, such Contributing Stockholder shall not take any action that would make any representation or warranty of such Contributing Stockholder contained herein untrue or incorrect or have the effect of preventing, impeding, interfering with or adversely affecting the performance by such Contributing Stockholder of its obligations under this Agreement.  Each Contributing Stockholder agrees, without further consideration, to execute and deliver such additional documents and to take such further actions as necessary or reasonably requested by Parent to confirm and assure the rights and obligations set forth in this Agreement or to consummate the transactions contemplated by this Agreement.

Section 4.04           No Solicitation.  Subject to Section 6.18, each Contributing Stockholder agrees that it shall not, and shall direct its Representatives not to, directly or indirectly, (i) initiate, solicit, knowingly encourage (including by providing information) or facilitate any inquiries, proposals or offers with respect to, or the making or completion of, or may reasonably be expected to lead to, a Company Acquisition Proposal, (ii) engage or participate in any negotiations concerning, or provide or cause to be provided any non-public information or data relating to the Company or any of its Subsidiaries in connection with, or have any discussions with any person relating to, or may reasonably be expected to lead to, an actual or proposed Company Acquisition Proposal, or otherwise knowingly encourage or facilitate any effort or attempt to make or implement a Company Acquisition Proposal, (iii) approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any Company Acquisition Proposal, (iv) approve, endorse or recommend, or propose to approve, endorse or recommend, or execute or enter into, any letter of intent, agreement in principle, merger agreement, acquisition agreement, option agreement or other similar agreement relating to, or may reasonably be expected to lead to, any Company Acquisition Proposal, or (v)  resolve to propose or agree to do any of the foregoing.  Each Contributing Stockholder agrees that it shall, and shall cause each of its Representatives to, immediately cease any existing solicitations, discussions or negotiations with any Person (other than the parties hereto) that has made or indicated an intention to make a Company Acquisition Proposal.  If, prior to the Expiration Time, a Contributing Stockholder receives a proposal with respect to the sale of Shares in connection with, or which may reasonably be expected to lead to, a Company Acquisition Proposal, then such Contributing Stockholder shall promptly (and in any event within 48 hours) inform Parent of the identity of the Person making, and the material terms of, such proposal.

5



ARTICLE V
TERMINATION

Section 5.01           Termination.  This Agreement shall terminate without further action at the Expiration Time.

Section 5.02           Effect of Termination.  Upon termination of this Agreement, the rights and obligations of all the parties will terminate and become void without further action by any party except for the provisions of Section 5.01, this Section 5.02 and Article VI, which will survive such termination.  For the avoidance of doubt, the termination of this Agreement shall not relieve any party of liability for any willful breach of this Agreement prior to the time of termination.

ARTICLE VI
GENERAL

Section 6.01           Notices.  Any notice, request, instruction or other communication under this Agreement shall be in writing and delivered by hand or overnight courier service or by facsimile, (i) if to a Contributing Stockholder, to the address set forth below such Contributing Stockholder’s name on the signature page hereto, and (ii) if to the Company or Parent, in accordance with Section 10.1 of the Merger Agreement, or to such other Persons, addresses or facsimile numbers as may be designated in writing by the Person entitled to receive such communication as provided above.  Each such communication, if to a Contributing Stockholder, will be effective (A) if delivered by hand or overnight courier service, when such delivery is made at the address specified in this Section 6.01, or (B) if delivered by facsimile, when such facsimile is transmitted to the facsimile number specified in this Section 6.01 and appropriate confirmation is received.

Section 6.02           Parties in Interest.  Other than with respect to the parties to this Agreement, nothing in this Agreement, express or implied, is intended to or shall confer upon any person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 6.03           Governing Law.  This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Nevada, without giving effect to any applicable principles of conflict of laws that would cause the Laws of another state otherwise to govern this Agreement.

Section 6.04           Severability.  The provisions of this Agreement are severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions of this Agreement.  If any provision of this Agreement, or the application of that provision to any Person or any circumstance, is invalid or unenforceable, (i) a suitable and equitable provision will be substituted for that provision in order to carry out, so far as may be valid and enforceable, the intent and purpose of the invalid or unenforceable provision and (ii) the remainder of this Agreement and the application of that provision to other Persons or circumstances will not be affected by such invalidity

6



or unenforceability, nor will such invalidity or unenforceability affect the validity or enforceability of that provision, or the application of that provision, in any other jurisdiction.

Section 6.05           Assignment.  Neither this Agreement nor any right, interest or obligation hereunder may be assigned by any party hereto, in whole or part (whether by operation of Law or otherwise), without the prior written consent of the other parties hereto and any attempt to do so shall be null and void; except that Parent may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to any direct or indirect wholly-owned subsidiary of Parent.

Section 6.06           Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns, including without limitation in the case of each Contributing Stockholder, any trustee, executor, heir, legatee or personal representative succeeding to the ownership of (or power to vote) such Contributing Stockholder’s Owned Shares or other securities subject to this Agreement (including as a result of the death, disability or incapacity of such Contributing Stockholder).

Section 6.07           Interpretation.  The headings in this Agreement are for reference only and do not affect the meaning or interpretation of this Agreement.  Definitions apply equally to both the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun includes the corresponding masculine, feminine and neuter forms.  All references in this Agreement to Articles and Sections refer to Articles and Sections of this Agreement unless the context requires otherwise.  The words “include,” “includes” and “including” are not limiting and will be deemed to be followed by the phrase “without limitation.”  The phrases “herein,” “hereof,” “hereunder” and words of similar import shall be deemed to refer to this Agreement as a whole and not to any particular provision of this Agreement.  The word “or” shall be inclusive and not exclusive unless the context requires otherwise.  Unless the context requires otherwise, any agreements, documents, instruments or Laws defined or referred to in this Agreement will be deemed to mean or refer to such agreements, documents, instruments or Laws as from time to time amended, modified or supplemented, including (i) in the case of agreements, documents or instruments, by waiver or consent and (ii) in the case of Laws, by succession of comparable successor statutes.  All references in this Agreement to any particular Law will be deemed to refer also to any rules and regulations promulgated under that Law.  References to a Person will refer to its predecessors and successors and permitted assigns.

Section 6.08           Amendments.  This Agreement may not be amended except by the express written agreement signed by all of the parties to this Agreement.

Section 6.09           Extension; Waiver.  At any time prior to the Effective Time, Parent, on the one hand, and the Contributing Stockholders, on the other hand, may (i) extend the time for the performance of any of the obligations of the other party, (ii) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any document delivered under this Agreement or (iii) waive compliance with any of the covenants or conditions contained in this Agreement.  Any agreement on the part of a party to any extension or waiver will be valid only if set forth in an instrument in writing signed by such party and

7



agreed and acknowledged by the Company.  The failure of any party to assert any of its rights under this Agreement or otherwise will not constitute a waiver of such rights.

Section 6.10           Fees and Expenses.  Except as expressly provided in this Agreement, the Merger Agreement or in the Interim LLC Agreement, each party is responsible for its own fees and expenses (including the fees and expenses of financial consultants, investment bankers, accountants and counsel) in connection with the entry into of this Agreement and the consummation of the transactions contemplated hereby.

Section 6.11           Entire Agreement.  This Agreement (together with the Merger Agreement) constitutes the entire agreement and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties to this Agreement with respect to the subject matter of this Agreement.

Section 6.12           Rules of Construction.  The parties to this Agreement have been represented by counsel during the negotiation and execution of this Agreement and waive the application of any Laws or rule of construction providing that ambiguities in any agreement or other document will be construed against the party drafting such agreement or other document.

Section 6.13           Remedies Cumulative.  Except as otherwise provided in this Agreement, any and all remedies expressly conferred upon a party to this Agreement will be cumulative with, and not exclusive of, any other remedy contained in this Agreement, at law or in equity.  The exercise by a party to this Agreement of any one remedy will not preclude the exercise by it of any other remedy.

Section 6.14           Counterparts; Effectiveness; Execution.  This Agreement may be executed in any number of counterparts, all of which are one and the same agreement.  This Agreement will become effective and binding upon each Contributing Stockholder when executed by such Contributing Stockholder, Parent and the Company.  This Agreement may be executed by facsimile signature by any party and such signature is deemed binding for all purposes hereof, without delivery of an original signature being thereafter required.

Section 6.15           Specific Performance.  The parties to this Agreement agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that prior to the termination of this Agreement in accordance with Article V the parties to this Agreement will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.

Section 6.16           Submission to Jurisdiction.  Each of the parties hereto irrevocably agrees that any Legal Action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determined exclusively in any federal or state court located in the State of Nevada.  Each of the parties hereto hereby irrevocably submits with

8



regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated hereby in any court other than the aforesaid courts.  Each of the parties hereto hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this Section 6.16, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by the applicable law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.  Each of the parties hereto agrees that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 6.01 or in such other manner as may be permitted by applicable Laws, will be valid and sufficient service thereof.

Section 6.17           Waiver of Jury Trial.  Each party acknowledges and agrees that any controversy that may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any litigation, controversy or other Legal Action directly or indirectly arising out of or relating to this Agreement or the transactions contemplated by this Agreement.  Each party to this Agreement certifies and acknowledges that (i) no Representative of any other party has represented, expressly or otherwise, that such other party would not seek to enforce the foregoing waiver in the event of a Legal Action, (ii) such party has considered the implications of this waiver, (iii) such party makes this waiver voluntarily and (iv) such party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 6.17.

Section 6.18           Action in Contributing Stockholder Capacity Only.  The parties acknowledge that this Agreement is entered into by each Contributing Stockholder solely in such Contributing Stockholder’s capacity as the Beneficial Owner of such Contributing Stockholder’s Owned Shares and nothing in this Agreement restricts or limits any action taken by such Contributing Stockholder in his capacity as a director or officer of the Company, or any of its controlled affiliates (but not on his own behalf as a stockholder) and the taking of any actions (or failure to act) in his capacity as an officer or director of the Company, or any of its controlled affiliates will not be deemed to constitute a breach of this Agreement.

[Remainder of page intentionally left blank. Signature Page Follows.]

9



IN WITNESS WHEREOF, each party hereto has caused this Agreement to be signed as of the date first above written.

 

STATION CASINOS, INC.

 

 

 

 

 

 

By:

/s/ James E. Nave, D.V.M.

 

 

Name: James E. Nave, D.V.M.

 

Title:  Chairman of the Special Committee

 

 

 

 

 

 

 

FERTITTA COLONY PARTNERS LLC

 

 

 

 

 

 

 

By:

/s/ Frank J. Fertitta, III

 

 

 

Frank J. Fertitta, III

 

 

Its Authorized Member

 

 

 

 

 

 

 

CONTRIBUTING STOCKHOLDERS:

 

 

 

 

 

 

 

/s/ Frank J. Fertitta, III

 

Frank J. Fertitta, III

 

 

 

 

 

 

 

/s/ Lorenzo J. Fertitta

 

Lorenzo J. Fertitta

 

 

 

 

 

 

 

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

 


 EX-7.19 13 a07-6707_1ex7d19.htm EX-7.19

Exhibit 7.19

FIRST AMENDED AND RESTATED

OPERATING AGREEMENT

OF

FERTITTA COLONY PARTNERS LLC

This First Amended and Restated Operating Agreement (this “Agreement”) of FERTITTA COLONY PARTNERS LLC, a Nevada limited liability company (“Parent”), dated and effective as of February 23, 2007, is entered into by and among FC Investor, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Colony Capital Acquisitions, LLC (the “Colony Member”), Frank J. Fertitta, III and Lorenzo J. Fertitta (collectively, the “Contributing Stockholder Members” and, together with the Colony Member, the “Members”).

WHEREAS, the Articles of Organization of Parent were filed with the Office of the Secretary of State of Nevada on December 1, 2006.  Effective as of December 2, 2006, the Members entered into an operating agreement for Parent (as amended by that First Amendment to Operating Agreement dated as of February 14, 2007, the “Original LLC Agreement”);

WHEREAS, on the date hereof, Parent, FCP Acquisition Sub, a Nevada corporation and a wholly owned subsidiary of Parent (“Merger Sub”) and Station Casinos, Inc., a Nevada corporation (the “Company”) have executed an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which Merger Sub will be merged with and into the Company (the “Merger”), with the Company surviving the Merger (in such capacity, the “Surviving Corporation”);

WHEREAS, on the date hereof, each Member, Blake L. Sartini and Delise F. Sartini have executed letter agreements in favor of Parent, in which each such person, or an affiliate controlled by such person, has agreed, subject to the terms and conditions set forth therein, to make or cause to be made a cash equity or rollover equity investment in Parent at the Closing (each, an “Equity Commitment Letter”);

WHEREAS, on the date hereof, Parent and the Contributing Stockholder Members, Blake L. Sartini and Delise F. Sartini have entered into a voting agreement (the “Voting Agreement”), pursuant to which the Contributing Stockholder Members, Blake L. Sartini and Delise F. Sartini have agreed, subject to the terms and conditions set forth therein, to vote or cause to be voted certain Shares (as defined in the Merger Agreement) in favor of the adoption of the Merger Agreement;

WHEREAS, on the date hereof, certain affiliates of the Colony Member have entered into a limited guarantee (the “Limited Guarantee”) in favor of the Company and have agreed to guarantee certain obligations of the Parent and Merger Sub under the Merger Agreement in accordance with the terms of the Limited Guarantee;



WHEREAS, on the date hereof certain affiliates of the Colony Member have entered into a guarantee (the “Parent Guarantee”) in favor of the Parent and have agreed to guarantee certain obligations of the Colony Member hereunder; and

WHEREAS, the parties desire to amend and restate the Original LLC Agreement and wish to agree to certain terms and conditions that will govern the actions of Parent and the relationship among the Members with respect to the Merger Agreement, the transactions contemplated thereby, and the other letters and agreements entered into in connection with the transactions contemplated hereby and thereby and by such other letters and agreements on the terms and conditions herein set forth.

I.                 EFFECTIVENESS; DEFINITIONS.

Section 1.1             Effectiveness.       This Agreement shall become effective upon the execution of this Agreement by all of the Members and shall be effective until the earlier of (i) the consummation of the Merger under the Merger Agreement; provided, however, that Sections 4.8 and 4.10 shall continue in full force and effect and be enforceable against the parties to this Agreement, and (ii) the dissolution of Parent pursuant to Section 5.15 hereof.  The Members hereby agree that they shall enter into a Second Amended and Restated Operating Agreement of Parent simultaneously with the consummation of the Merger under the Merger Agreement, in the form agreed by the parties as of the date hereof (the “Second A&R Operating Agreement”).

Section 1.2             Definitions.  Certain terms are used in this Agreement as specifically defined herein.  These definitions are set forth or referred to in Section 5.1 hereof.  Capitalized terms used herein but not defined shall have the meanings given to them in the Merger Agreement.

II.             ORGANIZATIONAL MATTERS.

Section 2.1             Name. The name of the limited liability company is “Fertitta Colony Partners LLC”.

Section 2.2             Formation and Continuation of Parent.  Parent was formed as a limited liability company under the NRS by the filing of the Articles of Organization (the “Articles”) with the Office of the Secretary of State of the State of Nevada on December 1, 2006.  The parties hereto agree to continue Parent.  Parent shall accomplish all filing, recording, publishing and other acts necessary or appropriate for compliance with all requirements for operation of Parent as a limited liability company under this Agreement and the NRS and under all other laws of the State of Nevada and such other jurisdictions in which Parent determines that it may conduct business.

Section 2.3             Purpose.  The purpose and business of Parent is to enter into the transactions contemplated by the Merger Agreement.

Section 2.4             Location of Principal Place of Business.  The location of the principal place of business of Parent shall be 11011 West Charleston Boulevard, Las Vegas, Nevada 89135, or such other location as may be determined by the Board of Directors.  In addition,

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Parent may maintain such other offices as the Board of Directors may deem advisable at any other place or places within or without the State of Nevada.

Section 2.5             Registered Agent.  The registered agent for Parent shall be The Corporation Trust Company of Nevada, 6100 Neil Road, Suite 500, Reno, NV  89511 or such other registered agent as the Board of Directors may designate from time to time.

Section 2.6             Term.  The term of Parent commenced on the date of filing of the Articles, and shall be perpetual unless Parent is earlier dissolved and terminated in accordance with the provisions of this Agreement.

III.         CAPITAL CONTRIBUTIONS; DISTRIBUTIONS.

Section 3.1             Capital Contributions. The Members are deemed admitted as Members of the Company upon their execution and delivery of this Agreement. Each Member has contributed the amount set forth in Exhibit A hereto.

Section 3.2             Distributions. With the exception of the Termination Fee, which shall be distributed as promptly as practicable upon its receipt and allocated in accordance with Section 4.8 hereof, distributions shall be made to the Members at the times and in the aggregate amounts determined by the Majority Members, and shall be distributed pro rata among the Members in proportion to their respective Equity Commitments.  Notwithstanding any provision to the contrary contained in this Agreement, Parent shall not make a distribution to the Members on account of their interests in Parent if such distribution would violate the NRS or other applicable law.

IV.        MEMBER ACTIONS.

Section 4.1             Powers of Members. The Members shall have the power to exercise any and all rights or powers granted to the Members pursuant to the express terms of this Agreement and under the NRS.

Section 4.2             Contributing Stockholder Member and Majority Member Decisions.

(a)           Except to the extent any Section of this Agreement expressly provides otherwise, the Majority Contributing Stockholder Members shall have all authority, right and power in the management of the business of Parent and on behalf of Parent in its capacity as the member or manager of its direct or indirect subsidiaries, and to make all decisions with respect to all actions taken by Parent or on behalf of Parent in its capacity as the member or manager of its direct or indirect subsidiaries, including Merger Sub; provided, however, that neither the Majority Contributing Stockholder Members nor the Majority Members may cause Parent or its subsidiaries, including Merger Sub, to take any action in a way that has a disproportionate and adverse impact on a Member relative to the other Members without such disproportionately and adversely impacted Member’s consent, other than any action expressly set forth in this Agreement.

(b)           The following actions shall require approval by the Majority Members:

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(i)            the approval by Parent of any of the actions by the Company or its subsidiaries pursuant to Sections 6.1(a), (b), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p), (q) or (r) of the Merger Agreement or Section 6.1(s) to the extent it relates to any of the foregoing; and

(ii)           the approval by Parent of any sale, lease or other conveyance of assets of the Company or any of its subsidiaries in any transaction or series of related transactions (other than (A) the transactions contemplated by the Sale and Lease-Back Agreements (as defined in the Merger Agreement) or (B) any sale, lease or other conveyance of assets of any wholly-owned subsidiary to the Company or any of the Company’s other wholly-owned subsidiaries), in each case outside the ordinary course of business or any assets (other than obsolete inventory or inventory sold in the ordinary course of business), except for sales, leases or other conveyances of assets in a single transaction or series of related transactions with a fair market value of less than $15 million.

(c)           Approval by the Majority Members shall be required to cause Parent to (i) amend or agree to an amendment of the Merger Agreement, (ii) waive or determine to be satisfied any covenant or other agreement in the Merger Agreement (other than Section 6.1(a) in the Merger Agreement, which is addressed in Section 4.2(b) above) or condition to closing specified in the Merger Agreement (each, a “Closing Condition”), (iii) determine any Closing Condition not to be satisfied, (iv) otherwise terminate the Merger Agreement, (v) take any action whatsoever other than in connection with the consummation of the transactions contemplated by this Agreement or the Merger Agreement or (v) take any action that would, or would be reasonably likely to, result in a breach of the Debt Commitment Letters.  Parent shall not, and the Members shall not permit Parent to, without the prior consent of the affected Member, amend, or agree to any amendment of, the Merger Agreement in a manner that discriminates against a Member relative to the other Members in a manner that is materially adverse to such Member.

(d)           If the Majority Members have agreed to take any action pursuant to Section 4.2(c) hereof to increase or modify the amount or form of the consideration to be offered by the Members to acquire the Company pursuant to the Merger Agreement (such a decision, a “Change in Merger Consideration”), the Colony Member shall have the obligation to contribute its proportionate share of the Equity Commitments to accommodate such Change in Merger Consideration; provided that the amount of equity of the Company that each Contributing Stockholder Member shall cash out in the Merger shall depend upon the amount required to realize a fixed net after-tax sale amount agreed upon by the parties as of the date hereof, and all remaining equity shall be contributed in the Merger pursuant to such Contributing Stockholder Member’s Equity Commitment.

(e)           The amount of the Colony Member’s Equity Commitment may be reduced from time to time with the written approval of the Majority Members (the “Equity Sell-down”).  The Colony Member’s obligation to fund the Equity Commitment is subject to the satisfaction or waiver of any Closing Condition pursuant to Section 4.2(c), and such funding will occur contemporaneous with the Closing and the simultaneous issuance to the Colony Member or their affiliates of the securities of Parent to be set forth opposite such Colony Member (or their affiliates) name on Schedule I to the Second A&R Operating Agreement.  The amount to be funded pursuant to the Equity Commitments will be reduced by any person providing equity

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commitment letters to Parent in proportion to each such person’s equity commitment after giving effect to any Equity Sell-down or similar reduction in commitments in the event Parent does not require all of the equity with respect to which the Members have made commitments.

Section 4.3             Debt Financing.  All actions and decisions of Parent with respect to debt financing  (including with respect to existing debt commitments) shall require the approval of the Majority Members.  The Majority Members shall cause Parent to, and each Member shall fully cooperate with Parent’s efforts to, negotiate, enter into and borrow under definitive agreements relating to debt financing to be provided at the Closing, on the terms set forth in the debt commitment letters attached as Exhibit B (the “Debt Commitment Letters”) or such other terms as may be agreed by the Majority Members.

Section 4.4             Further Assurances; Cooperation.  Subject to the terms and conditions of this Agreement and the Merger Agreement, each Member will use its reasonable best efforts to take all actions and to do all things necessary and proper or advisable to cause the Closing Conditions to be satisfied as promptly as reasonably practicable and to consummate the transactions contemplated by this Agreement and the Merger Agreement.

Section 4.5             Gaming and Antitrust Matters.

(a)           Each Member will use its reasonable best efforts, consistent with its past practice, to supply and provide information that is accurate in all material respects to any Governmental Authority requesting such information in connection with filings or notifications under, or relating to, the Antitrust Laws or Gaming Laws (each as defined below).  Notwithstanding anything to the contrary in this Agreement, no Member shall, whether prior to or following Closing, be required to cause any portfolio company, investment fund or other affiliate of any Member or any director, officer, employee, general partner, limited partner, member or manager of any of the foregoing to take any action, undertake any divestiture or restrict its conduct to the extent that such action or restriction relates to the Las Vegas Hilton.  Each Member shall (x) provide responsive information required to make any submission or application to a Governmental Authority and to otherwise cooperate in connection with any such submission or application as is necessary and customary under the circumstances and (y) except as expressly provided in the immediately preceding sentence, divest or restrict its conduct with respect to its business to the extent necessary to obtain any necessary approvals under the HSR Act.  If any Governmental Authority asserts any objections under (i) the HSR Act or any other applicable antitrust, competition or fair trade Laws (collectively, the “Antitrust Laws”) or (ii) any applicable gaming or similar laws and regulations (the “Gaming Laws”) with respect to the transactions contemplated by the Merger Agreement and such objections relate to the activities or investments of a Member or such Member’s affiliates, the Majority Members shall have the right, but not the obligation, to direct such Member (the “Affected Member”) to (1) modify or forego any or all of its governance rights with respect to Parent and its Affiliates if the Majority Members determine that such action may contribute to the resolution of such objections or, (2) solely in the event the Affected Member does not consent to the modification or elimination of its governance rights proposed by the Majority Members pursuant to clause (1), assign all of its rights and obligations under this Agreement and under its Equity Commitment Letter with respect to all or any portion of its Commitments to a person selected by the Majority Members (the “Assignee”), provided the Assignee agrees in writing to be bound by the terms and

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conditions of this Agreement and such Equity Commitment Letter (including assuming any liabilities and obligations of the Affected Member under such agreements and instruments) with respect to the portion (if less than all) of the Commitments so assigned and assumed and the other Members provide the Affected Member with a mutually satisfactory indemnity with respect to its liability under this Agreement and such Equity Commitment Letter (with respect to the portion (if less than all) of the Commitments so assigned) or obtain a full and unconditional release of the Affected Member from this Agreement and such Equity Commitment Letter, with respect to the portion (if less than all) of the Commitments so assigned and assumed.  The Majority Members will consult with the Affected Member in good faith and attempt to resolve any such dispute before directing the Affected Member to take any of the foregoing actions.

(b)           In the event that the Affected Member is the Colony Member and the Majority Members exercise their rights pursuant to clause (2) of the penultimate sentence of Section 4.5(a), then (i) the Assignee shall (A) agree in writing, or cause such other party as may acceptable to the Company its sole discretion, to be bound by the terms and conditions of the Limited Guarantee or (B) enter in a substitute guarantee agreement with the Company, in either case with respect to the portion (if less than all) of the Guaranteed Obligations equal to the portion of the Colony Member’s Commitments so assigned to and assumed by the Assignee; and (ii) the other Members and the Assignee shall (A) provide the Guarantors with an indemnity reasonably satisfactory to the Guarantors with respect to their respective liability under the Limited Guarantee (with respect to the portion (if less than all) of the Guaranteed Obligations so assigned to and assumed by the Assignee or its designee) or (B) obtain a full and unconditional release of the Guarantors from the Company with respect to the Guarantors several obligations under the Limited Guarantee, with respect to the portion (if less than all) of the Guaranteed Obligations so assigned and assumed.  Notwithstanding Section 5.2, the Colony Member shall have the unilateral right to waive the application of this Section 4.5(b) in connection with any assignment of all or a portion of its Commitments to an Assignee.

Section 4.6             Rights of Closing Majority Members; Equity Commitments.

(a)           In the event that the Majority Members (i) determine to close the Merger and (ii) have delivered to each Member a written notice (a “Commitment Notice”) stating that (1) the Majority Members have determined that all Closing Conditions have been satisfied or the Majority Members have determined to waive all unsatisfied Closing Conditions and (2) each such Majority Member is prepared to fund its Equity Commitment upon consummation of the Merger (each such Majority Member, a “Closing Majority Member”) then such Closing Majority Members may, in their discretion, (A) terminate the participation in the transaction of any Member that does not fund its Equity Commitment in full or that fails promptly following a written request of the Closing Majority Members to assert its willingness in writing to fund its Equity Commitment in full (each such terminated Member, a “Failing Member”), it being understood that no such termination shall affect the Closing Majority Member’s rights against such Failing Member with respect to such failure or unwillingness to fund, or (B) enforce the provisions of any Member’s Equity Commitment Letter.

(b)           Each Member hereby affirms and agrees that it is bound by the provisions set forth in its Equity Commitment Letter and that the Closing Majority Members shall be entitled to enforce the provisions of such Equity Commitment Letter in accordance with the foregoing

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Section 4.6(a).  Except as contemplated by Section 4.6(a), no Member shall attempt to enforce any Equity Commitment Letter against any other Member.

Section 4.7             Syndication.  No Member may syndicate its Equity Commitment without the prior written consent of the Majority Members. Notwithstanding anything to the contrary contained in this Agreement, a Member may syndicate its Equity Commitment without the prior written consent of the Majority Members to its affiliated funds, entities and investment vehicles and to co-investors where the Member retains direct or indirect control over voting and disposition (a “Permitted Assignee”); provided, however, that no such syndication shall relieve such Member of its obligations under this Agreement and its Equity Commitment Letter. At Closing, the Members will cause their respective Permitted Assignees to enter into all documentation necessary to cause such Permitted Assignee to become a Member.

Section 4.8             Termination Fee.  Any termination fee or expense reimbursement payment paid by the Company or any of its affiliates pursuant to the Merger Agreement (the “Termination Fee”) will be applied first (i) to repay all costs incurred pursuant to Section 4.10(a) and second (ii) to the Members (other than any Failing Member) or their designees and in proportion to their respective Equity Commitments.

Section 4.9             Notice of Closing.  Parent agrees to keep the Members reasonably informed, on a current basis, of developments relating to the Merger, including the likely Closing Date.  If Parent receives any notice under the Merger Agreement, it shall promptly notify each Member at the address set forth on Exhibit A to this Agreement or any other address designated by such Member in writing to Parent.  The failure of Parent to perform its obligations under this Section 4.9 will not relieve a Member of its obligations under this Agreement.

Section 4.10           Expense Sharing Provisions.

(a)           Except as provided in Sections 4.10(b), (c) and (d), each Member agrees to bear the pro rata portion of all the expenses and fees of legal counsel, accountants, financial advisors and other consultants and advisors and any financing (including to prospective sources of equity financing to the extent a Member is contractually obligated to pay fees or expenses to such party) or other fees or expenses incurred by the Members in connection with this Agreement or the Merger Agreement or the transaction contemplated hereby or thereby, Parent and its subsidiaries (including any fees or expenses to be paid to the Company pursuant to the Merger Agreement, including, without limitation, the Reverse Termination Fee and the Regulatory Termination Fee (each as defined in the Merger Agreement)) or by any of the Members or their affiliates, in connection with the transactions contemplated by the Merger Agreement, equal to a fraction, the numerator of which is the amount of such Member’s investment pursuant to such Member’s Equity Commitment Letter and the denominator of which is the total aggregate investment of all the Members pursuant to all the Equity Commitment Letters; provided, however, that (i) any expenses or fees in excess of $15 million in the aggregate shall be the sole responsibility of the Colony Member and (ii) the Contributing Stockholder Members shall not be responsible for any portion of any expenses or fees in excess of $15 million in the aggregate.

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(b)           If the Merger is consummated, the Members shall cause the Surviving Corporation or one of its subsidiaries to pay any such outstanding costs and to reimburse the Members for any such costs already expended.

(c)           If the Equity Commitment Letters are terminated and the Merger is not consummated (and no Termination Fee is received by Parent), and no Member shall have breached or caused a breach of the Merger Agreement or Voting Agreement, promptly after such termination, the Majority Members will determine the aggregate costs incurred by Parent and each Member shall be responsible for costs and expenses as set forth in Section 4.10(a).  Each Member agrees promptly to contribute such amounts, or to pay such expenses and fees, or to reimburse other Members in accordance with Section 4.10(a).

(d)           If the Equity Commitment Letters are terminated and the Merger is not consummated (and no Termination Fee is received by Parent) as a result of (i) a breach of the Merger Agreement or Voting Agreement caused by a Member (the “Breaching Member”) or (ii) a breach of the Merger Agreement by Parent due to the failure of Parent or the Company to receive the proceeds of the debt financing as a result of facts known to Frank J. Fertitta or Lorenzo J. Fertitta on or prior to the date of the Merger Agreement, the existence of which prevents Parent, the Company or any subsidiary of the Company, as the case may be, from making representation and warranties to the prospective lenders of such debt financing, which representations and warranties would have been able to be made is such representations and warranties were qualified by the knowledge of Frank J. Fertitta or Lorenzo Fertitta, then, (x) in the case of clause (i), such Breaching Member and (y) in the case of clause (ii), Frank J. Fertitta and Lorenzo J. Fertitta shall be responsible for all out-of-pocket costs and expenses incurred by Parent, Merger Sub and the Members incurred in connection with this Agreement or the Merger Agreement, including, without limitation, the Reverse Termination Fee or the Regulatory Termination Fee, as applicable; it being understood that Frank J. Fertitta and Lorenzo Fertitta shall be deemed to be the sole Breaching Members if the Company terminates the Merger Agreement due to a breach by Parent or Merger Sub of Section 5.15 thereof.

Section 4.11           Information Supplied.  Each Member hereby represents, warrants and covenants to the other Members that none of the information supplied in writing or otherwise by such Member for inclusion or incorporation by reference in (i) the Company Proxy Statement, (ii) the Schedule 13E-3 or (iii) any other filing or notification with any Governmental Authority, including, without limitation, filings or notifications under, or relating to, the Antitrust Laws or Gaming Laws, will cause a breach of the representations and warranties or covenants or other agreements of Parent and Merger Sub set forth in this Agreement or the Merger Agreement.

Section 4.12           Voting Agreement.  All actions and decisions relating to the Voting Agreement (other than actions and decisions taken by the Contributing Stockholder Members in their capacity as such), including any negotiations relating to any of the foregoing, shall require the approval of the Colony Member.

V.            MISCELLANEOUS.

Section 5.1             Certain Definitions.  For purposes of this Agreement, the following terms will have the following meanings when used herein with initial capital letters:

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“Affected Member” shall have the meaning set forth in Section 4.5.

“Antitrust Laws” shall have the meaning set forth in Section 4.5.

“Closing Majority Member” shall have the meaning set forth in Section 4.6(a).

“Closing Member” shall have the meaning set forth in Section 5.4.

“Colony Member” shall have the meaning set forth in the Recitals.

“Commitment Notice” shall have the meaning set forth in Section 4.6(a).

“Commitments” shall, for each Member, have the meaning given to such term in the Equity Commitment Letter delivered by such Member to Parent.

“Contributing Stockholder Members” shall have the meaning set forth in the Recitals.

“Equity Commitment” shall mean, with regard to the Colony Member, the Colony Member’s Equity Commitment Letter, and with regard to a Contributing Stockholder Member, such Contributing Stockholder Member’s Equity Commitment Letter.

“Equity Commitment Letter” shall have the meaning set forth in the Recitals.

“Failing Member” shall have the meaning set forth in Section 4.6(a).

“Gaming Laws” shall have the meaning set forth in Section 4.5.

“Guaranteed Obligations” shall have the meaning set forth in the Limited Guarantee.

“Guarantors” shall have the meaning set forth in the Limited Guarantee.

“Indemnified Member” shall have the meaning set forth in Section 5.5.

“Indemnifying Member” shall have the meaning set forth in Section 5.5.

“Majority Contributing Stockholder Members” means the Contributing Stockholder Members whose aggregate Equity Commitments represent a majority of the Equity Commitments of the Contributing Stockholder Members.

“Majority Members” means collectively the Majority Contributing Stockholder Members and the Colony Member.

“Members” shall have the meaning set forth in the Recitals.

“Merger Agreement” shall have the meaning set forth in the Recitals.

“Merger Sub” shall have the meaning set forth in the Recitals.

“Permitted Assignee” shall have the meaning set forth in Section 4.7.

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“Surviving Corporation” shall have the meaning set forth in the Recitals.

“Termination Fee” shall have the meaning set forth in Section 4.8.

“Voting Agreement” shall have the meaning set forth in the Recitals.

Section 5.2             Amendment.  This Agreement may be amended or modified, and the provisions hereof may be waived, only by an agreement in writing signed by the Majority Members; provided, however, that any provision herein requiring the approval of any Member who is distinguished from the other Members may, in each case, only be amended, modified or waived by an agreement in writing signed by all of the Members.

Section 5.3             Severability.  The provisions of this Agreement are severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions of this Agreement.  If any provision of this Agreement, or the application of that provision to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision will be substituted for that provision in order to carry out, so far as may be valid and enforceable, the intent and purpose of the invalid or unenforceable provision and (b) the remainder of this Agreement and the application of that provision to other Persons or circumstances will not be affected by such invalidity or unenforceability, nor will such invalidity or unenforceability affect the validity or enforceability of that provision, or the application of that provision, in any other jurisdiction.

Section 5.4             Remedies.  Except as otherwise provided in this Agreement, any and all remedies expressly conferred upon a party to this Agreement will be cumulative with, and not exclusive of, any other remedy contained in this Agreement, at law or in equity.  The exercise by a party to this Agreement of any one remedy will not preclude the exercise by it of any other remedy.  The parties hereto agree that this Agreement will be enforceable by all available remedies at law or in equity (including, without limitation, specific performance), provided that the termination power and the enforcement power referred to in Section 4.6(a) may only be used against a Member by, or at the direction of, the Closing Majority Members.  Without limiting any other remedies available, in the event that a Member (a “Closing Member”) pays or becomes obligated to pay any amount required to be paid by a Failing Member, then each Failing Member will promptly reimburse such Closing Member for an amount in immediately available funds equal to the product of (a) any amount paid by such Closing Member on behalf of such Failing Member multiplied by (b) a fraction of which the numerator is such Failing Member’s Equity Commitment and the denominator is all Failing Members’ Equity Commitments; provided that in no event shall any Member be obligated to pay any amount in excess such Member’s Equity Commitment.

Section 5.5             Indemnities.  Each Member (each, an “Indemnifying Member”) hereby agrees to defend, indemnify and hold harmless the other Members (each, an “Indemnified Member”) from and against any damages sustained or suffered by any such Indemnified Member resulting from any failure by such Indemnifying Member to perform its obligations in all material respects, or any failure of its representations and warranties to be true and accurate in all material respects, under this Agreement.  Each Member undertakes to the other Members cross-indemnities and contribution obligations so that, if any of the Members has liability under its

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Equity Commitment Letter or, subject to Section 4.10, otherwise relating to the transaction, each Member will bear a share proportionate to its portion of the Equity Commitment relative to the aggregate Equity Commitments of the other Members .  Notwithstanding the foregoing but subject to Section 4.10, (A) each Member will be solely responsible for any such liability attributable to breaches of representations, warranties or other obligations of it or its affiliated entities, (B) the Contributing Stockholder Members shall not be in breach (or deemed to be in breach) of this Agreement as a result of any actions (or failures to act) taken in their capacities as officers or directors of the Company and (C) no Member shall be obligated to pay any amount in excess of such Member’s Equity Commitment.

Section 5.6             No Recourse.  Except to the extent provided in the Parent Guarantee, notwithstanding anything that may be expressed or implied in this Agreement, and notwithstanding the fact that certain of the Members may be partnerships or limited liability companies, each of Parent and each Member covenants, agrees and acknowledges that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any current or future director, officer, employee, general or limited partner or member or manager of any Member or of any partner, member, manager or affiliate thereof (including, in the case of the Contributing Stockholder Members, any trusts or estate planning vehicles established for the benefit of such Contributing Stockholder Member’s family members), as such, 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 director, officer, employee, general or limited partner or member or manager of any Member or of any partner, member, manager or affiliate thereof (including, in the case of the Contributing Stockholder Members, any trusts or estate planning vehicles established for the benefit of such Contributing Stockholder Member’s family members), as such, for any obligation of any Member under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.

Section 5.7             Governing Law.  This Agreement will be governed by, and construed in accordance with, the Laws of the State of Nevada, without giving effect to any applicable principles of conflict of laws that would cause the Laws of another State to otherwise govern this Agreement.

Section 5.8             Submission to Jurisdiction.  Each of the parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns shall be brought and determined exclusively in the United States District Court for the District of Nevada.  Each of the parties hereto agrees that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 10.11 of the Merger Agreement or in such other manner as may be permitted by applicable Laws, will be valid and sufficient service thereof.  Each of the parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by

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this Agreement in any court or tribunal other than the aforesaid courts.  Each of the parties hereto hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder (i) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve process in accordance with this Section 5.8, (ii) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by applicable Law, any claim that (x) the suit, action or proceeding in such court is brought in an inconvenient forum, (y) the venue of such suit, action or proceeding is improper or (z) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

Section 5.9             Representations and Warranties.  Each of the Members hereby represents and warrants to the other Members (on behalf of such Member only) that (a) it has the requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary action on the part of such Person and no additional proceedings are necessary to approve this Agreement, and (c) this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms hereof.  Each of the Members further represents and warrants to the other Member (on behalf of such Member only) that its execution, delivery and performance of this Agreement will not (i) conflict with, require a consent, waiver or approval under, or result in a breach of or default under, any of the terms of any Contract to which such Person is a party or by which such Person is bound; (ii) violate any order, writ, injunction, decree or statute, or any rule or regulation, applicable to such Person or any of the properties or assets of such Person; or (iii) result in the creation of, or impose any obligation on such person to create, any lien, charge or other encumbrance of any nature whatsoever upon such Person’s properties or assets.

Section 5.10           WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 5.11           Exercise of Rights and Remedies.  No delay of or omission in the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later; nor shall any such delay, omission nor waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.

Section 5.12           Assignments.  Other than as provided herein (including Section 4.7), the rights and obligations of the Members hereunder shall not be assigned without the prior consent of the other Members; provided, however, that, to the extent permitted by the Equity

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Commitment Letters or Section 4.7 hereof, an Member may assign its rights and obligations under this Agreement to a Permitted Assignee, but no such assignment shall relieve any such assigning Member from any of its obligations hereunder.

Section 5.13           Other Agreements.  This Agreement, together with the agreements referenced herein, constitutes the entire agreement, and supersedes all prior agreements, understandings and statements, both written and oral, among the parties or any of their affiliates with respect to the subject matter contained herein except for such other agreements as are referenced herein which shall continue in full force and effect in accordance with their terms.

Section 5.14           Counterparts.  This Agreement may be executed in any number of counterparts, all of which will be one and the same agreement.  This Agreement will become effective when each party to this Agreement will have received counterparts signed by all of the other parties.

Section 5.15           Dissolution.

(e)           Parent shall dissolve and its affairs shall be wound up upon the first to occur of the following: (i) the later of (x) the termination of the Merger Agreement by Parent, Merger Sub or the Company pursuant to Section 9.1 of the Merger Agreement, (y) the payment of all fees due to Parent thereunder and (z) the payment of all fees due to the Company pursuant to the Merger Agreement; (ii) the unanimous written consent of the Members; (iii) at any time there are no members of Parent unless Parent is continued in accordance with the NRS, or (iv) the entry of a decree of judicial dissolution under Section 86.541 of the NRS.

(f)            The bankruptcy of a Member shall not cause such Member to cease to be a member of Parent and, upon the occurrence of such an event, the business of Parent shall continue without dissolution.

(g)           In the event of dissolution, Parent shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of Parent in an orderly manner), and the assets of Parent shall be applied in the manner, and in the order of priority, set forth in Section 86.521 of the NRS.

[Signature pages follow]

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IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement (or caused this Agreement to be executed on its behalf by its officer or representative thereunto duly authorized) under seal as of the date first above written.

COLONY MEMBER:

FC INVESTOR, LLC, a Delaware limited liability company

By:

/s/ Jonathan H. Grunzweig

 

Name: Jonathan H. Grunzweig

 

Title: Vice President

 

 

CONTRIBUTING STOCKHOLDERS:

/s/ Frank J. Fertitta, III

 

Frank J. Fertitta, III

 

/s/ Lorenzo J. Fertitta, III

 

Lorenzo J. Fertitta

 

 

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