Loan Agreement [Amended and Restated No. 2] (2004)Full Document 

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                           SECOND AMENDED AND RESTATED
                                 LOAN AGREEMENT


                          Dated as of December 21, 2004


                                      among


                       PALACE STATION HOTEL & CASINO, INC.
                              BOULDER STATION, INC.
                               TEXAS STATION, LLC
                             SANTA FE STATION, INC.
                              SUNSET STATION, INC.
                         LAKE MEAD STATION HOLDINGS, LLC
                             LAKE MEAD STATION, INC.
                          FIESTA STATION HOLDINGS, LLC
                              FIESTA STATION, INC.
                                       and
                             CHARLESTON STATION, LLC


                            the Lenders herein named,


                                BANK OF SCOTLAND
                      DEUTSCHE BANK TRUST COMPANY AMERICAS
                          LEHMAN COMMERCIAL PAPER INC.
                                       and
                             WELLS FARGO BANK, N.A.

                              as Syndication Agents

                                       and


                 BANK OF AMERICA, N.A., as Administrative Agent


                         BANC OF AMERICA SECURITIES LLC
                has served as Sole Lead Arranger and Book Manager
                   for the Credit Facilities described herein





                                TABLE OF CONTENTS



                                                                                                            Page(s)
                                                                                                          
Article 1 DEFINITIONS AND ACCOUNTING TERMS....................................................................1

1.1      Defined Terms........................................................................................1
         -------------

1.2      Use of Defined Terms................................................................................27
         --------------------

1.3      Accounting Terms....................................................................................27
         ----------------

1.4      Rounding............................................................................................27
         --------

1.5      Exhibits and Schedules..............................................................................28
         ----------------------

1.6      References to "Borrowers and their Subsidiaries"....................................................28
         -----------------------------------------------

1.7      Miscellaneous Terms.................................................................................28
         -------------------


Article 2 LOANS AND LETTERS OF CREDIT........................................................................29

2.1      Loans-General.......................................................................................29
         -------------

2.2      Base Loans..........................................................................................30
         ----------

2.3      Eurodollar Loans....................................................................................30
         ----------------

2.4      Letters of Credit...................................................................................30
         -----------------

2.5      Voluntary Reduction of Commitment...................................................................34
         ---------------------------------

2.6      Senior Indebtedness.................................................................................34
         -------------------

2.7      Optional Termination of Commitment..................................................................34
         ----------------------------------

2.8      Administrative Agent's Right to Assume Funds Available for Advances.................................34
         -------------------------------------------------------------------

2.9      Swing Line..........................................................................................34
         ----------

2.10     Collateral and Guaranty.............................................................................36
         -----------------------


Article 3 PAYMENTS AND FEES..................................................................................37

3.1      Principal and Interest..............................................................................37
         ----------------------

3.2      Amendment and Upfront Fees..........................................................................38
         --------------------------

3.3      Commitment Fee......................................................................................38
         --------------

3.4      Letter of Credit Fees...............................................................................38
         ---------------------




                                      -i-





                                                                                                          
3.5      Arrangement and Agency Fees.........................................................................38
         ---------------------------

3.6      Increased Commitment Costs..........................................................................39
         --------------------------

3.7      Eurodollar Costs and Related Matters................................................................39
         ------------------------------------

3.8      Late Payments.......................................................................................42
         -------------

3.9      Computation of Interest and Fees....................................................................42
         --------------------------------

3.10     Non-Business Days...................................................................................42
         -----------------

3.11     Manner and Treatment of Payments....................................................................42
         --------------------------------

3.12     Funding Sources.....................................................................................43
         ---------------

3.13     Failure to Charge Not Subsequent Waiver.............................................................43
         ---------------------------------------

3.14     Administrative Agent's Right to Assume Payments Will be Made by Borrowers...........................44
         -------------------------------------------------------------------------

3.15     Fee Determination Detail............................................................................44
         ------------------------

3.16     Survivability.......................................................................................44
         -------------


Article 4 REPRESENTATIONS AND WARRANTIES.....................................................................45

4.1      Existence and Qualification; Power; Compliance With Laws............................................45
         --------------------------------------------------------

4.2      Authority; Compliance With Other Agreements and Instruments and Government Regulations..............45
         --------------------------------------------------------------------------------------

4.3      No Governmental Approvals Required..................................................................46
         ----------------------------------

4.4      Subsidiaries........................................................................................46
         ------------

4.5      Financial Statements................................................................................46
         --------------------

4.6      No Other Liabilities; No Material Adverse Changes...................................................46
         -------------------------------------------------

4.7      Title to Property...................................................................................46
         -----------------

4.8      Intangible Assets...................................................................................46
         -----------------

4.9      Public Utility Holding Company Act..................................................................47
         ----------------------------------

4.10     Litigation..........................................................................................47
         ----------

4.11     Binding Obligations.................................................................................47
         -------------------

4.12     No Default..........................................................................................47
         ----------

4.13     ERISA...............................................................................................47
         -----

4.14     Regulations T, U and X; Investment Company Act......................................................48
         ----------------------------------------------





                                      -ii-





                                                                                                          
4.15     Disclosure..........................................................................................48
         ----------

4.16     Tax Liability.......................................................................................48
         -------------

4.17     Projections.........................................................................................48
         -----------

4.18     Hazardous Materials.................................................................................48
         -------------------

4.19     Gaming Laws.........................................................................................48
         -----------

4.20     Security Interests..................................................................................48
         ------------------

4.21     Deposit and Other Accounts..........................................................................49
         --------------------------


Article 5 NEGATIVE COVENANTS OF BORROWERS....................................................................50

5.1      Fixed Charge Coverage Ratio.........................................................................50
         ---------------------------

5.2      Borrower Leverage Ratio.............................................................................50
         -----------------------

5.3      New Capital Stock...................................................................................50
         -----------------


Article 6 AFFIRMATIVE COVENANTS..............................................................................51

6.1      Payment of Taxes and Other Potential Liens..........................................................51
         ------------------------------------------

6.2      Preservation of Existence...........................................................................51
         -------------------------

6.3      Maintenance of Properties...........................................................................51
         -------------------------

6.4      Maintenance of Insurance............................................................................51
         ------------------------

6.5      Compliance With Laws................................................................................51
         --------------------

6.6      Inspection Rights...................................................................................51
         -----------------

6.7      Keeping of Records and Books of Account.............................................................52
         ---------------------------------------

6.8      Compliance With Agreements..........................................................................52
         --------------------------

6.9      Use of Proceeds.....................................................................................52
         ---------------

6.10     Hazardous Materials Laws............................................................................52
         ------------------------

6.11     Construction Monitoring.............................................................................52
         -----------------------

6.12     Designation of Additional Borrowers; Sibling Guarantors, Immaterial Subsidiaries, Etc...............52
         --------------------------------------------------------------------------------------

6.13     Additional Collateral...............................................................................53
         ---------------------

6.14     Designated Senior Indebtedness......................................................................54
         ------------------------------


Article 7 GENERALLY APPLICABLE NEGATIVE COVENANTS............................................................55





                                     -iii-





                                                                                                          
7.1      Payment of Certain Obligations......................................................................55
         ------------------------------

7.2      Disposition of Property.............................................................................56
         -----------------------

7.3      Mergers.............................................................................................56
         -------

7.4      Hostile Acquisitions................................................................................56
         --------------------

7.5      Distributions.......................................................................................56
         -------------

7.6      ERISA...............................................................................................57
         -----

7.7      Change in Nature of Business........................................................................57
         ----------------------------

7.8      Liens and Negative Pledges..........................................................................57
         --------------------------

7.9      Indebtedness and Guaranty Obligations...............................................................58
         -------------------------------------

7.10     Transactions with Affiliates........................................................................59
         ----------------------------

7.11     Parent Leverage Ratio...............................................................................59
         ---------------------

7.12     Capital Expenditures................................................................................60
         --------------------

7.13     Investments.........................................................................................60
         -----------

7.14     Amendments to Other Financial Instruments...........................................................61
         -----------------------------------------

7.15     Prepayments.........................................................................................61
         -----------

7.16     Basket Expenditures.................................................................................61
         -------------------


Article 8 INFORMATION AND REPORTING REQUIREMENTS.............................................................62

8.1      Financial and Business Information..................................................................62
         ----------------------------------

8.2..........................................................................................................62

8.1..........................................................................................................64

8.2      Compliance Certificates.............................................................................64
         -----------------------


Article 9 CONDITIONS.........................................................................................65

9.1      Initial Advances, Etc...............................................................................65
         ----------------------

9.2      Any Advance; Letter of Credit or Swing Line Loan....................................................67
         ------------------------------------------------


Article 10 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT..............................................68

10.1     Events of Default...................................................................................68
         -----------------

10.2     Remedies Upon Event of Default......................................................................70
         ------------------------------




                                      -iv-





                                                                                                          
Article 11 THE ADMINISTRATIVE AGENT..........................................................................72

11.1     Appointment and Authorization.......................................................................72
         -----------------------------

11.2     Delegation of Duties................................................................................72
         --------------------

11.3     Liability of Administrative Agent...................................................................72
         ---------------------------------

11.4     Reliance by Administrative Agent....................................................................73
         --------------------------------

11.5     Notice of Default...................................................................................73
         -----------------

11.6     Credit Decision; Disclosure of Information by Administrative Agent..................................73
         ------------------------------------------------------------------

11.7     Indemnification of Administrative Agent.............................................................74
         ---------------------------------------

11.8     Administrative Agent in its Individual Capacity.....................................................74
         -----------------------------------------------

11.9     Successor Administrative Agent......................................................................74
         ------------------------------

11.10      Administrative Agent May File Proofs of Claim.....................................................75
           ---------------------------------------------

11.11      Collateral and Guaranty Matters...................................................................76
           -------------------------------

11.12      Other Agents; Arrangers and Managers..............................................................76
           ------------------------------------


Article 12 MISCELLANEOUS.....................................................................................77

12.1     Cumulative Remedies; No Waiver......................................................................77
         ------------------------------

12.2     Amendments; Consents................................................................................77
         --------------------

12.3     Costs, Expenses and Taxes...........................................................................78
         -------------------------

12.4     Nature of Lenders' Obligations......................................................................78
         ------------------------------

12.5     Survival of Representations and Warranties..........................................................79
         ------------------------------------------

12.6     Notices.............................................................................................79
         -------

12.7     Execution of Loan Documents.........................................................................79
         ---------------------------

12.8     Binding Effect; Assignment..........................................................................79
         --------------------------

12.9     Right of Setoff.....................................................................................82
         ---------------

12.10      Sharing of Setoffs................................................................................82
           ------------------

12.11      Indemnity by Borrowers............................................................................82
           ----------------------

12.12      Nonliability of the Lenders.......................................................................83
           ---------------------------

12.13      No Third Parties Benefited........................................................................84
           --------------------------




                                      -v-





                                                                                                          
12.14      Confidentiality...................................................................................84
           ---------------

12.15      Further Assurances................................................................................85
           ------------------

12.16      Integration.......................................................................................85
           -----------

12.17      Governing Law.....................................................................................85
           -------------

12.18      Severability of Provisions........................................................................85
           --------------------------

12.19      Headings..........................................................................................85
           --------

12.20      Time of the Essence...............................................................................85
           -------------------

12.21      Foreign Lenders and Participants..................................................................85
           --------------------------------

12.22      Hazardous Material Indemnity......................................................................87
           ----------------------------

12.23      Gaming Boards.....................................................................................87
           -------------

12.24      Joint and Several.................................................................................88
           -----------------

12.25      WAIVER OF RIGHT TO TRIAL BY JURY..................................................................88
           --------------------------------

12.26      Purported Oral Amendments.........................................................................88
           -------------------------

12.27      USA PATRIOT ACT...................................................................................88
           ---------------




                                      -vi-



Exhibits
--------

A   -    Assignment and Assumption
B   -    Compliance Certificate
C   -    Joinder Agreement
D   -    Landlord Consent
E   -    Note
F   -    Pricing Certificate
G   -    Request for Letter of Credit
H   -    Request for Loan
I     -  Joint Borrower Provisions

Schedules
---------

4.3      Governmental Approvals
4.4      Subsidiaries
4.7      Existing Liens, Negative Pledges and Rights of Others
4.8      Trademarks and Trade Names
4.10     Material Litigation
4.18     Hazardous Materials Matters
4.21     Parent's Deposit Accounts
7.9      Existing Indebtedness and Guaranty Obligations
7.13     Existing Investments



                                     -vii-


                           SECOND AMENDED AND RESTATED
                           ---------------------------
                                 LOAN AGREEMENT
                                 --------------

                          Dated as of December 21, 2004

     This SECOND  AMENDED AND  RESTATED  LOAN  AGREEMENT  is entered into by and
among  Palace  Station  Hotel &  Casino,  Inc.,  a Nevada  corporation,  Boulder
Station,  Inc.,  a Nevada  corporation,  Texas  Station,  LLC, a Nevada  limited
liability company, Santa Fe Station, Inc., a Nevada corporation, Sunset Station,
Inc., a Nevada  Corporation,  Lake Mead Station Holdings,  LLC, a Nevada limited
liability company, Lake Mead Station, Inc., a Nevada corporation, Fiesta Station
Holdings,  LLC, a Nevada limited  liability  company,  Fiesta  Station,  Inc., a
Nevada  corporation,  and Charleston  Station,  LLC, a Nevada limited  liability
company (collectively, with each other Person hereafter designated as a Borrower
pursuant to Section 6.12,  the  "Borrowers"),  Station  Casinos,  Inc., a Nevada
corporation  ("Parent")  (but only for the purpose of making the  covenants  set
forth in Articles 6 and 7 hereof),  each  lender  whose name is set forth on the
signature  pages of this Agreement and each lender which may hereafter  become a
party to this Agreement  pursuant to Section 12.8  (collectively,  the "Lenders"
and  individually,  a "Lender"),  Bank of Scotland,  Deutsche Bank Trust Company
Americas,   Lehman  Commercial  Paper  Inc.  and  Wells  Fargo  Bank,  N.A.,  as
Syndication  Agents, and Bank of America,  N.A., as Administrative  Agent. While
not a party  hereto,  Banc of  America  Securities  LLC has  served as sole Lead
Arranger and Book Manager for the credit facilities described herein.

     This Agreement amends and restates in its entirety the Amended and Restated
Loan  Agreement  dated as of September 18, 2002 (as amended,  the "Existing Loan
Agreement")  among the  Borrowers,  Parent  (but only for the  limited  purposes
specified therein),  the lenders party thereto and Bank of America, N.A., as the
administrative agent for the lenders named therein.

     In consideration of the mutual covenants and agreements  herein  contained,
the parties hereto covenant and agree as follows:

                                   Article 1
                        DEFINITIONS AND ACCOUNTING TERMS
                        --------------------------------

     1.1 Defined Terms.  As used in this  Agreement,  the following  terms shall
have the meanings set forth below:

     "Adjusted EBITDA" means, with respect to any Person and with respect to any
fiscal  period,  the sum of (a) the  consolidated  Net Income of that Person for
that period, plus (b) any non-operating non-recurring loss reflected in such Net
Income,  minus (c) any  non-operating  non-recurring  gain reflected in such Net
Income,  plus (d) Interest Expense of that Person for that period,  plus (e) the
aggregate  amount of federal  and state  taxes on or  measured by income of that
Person for that period  (whether or not payable  during that  period),  plus (f)
depreciation,  amortization  and all other non-cash  expenses of that Person for
that period,  plus (g) any Pre-Opening  Expenses of that Person for that period,
in each case as determined in accordance with GAAP.

     "Adjusted  Funded Debt" means,  as of each date of  determination,  the sum
without  duplication of, (a) the aggregate  principal amount of all Indebtedness
of Parent and its  Subsidiaries  for borrowed money  (including  debt securities
issued and  outstanding)  on that  date,  plus (b) the  aggregate  amount of the
principal   portion  of  all  Capital  Lease   Obligations  of  Parent  and  its
Subsidiaries on that date, plus (c) the aggregate  amount  available for drawing



                                      -1-


under all outstanding  letters of credit on that date for which Parent or any of
its  Subsidiaries  are the account party,  plus (d) the aggregate  amount of the
principal  portion of the  Indebtedness of any other Person on that date subject
to a Guaranty  Obligation  issued by Parent or any of its Subsidiaries  plus (e)
the aggregate  amount of all Guaranty  Obligations  which are not  guarantees of
Indebtedness  that have been  quantified  and  reflected on the balance sheet of
Parent and its Subsidiaries as of that date;  provided,  however,  that Adjusted
Funded Debt shall not include (i) the obligations of a Person under an operating
lease (as such term is defined  in  accordance  with  GAAP) or (ii)  obligations
under Support Agreements unless and until the amount thereof has been quantified
and reflected in the consolidated balance sheet of Parent.

     "Administrative  Agent"  means Bank of  America,  N.A.,  when acting in its
capacity as the  Administrative  Agent under any of the Loan  Documents,  or any
successor Administrative Agent.

     "Administrative Agent's Office" means the Administrative Agent's address as
set forth on the signature pages of this Agreement, or such other address as the
Administrative  Agent hereafter may designate by written notice to Borrowers and
the Lenders.

     "Advance"  means any advance  made or to be made by any Lender to Borrowers
as provided in Article 2, and includes each Base Advance and Eurodollar Advance.

     "Affiliate"  means,  as to any Person,  any other Person which  directly or
indirectly controls,  or is under common control with, or is controlled by, such
Person.  As used in this  definition,  "control"  (and  the  correlative  terms,
"controlled by" and "under common control with") shall mean possession, directly
or  indirectly,  of power to direct  or cause the  direction  of  management  or
policies  (whether  through  ownership of  securities  or  partnership  or other
ownership interests, by contract or otherwise); provided that, in any event, any
Person that owns,  directly or indirectly,  10% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation that has more than 100 record holders of such securities,  or 10% or
more of the  partnership or other  ownership  interests of any other Person that
has more than 100  record  holders  of such  interests,  will be deemed to be an
Affiliate of such corporation, partnership or other Person.

     "Agent-Related  Persons" means the Administrative  Agent, together with its
Affiliates  (including,  in the case of Bank of America in its  capacity  as the
Administrative  Agent,  Banc of  America  Securities  LLC),  and  the  officers,
directors,   employees,   agents  and  attorneys-in-fact  of  such  Persons  and
Affiliates.

     "Aggregate  Basket" means, as of each date of  determination,  $600,000,000
minus  (i)  the  aggregate  amount  of the  liabilities  required  by GAAP to be
quantified  on the  consolidated  balance  sheet of Parent in respect of Support
Agreements,  and (ii) without duplication,  Support Payments required to be made
following the Closing Date.

     "Aggregate  Effective Amount" means (a) as of any date of determination and
with  respect to all  Letters  of Credit  then  outstanding,  the sum of (i) the
aggregate  effective face amounts of all such Letters of Credit not then paid by
the Issuing  Lender plus (ii) the aggregate  amounts paid by the Issuing  Lender
and neither  repaid by Borrowers  pursuant to Section  2.4(d) nor the subject of
Advances made pursuant to Sections 2.4(e) and 2.4(f).



                                      -2-


     "Aggregate  Outstandings" means, as of each date of determination,  the sum
of (a)  the  aggregate  outstanding  principal  balance  of the  Loans,  (b) the
aggregate  outstanding  principal  balance of the Swing Line Loans,  and (c) the
Aggregate Effective Amount.

     "Agreement"  means this Second Amended and Restated Loan Agreement,  either
as originally executed or as it may from time to time be supplemented, modified,
amended, restated or extended.

     "Amended  and  Restated  Pledge  Agreement"  means the Amended and Restated
Pledge  Agreement  executed on the  Closing  Date by Parent,  Borrowers  and the
Sibling  Guarantors  in  respect  of the  Equity  Interests  held by them in all
Restricted Subsidiaries of the Parent other than Dormant Subsidiaries and Native
American Subsidiaries.

     "Annualized  Adjusted  EBITDA"  means,  as of the last  day of each  Fiscal
Quarter,  the consolidated  Adjusted EBITDA of Parent and its Subsidiaries,  for
the four Fiscal Quarters ending on that date, after making pro forma adjustments
thereto to (i) eliminate that portion of Adjusted  EBITDA which is  attributable

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