Completion Guaranty (2003)Full Document 

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COMPLETION GUARANTY

        This Completion Guaranty is made as of January 24, 2003 by Station Casinos, Inc., a Nevada corporation ("Completion Guarantor"), in favor of Bank of America, N.A., as Administrative Agent for the benefit of the Creditors under the Loan Agreement described below.

RECITALS

        A.    Pursuant to the Loan Agreement (as amended, supplemented or otherwise modified from time to time, the "Loan Agreement") of even date herewith by and among the United Auburn Indian Community, a federally recognized Indian Tribe ("Borrower"), the lenders from time to time parties thereto (each a "Lender" and collectively, the "Lenders"), and Bank of America, N.A., as Administrative Agent, the Creditors have agreed to extend certain credit facilities to Borrower, the proceeds of which shall be used, inter alia, to construct the Thunder Valley Casino.

        B.    This Completion Guaranty is the "Completion Guaranty" referred to in the Loan Agreement and one of the Loan Documents described therein.

        C.    Pursuant to this Agreement, Completion Guarantor agrees to make certain Sub Debt Contributions to the Borrower in an amount sufficient to cause the completion of the Thunder Valley Casino, all as set forth herein.

        D.    It is acknowledged that (i) the Loan Agreement provides for credit facilities in an aggregate principal amount of $142,500,000 as of the Closing Date, (ii) the Completion Guarantor's prior contributions to the Thunder Valley Casino project are in the amount of $36,798,151, as of January 22, 2003 and are concurrently being converted to a subordinated obligation of the Borrower to Completion Guarantor, (iii) these sources of capital are insufficient to finance the entire $215,000,000 Approved Budget, and (iv) that the completion of the Thunder Valley Casino is dependent upon either the identification of additional Lenders under the Loan Agreement or the contribution of additional capital by the Completion Guarantor pursuant to this Agreement.


AGREEMENT

        NOW, THEREFORE, in order to induce the Creditors to extend credit facilities to Borrower under the Loan Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Completion Guarantor hereby agrees as follows:

        1.    Definitions.    This Agreement is the Completion Guaranty referred to in the Loan Agreement. Capitalized terms used Terms but not otherwise defined in this Agreement shall have the meanings defined for those terms in the Loan Agreement. As used in this Agreement, the following terms shall have the meanings respectively set forth after each:

        "Bankruptcy Code" means Title 11 of the United States Code as amended from time to time.

        "Completion Payment" means a Cash payment required to be made hereunder by the Completion Guarantor to the Administrative Agent.

        "Insolvency Proceeding" means any case or proceeding, voluntary or involuntary, under the Bankruptcy Code, or any similar existing or future law of any jurisdiction, state or federal, relating to bankruptcy, insolvency, reorganization or relief of debtors.

        "Term Loan Participations" means participations by Station in Term Loans made by Bank of America or other willing Lenders made pursuant to a participation agreement in the form of Exhibit A hereto.

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        "Unreimbursed Expenses" has the meaning set forth in Section 5.3(c)(ii).

        2.    Completion Guaranty and Agreement.    

        Completion Guarantor hereby irrevocably and unconditionally guarantees that:

            (a)  Completion Guarantor shall (i) complete or cause to be completed in accordance with Section 5.2 hereof the construction of the Thunder Valley Casino in material conformity with the Approved Budget and the Approved Plans (in each case as the same exist as of the Closing Date and with such changes thereto as are permitted by the Loan Agreement), free and clear of material defects and Liens or claims for Liens for material supplied or labor or services performed in connection therewith, except for Permitted Encumbrances and Permitted Rights of Others and Liens permitted under Section 6.7 of the Loan Agreement and (ii) cause the Completion Date to occur on or before December 31, 2003.

            (b)  Without limitation on the foregoing, if as of any date the total cost of construction, design, and development of the Thunder Valley Casino (and of all other costs contemplated by the Approved Budget) theretofore expended exceeds $215,000,000 (or, if the Increased Capex Conditions have been satisfied, $225,000,000), and to the extent that the Borrower has not dedicated Available Cash Flow to the payment of such amounts as determined by Administrative Agent in its sole discretion, Completion Guarantor shall make (or cause to be made), within five Business Days following demand by the Administrative Agent, a Cash payment to Borrower in an amount which is equal to the greater of (i) the Estimated Completion Amount required to permit such completion on or before the Completion Date, or (ii) if the Thunder Valley Casino has then been completed, the amount of such excess. As used herein, the "Estimated Completion Amount" is the amount (as determined by the Administrative Agent in its sole discretion after consultation with Construction Consultant) equal to the sum of (a) the amount by which the actual completion cost (or theretofore expended amounts) for each line item in the Approved Budget has been exceeded (net of any savings on any completed line items), plus, without duplication, (b) to the extent that Loans are not then available under the Loan Agreement, the remaining unexpended amount of the Approved Budget.

            (c)  Without limitation on the foregoing, if the Opening Date does not occur on or before September 5, 2003 (or such date not later than December 31, 2003 upon which Borrower would be entitled to open the Thunder Valley Casino in a manner that allows it to retain not less than 1256 of its allocated gaming units), the Completion Guarantor shall, within five Business Days following demand by the Administrative Agent, make or cause to be made a Cash payment to Borrower in an amount which is equal to the outstanding Obligations under the Loan Agreement.

            (d)  Without limitation on the foregoing, in the event that the Administrative Agent determines, prior to the Completion Date, that either (i) additional Lenders are unlikely to be available to subscribe pursuant to Section 2.11 of the Loan Agreement for additional Pro Rata Shares which will result in an increase in the principal amount of the Commitments to $215,000,000, or (ii) subscriptions by additional Lenders are unlikely to be available prior to the date upon which funds otherwise available for the Completion of the Thunder Valley Casino are anticipated to be exhausted, then either (y) to the extent that Term Loan Participations by Station are not prohibited by the Compact or other applicable Law, and provided that Administrative Agent shall have received such assurances thereof as it may reasonably request (including, without limitation, legal opinions of counsel in form and substance reasonably satisfactory to it), the Administrative Agent shall cause Bank of America or other willing Lenders to make additional Term Loans to Borrower pursuant to Section 2.11 of the Loan Agreement in an amount which results in the principal amount of the Commitments being increased to $215,000,000 and Station will concurrently purchase Term Loan Participations therein, or (x) to the extent that Term Loan Participations are prohibited (or to the extent Administrative Agent has not received the

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    assurances referred to in clause (ii)(y) hereof), Station will make Sub Debt Contributions in the same amount. Station hereby agrees to indemnify Bank of America and each other Lender which makes Term Loans which are the subject of Term Loan Participations from any loss, cost, damage, expense, claim, action or cause of action arising out of or relating to the making of such Term Loans, including without limitation any costs associated with capital reserves which Bank of America or such Lenders are obliged to create or maintain by reason of such Term Loans.

            (e)  All Completion Payments made by the Completion Guarantor hereunder shall be deemed to be Sub Debt Contributions to the Borrower except to the extent properly treated as Term Loan Participations pursuant to Section 2(d). For greater certainty, Completion Guarantor acknowledges that the issuance by Borrower of a Sub Debt Contribution Note to Completion Guarantor is not a condition precedent to its obligation to make any Completion Payment required hereunder.

        3.    Payment Provisions in the Event of Bankruptcy.    

        In the event, prior to the Completion Date, that the Borrower becomes subject to an Insolvency Proceeding as defined below, notwithstanding Section 2 hereof, Completion Guarantor guarantees and agrees that:

            (a)  To the extent that the Estimated Completion Amount exceeds $215,000,000 (or, if the Increased Capex Conditions have been satisfied, $225,000,000), the Completion Guarantor shall immediately make or cause to be made Completion Payments in the amount of such excess into an interest-bearing deposit account designated and controlled exclusively by the Administrative Agent (the "Deposit Account") in which the Administrative Agent has concurrently been granted a security interest for the benefit of the Creditors. Such funds in the Deposit Account shall only be available for, and used to complete, construction of the Thunder Valley Casino.

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