Fertitta Frank J Iii SC 13D/A STATION CASINOS / FERTITTA FRANK J III ownership change | SEC 30 Jul 10

Exhibit 7.02

EXECUTION VERSION

AMENDED AND RESTATED MEMORANDUM OF UNDERSTANDING

This AMENDED AND RESTATED MEMORANDUM OF UNDERSTANDING (“MOU”) is made and entered into as of July 23, 2010 by and among the following parties:

(a) Fertitta Gaming LLC, a Nevada limited liability company (“FG”), Frank J. Fertitta III (“FJF”), Lorenzo J. Fertitta (“LJF” and collectively with FJF and their respective estate planning entities, the “Fertittas”), FJF Investco, LLC (“FJF Investco”), LJF Investco, LLC (“LJF Investco”), and FCP Class B HoldCo LLC (“Class B HoldCo,” and collectively with FG, the Fertittas, FJF Investco and LJF Investco, the “Fertitta Parties”);

(b) FC Investor LLC (“FC Investor”), Thomas Barrack, Jr. (solely in his capacity as a equity holder of Voteco, as managing member of Colony Capital, LLC, and a manager of FCP, “Barrack”), and any affiliate of Colony Capital LLC that may be added as a party to this MOU by way of joinder (such affiliates together with FC Investor and Barrack, “Colony” or the “Colony Parties”);

(c) Colony Capital, LLC (“Colony Capital”) solely for the purposes of giving releases as provided in Section 4 of this MOU.

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

RECITALS

WHEREAS, Station Casinos, Inc. (“SCI”) and each and every one of its direct and indirect subsidiaries, including without limitation, each direct and indirect subsidiary of SCI that is a debtor in the Bankruptcy Cases (collectively, the “Station Group”) constitute a gaming entertainment enterprise that owns and/or operates gaming properties under the “Station” and “Fiesta” brand names;

WHEREAS, on November 7, 2007, SCI consummated the transactions contemplated by that certain Agreement and Plan of Merger by and among SCI, Fertitta Colony Partners, LLC (“FCP”), and FCP Acquisition Sub (“FCP Merger Sub”), as amended by that certain Amendment to Agreement and Plan of Merger dated by and among SCI, FCP, and FCP Merger Sub (such transactions, collectively the “Transaction”);

WHEREAS, Colony provided a portion of the funding for the Transaction and, in return, acquired an indirect ownership interest in SCI;

WHEREAS, as part of the Transaction, FCP PropCo, LLC (“Propco”) entered into that certain Loan and Security Agreement, dated as of November 7, 2007 (the “Original Mortgage Loan Agreement”), with the German American Capital Corporation (“GACC”) and JP Morgan Chase Bank, N.A. (“JPM” and together with GACC collectively, the “Mortgage Lenders”) pursuant to which the Mortgage Lenders made loans and other financial accommodations to Propco (the “Mortgage Loan”). The Original Mortgage Loan Agreement has been amended and restated by that certain Amended and Restated Loan and Security Agreement, dated as of March 19, 2008 (the “Mortgage Loan Agreement”). The Propco Properties, the

Master Lease (as defined below), the rent due under the Master Lease, the cash collateral and certain other assets pledged under the Security Instruments, Security Documents or other Loan Documents (as such terms are defined in the Mortgage Loan Agreement), are pledged to the Mortgage Lenders or to German American Capital Corporation, as the Collateral Agent for the Mortgage Lenders to secure the obligations due under the Mortgage Loan Agreement;

WHEREAS, FCP VoteCo, LLC (“VoteCo”) owns 100% of the voting stock of SCI;

WHEREAS, FCP Holding, Inc. (“FCP Holding”), owns 75.9% of the non-voting stock of SCI, and Fertitta Partners, LLC (“Fertitta Partners”) owns 24.1% of the non-voting stock of SCI;

WHEREAS, FCP owns 100% of the stock of FCP Holding;

WHEREAS, FCP’s (i) Class A membership interests are owned by FC Investor, an entity indirectly controlled by Colony, (ii) Class B membership interests are owned by Class B HoldCo, an entity indirectly controlled by the Fertittas, and (iii) Class C membership interests are owned by certain current and former members of SCI’s management;

WHEREAS, effective as of November 7, 2007, SCI, FCP, Fertitta Partners, FCP Holding, VoteCo, FC Investor, FJF Investco, LJF Investco, BLS Investco LLC, Class B HoldCo, and certain individuals holding Class A membership interests of Fertitta Partners and/or Class C membership interests of Fertitta Partners and/or FCP entered into the Equityholders Agreement of Station Casinos, Inc., Fertitta Colony Partners LLC and Fertitta Partners LLC (the “Equityholders Agreement”);

WHEREAS, effective as of November 7, 2007, FC Investor, Class B HoldCo, each of the Class C members of FCP, and the Fertittas entered into the Second Amended and Restated Operating Agreement of Fertitta Colony Partners LLC (the “FCP LLC Agreement” and together with the Equityholders Agreement, the “Equity Agreements”);

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”);

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) 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, on July 28, 2009, SCI, Propco and certain of their affiliates (the “Debtors”) commenced voluntary cases in the District of Nevada, administratively consolidated under case no. BK-09-52477 (the “Bankruptcy 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, Propco will, pursuant to the Plan or the Propco Plan (each as defined below) transfer substantially all of its assets to a new entity (such entity, “New Propco”) and all of the non-voting equity of New Propco shall be held by its parent company “Propco Holdco”, which entity shall initially be wholly owned by the Mortgage Lenders;

WHEREAS, FG and the Mortgage Lenders have negotiated a term sheet that summarizes the material terms of a joint chapter 11 plan (the “Plan”) with the terms and conditions set forth in the term sheet and its amendments and supplements annexed hereto as Attachment 1 (including all of its annexes, and as it may be amended from time to time, the “Propco Plan Term Sheet”). As defined in this MOU, the Plan, including any Propco Plan (as defined below), means the chapter 11 plan of reorganization described in the Propco Plan Term Sheet or any chapter 11 plan incorporating the material terms of the Propco Plan Term Sheet, provided that in no event shall the Plan (i) alter the terms set forth in the Propco Plan Term Sheet in a manner that is materially or disproportionally adverse to the Colony, (ii) adversely alter any rights specific to Colony set forth in the Propco Plan Term Sheet, (iii) impair the rights of the holders of the FG Warrants collectively to receive 2.5% of the equity of Propco Holdco, subject to dilution as provided in Attachment 2 and to the provisions of Section 1(c) of this MOU, (iv) substantively alter the terms and conditions of the FG Warrants described in Attachment 2 hereto or the Effective Date Deliverables, the Propco Contribution True Up Payment, the Other Equity Contribution True Up Payment, and Participation Rights described herein and in Attachment 3, in each case subject to the provisions of Section 1(c) of this MOU, or (v) alter the equity ownership of Propco Holdco, New Propco or reorganized SCI if New Propco acquires the equity or assets of SCI, each as set forth in the Propco Plan Term Sheet, in a manner that is materially or disproportionately adverse to Colony, provided, however, that the reallocation by the Fertitta Affiliates or the Mortgage Lenders of equity they would otherwise receive under the Plan shall not constitute an alteration of such equity ownership.

WHEREAS, the Fertitta Affiliates(1) and the Mortgage Lenders have executed a Plan Support Agreement and certain amendments thereto (and are contemplating a further

(1) As used in this MOU and the attachments hereto, “Fertitta Affiliates” shall mean, individually and collectively, (a) FJF or LJF, any spouse or child or Fertitta Family Entity (as defined in Propco Plan Term Sheet) (each, a “Specified Person”), (b) a person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, a Specified Person, (c) any person that is an officer, director, partner, manager or trustee of, or serves in a similar capacity with respect to, a Specified Person or of which a Specified Person is an officer, partner, manager or trustee, or with respect to which a Specified Person serves in a similar capacity; or (d) any person one-third or more of whose equity securities are owned by Specified Persons. Without otherwise limiting the scope of the definition of Fertitta Affiliates, it is agreed that neither Zuffa, LLC nor its subsidiaries and joint ventures shall constitute a Fertitta Affiliate unless engaged in the investment in, ownership of or management of a hotel in the Las Vegas Locals Market, or any activity wherever located that requires licensing as a casino gaming company.

amendment to reflect, inter alia, the execution of this MOU), pursuant to which the Fertitta Affiliates and the Mortgage Lenders have agreed, inter alia, to support the Plan on the terms and conditions set forth therein (as so amended and including all of its attachments, the “Plan Support Agreement”);

WHEREAS, the Colony Parties also support the approval and consummation of the Plan and the related transactions described in the Plan Support Agreement;

WHEREAS, the Parties desire to resolve any Claims (as defined in Paragraph 4(a) hereof);

WHEREAS, the Parties have negotiated the material terms of the consideration that the Colony Parties shall receive in consideration for the releases of Claims described herein if the Plan is confirmed and becomes effective;

WHEREAS, the Parties have engaged in good faith negotiations with one another with regard to this MOU;

WHEREAS, the Parties have executed and delivered a Memorandum of Understanding dated as of March 23, 2010, as amended by that First Amendment to Memorandum of Understanding dated as of April 15, 2010 (as so amended, the “Original MOU”);

WHEREAS, the Parties now wish to enter into this MOU to amend and restate in its entirety the Original MOU to, inter alia, memorialize certain refinements of their prior arrangements; and

WHEREAS, each Party has reviewed, or has had the opportunity to review, this MOU with the assistance of professional legal advisors of its own choosing;

AGREEMENT

NOW THEREFORE, in consideration for 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 and intending to be legally bound hereby, the Parties hereby agree as follows:

1. Consideration to Colony Parties.

(a) Consideration

In consideration to the Colony Parties for the releases to be granted by the Colony Parties to the Fertitta Release Parties and the Station Release Parties as described in Paragraphs 4(a) and 4(b) hereof, the Fertitta Affiliates, as more particularly described in Attachment 3 hereto, shall (a) purchase equity interests in Propco Holdco; (b) grant to Colony and/or any Colony Designees (i) an option (the “First Tranche Option”) to purchase from the Fertitta Affiliates 8.75% of the Fertitta Affiliate’s equity interests in Propco Holdco as of immediately following the Effective Time, after giving effect to all sales of equity to be consummated as of

the Effective Date (provided such amount shall in no event be less than 3.0625% of all Propco Holdco equity outstanding immediately following the Effective Time, after giving effect to all sales of equity to be consummated as of the Effective Date), exercisable only in full (unless the Effective Date Value is in excess of $430 million, in which case Colony shall only be obligated to exercise for such portion of the equity as is equal to the full allocation multiplied by the quotient of $430 million divided by the Effective Date Value) and only during the thirty (30) days following the first anniversary of the Effective Date for cash consideration equal to the number of units subject to the First Tranche Option multiplied by the First Tranche Strike Price and (ii) an option (the “Second Tranche Option”) to purchase from the Fertitta Affiliates 11.25% of the Fertitta Affiliate’s equity interests in Propco Holdco as of immediately following the Effective Time, after giving effect to all sales of equity to be consummated as of the Effective Date (provided such amount shall in no event be less than 3.9375% of all Propco Holdco equity outstanding immediately following the Effective Time, after giving effect to all sales of to be consummated as of the Effective Date, and further provided that if Colony has exercised the First Tranche Option and the Premium Amount falls within one of the ranges set forth below, the number of units subject to the Second Tranche Option shall be adjusted to also include such additional percentage of all Propco Holdco equity outstanding immediately following the Effective Time, after giving effect to all sales of equity to be consummated as of the Effective Date, as corresponds to the range in which the Premium Amount falls: at least $350 million but less than $375 million: 0.5%; at least $375 million but less than $400 million: $1.0%; at least $400 but less than $425 million: 1.5%; at least $425 but less than $450 million: 2.0%; at least $450 but less than $475 million: 2.5%; and $475 million or more: 3.0%), exercisable in full or in part, at Colony’s election, but only during the one hundred twenty (120) days following the first anniversary of the Effective Date for cash consideration equal to the number of units subject to the Second Tranche Option multiplied by the Second Tranche Strike Price (the First Tranche Option and the Second Tranche Option, collectively, the “Colony Equity Options”), provided that the terms of the Colony Equity Options shall be subject to the Section 1(c) of this MOU, and provided further that as a condition to the receipt of the Colony Equity Options, Colony shall represent and warrant, on the Effective Date, that it has no present plan or intention as of the Effective Date to exercise either of the Colony Equity Options, subject to future reexamination during the applicable exercise period based upon then current value information; (c) subject to the terms and conditions set forth in Attachment 3 hereto, grant to Colony and/or any Colony Designee a right of first refusal to purchase equity of Propco Holdco offered to the Fertitta Affiliates (“ML ROFR”) at the price offered to the Fertitta Affiliates, with such ML ROFR to be exercised no later than ten (10) days prior to the last day for the Fertitta Affiliates to exercise such right (or if the Fertitta Affiliates have a period of less than 20 days to exercise such right, one half of such lesser time period), together with delivery of a firm funding commitment and a representation from the exercising entity that it has sufficient cash available to pay the purchase price for the equity; (d) purchase from the Mortgage Lenders all FG Warrants (as defined in and on the terms and conditions set forth in Attachment 2 hereto), and immediately thereafter assign all such FG Warrants to Colony and/or any Colony Designee for no further consideration, provided that as a condition to the receipt of the FG Warrants, Colony shall represent and warrant, on the Effective Date, that it has no present plan or intention as of the Effective Date to exercise the FG Warrants, subject to future reexamination during the exercise period thereof based upon then current value information; (e) pay or cause to be paid to the Colony Parties on the Effective Date a settlement fee equal to $450,000 plus an amount equal to 15% of the Colony

Fraction multiplied by $200,000,000 (the “Settlement Fee”) (the Colony Equity Options, the FG Warrants, the ML ROFR and the Settlement Fee are collectively the “Effective Date Deliverables”); (f) pay or cause to be paid to the Colony Parties the Propco Contribution True Up Payment and the Other Equity Contribution True Up Payment on the later of (i) the Effective Date and (ii) the date that is two (2) business days after the amounts of both the Propco Contribution True Up Payment and the Other Equity Contribution True Up Payment have been determined (which in all events shall be determined no more than thirty (30) days following the Effective Date); (g) deliver to an employee or member of Colony Capital licensed by all applicable regulatory authorities the “Colony Proxy” subject to and as described in Annex 7 of the Propco Plan Term Sheet; (h) grant to Colony and/or the Colony Designees, as of the Effective Date (i) a co-investment right with respect to certain gaming or hotel investment opportunities in the Applicable Market (as defined in Attachment 3 hereto) that may be pursued by FG or any Fertitta Affiliate (other than indirectly through their equity investment in New Propco), and (ii) a third party equity investment right with respect to certain gaming opportunities arising outside of the Applicable Market that may be pursued by FG or any Fertitta Affiliate, all on the terms and conditions set forth in Attachment 3 (items (h)(i) and (h)(ii), as more particularly described on Attachment 3, being collectively, the “Participation Rights” and, together with the FG Warrants and the Colony Equity Options, the “Colony Equity Consideration”); (i) grant to Colony and/or the Colony Designees such other rights as set forth in Attachment 3 hereto; and (j) release the Colony Release Parties as described in Paragraph 4(c) hereof. Unless otherwise specified in writing by Colony (or a representative or agent thereof), the Fertitta Affiliates must pay, deliver, or assign, as the case may be, all Effective Date Deliverables and Participation Rights to Colony and not to any Colony Designee. For purposes of this MOU, the term “Colony Designee” shall mean any current or future Colony affiliate, funds and separate accounts for which Colony or an affiliate under Colony’s control acts as an investment advisor, or any limited partner or co-investor in any such affiliate or entity.

(b) Certain Definitions

For purposes of this Agreement:

(1) “Additional Equity Amount” means the amount of all equity or capital contributions made to Propco Holdco as of the Effective Date, excluding the contribution of the New Propco Acquired Assets (as defined in the Plan), plus any reduction in the debt of New Propco below the Effective Date level contemplated by the Plan that is agreed to by the Mortgage Lenders and FG in exchange for additional equity in Propco Holdco.

(2) “Colony Fraction” means (A) the percentage of outstanding units of Propco Holdco owned by the Fertitta Affiliates immediately following the Effective Time after giving effect to all sales of equity to be consummated as of the Effective Date multiplied by (B) 0.2 and then multiplied by (C) 0.4375.

(3) “Effective Date Per Unit Value” means the aggregate value of all outstanding units of Propco Holdco determined as of immediately following the Effective Time by Imperial Capital LLC (or, if it is unavailable, another nationally recognized valuation firm to be mutually agreed upon by FG and Colony) (such aggregate value, the “Effective Date Value”), divided by the total number of units of Propco Holdco outstanding immediately following the

Effective Time, in each case after giving effect to all sales of equity to be consummated as of the Effective Date.

(4) “Effective Time” means the time at which the transactions contemplated by the Propco Plan Term Sheet to be consummated on the Effective Date are so consummated.

(5) “First Tranche Strike Price” means a strike price of up to 125% of the Propco Plan Per Unit Value, as determined by FG.

(6) “Other Equity Contribution True Up Payment” means an amount equal to the lesser of (A) $2,500,000 and (B) (i) if the percentage used in the First Tranche Strike Price is 125%, then 1.25% of the Additional Equity Amount, or (ii) if the percentage used to calculate the First Tranche Strike Price is less than 125%, then (x) the percentage used to calculate the First Tranche Strike Price minus 100%, multiplied by the Additional Equity Amount and then multiplied by 0.04375, plus (y) $350,000.

(7) “Premium Amount” means an amount equal to (A) the First Tranche Strike Price multiplied by the total number of units of Propco Holdco outstanding immediately following the Effective Time after giving effect to all sales of equity to be consummated as of the Effective Date minus (B) the Propco Plan Value.

(8) “Propco Contribution True Up Payment” means an amount equal to the lesser of (A) $15,000,000 and (B) the Premium Amount multiplied by the Colony Fraction.

(9) “Propco Plan Per Unit Value” means the Propco Plan Value divided by the total number of units of Propco Holdco outstanding immediately following the Effective Time after giving effect to all sales of equity to be consummated as of the Effective Date.

(10) “Propco Plan Value” means an amount equal to $200 million plus the Additional Equity Amount.

(11) “Second Tranche Strike Price” means a strike price equal to 150% of the Effective Date Per Unit Value.

It is expressly acknowledged and agreed that it will be a condition (the “Tax Condition”) to the Fertitta Parties’ obligation to provide the consideration described above in clauses (b) (relating to the Colony Equity Options), (c) (relating to the ML ROFR), (d) (relating to the FG Warrants), (f) (relating to the Other Equity Contribution True Up Payment and the Propco Contribution True Up Payment), (g) (relating to the Colony Proxy), (h) (relating to the Participation Rights) and (i) (relating to such other rights set forth in Attachment 3) (each of clauses (b)-(d) and (f)-(i), a “Colony Equity Deliverable”) that (I) the Bankruptcy Court shall have issued a final order (the “Confirmation Order”) that shall include a finding that no income taxes will arise out of or result from implementation of the transactions contemplated by the Plan, including, without limitation, if the Stalking Horse Bidder is the Successful Bidder (each as defined in the Plan), contemplated by the Stalking Horse APA (as defined in the Plan) or the Plan, other than alternative minimum taxes that in the aggregate are less than $15 million (the

“Tax Findings”), and (II) the Internal Revenue Service shall have issued a private letter ruling to SCI, in form and substance acceptable to the Fertitta Parties, regarding the application of Section 267 of the Internal Revenue Code of 1986, as amended (the “Code”) to the transactions contemplated by the Plan, including, without limitation, if the Stalking Horse Bidder is the Successful Bidder (each as defined in the Plan), contemplated by the Stalking Horse APA (as defined in the Plan) or the Plan (the “IRS Ruling”). As of the date hereof and after conducting reasonable diligence, the Fertitta Parties are not aware of any facts that would preclude the issuance of a Confirmation Order containing the Tax Findings or the issuance of the IRS Ruling; provided that there can be no guarantee as to the ultimate success with respect to either the Tax Findings or the IRS Ruling. If the Fertitta Parties fail to provide any portion of the Colony Equity Deliverables to Colony and/or any Colony Designee due to a failure to satisfy the Tax Condition, then Colony shall have the option, in its sole and absolute discretion but subject to the following paragraph, to terminate this MOU for all purposes, without obligation or liability to any Party, and without prejudice or detriment to the rights of the Parties as they existed prior to entering into the Original MOU.

Notwithstanding anything herein to the contrary, if the Fertitta Parties determine in good faith, after reasonable pursuit of the Tax Findings and the IRS Ruling, that (a) the Internal Revenue Service has objected to the Tax Findings (and such objection cannot be resolved through reasonable and good faith efforts of the Fertitta Parties and without requiring additional consideration or any economic concessions from the Fertitta Parties or the Mortgage Lenders) and/or the Internal Revenue Service will not issue the IRS Ruling and/or the Bankruptcy Court will not enter the Tax Findings, and (b) modification of the Colony Equity Deliverables is necessary to obtain the IRS Ruling and/or the Tax Findings and/or to overcome any IRS objection to the Tax Findings (the occurrence of (a) and (b), whether before or after a determination regarding the IRS Ruling or the Tax Finding, a “Tax Condition Offer Event”), they shall make a bona-fide good faith offer (the “Tax Condition Offer”) to Colony to modify the Colony Equity Deliverables solely to the extent required and to the least extent necessary to obtain the IRS Ruling and/or the Tax Findings and/or to overcome any IRS objection to the Tax Findings without requiring any additional consideration or any economic concessions from the Fertitta Parties or the Mortgage Lenders, and continue to provide Colony and/or any Colony Designee with all other consideration set forth in this MOU. Promptly following the occurrence of a Tax Condition Offer Event and the making of a Tax Condition Offer, the Fertitta Parties shall provide to Colony a reasonably detailed written summary of (i) the circumstances giving rise to, the causes of, and the rationale for determining the occurrence of the Tax Condition Offer Event, (ii) the nature of the steps taken by the Fertitta Parties and the Debtors to prevent the occurrence of the Tax Condition Offer Event, and (iii) the potential curative measures considered in formulating the Tax Condition Offer. The Fertitta Parties shall make themselves and/or their legal and financial representatives reasonably available to Colony for purposes of discussing this written summary and addressing any reasonable inquiries Colony may have based on such summary, the Tax Condition Offer Event, and the Tax Condition Offer.

Any such modifications to the Colony Equity Deliverables shall not be a breach of this MOU, but Colony shall have the option (the “Colony Tax Condition Option”), in its sole and absolute discretion, to be exercised within five business days following the delivery to Colony of the Tax Condition Offer, (i) to accept the Tax Condition Offer, (ii) to (a) decline this Tax

Condition Offer solely with respect to the modified Colony Equity Deliverable(s), (b) accept and receive the unmodified Colony Equity Deliverables(s), (c) enjoy the other rights and benefits (other than the Settlement Fee, the Propco Contribution True Up Fee and the Other Equity Contribution True Up Fee) set forth in this MOU, (d) accept and receive a cash payment from the Fertitta Parties in lieu of the Settlement Fee, the Propco Contribution True Up Fee and the Other Equity Contribution True Up Fee, in the amount of $8,750,000 (the “Modification Payment”), (e) if the Colony Equity Deliverable(s) declined under clause (ii)(a) of this paragraph include the First Tranche Option and/or the Second Tranche Option, have (x) its ratable holdings of Propco Holdco equity for purposes of exercising its rights under this MOU deemed to be the sum of Propco Holdco equity actually acquired pursuant to the Colony Equity Deliverables accepted under clause (ii)(b) of this paragraph plus the Propco Holdco equity Colony has the right to acquire (but has not yet acquired) pursuant to the Colony Equity Option(s) accepted under clause (ii)(b) of this paragraph plus the amount of Propco Holdco equity Colony would have had the right to acquire if it had exercised, in full and according to their original terms, the Colony Equity Option(s) declined under clause (ii)(a) of this paragraph, and (y) any condition based on the exercise of a Colony Equity Option declined under clause (ii)(a) of this paragraph deemed to be satisfied, and (f) be bound, together with the Fertitta Parties, by all obligations, conditions, and commitments under this MOU other than the Settlement Fee, the Propco Contribution True Up Fee, the Other Equity Contribution True Up Fee and those pertaining to or deriving from the modified Colony Equity Deliverable(s), or (iii) to terminate this MOU for all purposes, without obligation or liability to any Party, and without prejudice or detriment to the rights of the Parties as they existed prior to entering into the Original MOU; provided that clauses (ii) and (iii) shall not apply and Colony shall be obligated to accept the Tax Condition Offer (1) if the only proposed modifications are to change “Propco Plan Per Unit Value” to “Effective Date Per Unit Value” in the definition of First Tranche Strike Price, change the exercise price of the Opco Purchaser Option Equity (as defined in Attachment 3) to the greater of 110% of the price paid by the Participating Fertitta Party (as defined in Attachment 3) or the fair market value of such equity (which will conclusively be presumed to be the price paid for such equity by other investors), and/or to defer Colony’s voting/proxy rights (as described in Attachment 3) until after it has exercised the First Tranche Option (provided that the Fertitta Parties have made reasonable and good faith efforts (without requiring additional consideration or any economic concessions from the Fertitta Parties or the Mortgage Lenders) to resolve any objection of the IRS to the granting of the voting/proxy rights as described in Attachment 3), or (2) if Imperial Capital LLC (or, if it is unavailable, another nationally recognized valuation firm to be mutually agreed upon by FG and Colony) determines that the modified portion(s) of the Colony Equity Deliverable(s) together with the additional consideration being delivered to Colony are of an economic value and nature that clearly equates to the economic value and nature of the portion(s) of the Colony Equity Deliverable(s) being so replaced.

2. Consideration to Fertitta Parties.

In consideration to the Fertitta Parties for the Colony Equity Consideration and the releases described in Paragraph 4(b) hereof, the Colony Parties and Colony Capital shall release the Fertitta Release Parties as described in Paragraph 4(a) hereof, the Equityholders Agreement shall be terminated and FCP, FCP Holding, Fertitta Partners and Voteco shall be

dissolved or merged out of existence pursuant to applicable law or court order, including pursuant to the Plan, on or prior to the Effective Date.

3. Commitments of the Parties to this Agreement.

(a) MOU Termination Event.

As used herein, “MOU Termination Event” means: (i) the occurrence of both of (A) either (x) the Plan Support Agreement being terminated by mutual agreement of the parties thereto (and other than as a result of the occurrence of the Effective Date ) or (y) the occurrence a “Termination Event” as defined in the Plan Support Agreement (other than as a result of the occurrence of the Effective Date ) that has not been duly waived or cured in accordance with the terms of the Plan Support Agreement; and (B) the parties to the Plan Support Agreement not thereafter pursuing a “propco stand-alone plan” consistent with the terms and conditions of the Propco Plan Term Sheet dated March 24, 2010 (a “Propco Plan”) or (ii) the agreement of any Fertitta Affiliate to support, the filing with the Bankruptcy Court of, or the effectiveness of any chapter 11 plan of the Debtors other than the Plan or the Propco Plan.

(b) Mutual Commitments.

As long as a MOU Termination Event has not occurred, each Party hereto agrees for itself, that it will:

i. promptly following the execution of this MOU, (a) negotiate in good faith to prepare definitive documentation, which shall contain provisions consistent with this MOU, the attachments hereto, and such other provisions as are mutually acceptable to the Parties and (b) use best efforts to agree to final form of such definitive documentation on or before August 15, 2010, with the documentation initially to be drafted by the Fertitta Parties;

ii. not object to or otherwise commence any proceeding or take any other action opposing any of the terms of the Plan Support Agreement, the disclosure statement associated with the Plan or a Propco Plan, the Plan or a Propco Plan or any other agreement or transaction that is contemplated by the Propco Plan Term Sheet or the Plan Support Agreement, or a Propco Plan;

iii. not directly or indirectly, 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 SCI, Propco or any of their respective affiliates that could reasonably be expected to prevent, delay or impede solicitation, confirmation or consummation of the Plan or the Propco Plan or any document filed with the Bankruptcy Court in furtherance of soliciting or confirming the Plan or the Propco Plan or consummating the transactions contemplated thereby;

iv. support approval of the Plan or the Propco Plan, any associated disclosure statement, the amended Compromise and other related matters in proceedings before the Bankruptcy Court;

v. following receipt of the disclosure statement associated with the Plan or the Propco Plan and other related solicitation materials approved by the Bankruptcy Court, vote all claims that it holds or controls, if any, in favor of the Plan or the Propco Plan by delivering its duly executed and timely completed ballot or ballots accepting the Plan or the Propco Plan to the balloting agent for the Plan or the Propco Plan, and it shall not thereafter withdraw or change such vote so long as the Plan and associated disclosure statement are not modified except in such manner that does not affect or in any way alter materially or disproportionately adversely the terms of the Colony Equity Consideration subject to Section 1(c); and

vi. take all reasonable and customary steps necessary or desirable to cause the Equityholders Agreement to be terminated and FCP, FCP Holding, Fertitta Partners and Voteco to be dissolved or merged out of existence pursuant to applicable law or court order, including pursuant to the Plan, on or prior to the Effective Date.

As long as a MOU Termination Event has not occurred each Colony Party agrees for itself, that it will from and after the date hereof:

i. promptly disclose to the Fertitta Parties any agreement (other than procedural or immaterial understandings) between any Colony Party and any Mortgage Lender related to or in connection with the Plan, the Fertitta Affiliates, New Propco, the sale or auction of SCI’s assets, or any transaction described in the Propco Plan Term Sheet; provided, however, that the Colony Parties shall be under no obligation to disclose any such agreement if the agreement relates to the Mortgage Loan or any investment referencing the Mortgage Loan.

Within five (5) business days of the date hereof, Colony shall deliver to SCI an executed stipulation in the form attached hereto as Attachment 4 and that certain Ownership Standstill Agreement, in each case, executed by all relevant Colony Parties.

(d) Fertitta Party Commitments.

As long as a MOU Termination Event has not occurred each Fertitta Party agrees for itself, that it will from and after the date hereof:

i. promptly disclose to the Colony Parties any proposed revision or modification to the Propco Plan Term Sheet or Plan Support Agreement;

ii. not enter into any agreement or otherwise take any action that could be reasonably expected to interfere with the Fertitta Parties’ or the Fertitta Affiliates’ collective ability to perform their obligations to grant and to honor the exercise of any rights of Colony and/or the Colony Designees in respect of the Colony Equity Consideration granted to Colony and/or the Colony Designees pursuant to this MOU; and

iii. promptly disclose to the Colony Parties any agreement (other than procedural or immaterial understandings) between any Fertitta Party and any Mortgage Lender related to or in connection with the Plan, the Fertitta Affiliates, New Propco, the sale of SCI’s equity or assets, or any transaction described in the Propco Plan Term Sheet.

4. Releases

(a) Releases of the Fertitta Release Parties by Colony Releasing Parties.

Subject only to the condition precedent of the occurrence of (i) the Effective Date, (ii) the tender of the Effective Date Deliverables to the Colony Parties or their designees (subject to Section 1(c) of this MOU) as and to the extent required by applicable definitive documentation, and (iii) entry by the Parties into and effectiveness of binding documentation memorializing the rights of the Colony Parties and the Colony Designees to the Colony Equity Consideration other than the Effective Date Deliverables (the date of such occurrence of items (i), (ii), and (iii), the “Fertitta Release Effective Date”), the Colony Parties and Colony Capital (the “Colony Releasing Parties”) on the Fertitta Release Effective Date hereby knowingly and voluntarily, expressly and absolutely forever release and discharge the Fertitta Parties, and each and every one of them, (whether individually or collectively) and each of their respective agents, principals, managers, managing members, members, stockholders, “controlling persons” (within the meaning of the United States federal securities laws), partners, limited partners, investors, parents, subsidiaries, affiliates, directors, officers, employees, attorneys, accountants, successors, assigns, consultants, advisors, agents, trusts, trustors, beneficiaries, heirs, executors, and administrators (the “Fertitta Release Parties”), from any and all claims, potential claims, demands, rights, actions or causes of action, debts, liabilities, damages, losses, obligations, accounts, attorneys’ fees, reckonings, judgments, suits, costs, expenses, liens, matters and issues of any kind or nature whatsoever, whether known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, matured or unmatured arising out of, related to, based upon, by reason of, or in any way involving, directly or indirectly, (1) the Transaction, (2) any contract, agreement, document or obligation (including the Equity Agreements and any amendments thereto) pursuant to which any of the Fertitta Release Parties owes, is bound to, or subject to any obligation or duty to any of the Colony Releasing Parties, (3) the Plan and any transactions described in the Plan; or (4) any prior transactions referred to herein (collectively,

the “Fertitta Claims”), which any of them respectively now has, owns or holds, or at any time heretofore had, owned or held, or could, shall or may hereafter have, own, or hold. For avoidance of doubt, this release of all Fertitta Claims by the Colony Releasing Parties is inclusive of, and, on the Fertitta Release Effective Date, hereby releases all Fertitta Claims that the Colony Parties may hold against the Fertitta Release Parties derivatively by, though or under FCP, FCP Holding, Voteco or Fertitta Partners, including by reason of the dissolution of any thereof. Such releases shall expressly be inapplicable to any claims of the Colony Parties (i) for indemnification arising under the Equityholders Agreements, the VoteCo operating agreement, the SCI articles of incorporation, SCI by-laws or applicable law, (ii) that expressly survive the Effective Date pursuant to the Plan’s terms, (iii) relating to or arising under this MOU or any definitive documentation entered into by the Parties reflecting the terms contemplated by this MOU or otherwise acceptable to the Parties and (iv) relating to or arising under any documents or agreements entered into in connection with or evidencing the ownership interests obtained by Colony or its affiliates or designees as a result of the Colony Equity Consideration.

(b) Releases of the Station Group by the Colony Releasing Parties and the Fertitta Parties.

Subject only to the condition precedent of the occurrence of (i) the Effective Date, (ii) the tender of the Effective Date Deliverables to the Colony Parties or their designees (subject to Section 1(c) of this MOU) as and to the extent required by applicable definitive documentation, (iii) entry by the Parties into and effectiveness of binding documentation memorializing the rights of the Colony Parties and the Colony Designees to the Colony Equity Consideration other than the Effective Date Deliverables, and (iv) the effectiveness of a release by SCI and each direct and indirect subsidiary of SCI that is a debtor in the Bankruptcy Cases of all Claims against the Colony Release Parties (as defined below) and the Fertitta Release Parties, (the date of such occurrence of items (i), (ii), (iii) and (iv), the “Station Group Release Effective Date”), the Fertitta Parties and the Colony Releasing Parties on the Station Group Release Effective Date hereby knowingly and voluntarily, expressly and absolutely forever release and discharge the Station Group, and each and every one of them, (whether individually or collectively) and each of their respective agents, principals, managers, managing members, members, stockholders, “controlling persons” (within the meaning of the United States federal securities laws), partners, limited partners, investors, parents, subsidiaries, affiliates, directors, officers, employees, attorneys, accountants, successors, assigns, consultants, advisors, agents, trusts, trustors, beneficiaries, heirs, executors, and administrators (the “Station Group Release Parties”), from any and all claims, potential claims, demands, rights, actions or causes of action, debts, liabilities, damages, losses, obligations, accounts, attorneys’ fees, reckonings, judgments, suits, costs, expenses, liens, matters and issues of any kind or nature whatsoever, whether known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, matured or unmatured arising out of, related to, based upon, by reason of, or in any way involving, directly or indirectly, (1) the Transaction, (2) either of the Equity Agreements and any amendments thereto, or (3) the Plan and any transactions described in the Plan; or (4) any prior transaction referred to herein (the “Station Claims”), which any of them respectively now has, owns or holds, or at any time heretofore had, owned or held, or could, shall or may hereafter have, own, or hold. For avoidance of doubt, this release of all Station Claims by the Colony Releasing Parties and the Fertitta Parties is inclusive of, and, on the Station Group Release Effective Date, hereby releases all Station Claims that the Colony Releasing Parties or the

Fertitta Parties may hold against the Station Group derivatively by, though or under FCP, FCP Holding, Voteco or Fertitta Partners, including by reason of the dissolution of any thereof. Such releases shall expressly be inapplicable to any Station Claims of the Colony Releasing Parties or the Fertitta Parties (i) for indemnification, reimbursement of expenses, compensation, contribution, or subrogation arising under the Equity Agreements, the VoteCo operating agreement, the SCI articles of incorporation, SCI by-laws, SCI board resolutions, SCI policies, or applicable law, (ii) that expressly survive the Effective Date pursuant to the Plan’s terms, (iii) relating to or arising under this MOU or any definitive documentation entered into by the Parties reflecting the terms contemplated by this MOU or otherwise acceptable to the Parties and (iv) relating to or arising under any documents or agreements entered into in connection with or evidencing the ownership invests obtained by Colony or its affiliates or designees as a result of the Colony Equity Consideration.

Subject only to the condition precedent of the occurrence of (i) the Effective Date, (ii) the tender of the Effective Date Deliverables to the Colony Parties or their designees (subject to Section 1(c) of this MOU) as and to the extent required by applicable definitive documentation, and (iii) entry by the Parties into and effectiveness of binding documentation memorializing the rights of the Colony Parties and the Colony Designees to the Colony Equity Consideration other than Effective Date Deliverables (the date of such occurrence of items (i), (ii), and (iii), heretofore defined as the “Colony Release Effective Date”), each of the Fertitta Parties on the Colony Release Effective Date hereby knowingly and voluntarily, expressly and absolutely forever release and discharge the Colony Parties and Colony Capital (whether individually or collectively) and each of their respective agents, principals, managers, managing members, members, stockholders, “controlling persons” (within the meaning of the United States federal securities laws), partners, limited partners, investors, parents, subsidiaries, affiliates, directors, officers, employees, attorneys, accountants, successors, assigns, consultants, advisors, agents, lenders, investors, investment banks, trusts, trustors, beneficiaries, heirs, executors, and administrators (collectively, the “Colony Release Parties”) from any and all claims, potential claims, demands, rights, actions or causes of action, debts, liabilities, damages, losses, obligations, accounts, attorneys’ fees, reckonings, judgments, suits, costs, expenses, liens, matters and issues of any kind or nature whatsoever, whether known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, matured or unmatured arising out of, related to, based upon, by reason of, or in any way involving, directly or indirectly, (1) the Transaction, (2) any contract, agreement, document or obligation (including the Equity Agreements and any amendments thereto) pursuant to which any of the Colony Release Parties owes, is bound to, or subject to any obligation or duty to any of the Fertitta Releasing Parties, (3) the Plan and any transactions described in the Plan; or (4) any prior transactions referred to herein (the “Colony Claims”), which any of them respectively now has, owns or holds, or at any time heretofore had, owned or held, or could, shall or may hereafter have, own, or hold. For avoidance of doubt, this release of all Colony Claims by the Fertitta Releasing Parties is inclusive of, and, on the Colony Release Effective Date, hereby releases all Colony Claims that the Fertitta Parties may hold against the Colony Release Parties derivatively by, though or under FCP, FCP Holding, Voteco or Fertitta Partners, including by reason of the dissolution of any thereof. Such releases shall expressly be inapplicable to any Colony Claims of the Fertitta Parties (i) for indemnification arising under the Equityholders Agreements, the VoteCo operating

agreement, the SCI articles of incorporation, SCI by-laws or applicable law, (ii) relating to or arising under this MOU or any definitive documentation entered into by the Parties reflecting the terms contemplated by this MOU or otherwise acceptable to the Parties and (iii) relating to or arising under any documents or agreements entered into in connection with or evidencing the ownership invests obtained by Colony or its affiliates or designees as a result of the Colony Equity Consideration.

(d) Additional Common Release Terms. Notwithstanding any statute or provision of the common law that provides that a general release does not extend to claims that a releasor does not know or suspect to exist at the time of executing the release, the releases provided for herein are deemed to constitute a full release in accordance with their terms. The foregoing shall include, but not be limited to, a waiver of all rights provided by California Civil Code Section 1542, or by any similar provision of federal, state or territorial law. Each Party hereby acknowledges that, except as otherwise set forth herein, the agreements in this Section 4 are intended to be in full satisfaction of all or any alleged injuries or damages arising in connection with the applicable released claims. In entering into the aforementioned releases, each Party expressly disclaims any reliance on any representations, acts, or omissions by any of the Parties and agrees and acknowledges that the validity and effectiveness of the releases described above do not depend in any way on any such representation, acts and/or omissions or the accuracy, completeness, or validity thereof. Each Party further represents, warrants and acknowledges that it is familiar with and voluntarily waives any right or benefit arising from Section 1542 of the Civil Code of the State of California, which provides as follows:

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his settlement with the debtor.”

Each Party covenants and agrees never to institute or cause to be instituted or continue prosecution of any suit or other form of action or proceeding of any kind or nature whatsoever against any person released by such Party, by reason of or in connection with any of the matters, claims or causes of action released by such Party in this MOU. The provisions of this MOU, including this Section 4, may be pleaded as a full and complete defense to, and may be used as the basis for an injunction against, any action, suit, or other proceeding that may be instituted, prosecuted, or attempted in breach of the foregoing release.

(e) Mortgage Lender Release. The Colony Releasing Parties further agree that, on or prior to the Effective Date, the Colony Releasing Parties will, as contemplated under the Propco Plan Term Sheet, enter into a release of the Mortgage Lenders, Deutsche Bank AG, as swap counterparty under the Propco swap agreement and each other direct lender to any one or more of the FCP MezzCo Borrower I, II, III or IV (the “Mortgage Lender Release Parties”), on the same terms as those set forth in the preceding sections of this Section 4, subject only to the effectiveness of the conditions precedent described in clause 4(a) and the receipt of a reciprocal release from the Mortgage Lender Release Parties on the same terms; provided, however, that such releases shall provide that (x) the release by the Colony Releasing Parties of the Mortgage Lender Release Parties (i) shall only be a release of claims held by the Colony Releasing Parties with respect to their direct or indirect equity interests in SCI, FCP, FCP Holding, and VoteCo

and related to the Transaction, the Equity Agreements, or the Plan, and (ii) for avoidance of doubt, shall not apply to any existing business relationships between or among the Mortgage Lender Release Parties, the Colony Releasing Parties, or co-investors of the Colony Parties or any affiliate thereof that are not directly related to (1) the Transaction, (2) the Plan and any transactions described in the Plan; or (3) any prior transaction referred to herein and (y) the release by the Mortgage Lender Release Parties of the Colony Release Parties shall not apply to any existing business relationships between or among the Mortgage Lender Release Parties, the Colony Release Parties, or co-investors of the Colony Parties or any affiliate thereof that are not directly related to (1) the Transaction (2) the Plan and any transactions described in the Plan; or (3) any prior transaction referred to herein.

5. Representations, Warranties, and Covenants.

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

i. Enforceability. This MOU 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.

ii. No Consent or Approval. Except as expressly provided in this MOU, no consent or approval is required by any other entity for it to carry out the provisions of this MOU.

iii. Power and Authority. The Party has all requisite power and authority to enter into this MOU and to carry out the transactions contemplated by, and perform its respective obligations under, this MOU.

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

v. No Conflicts. The execution, delivery and performance of this MOU does not and shall not: (a) violate any provision of law, rule or regulations applicable to it or any of its subsidiaries; (b) violate its certificate of incorporation, bylaws or other organizational documents or those of any of its subsidiaries; or (c) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its subsidiaries is a party.

(b) As long as a MOU Termination Event has not occurred, Colony:

i. represents and warrants that (x) the entities listed on Schedule A (each such entity, a “Colony Fund”) are the Colony sponsored

investment funds that directly and indirectly collectively own 100% of the Class A Units of FC Investor and (y) the only other class of equity of FC Investor consists of Class B Units which are subordinate to the return of capital attributable to the Class A Units and are reflected in FC Investor’s books and records as being owned by Axon Rising Sun, LLC, which is not a Colony affiliate; and

ii. will (x) cause each such Colony Fund to promptly provide to Ernst & Young LLP, Deloitte Tax LLP, or such other nationally recognized accounting firm, financial advisory firm or consulting firm acceptable to Colony, SCI and the Mortgage Lenders (the “Clearinghouse”) on a strictly confidential basis, subject to the terms of a confidentiality agreement in form and substance acceptable to Colony, (i) the identity of record of each of the direct investors in each such Colony Fund (based solely on the information provided in such investor’s subscription agreement or assignment agreement in the possession of the Colony Fund and pursuant to which the investor acquired its interest with the written consent of the general partner or similar managing entity of such Colony Fund, as applicable), (ii) the name shown on the Schedule K-1 most recently issued with respect to any interest in the Colony Fund that differs from the identity of record of the owner of such interest determined under clause (i), and (iii) with respect to (1) each Colony Fund investor that is a “fund of funds” or similar pooled investment vehicle or (2) a Colony Fund investor if the Clearinghouse determines that such investor or any direct or indirect equity owner of such investor is reasonably likely to be treated directly or by attribution as owning a capital interest or profits interest in Propco Holdco for purposes of Section 267 of the Code (each investor described in (1) and (2), an “Overlapping Investor”), such investor’s percentage ownership (based on capital contributions) of such Colony Fund and such Colony Fund’s indirect percentage ownership of the Class A Units of FC Investor, but shall not be required to provide any other information with respect to its investors, nor shall the Colony Funds be required to disclose any other information about Colony or the Colony Funds’ structure that is not otherwise publicly available (the information described in the foregoing clauses (i), (ii), and (iii), the “Confidential Information”) (and provided that the Clearinghouse shall not be permitted to disclose the Confidential Information provided to it pursuant to this Section 5(b) to any Party or any other person and shall destroy all documents and records provided by the Colony Funds and all copies, extracts, notes, studies, reports, memoranda, and other documents that it prepares or produces that contain or reflect the Confidential Information no later than ninety (90) days after the Effective Date) (it being

understood that with respect to Overlapping Investors, if the Clearinghouse determines that (a) a potential direct or indirect equity holder of Propco Holdco has a direct or indirect equity interest in an Overlapping Investor or (b) an Overlapping Investor has a direct or indirect equity interest in a potential direct or indirect equity holder of Propco Holdco, then the Clearinghouse may disclose to SCI, the Fertitta Parties, the Mortgage Lenders and any such person’s legal and tax advisors that are acceptable to Colony (it being agreed that Ernst & Young LLP, Deloitte Tax LLP, Munger, Tolles & Olson LLP and Sidley Austin LLP are acceptable to Colony), the aggregate percentage of all Overlapping Investors’ indirect ownership percentage of Class A Units of FC Investor associated with a direct equity holder of Propco Holdco or a direct equity holder of the “blocker corporation” through which the unsecured creditors of SCI will indirectly invest in Propco Holdco in order to determine whether (or the extent to which) such holder will be offered the right to purchase equity of Propco Holdco or stock in such “blocker corporation”, but for the avoidance of doubt, in no event shall the identity of any Overlapping Investor (or its equity owners) be disclosed, provided further that such information will be provided on a strictly confidential basis, subject to the recipient entering into a confidentiality agreement in form and substance acceptable to Colony (which agreement shall contain confidentiality and document and record destruction provisions identical to those applicable to the Clearinghouse), and used by the recipient solely for the purpose of assessing the potential overlap between potential direct and indirect equity holders of Propco Holdco and equity holders of any Colony Fund), and (y) represent and warrant to the Clearinghouse and SCI that the information provided under clauses (i) and (ii) is accurate in all material respects based on the information as set forth in the above-referenced subscription agreements and assignment agreementsexecuted by such investors and the Schedules K-1 issued by each Colony Fund and the information provided under clause (iii) is accurate in all material respects to Colony’s knowledge.

6. No Waiver of Participation and Preservation of Rights.

This MOU is part of a proposed settlement of disputes among the Parties. Without limiting the foregoing sentence in any way, if the transactions contemplated by this MOU, the Participation Term Sheet, or otherwise set forth in the Propco Plan Term Sheet and the Plan are not consummated as provided herein, if a MOU Termination Event occurs, or if this MOU is otherwise terminated for any reason, the Parties each fully reserve any and all of their respective rights, remedies, claims and interests.

7. Acknowledgement.

This MOU and the transactions contemplated herein are the product of negotiations between the Parties and their respective representatives.

8. Effect of MOU Termination Event.

If a MOU Termination Event as defined in section 3(a) occurs, then upon delivery of written notice of such MOU Termination Event from the Fertitta Parties to the Colony Parties or from the Colony Parties to the Fertitta Parties pursuant to Section 9(j), this MOU (including, without limitation, the releases in Section 4) shall terminate for all purposes without the need for any further action by any party and without obligation or liability to any party. This MOU may also be terminated by Colony upon notice to the Fertitta Parties pursuant to Section 9(j) under the circumstances set forth in Section 1(c) above.

9. Miscellaneous Terms.

(a) Binding Obligation; Assignment; Duties.

i. Binding Obligation. This MOU is a legally valid and binding obligation of the Parties, enforceable in accordance with its terms, and shall inure to the benefit of the Parties and their representatives. Nothing in this MOU, express or implied, shall give to any entity, other than the Parties and their respective members, officers, directors, agents, financial advisors, attorneys, employees, partners, affiliates, successors, assigns, heirs, executors, administrators and representatives, any benefit or any legal or equitable right, remedy or claim under this MOU.

ii. Assignment. No rights or obligations of any Party under this MOU may be assigned or transferred to any other entity.

iii. Fiduciary Obligations. For the avoidance of doubt, none of FJF, LJF, or Thomas J. Barrack, Jr. is executing, or shall be deemed to have executed, this MOU in his capacity as a director or officer of SCI or any subsidiary of SCI. Furthermore, nothing in this MOU shall prevent or limit FJF, LJF, Thomas J. Barrack, Jr., Jonathan H. Grunzweig, or any other representative of the Colony Parties from fulfilling his or her fiduciary duties to any of the Debtors by voting or taking other actions in his or her capacity as a director, manager, member, or officer of any Debtor, and neither such voting nor the taking of any such other actions in such capacities shall result in a breach of any provision of this MOU.

(b) Further Assurances.

The Parties agree to execute and deliver such other instruments and perform such acts, in addition to the matters herein specified, as may be reasonably appropriate or necessary, from time to time, to effectuate the agreements and understandings of the Parties, whether the same occurs before or after the date of this MOU, and they shall similarly refrain from executing any

instruments or taking any actions that would interfere with the effectuation of the agreements and understandings of the Parties. In addition, the Parties agree to work together in good faith to modify the terms of this MOU and/or to include modified terms in the definitive documents in the event that doing so would harmonize the arrangements set forth herein with other arrangements being entered into in connection with the Bankruptcy Cases and the Plan in terms of the level of detail, processes, non-economic protections and other value-neutral provisions; provided, however, no such modifications shall be made to the extent the differences in the arrangements reflect differences in the negotiated terms of those arrangements such that making or including such modifications would (i) result in any economic consideration or other material consideration for Colony (and/or the Colony Designees) that was not a part of its bargain or (ii) place any economic burden or material incremental burden on the Fertitta Parties.

The headings of all sections of this MOU are inserted solely for the convenience of reference and are not a part of and are not intended to govern, limit or aid in the construction or interpretation of any term or provision hereof.

(d) Governing Law.

THIS MOU IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS PRINCIPLES THEREOF. By its execution and delivery of this MOU, each of the Parties hereto hereby irrevocably and unconditionally agrees for itself that any legal action, suit or proceeding with respect to any matter under or arising out of or in connection with this MOU or for recognition or enforcement of any judgment rendered in any such action, suit or proceeding, shall be brought exclusively in either the United States District Court for the Southern District of New York or the United States District Court for the District of Nevada. By execution and delivery of this MOU, each of the Parties hereto hereby irrevocably accepts and submits itself to the exclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding.

(e) Specific Performance.

The Parties hereby acknowledge that the rights of the Parties under this MOU are unique and that remedies at law for breach or threatened breach of any provision of this MOU would be inadequate and, in recognition of this fact, agree that, in the event of a breach or threatened breach of the provisions of this MOU, in addition to any remedies at law, the Parties shall, without posting any bond, be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available and the Parties hereby waive any objection to the imposition of such relief.

(f) Complete Agreement, Interpretation and Modification.

i. Complete Agreement. This MOU constitutes the complete agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements, oral or written, between or among the Parties with respect thereto.

ii. Interpretation. This MOU is the product of negotiation by and among the Parties. Any Party enforcing or interpreting this MOU shall interpret it in a neutral manner. There shall be no presumption concerning whether to interpret this MOU for or against any Party by reason of that Party having drafted this MOU, or any portion thereof, or caused it or any portion thereof to be drafted.

iii. Modification of this MOU. The MOU may only be modified, altered, amended or supplemented, or otherwise deviated from by waiver, consent or otherwise, by an agreement in writing signed by each Party hereto.

(g) Effectiveness.

This MOU shall become effective immediately once each Party hereto has duly executed and delivered a counterpart to this MOU to each other Party hereto.

(h) Execution of this MOU.

This MOU may be executed and delivered (by facsimile, email, or otherwise) in any number of counterparts, each of which, when executed and delivered, shall be deemed an original, and all of which together shall constitute the same agreement. Except as expressly provided in this MOU, each individual executing this MOU on behalf of a Party has been duly authorized and empowered to execute and deliver this MOU on behalf of said Party.

(i) Settlement Discussions.

This MOU is part of a proposed settlement of a dispute among the Parties. Nothing herein shall be deemed an admission of any kind. Pursuant to Federal Rule of Evidence 408 and any applicable state rules of evidence, this MOU and all negotiations relating thereto shall not be admissible into evidence in any proceeding other than a proceeding to enforce the terms of this MOU.

(j) Notices.

All notices hereunder shall be deemed given if in writing and delivered, if sent by facsimile, email, courier or by registered or certified mail (return receipt requested) to the following addresses and facsimile numbers (or at such other addresses or facsimile numbers as shall be specified by like notice):

i. If to the Fertitta Affiliates, to:

Fertitta Gaming, LLC

10801 West Charleston Boulevard, Suite 600

Las Vegas, Nevada 89135

Attn: Frank J. Fertitta, III

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

Munger, Tolles and Olson

355 South Grand Avenue, 35th Floor
Los Angeles CA 90071-1560

Attn: Brett Rodda

iii. If to the Colony Parties, to:

Colony Capital, LLC

2450 Broadway, 6th Floor

Santa Monica, California 90404

Attn: Richard Nanula

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

O’Melveny & Myers, LLP

Two Embarcadero Center, 28th Floor

San Francisco, California 94111

Attn: Suzzanne S. Uhland

and

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

Attn: Adam M. Turteltaub

Any notice given by delivery, mail or courier shall be effective when received. Any notice given by facsimile or email shall be effective upon oral or machine confirmation of transmission.

(k) Time of the Essence.

The Parties agree that time is of the essence with respect to each and every term and provision of this MOU.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the Parties have entered into this MOU on the day and year first above written.

		FERTITTA GAMING LLC
		A Nevada Limited Liability Company


		By:	/s/ Frank J. Fertitta III
			Frank J. Fertitta III
			Manager


		FRANK J. FERTITTA III
		An Individual


		By:	/s/ Frank J. Fertitta III


		FJF INVESTCO, LLC


		By:	/s/ Frank J. Fertitta III
			Frank J. Fertitta III
			Manager