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Exhibit 4.2
COMPLETION
GUARANTY
This Completion
Guaranty (" Completion Guaranty
") is made as of October 5, 2007 by Station
Casinos, Inc., a Nevada corporation (" Station ") and G.C. Investments,
LLC, a Nevada limited liability company (" GC Investments " and
collectively with Station, the " Completion Guarantors "), jointly
and severally, in favor of Bank of America, N.A., as Administrative
Agent (" Administrative Agent
") under the Credit Agreement referred to below, and
for the benefit of the other Beneficiaries (as defined below).
Certain capitalized terms used herein have the meanings set forth
in the recitals hereto or in Section 1 of this Completion
Guaranty. Capitalized terms used but not defined herein shall have
the meanings defined for those terms in the Credit Agreement
described below.
RECITALS
A. Aliante
Gaming, LLC, a Nevada limited liability company ("
Borrower ") is a joint
venture of Station and certain Affiliates of GC Investments.
Pursuant to the Credit Agreement described below, the Lenders have
agreed to extend certain credit facilities to Borrower, the
proceeds of which shall be used, inter
alia , to construct the Aliante Station
Hotel and Casino in North Las Vegas, Nevada.
B. The
obligations of GC Investments hereunder are secured by a
pledge of $35,000,000 of cash or marketable securities acceptable
to the Administrative Agent pursuant to the Greenspun Pledge
Agreement. As of the date hereof, the obligations of Station
hereunder are unsecured.
C. This
Completion Guaranty is the "Completion Guaranty" referred to in the
Credit Agreement and is one of the "Loan Documents" described in
the Credit Agreement.
AGREEMENT
NOW, THEREFORE,
in order to induce the Lenders to extend the credit facilities to
Borrower under the Credit Agreement, and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Completion Guarantors hereby jointly and
severally agree as follows:
1.
Definitions.
"
Beneficiaries " means
collectively, the Administrative Agent, the Lenders, the Issuing
Lender, the Swing Line Lender, the Bank Products Banks and the
Hedge Banks. Each right, remedy, privilege or power of the
Beneficiaries shall be exercised solely by the Administrative Agent
on behalf of the Beneficiaries.
"
CG Event of Default "
means the occurrence of any of the following events:
-
(a) the
Completion Guarantors fail to make any payment required of them
hereunder on the date when such payment is due; or
(b) the
Completion Guarantors fail to perform any of their non-monetary
obligations under this Completion Guaranty within five Business
Days of written demand by the Administrative Agent; or
(c) either
Completion Guarantor revokes this Completion Guaranty or disputes
the validity hereof or this Completion Guaranty becomes ineffective
for any reason; or
(d) any
representation or warranty made or given by either Completion
Guarantor in any Loan Document proves to be false or misleading in
any material respect; or
(e) the
occurrence of any of the events described in Section 9.1(m) or
Section 9.1(n) of the Credit Agreement; or
1
"
Completion Guaranty Collateral
" means the $35,000,000 of cash or marketable
securities acceptable to the Administrative Agent pledged by
GC Investments or another Affiliate of the Greenspun
Corporation which is reasonably acceptable to the Administrative
Agent pursuant to the Greenspun Pledge Agreement.
"
Insolvency Proceeding "
means any case or proceeding, voluntary or involuntary, under any
Debtor Relief Law or any similar existing or future law of any
jurisdiction, state or federal, relating to bankruptcy, insolvency
reorganization or relief of debtors.
"
NRS " means the Nevada
Revised Statutes.
2.
Completion Guaranty and
Agreement.
-
(a) Completion
Guarantors hereby, jointly and severally, irrevocably and
unconditionally guarantee and agree that:
-
(i) at
all times prior to the Completion Date, the In-Balance Test will
continue to be satisfied; and
(ii) the
aggregate Project Costs shall not exceed $618,000,000 exclusive of
land acquisition costs and financing costs (or, $670,000,000
exclusive of such costs, but only to the extent that any such
increases to the Budget (A) have been financed by the making
of additional Cash Equity Contributions to the Borrower and
(B) have been made in a manner which complies with the Credit
Agreement).
In the event that the Administrative Agent
determines that either of the circumstances set forth in
Section 2(a)(i) or 2(a)(ii) has occurred and remains
continuing, then the Completion Guarantors (A) shall cause the
Borrower to continue to construct the Project, and (B) shall
make contributions of Cash Equity into the Operating Account in the
amount required for the payment of all Project Costs as
incurred, provided that:
-
(i) the
Completion Guarantors shall not be obligated to make any payments
hereunder sooner than five Business Days following written request
by the Administrative Agent; and
(ii) the
amount so contributed shall be equal to the greater of (1) the amount by
which the Remaining Costs exceed the Available Funds from time to
time, and (2) the amount by which the Aggregate Project Costs
exceed $618,000,000 (exclusive of land acquisition costs and
financing costs) from time to time (or, $670,000,000 exclusive of
such costs, but only to the extent that any such increases to the
Budget (A) have been financed by the making of additional Cash
Equity Contributions to the Borrower and (B) have been made in
a manner which complies with the Credit Agreement, but in each case
less any amounts previously funded hereunder).
The Completion Guarantors acknowledge that each
of the conditions set forth in Sections 2(a)(i) and 2(a)(ii)
are susceptible of repetition, and that their funding obligations
hereunder may re-occur as a result of such repetition.
(b) Subject
to the agreement of the Lenders set forth in Section 2(e),
Completion Guarantors shall in any event cause Borrower to perform
and comply with all provisions and conditions of the Credit
Agreement relating to (i) the construction of the Project and
the occurrence of the Opening Date and Completion Date within the
time and in the manner set forth in Construction Plans and the
Timetable, (ii) the payment of all costs and expenses thereof,
(iii) the payment, satisfaction or discharge of all Liens
(other than Permitted Liens) that are or may be imposed upon or
asserted against Borrower, the Project or the Site in connection
with the construction of the Project, and (iv) the defense and
indemnification of the Beneficiaries against all such Liens (other
than
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Permitted Liens), whether arising from the
furnishing of labor, materials, supplies or equipment, from taxes,
assessments, fees or other charges, from injuries or damage to
Persons or property, or otherwise in connection with the
construction of the Project. Without limiting the generality of the
foregoing, Completion Guarantors jointly and severally agree
(A) to cause any and all costs of constructing and completing
the Project and causing the Opening Date and Completion Date to
occur in accordance with the terms of the Credit Agreement,
including, without limitation, the costs of all labor, materials,
supplies and equipment related thereto, to be paid and satisfied as
the same shall become due, subject to Completion Guarantors' right
to remove any Liens arising therefrom by securing bond(s) therefor,
(B) to cause the net amount of cost overruns to be directly or
indirectly funded, paid and satisfied from Completion Guarantors'
own resources, (C) directly or indirectly to cause the
completion of the Project in a timely, good, workmanlike and
Lien-free manner (except for Permitted Liens), in accordance in all
material respects with the terms of the Construction Plans, the
Budget and the Timetable and (D) to cause all pre-operating
and carrying costs of the Project, including, without limitation
the payment of taxes, assessments, utilities, insurance and
maintenance expenses, to be funded, paid and satisfied as the same
shall become due throughout the term of this Completion
Guaranty;
(c) subject
to a delay of not more than 90 days to the extent caused by
any one or more Force Majeure Events, the Opening Date shall occur
on or prior to March 31, 2009; and
(d) the
Completion Date shall occur within 180 days following the
Opening Date.
(e) The
Lenders hereby agree for the benefit of the Borrower that, subject
to the terms of the Credit Agreement, following the making of any
payments required by Section 2(a)above they shall thereafter
recommence the making of credit extensions under the Credit
Agreement to finance the construction of the Project. As it affects
the obligations of the Completion Guarantors hereunder, the Lenders
shall be conclusively presumed to have fully performed their
obligations under this clause (e) unless the Administrative
Agent shall have received thirty days prior written notice from the
Completion Guarantors of any circumstances which the Completion
Guarantors believe violate the obligations of the Lenders under
this clause (e), and the Lenders shall have failed, during
that period, to effectuate a cure by funding Project
Costs.
(f) The
Completion Guarantors acknowledge and agree that (i) all
amounts deposited into the Operating Account as Cash Equity shall
be expended for Project Costs and (ii) if the Completion
Guarantors fail to make any payment or to perform any covenant set
forth in this Completion Guaranty on or prior to the required date,
the Administrative Agent shall be entitled to apply any collateral,
including, without limitation, the Completion Guaranty Collateral,
held by the Administrative Agent to make such payment or perform
such covenant.
3.
Payment Provisions in the
Event of Bankruptcy. In the event that the Borrower becomes
subject to an Insolvency Proceeding prior to the Final Completion
Date, then the obligations of the Completion Guarantors hereunder
shall remain effective in respect of the construction of the
Project by any subsequent owner of the Project (whether the
Administrative Agent or another designee of the Lenders, a Person
purchasing the Project in a sale under Section 363 of the
United States Bankruptcy Code, or otherwise), and the Completion
Guarantors shall make the payments required hereunder in respect of
the construction of the Project, provided that either (a) the
Lenders shall provide funds in an amount which is equal to the
unfunded Commitments under the Credit Agreement (minus the
$10,000,000 portion of the Operating Reserve) for the construction
of the Project, or (b) the purchaser
3
or other owner of the Project shall provide
replacement capital for the construction of the Project in an
amount equal to such unfunded Commitments.
4.
Procedures for
Completion.
-
(a) In
the event that Borrower fails to (i) perform all of its
Obligations under the Credit Agreement relating to construction of
the Project or (ii) cause the Opening Date or Completion Date
to occur by the dates set forth in Section 2 (collectively,
the " Construction Obligations
"), then in any such event or at any time
thereafter, the Administrative Agent may give written notice to
Completion Guarantors of the occurrence of such event ("
Notice of Default ").
(b) Within
five days after the date on which the Administrative Agent gives
any Notice of Default to the Completion Guarantors, if and to the
extent that Borrower continues to fail to perform its Construction
Obligations, Completion Guarantors shall, at the Completion
Guarantors sole cost:
-
(i) commence
to complete the construction of the Project and do all things
reasonably required to cause the Opening Date and Completion Date
to occur promptly;
(ii) diligently
prosecute the construction of the Project to completion within the
time and in the manner specified in the Construction Plans and
Timetable and free of Liens (other than Permitted Liens) and
diligently cause the Opening Date and Completion Date to occur;
and
(iii) defend,
indemnify and hold each Beneficiary harmless from all losses,
costs, liabilities and expenses, including reasonable attorneys'
fees, incurred in connection with such completion of the Project
and such occurrence of the Opening Date and Completion Date, in
each case other than arising as a result of the gross negligence or
willful misconduct of such Beneficiary.
If and to the extent that, at any time following
the giving of any Notice of Default, the Completion Guarantors
remedy the failures of Borrower to comply with the Construction
Obligations in a manner which is acceptable to the Administrative
Agent in the exercise of its discretion (including without
limitation the funding of any construction over-runs from other
sources), and provided that no Default or Event of Default then
exists (other than (i) Defaults or Events of Default which
arise solely from the failure of Borrower to timely construct the
Project or to construct it in accordance with the Construction
Plans and Budget and which, in the determination of the
Administrative Agent, have been cured to the extent which is
commercially practicable), (ii) Events of Default arising
solely from the failure of Borrower to comply with any financial
covenant set forth in the Credit Agreement for any past compliance
period, provided that Borrower is in compliance with such financial
covenant and with all other financial covenants set forth in the
Credit Agreement for the then current compliance period, or
(iii) other Defaults or Events of Default to the extent that
the circumstances giving rise thereto have been cured or otherwise
addressed to the satisfaction of the Administrative Agent in its
sole and unfettered discretion), then, subject to the terms and
conditions of the Credit Agreement, the Administrative Agent and
the Lenders shall continue to make Loans and Letters of Credit
available to the Borrower for the completion of the Project (or, in
the event that the Completion Guarantors have assumed
responsibility for the construction of the Project in writing in a
manner which is reasonably acceptable to the Administrative Agent
and the Required Lenders, the Lenders shall make replacement
capital available to the Completion Guarantors for the construction
of the Project in an aggregate amount not to exceed the Commitments
(less the Operating Reserve), but only to the extent that the
In-Balance Test is satisfied).
(c) If
Completion Guarantors fail to commence to complete the construction
of the Project or diligently to prosecute such construction to
timely completion as provided in Section 4(b) above, then the
right of the Administrative Agent to recover from the Completion
Guarantors hereunder
4
shall not be affected or diminished by its
exercise of the rights and remedies that may be available to the
Administrative Agent under the Credit Agreement and the other Loan
Documents, at law or in equity, including:
-
(i) Administrative
Agent may, at the Administrative Agent's option, enter the Project
Site to complete construction of the Project (either itself or
through any agent, contractor or subcontractor of its selection),
which option of the Administrative Agent shall be exercisable
whether or not the Administrative Agent elects to proceed
judicially or non judicially to foreclose on all or any portion of
the Collateral;
(ii) the
Administrative Agent, at its option and in accordance with the
Credit Agreement and the other Loan Documents, shall have the
right, but shall have no obligation, to proceed judicially or
non-judicially to foreclose on all or any portion of the
Collateral, exercisable whether or not the Administrative Agent
elects to undertake to complete the construction of the
Project;
(iii) if
the Administrative Agent elects to undertake to complete the
construction of the Project, and whether or not the Administrative
Agent elects to proceed judicially or non-judicially to foreclose
on all or any portion of the Collateral, the Administrative Agent
shall have the right to recover damages from Completion Guarantors
in an amount equal to the sum of:
-
(A) the
greater of the Remaining Costs forecast in the latest Remaining
Cost Report or the amount of the Project Costs estimated by the
Administrative Agent (in consultation with the Construction
Consultant or other professional construction managers selected by
the Administrative Agent) as required to complete the Project (but
in any event including debt service in respect of the Obligations
until the Opening Date, the "Cost to Complete") and provided
further that should the total actual Project Costs incurred by the
Administrative Agent to complete the Project be less than the Cost
to Complete, the amount by which the Cost to Complete recovered by
the Administrative Agent exceeds such actual Project Costs shall be
remitted to Completion Guarantors upon the Final Completion Date;
plus
(B) all
unreimbursed costs and expenses, including attorneys' fees,
reasonably incurred by the Administrative Agent in protecting and
preserving the Project and enforcing or defending the interests of
the Beneficiaries under this Completion Guaranty (the "
Unreimbursed Expenses "); minus
(C) the
amount by which the aggregate outstanding Obligations owed to the
Lenders as of that date are less than $420,000,000.
(iv) in
any action or proceeding by the Administrative Agent to recover
damages from Completion Guarantors, the Administrative Agent may
exercise any and all remedies available under applicable
Law.
(d) The
parties recognize that the choice of remedies by the Administrative
Agent will necessarily and properly be a matter of business
judgment, which the passage of time and events may or may not prove
to have been the best choice to maximize recovery by the
Administrative Agent at the lowest cost to either the Borrower or
the Completion Guarantors. In recognition of the foregoing, to the
fullest extent permitted by Law, each Completion Guarantor agrees
that it shall not assert, and each Completion Guarantor hereby
waives, any and all claims against the Administrative Agent and the
other Beneficiaries that any exercise of remedies or any election
of remedies thereby has resulted (a) in actual or general
damages to the Borrower, the Completion Guarantors or any Party as
a result of the simple negligence of the Administrative Agent or
the other Beneficiaries, or (b) in special, indirect,
consequential, exemplary or punitive damages (as
5
-
opposed to actual or general damages) except to
the extent arising out any such action taken thereby in bad faith
or constituting willful misconduct or gross negligence on the part
of the Administrative Agent or the other Beneficiaries. In any
event, any claim of the Completion Guarantors, or either of them
alleging damages to the Borrower, the Completion Guarantors or any
other Person, shall not be asserted as a defense to payment under
this Completion Guaranty or as a set-off or basis for any claim of
failure to mitigate damages in any action or proceeding arising
from this Completion Guaranty, but shall instead be asserted in a
separate action or actions against the Administrative Agent or
other relevant party.
5.
Commencement of Lawsuit
by Administrative Agent; Measure of Damages. At any time after the occurrence of a
CG Event of Default, the Administrative Agent, on behalf of the
Beneficiaries, may commence a lawsuit against Completion Guarantors
or either of them to compel Completion Guarantors or either of them
to perform their respective obligations under this Completion
Guaranty and/or to recover damages under this Completion Guaranty.
The Beneficiaries' damages under this Completion Guaranty shall
include, without duplication: (a) the costs of completing the
Project and/or correcting any construction defects,
(b) damages arising from any delay in completing the Project,
including interest, taxes and insurance premiums, and (c) the
Unreimbursed Expenses. The Beneficiaries need not perform any work
on the Project before such a lawsuit is commenced. EACH COMPLETION
GUARANTOR EXPRESSLY ACKNOWLEDGES THAT THE MEASURE OF THE
BENEFICIARIES' DAMAGES FOR BREACH OF THIS COMPLETION GUARANTY SHALL
BE BASED ON THE COSTS OF COMPLETING THE PROJECT, NOT THE EXTENT TO
WHICH COMPLETING THE PROJECT WOULD INCREASE THE VALUE OF THE
PROJECT AND SITE.
6.
Relationship to Other
Agreements. Nothing herein shall in any way modify
or limit the effect of terms or conditions set forth in any other
document, instrument or agreement executed by Completion Guarantors
or in connection with obligations guarantied hereby, but each and
every term and condition hereof shall be in addition thereto. All
provisions contained in the Credit Agreement that apply to Loan
Documents generally are fully applicable to this Completion
Guaranty and are incorporated herein by this reference.
7.
Subordination of
Indebtedness of Borrower to Completion Guarantors.
Each Completion Guarantor
agrees that:
-
(a) Any
indebtedness of Borrower now or hereafter owed to Completion
Guarantors or either of them hereby is subordinated to the
obligations guarantied hereby.
(b) If
the Administrative Agent so requests, upon the occurrence and
during the continuance of any Event of Default, any such
indebtedness of Borrower now or hereafter owed to Completion
Guarantors, or any of them, shall be collected, enforced and
received by the applicable Completion Guarantor as trustee for
Beneficiaries and shall be paid over to the Administrative Agent
for the benefit of Beneficiaries in kind on account of the
obligations guarantied hereby, and shall be applied by the
Administrative Agent to construction of the Project.
(c) Should
Completion Guarantors fail to collect or enforce any such
indebtedness of Borrower now or hereafter owed to Completion
Guarantors or any of them and pay the proceeds thereof to the
Administrative Agent for the benefit of Beneficiaries in accordance
with Section 7(b) hereof, the Administrative Agent as
Completion Guarantors' attorney-in-fact may do such acts and sign
such documents in the applicable Completion Guarantor's name as the
Administrative Agent considers necessary or desirable to effect
such collection, enforcement and/or payment.
6
8.
Statutes of Limitations
and Other Laws. Until the obligations guarantied hereby
shall have been paid and performed in full, all the rights,
privileges, powers and remedies granted to the Beneficiaries
hereunder shall continue to exist and may be exercised by the
Administrative Agent for the benefit of the Beneficiaries at any
time and from time to time irrespective of the fact that any of the
obligations guarant
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