Support Agreement (2010)Full Document 

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PROPCO PLAN SUPPORT AGREEMENT

 

This PLAN SUPPORT AGREEMENT (the “Agreement”) is made and entered into as of March 24, 2010 by and among the following parties:

 

(a)           German American Capital Corporation (“GACC”) and JP Morgan Chase Bank, N.A. (“JPM” and together with GACC collectively, the “Mortgage Lenders”) in their capacities as lenders under (i) that certain Amended and Restated Loan and Security Agreement, dated as of March 19, 2008 (the “Mortgage Loan Agreement”), pursuant to which the Mortgage Lenders made loans and other financial accommodations to FCP Propco, LLC (“PropCo”) and (ii) that Amended and Restated Mezzanine Loan and Security Agreement (First Mezzanine), dated as of March 19, 2008 (the “Mezz 1 Loan Agreement”) among FCP Mezzco Borrower I, LLC and GACC and JPM in their capacity as “Lenders” thereunder;

 

(b)           Deutsche Bank AG (“Deutsche Bank AG”) in its capacity as Party A under an interest rate swap transaction evidenced by that certain Confirmation dated as of November 29, 2007, as further modified by that certain Novation Confirmation dated as of March 5, with PropCo as counterparty;

 

(c)           Fertitta Gaming LLC, a Nevada limited liability company (“FG”); and

 

(d)           Frank J. Fertitta III and Lorenzo J. Fertitta (collectively, the “FG Principals” and with FG, the “FG Parties”) who are the primary equity investors in FG.

 

Each party named above is a “Party”, and collectively are referred to as the “Parties”.

 

RECITALS

 

WHEREAS, on July 28, 2009, Station Casinos, Inc. (“SCI”), PropCo and certain of their affiliates (collectively, the “Debtors”)(1) commenced voluntary cases under chapter 11 of 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Nevada (the “Bankruptcy Court”);

 

WHEREAS, SCI and its non-debtor subsidiaries (collectively, the “Station Group”) constitute a gaming entertainment enterprise that owns and/or operates, among other things, gaming properties under the “Station” and “Fiesta” brand names;

 

WHEREAS, the Station Group operates and owns certain assets associated with: (i) Palace Station Hotel & Casino (“Palace Station”), (ii) Boulder Station Hotel & Casino (“Boulder Station”), (iii) Sunset Station Hotel & Casino (“Sunset Station”), and (iv) Red Rock Casino Resort Spa (“Red Rock”) (collectively, the “PropCo Properties”);

 


(1)   Debtor GV Ranch Station Inc. commenced its voluntary case under the Bankruptcy Code on February 10, 2010 and is included in the definition of the term Debtors in this Agreement.

 

Note: Portions of this exhibit have been omitted pursuant to a request for confidential treatment and have been filed separately with the SEC.

 



 

WHEREAS, PropCo owns the real property (or, with respect to a portion of Boulder Station, a leasehold interest in the real property pursuant to a ground lease) and improvements associated with the PropCo Properties, and PropCo, as landlord, and SCI, as tenant, entered into that certain Master Lease Agreement, dated as of November 7, 2007 and amended by that certain First Amendment to Master Lease Agreement dated as of March 19, 2008 (collectively, the “Master Lease”), under which SCI leases the PropCo Properties from PropCo;

 

WHEREAS, PropCo entered into the Mortgage Loan Agreement, with the Mortgage Lenders, pursuant to which the Mortgage Lenders made certain loans and other financial accommodations to PropCo (the “Mortgage Loan”).  The Mortgage Loan and the obligations and liabilities of PropCo under the Mortgage Loan Agreement and the other Loan Documents (as defined in the Mortgage Loan Agreement) are secured by the PropCo Properties, the Master Lease, the rent due under the Master Lease, the cash collateral, certain bank accounts and certain other assets pledged or otherwise encumbered under the Security Instruments, Security Documents or other Loan Documents (as such terms are defined in the Mortgage Loan Agreement) (collectively, the “Collateral”);

 

WHEREAS, as of the Petition Date, the principal amount of $1,800,000,000, together with accrued and unpaid interest outstanding under the Mortgage Loan Agreement;

 

WHEREAS: (i) on or about December 11, 2009, the Bankruptcy Court approved the Master Lease Compromise Agreement between SCI and PropCo (the “Compromise”) which, inter alia, provides a “Deferral Period” ending on the lease payment date in March 2010 and permits SCI to pay “Reduced Rent” during such period pending assumption or rejection of the Master Lease; (ii) on March 4, 2010, the Bankruptcy Court entered an order approving a 60-day extension of the Compromise on terms substantially similar to the original Compromise; and (iii) SCI and PropCo have informed the Parties that they intend to enter into and file a stipulation and motion to approve a modified Master Lease Compromise Agreement that shall be in form and substance acceptable to the Mortgage Lenders and shall provide, inter alia, for pre-confirmation transition assistance in aid of, and to facilitate, the transactions contemplated in the PropCo Term Sheet and the Plan (each as defined below) (the “Modified MLCA”);

 

WHEREAS, the Mortgage Lenders, as PropCo’s senior secured lenders, and FG, as a potential new money investor in and operator of the PropCo Properties, desire to see PropCo reorganized in a consensual manner and have engaged in extensive, arms’ length negotiations regarding the terms of such a reorganization;

 

WHEREAS, in light of the interrelationships among SCI, PropCo and their affiliates, the Parties believe that a joint chapter 11 plan for PropCo and SCI is the most efficient and effective means to effectuate a reorganization of PropCo (the “PropCo Reorganization”) concurrently with the consummation of a sale or other disposition by SCI of substantially all of its assets pursuant to a chapter 11 plan on terms yet to be determined but otherwise acceptable to FG and the Mortgage Lenders (the “SCI Sale”);

 

WHEREAS, the Parties have negotiated a term sheet annexed hereto as Attachment 1 that sets forth the material terms of the PropCo Reorganization (as such term sheet

 

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may be amended from time to time in accordance with the terms of this Agreement and including all annexes, the “PropCo Term Sheet”);

 

WHEREAS, the Parties are willing to support the Debtors in filing and seeking to obtain confirmation of a joint chapter 11 plan that incorporates the PropCo Term Sheet and provides for the PropCo Reorganization in parallel with the SCI Sale (such plan of reorganization, the “Plan”),(2) so long as the Plan is amended no later than April 10, 2010 to either:  (a) incorporate the definitive terms of any such SCI Sale (or SCI reorganization), [*], and such definitive terms are acceptable to the Mortgage Lenders and FG; or (b) provide for an auction or sale process acceptable to the Mortgage Lenders and FG which governs (x) the SCI Sale and (y) [†] (collectively, the “Sale Process”);

 

WHEREAS, the Parties have engaged in good faith negotiations with each other and with the objective of reaching an agreement with regard to the Plan and the PropCo Term Sheet;

 

WHEREAS, each Party has reviewed, or has had the opportunity to review, this Agreement and the PropCo Term Sheet with the assistance of professional legal advisors of its own choosing;

 

WHEREAS, each Party desires to support the Plan, to the extent consistent with the PropCo Term Sheet; and

 

WHEREAS, subject to the execution of Definitive Restructuring Documentation, as defined below, and appropriate approvals by the Bankruptcy Court of the Plan and the associated disclosure statement (as the same may be amended pursuant to this Agreement from time to time in accordance with this Agreement, the “Disclosure Statement”), the following sets forth the agreement between the Parties concerning their respective obligations under this Agreement to support the PropCo Reorganization and the Plan.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the promises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

 


(2)   Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the PropCo Term Sheet.

 

* Material has been omitted pursuant to a request for confidential treatment and has been filed separately with the SEC.

 

† Material has been omitted pursuant to a request for confidential treatment and has been filed separately with the SEC.

 

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1.     PropCo Term Sheet and Plan of Reorganization.

 

The PropCo Term Sheet is incorporated herein by reference and is made part of this Agreement as if fully set forth herein.  The general terms and conditions to be contained in the Plan are set forth in the PropCo Term Sheet; provided, however, that the PropCo Term Sheet is supplemented by the terms and conditions of this Agreement.  In the event of any inconsistencies between the terms of this Agreement and the PropCo Term Sheet, the terms of this Agreement shall govern.

 

2.     Effectuating the Plan.

 

To implement the Plan, the Parties have agreed, on the terms and conditions set forth herein, to request that SCI and PropCo use their respective best efforts (i) to effectuate the Plan (as amended in the manner described herein), and without limiting the foregoing, (ii) to take all actions necessary and appropriate to:

 

(a)           prepare and file the Plan and Disclosure Statement on or prior to March 25, 2010 which incorporates the PropCo Term Sheet, it being understood that (1) the forms of Plan and Disclosure Statement that have been provided to the Mortgage Lenders as of the date of this Agreement and that may initially be filed by the Debtors are not acceptable in all respects to the Mortgage Lenders and remain subject to review and comment by the Mortgage Lenders; and (2) the Plan and Disclosure Statement will be amended by April 10, 2010 in the manner described herein and must be in form and substance acceptable to the Mortgage Lenders and FG;

 

(b)           negotiate and finalize the Definitive Restructuring Documentation, as defined below, in form and substance acceptable to each of the Parties, on or prior to May 15, 2010 (in respect of certain Definitive Restructuring Documentation indicated on Attachment 2 hereto) and otherwise by the plan supplement deadline specified in the Plan (unless extended by the Mortgage Lenders);

 

(c)           as applicable, (1) amend the Plan prior to April 10, 2010 so that it is in form and substance acceptable to the Mortgage Lenders in all respects, including to reflect:  (i) the definitive terms of the SCI Sale or any SCI restructuring, which terms must be acceptable to the Mortgage Lenders and FG; or (ii) a Sale Process acceptable to the Mortgage Lenders and FG which governs (x) the SCI Sale and (y) [*], and (2) to prosecute and use their respective best efforts to obtain confirmation of the Plan as amended [†];

 

(d)           move the Bankruptcy Court to enter an order approving the Disclosure Statement (the “Disclosure Statement Order”) as expeditiously as practicable under

 


* Material has been omitted pursuant to a request for confidential treatment and has been filed separately with the SEC.

 

† Material has been omitted pursuant to a request for confidential treatment and has been filed separately with the SEC.

 

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the Bankruptcy Code and the Bankruptcy Rules and, in any event, have the Disclosure Statement Order entered on or prior to May 15, 2010;

 

(e)           move the Bankruptcy Court by April 10, 2010 to enter an order approving the Sale Process, with such order to be entered on or prior to May 15, 2010; provided, however, that, [*];

 

(f)            move the Bankruptcy Court to confirm the Plan as expeditiously as practicable under the Bankruptcy Code and the Bankruptcy Rules, and, in any event, have the order confirming the Plan entered on or prior to August 31, 2010;

 

(g)           in advance of confirmation of the Plan, take all actions that are reasonably necessary to obtain requisite gaming and regulatory approvals of the Plan (and the transactions contemplated therein) to be effective upon confirmation of the Plan or as soon as practicable thereafter; and

 

(h)           consummate the PropCo Reorganization as expeditiously as practicable in accordance with its terms and the terms of this Agreement, and, in any event, ensure that the effective date of the Plan occurs no later than January 31, 2011.

 

3.     Commitments of the Parties to this Agreement.

 

(a)           Support of Plan.

 

As long no Termination Event (as defined in Section 7 below) has occurred, or has occurred but has been duly waived or cured in accordance with the terms hereof, each Party hereto agrees for itself, that it will:

 

i.              promptly upon execution of the Agreement, present this Agreement and the PropCo Term Sheet to PropCo and SCI and request that the boards of PropCo and SCI: (a) review the Agreement and PropCo Term Sheet, (b) authorize their respective management and advisors to prepare the Plan, Disclosure Statement and all other necessary and/or appropriate documents (collectively, the “Definitive Restructuring Documentation”)(3) for filing with the Bankruptcy Court, and (c) authorize their respective management and advisors to negotiate the terms of all Definitive Restructuring Documentation with the Parties;
 
ii.             promptly upon execution of this Agreement, negotiate in good faith to prepare the Definitive Restructuring Documentation, which shall contain provisions consistent with this Agreement and the

 


* Material has been omitted pursuant to a request for confidential treatment and has been filed separately with the SEC.

 

(3)   The Definitive Restructuring Documentation shall include each of the documents listed on Attachment 2 hereto.

 

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PropCo Term Sheet and such other provisions as are mutually acceptable to the Parties; provided that all such Definitive Restructuring Documentation shall be in form and substance satisfactory to each of the Parties, in their respective sole and absolute discretion as determined in accordance with their obligation to negotiate in good faith; and the Parties hereby acknowledge that the PropCo Term Sheet does not contain all material terms in respect of the Definitive Restructuring Documentation and that such terms are subject in all respects to good faith negotiation and agreement by the Parties;
 
iii.            the FG Parties shall, in advance of confirmation of the Plan, take all actions that are reasonably necessary to obtain requisite gaming and regulatory approvals of the Plan (and the transactions contemplated therein) to be effective upon confirmation of the Plan or as soon as practicable thereafter, provided, however, that the Mortgage Lenders and their affiliates shall be under no obligation to become licensed but will use their best efforts to assist FG and the FG Principals in obtaining requisite gaming and regulatory approvals and will identify and appoint directors, as necessary, in advance of confirmation and in furtherance of the transactions contemplated under the Plan;
 
iv.            take all actions reasonably necessary to consummate the transactions described in the PropCo Term Sheet and in accordance with the Plan;
 
v.             from and after the date hereof, not directly or indirectly seek, solicit, support or vote in favor of, as applicable, any other plan, sale, proposal or offer of dissolution, winding up, liquidation, reorganization, merger or restructuring of PropCo or any of its affiliates that could reasonably be expected to prevent, delay or impede solicitation, confirmation or consummation of the Plan or any document filed with the Bankruptcy Court in furtherance of soliciting or confirming the Plan or consummating the transactions contemplated thereby;
 
vi.            consent to disclosure in the Disclosure Statement and any filings by SCI with the Securities and Exchange Commission of the contents of this Agreement;
 
vii.           following receipt of the Disclosure Statement and other related solicitation materials and provided that such approved Disclosure Statement does not contain information that (A) was not disclosed to the Mortgage Lenders prior to the execution of this Agreement, or (B) is different than information disclosed to the Mortgage Lenders prior to the voting deadline on the Plan and, in either

 

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event, (C) is material to the Mortgage Lenders’ decision to vote in favor of the Plan, each Mortgage Lender agrees to vote all Claims that it holds or controls in favor of the Plan by delivering its duly executed and timely completed ballot or ballots accepting the Plan to the balloting agent for the Plan, and each Mortgage Lender agrees that it shall not thereafter withdraw or change such vote so long as the Plan and Disclosure Statement are not modified, except in accordance with this Agreement; and each of the Parties hereby acknowledges that as of the date of this Agreement, to the best of its knowledge, it has received sufficient information to permit such Party to make a fully informed judgment concerning its decision to enter into the PropCo Term Sheet and support the Plan; and
 
viii.         not object to or otherwise commence any proceeding or take any other action opposing any of the terms of this Agreement, the Disclosure Statement, the Plan or any other agreement or transaction that is contemplated by the PropCo Term Sheet or this Agreement.
 

(b)       No Limitation on Other Actions.

 

Notwithstanding anything to the contrary contained herein, nothing in this Agreement shall (i) prevent any Party from taking any action (or refraining from taking any action), or from revoking any vote or consent previously given, at any time following the termination of this Agreement pursuant to Section 7 below, (ii) constitute a waiver, limitation, impairment or restriction on the ability of any Party to protect and preserve all of its rights and remedies under and with respect to such Party’s claims and its full participation in the bankruptcy cases for SCI and its affiliates, to the extent not inconsistent with the terms of this Agreement; (iii) prevent any Mortgage Lender from engaging in discussions or negotiations with third parties regarding contingency planning to protect its interests in the event that the Plan is not confirmed, including, without limitation, taking all steps necessary to develop a back-up transition plan in consultation with a third-party licensed operator and obtaining information from SCI and PropCo in connection therewith as provided in the Compromise or Modified MLCA, as applicable.

 

(c)       Transfers of Claims.

 

Each Mortgage Lender may sell, assign, transfer, hypothecate or otherwise dispose of, directly or indirectly (each such transfer, a “Transfer”), all or any of its Claims (or any right related thereto and including any voting rights associated with such Claims, provided, that the transferee thereof (i) agrees in writing, prior to such Transfer, to assume the rights and obligations of the selling Party under this Agreement and (ii) promptly delivers such writing to each other Party to this Agreement (each such transferee becoming, upon the Transfer, a Party hereunder).  Any sale, transfer or assignment of a Claim that does not comply with the procedure set forth in the first sentence of this Subsection 3(c) shall be deemed void ab initio.

 

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(d)       Representations of the Mortgage Lenders.

 

Each Mortgage Lender represents, with respect to itself only, that, as of the date hereof:

 

i.              it is the owner and/or the investment advisor or manager for the owner of such Claims set forth opposite its name on the signature page hereto (collectively, the “Relevant Claims”);
 
ii.             it has made no prior assignment, sale, participation, grant, conveyance, or other transfer of, and has not entered into any other agreement to assign, sell, participate, grant, or otherwise transfer, in whole or any part, any portion of its right, title or interest in the Relevant Claims; and
 
iii.            Except as otherwise set forth on its respective signature page, it has full power to vote the aggregate principal amount of the Relevant Claims in accordance with the terms of this Agreement.
 

(e)       Equity Commitment.

 

FG Principals and FG hereby agree to fund their equity commitment as specified in the PropCo Term Sheet provided that the Plan is confirmed and becomes effective and shall deliver to the Mortgage Lenders an equity commitment letter in form and substance acceptable to the Mortgage Lenders by no later than April 2, 2010 (the “Equity Commitment”).
 

4.     Mutual Representations, Warranties, and Covenants.

 

Each Party makes the following representations and warranties, solely with respect to itself, to each of the other Parties:

 

(a)       Enforceability.

 

Subject to the provisions of sections 1125 and 1126 of the Bankruptcy Code, and except as set forth herein, this Agreement is a legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms, except as enforcement may be limited by applicable laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

 

(b)       Power and Authority.

 

Except with respect to actions that require Bankruptcy Court approval, it has all requisite power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement and the Plan.

 

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(c)       Authorization.

 

The execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary action on its part.

 

(d)       No Conflicts.

 

The execution, delivery and performance of this Agreement does not and shall not: (a) violate any provision of law, rule or regulations applicable to it or any of its subsidiaries; or (b) violate its certificate of incorporation, bylaws or other organizational documents or those of any of its subsidiaries.

 

5.     No Waiver of Participation and Preservation of Rights.

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