[EXECUTION COPY]
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT, dated as of May 10, 1996 (this "Agreement"),
among American Bank National Association, as trustee (the "Indenture Trustee")
under the Indenture (as hereinafter defined), First Security Bank of Utah, as
trustee (under the Master Trust Vessel Agreement dated the date hereof with
Agent) and mortgagee (the "Vessel Trustee") under the Third Mortgage (as
hereinafter defined), any lender that constitutes a "Pari Passu Lender" under
the Indenture and who becomes a signatory to this Agreement (a "Pari Passu
Lender"), Grand Casinos, Inc., a Minnesota corporation ("GCI"), under the GCI
First Mortgage (as hereinafter defined), GCA Acquisition Subsidiary, Inc., a
Minnesota corporation and successor by merger to Gaming Corporation of America
("GCA"), under the GCA First Mortgage (as hereinafter defined), the Mortgagor
(as hereinafter defined) and BA Leasing & Capital Corporation, as Agent (the
"Agent") under the Participation Agreement (as hereinafter defined) for certain
lenders named therein (the "Lenders") and acknowledged and accepted by each of
Grand Casinos Resorts, Inc., Grand Casinos of Mississippi, Inc. - Gulfport,
Grand Casinos of Mississippi, Inc. - Biloxi, Grand Casinos Biloxi Theater, Inc.,
GCI Biloxi Hotel Acquisition Corporation, GCI Gulfport Hotel Acquisition
Corporation, Mille Lacs Gaming Corporation, Grand Casinos of Louisiana, Inc. -
Tunica - Biloxi, Grand Casinos of Louisiana, Inc. - Coushatta, GCA (collectively
and together with GCA, the "Guarantors"), and BL Development Corp. (the
"Mortgagor"; and together with the Guarantors, collectively, the "Subsidiaries"
and individually, a "Subsidiary"),
W I T N E S S E T H:
WHEREAS, Mortgagor has granted a First Preferred Fleet Mortgage to GCI
covering the certain barges more fully described therein (the "Barges"), dated
as of February 9, 1995, filed for record at the Port of St. Louis, Missouri on
February 14, 1995 and recorded in Book 9502, Page 338, as amended by that
certain First Amendment to First Preferred Fleet Mortgage dated August 16, 1995
and filed of record at the Port of New Orleans on August 31, 1995, and recorded
in Book 9509, Page 97, and as further amended by that certain Second Amendment
to First Preferred Fleet Mortgage dated November 30, 1995, and filed for record
at the National Vessel Documentation Center on December 6, 1995, and recorded in
Book 96-03, Page 806 (collectively, the "GCI First Mortgage");
WHEREAS, Mortgagor has granted a First Preferred Fleet Mortgage to GCA
covering the Barges, dated as of February 9, 1995, filed for record at the Port
of St. Louis, Missouri on February 14, 1995 and recorded in Book 9502, Page 337,
as amended by that certain First Amendment to First Preferred Fleet Mortgage
dated August 16, 1995 and filed of record at the Port of New Orleans on August
31, 1995, and recorded in Book 9509, Page 96, and as further amended by that
certain Second Amendment to First Preferred Fleet Mortgage dated November 30,
1995, and filed for record at the National Vessel Documentation Center on
December 6, 1995, and recorded in Book 96-03, Page 804 (collectively, the "GCA
First Mortgage"; and together with GCI First Mortgage, collectively referred to
as the "First Mortgages");
WHEREAS, GCI has issued its 10 1/8% First Mortgage Notes due December 1,
2003 (collectively, the "First Mortgage Notes") under that certain indenture
dated as of November 30, 1995, by and among GCI, the Subsidiaries (as defined
therein) and the Indenture Trustee (the "Indenture");
WHEREAS, in connection with the execution and delivery of the Indenture,
GCI and GCA have irrevocably transferred and assigned the GCI First Mortgage and
the GCA First Mortgage, respectively, to the Indenture Trustee pursuant to (i)
that certain Assignment of First Preferred Fleet Mortgage dated as of November
30, 1995, executed by GCI in favor in the Indenture Trustee and filed for record
at the National Vessel Documentation Center on December 7, 1995 and recorded in
Book 96-03, Page 807 (the "GCI Assignment") and (ii) that certain Assignment of
First Preferred Fleet Mortgage dated as of November 30, 1995, executed by GCA in
favor of the Indenture Trustee and filed for record at the National Vessel
Documentation Center on December 7, 1995 and recorded in Book 96-03, page 805
(the "GCA Assignment");
WHEREAS, pursuant to Section 4.20(c) of the Indenture (relating to
redocumentation of the Barges upon completion of the casino), GCI shall as soon
as practical submit to the United States Coast Guard an application and any
other materials/ documents to request a redocumentation of the Barges (following
such redocumentation, the Barges shall be referred to as the "Vessel") and the
Indenture Trustee will file a preferred ship mortgage subject only to the First
Mortgages (the "Second Mortgage" together with the First Mortgages,
collectively, the "Indenture Trustee Mortgages") with respect to the Vessel;
WHEREAS, pursuant to that certain Deed of Trust, Assignment of Rents and
Security Agreement (Tunica, Mississippi) dated as of November 30, 1995 (the
"Indenture Deed of Trust") among the Mortgagor, as Trustor, James K. Merrihew,
an individual as Trustee, and the Indenture Trustee (the "Indenture Deed of
Trust"), the Mortgagor has granted a first priority lien for the benefit of the
Indenture Trustee on certain real and personal property of the Mortgagor located
in Tunica County, Mississippi and more fully described therein (the "Indenture
Deed of Trust Collateral"), excluding expressly, however, any FF&E (as such term
is defined in the Indenture Deed of Trust and herein referred to as "FF&E")
which is the subject of an FF&E Financing Agreement permissible under the terms
of the Indenture (herein referred to as an "FF&E Financing Agreement");
WHEREAS, subject to the terms and provisions of the Indenture, GCI and its
Restricted Subsidiaries (as such term is defined in the Indenture) are permitted
to, among other things, incur capital lease obligations from other sources to
finance the costs of various improvements and equipment;
WHEREAS, GCI and the Subsidiaries may from time to time provide one or more
Pari Passu Lenders with a lien and security interest in certain real and
personal property of GCI, the Mortgagor and the other Subsidiaries (the "Pari
Passu Collateral"), as more fully described in an intercreditor agreement, to be
executed and amended from time to time, (each a "Pari Passu Intercreditor
Agreement"), among the Indenture Trustee, GCI, the Subsidiaries and each Pari
Passu Lender in the form contemplated by and attached to the Indenture, as
security for certain Indebtedness (as such term is defined in the Indenture and
herein referred to as "Indebtedness") owing to the Pari Passu Lender (the "Pari
Passu Indebtedness") pursuant to certain agreements, documents and instruments
among GCI, the Subsidiaries and the Pari Passu Lender to be executed and
delivered (the "Pari Passu Collateral Agreements");
WHEREAS, GCI intends to grant each Pari Passu Lender as security for the
Pari Passu Indebtedness, among other things, a preferred ship mortgage on the
Vessel pari passu with the Indenture Trustee Mortgages (each a "Pari Passu
Second Mortgage");
WHEREAS, subject to the terms and conditions set forth below, the Agent on
behalf of the Lenders hereby consents to the recordation and filing of each Pari
Passu Second Mortgage;
WHEREAS, GCI, the Mortgagor and the Subsidiaries have entered into that
certain Participation Agreement, dated as of the date hereof (as amended,
modified or supplemented from time to time, the "Participation Agreement"), with
the Agent, Hancock Bank, not in its individual capacity but solely as Trustee
(the "Trustee"), and the Co-Agents, the Lead Manager and the Lenders named
therein, for the purpose of obtaining funds for construction and acquisition
financing for a hotel and equipment associated with Grand Casino Tunica Resort
in Tunica County, Mississippi being developed by the Mortgagor;
WHEREAS, the Participation Agreement requires, among other matters, (i)
that each Lender advance funds to the Trustee to fund the acquisition of certain
equipment described on Schedule 1 hereto (including all substitutions,
replacements, modifications and alterations thereof, all additions or accessions
thereto, all related bills of sale, purchase orders, purchase agreements and
documents of title thereto, and all proceeds, including, without limitation,
insurance proceeds derived therefrom, collectively, the "Barge Equipment"), (ii)
that the Trustee enter into a lease, dated the date hereof (as amended or
modified, the "Capital Lease") with Mortgagor for such Barge Equipment, with a
lease term ending March 30, 2002, (iii) that the Trustee assign all of its
right, title and interest in the Barge Equipment, the Capital Lease, the
guaranty of the Capital Lease made by GCI and all other rights to the Agent as
collateral security for the advances made by the Lenders pursuant to a loan
agreement, dated the date hereof, and (iv) that the Trustee collateralize the
advances to the Agent for the benefit of the Lenders by granting a lien and
security interest against the Barge Equipment pursuant to that certain Security
Agreement and Assignment of Rents, the Third Mortgage and the Deed of Trust and
Security Agreement, each dated the date hereof, among the Agent and the Trustee
as beneficiaries, and the Lessee and Trustee, as borrowers;
WHEREAS, pursuant to the Partial Release of the Deed of Trust and
Collateral Documents dated the date hereof (the "Partial Release"), the
Indenture Trustee has, among other things, released its liens on the Barge
Equipment under its Collateral Documents (as defined in the Indenture, but
specifically excluding the Indenture Trustee Mortgages);
WHEREAS, because certain restrictions under maritime law prevent the
Indenture Trustee from granting a partial release of its liens with respect to
the Barge Equipment under the Indenture Trustee Mortgages, the Indenture Trustee
has agreed to permit the granting of a junior ship mortgage by the Mortgagor to
the Vessel Trustee for the benefit of the Lenders in and to the whole of the
Vessel for purposes of providing a lien with respect to the Barge Equipment
under and to the extent that the Vessel is governed by the Ship Mortgage Act;
and
WHEREAS, pursuant to Section 5.17 of the Participation Agreement (relating
to redocumentation of the Barges upon completion of the Casino) the Mortgagor
will file and record a preferred mortgage lien (subject only to the First
Mortgages, the Second Mortgage and any Pari Passu Second Mortgage) in favor of
the Vessel Trustee for the benefit of the Lenders on the Vessel pursuant to that
certain Preferred Mortgage, to be entered into concurrently with the
redocumentation of the Casino Barges (the "Third Mortgage");
WHEREAS, the parties hereto (the "Intercreditor Parties") intend to agree
hereby, as more fully described herein and subject to the terms and conditions
hereof, that:
(a) with respect to the Barges and after redocumentation, the
Vessel:
(i) as between the Indenture Trustee and the Pari Passu Lenders,
on the one hand, and the Vessel Trustee, on the other hand, (x) the
Indenture Trustee and the Pari Passu Lenders shall have a first
priority lien on the Vessel, and (y) the Vessel Trustee shall have a
second priority lien on the Vessel;
(ii) as between the Vessel Trustee, on the one hand, and GCI and
GCA, on the other hand, (x) the Vessel Trustee shall have a first
priority lien on the Vessel and (y) GCI and GCA (to the extent of
their interests in the First Mortgages) shall have a second priority
lien on the Vessel; and
(b) with respect to the Barge Equipment, the Indenture Trustee
acknowledges (i) that the Capital Lease, the Participation Agreement and
ancillary documents constitute FF&E Financing Agreements (which expressly
require the release of the Indenture Trustees' liens except as limited in
this Agreement and the Partial Release) and (ii) the Barge Equipment
constitutes FF&E and, therefore, the Indenture Trustee shall have no lien
or other security interest in the Barge Equipment, except as reserved under
the Partial Release with respect to the Indenture Trustee Mortgages, and
then only under such Mortgages for purposes of the Ship Mortgage Act,
subject, however, to the rights in the proceeds of the Vessel and the Barge
Equipment pursuant to the terms of this Agreement;
(c) as between the Agent and each Pari Passu Lender, the Pari Passu
Lender shall have no lien or any other security interest in the Barge
Equipment, other than pursuant to the Pari Passu Second Mortgage,
regardless of the terms of any of the Pari Passu Intercreditor Agreement or
the Pari Passu Collateral Documents; and
(d) without limiting the validity and enforceability of the GCI
Assignment or the GCA Assignment or the rights of the Indenture Trustee
under each Indenture Trustee Mortgage or under clause (a)(i) above, as
between the Agent, on the one hand, and GCI and GCA, on the other hand, (x)
the Agent shall have a first priority lien on the Barge Equipment and (y)
neither GCI nor GCA shall have a lien or other security interest on the
Barge Equipment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Intercreditor Parties agree as
follows:
Section 1. Effect of this Agreement. The priorities of the liens,
mortgages, pledges or security interests established, altered or specified
herein are applicable irrespective of:
(a) the time or order of attachment or perfection thereof;
(b) the method of perfection;
(c) the time or order of filing or recording of financing
statements, mortgages or other instruments;
(d) any amendments to the liens, mortgages or security interest
established, altered or specified herein, provided that such amendment does
not alter the aggregate principal amount of the Indebtedness secured by
such lien, mortgage or security interest; or
(e) the time or order of foreclosure, taking of possession or
the exercise of any remedy;
provided, however, that the priorities of any liens, mortgages or security
interests which are not established, altered or specified herein shall be
unaffected and shall exist and continue in accordance with applicable law. The
agreements in Section 2 hereof are solely for the purpose of establishing the
relative priorities of the interests of the Intercreditor Parties in the Vessel
and the Barge Equipment (collectively, the "Intercreditor Collateral") and do
not alter or amend any right which the Intercreditor Parties, or any one of
them, have against parties not a signatory hereto.
Section 2. The Vessel and the Barge Equipment.
(a) Priority of Liens.
(i) So long as any Indebtedness with respect to the Indenture or
any Pari Passu Indebtedness remains outstanding and unpaid, the lien,
mortgage, pledge or security interest of the Indenture Trustee and the
Pari Passu Lenders with respect to the Intercreditor Collateral
pursuant to the Indenture Trustee Mortgages and the Pari Passu Second
Mortgages shall be prior to the lien, mortgage, pledge or security
interest of the Vessel Trustee with respect to the Intercreditor
Collateral pursuant to the Third Mortgage.
(ii) If clause (i) does not apply and so long as any indebtedness
contemplated by the Participation Agreement remains outstanding and
unpaid, the lien, mortgage, pledge or security interest of the Vessel
Trustee with respect to the Intercreditor Collateral pursuant to the
Third Mortgage shall be prior to the lien, mortgage, pledge or
security interest of GCI and/or GCA with respect to the Intercreditor
Collateral pursuant to the First Mortgages.
(b) Actions to be Taken.
(i) Subject to Section 17(b) hereof, so long as any Indebtedness
with respect to the Indenture and/or the Pari Passu Indebtedness
remains outstanding and unpaid, the Indenture Trustee, or the
Controlling Party (as defined in the Pari Passu Intercreditor
Agreement if such Pari Passu Intercreditor Agreement is in effect),
shall have the sole right without the affirmative consent of the
Agent, Vessel Trustee or the Trustee to take or fail to take each of
the actions described in this Section 2(b), except as otherwise
expressly provided herein:
(A) Commence an in rem foreclosure proceeding in respect of the
Intercreditor Collateral under the Indenture Trustee
Mortgages and/or the Pari Passu Mortgages; provided that the
Vessel Trustee may file claims and exercise rights to prove
such claims under the Third Mortgage in an in rem
foreclosure proceeding commenced by the Indenture Trustee or
the Controlling Party, as the case may be, or a third party,
which in rem proceeding the Indenture Trustee or Controlling
Party has joined. The Indenture Trustee or Controlling
Party shall control the in rem proceeding, except as
provided below. If the Indenture Trustee and/or Controlling
Party discontinues such in rem foreclosure proceeding, and
such proceedings are actually discontinued, then the Vessel
Trustee shall also withdraw its in rem claims under the
Third Mortgage.
Vessel Trustee acknowledges and agrees that it shall not commence
an in rem foreclosure proceeding in respect of the Intercreditor
Collateral, except as set forth in Sections 2(b)(i)(A) and
2(b)(ii) or as approved in writing by the Indenture Trustee or
Controlling Party, as applicable.
(B) In any proceeding (a "Bankruptcy Proceeding") commenced
under the United States Bankruptcy Code, 11 U.S.C. 101 et
seq. (the "Bankruptcy Code"), and any other state or federal
insolvency, reorganization, moratorium or similar law for
the relief of debtors ("Bankruptcy Law"), make a motion to
lift the automatic stay (or similar motion under other state
or federal laws) in respect of the Intercreditor Collateral;
provided that the Vessel Trustee, Trustee and/or Agent on
behalf of the Lenders may join in to support any motion made
by the Indenture Trustee or Controlling Party to lift the
automatic stay (or similar state motion) in respect of the
Intercreditor Collateral. Neither Vessel Trustee, Trustee
or Agent shall file a similar motion on their own behalf.
If the automatic stay (or similar state motion) is lifted in
respect of the Intercreditor Collateral, Section 2(b)(i)(A)
above shall apply.
(ii) If the Indenture Trustee Mortgages are held invalid and
unenforceable for any reason whatsoever, (A) Vessel Trustee may
commence an in rem foreclosure proceeding in respect of the
Intercreditor Collateral, (B) if such proceeding has been commenced,
remain a party to the in rem foreclosure proceeding and control its
claims or (C) if a Bankruptcy Proceeding has been commenced, bring a
motion to lift the automatic stay against the Intercreditor Collateral
or, if the motion has been commenced, control and litigate such
claims.
(iii) Subject to Section 17(a) hereof, each of the Intercreditor
Parties agrees to and with each other that none of them shall at any
time contest in any manner, under any applicable law, the legal
validity, enforceability and priority of each Intercreditor Party's
respective ship mortgage and lien as established thereby and hereby or
(ii) the allocation of proceeds from the sale or other disposition of
the Intercreditor Collateral under Section 2(b)(ix) hereof.
(iv) In the event that the Indenture Trustee or the Controlling
Party, if a Pari Passu Intercreditor Agreement is in effect, shall
take any action permitted pursuant to Section 2(b)(i) hereof, and
shall thereafter realize and receive any proceeds (net of any
reasonable collection costs and expenses of sale, including, without
limitation reasonable attorney's fees not otherwise paid by the
Mortgagor or Guarantor) from the sale or other disposition of the
Barge Equipment, all such amounts allocable to the Barge Equipment
pursuant to Section 2(b)(viii) or (ix), without taking account of any
set off, claims or deductions, and otherwise free and clear of any
liens or other security interests created by, through or under the
Indenture Trustee or Pari Passu Lender, shall be immediately deposited
by the Indenture Trustee or the Controlling Party, as the case may be,
in an account notified to the Indenture Trustee or Controlling Party
by the Agent, for the sole use by the Agent for the benefit of the
Lenders. Each Pari Passu Lender agrees to cause the release of any
lien or security interests created by, through or under such party in
the foregoing proceeds, if any, upon request by the Agent or the
Indenture Trustee.
(v) Subject to Section 17(b) hereof, if the Indebtedness with
respect to the Indenture and the Pari Passu Lenders has been paid in
full and discharged, then upon the occurrence and continuance of a
Lease Event of Default (as defined in the Capital Lease), the Vessel
Trustee shall have the sole right without the affirmative consent of
GCA or GCI to take or fail to take the actions described in Section
2.2(b)(i) (A) and (B) above, as if it were the Indenture Trustee and
GCA and GCI shall have the same rights that the Vessel Trustee has
under such Sections.
(vi) In connection with Section 2(b)(i) hereof, the Indenture
Trustee, each Pari Passu Lender, GCI, GCA and the Mortgagor shall at
all times permit the Agent and the Vessel Trustee and their employees,
agents and representatives to have full access to the Intercreditor
Collateral in order to assemble, remove and/or dispose of the Barge
Equipment under all applicable laws.
(vii) In the event the Vessel Trustee shall take any action
permitted pursuant to Section 2(b)(iii), and shall thereafter realize
any proceeds (net of any reasonable collection costs and expenses of
sale, including, without limitation reasonable attorney's fees and any
appraisal expenses incurred pursuant to Section 2(b)(vi) below not
otherwise paid by the Mortgagor or Guarantor) from the sale or other
disposition of the Intercreditor Collateral, all such amounts
attributable to the Intercreditor Collateral, without taking account
of any set off, claims or deductions, and otherwise free and clear of
any liens or other security interests of the Indenture Trustee or the
Pari Passu Lenders or any other party, except the Agent, shall be
applied to repayment of the indebtedness contemplated by the
Participation Agreement and any remaining amounts realized from the
sale or other disposition of the Vessel shall be applied to the
repayment of GCI and GCA Indebtedness, pro rata in accordance with the
principal amounts owing to each.
(viii) In the event the Barge Equipment is sold or otherwise
disposed of pursuant to Section 2(b)(iv) in such manner that the Barge
Equipment is separately sold, then the proceeds from such Barge
Equipment shall be deposited in accordance with Section 2(b)(iv).
(ix) In the event of a sale or other disposition of the
Intercreditor Collateral as a whole pursuant to Section 2(b)(i)
hereof, then the total net proceeds from the sale or other disposition
of the Intercreditor Collateral shall be allocated between the Vessel
Trustee, on the one hand, and the Indenture Trustee or the Controlling
Party and the Pari Passu Lender, on the other hand, by multiplying the
net proceeds realized from the sale or other disposition of the
Intercreditor Collateral times the Vessel Trustee Sharing Percentage
and the Controlling Party Sharing Percentage, with the former amount
being paid to the Vessel Trustee for the benefit of the Agent and the
Lenders and the latter amount being paid to the Controlling Party (or
the Indenture Trustee for application in accordance with the
applicable Pari Passu Intercreditor Agreements).
"Vessel Trustee Sharing Percentage" for any date with respect to
the net proceeds from the sale or other disposition of the
Intercreditor Collateral means the percentage specified for the Vessel
Trustee in Exhibit A hereto for the date coinciding with or next
preceding the date of the transfer of title to the Intercreditor
Collateral pursuant to such sale or other disposition.
"Controlling Party Sharing Percentage" for any date with respect
to the net proceeds from the sale or other disposition of the
Intercreditor Collateral means the percentage specified for the
Controlling Party (including the Indenture Trustee and any Pari Passu
Lender) in Exhibit A hereto for the date coinciding with or next
preceding the date of the transfer of title to the Intercreditor
Collateral pursuant to such sale or other disposition.
Notwithstanding anything in this Section 2(b)(ix) to the
contrary, if the Indenture Trustee or Controlling Party is dismissed
from or not a party to an in rem foreclosure proceeding as a result of
the invalidity or unenforceability of the Indenture Trustee Mortgages
and the Vessel Trustee successfully forecloses on the Intercreditor
Collateral, the Vessel Trustee shall share the net proceeds from the
sale of the Intercreditor Collateral as a whole as follows: the Vessel
Trustee shall be entitled to receive an amount equal to the Vessel
Trustee Percentage Share times the net proceeds realized from the sale
or other disposition of the Intercreditor Collateral and the Indenture
Trustee or Controlling Party, as applicable, shall receive the
remaining amount of net proceeds received by the Vessel Trustee from
such sale or other disposition.
(x) Except as otherwise expressly provided herein, neither the
Vessel Trustee nor the Agent shall exercise any remedies under the
Third Mortgage in respect of the Vessel (excluding the Barge
Equipment), although it may exercise remedies under the Third Mortgage
or any other collateral document in respect of the Barge Equipment.
Section 3. Acknowledgement of FF&E Financing Agreements.
(a) The Intercreditor Parties agree and acknowledge that the Capital
Lease and the Participation Agreement constitute FF&E Financing Agreements,
and the Barge Equipment constitutes FF&E and, therefore, the Indenture
Trustee shall have no lien or other security interest in the Barge
Equipment, except as reserved under the Partial Release with respect to the
Indenture Trustee Mortgages, and then only under such Mortgages and this
Agreement for purposes of the Ship Mortgage Act. Neither the Indenture
Trustee nor any Pari Passu Lender shall have any liens, security interests
or related rights in the Barge Equipment that may otherwise arise under
applicable real estate laws, the Uniform Commercial Code as in effect in
the governing jurisdiction or any other law, except as may otherwise be
provided under the Indenture Trustee Mortgages, the Pari Passu Mortgages
and the Ship Mortgage Act. The Indenture Trustee and each of GCI and the
Subsidiaries agrees to execute and deliver each and every necessary
document, instrument and agreement necessary, in the opinion of the Agent
to evidence the foregoing release of any such lien or security interest as
of the date hereof, including, without limitation, all such documents,
instruments or agreements required in connection with the terms and
conditions of the Indenture or any of the related Collateral Documents (as
defined in the Indenture) with respect to any such release.
(b) So long as any indebtedness contemplated by the Participation
Agreement remains outstanding and unpaid, neither GCI nor any Subsidiary
shall grant to the Indenture Trustee or any Pari Passu Lender on or after
the date hereof any lien, mortgage, pledge or security interest with
respect to the Barge Equipment except (i) Pari Passu Second Mortgages in
accordance with the terms of the Indenture and this Agreement and (ii) any
document or instrument required under any "further assurances" provision of
the Indenture Trustee Mortgages and any Pari Passu Second Mortgage.
Section 4. Other Rights and Remedies. Each of the Intercreditor Parties
agrees not to take any action whatsoever to enforce any of its rights in respect
of the Vessel under any ship's mortgage, except in accordance with Section 2
hereof; provided, however, that this Agreement shall not prevent any party
hereto from enforcing or exercising any right or remedy with respect to any
collateral which is not the Vessel. Nothing contained herein is intended to
alter the respective rights and obligations of either the Indenture Trustee or
the Pari Passu Lender vis-a-vis each other with respect to the Pari Passu
Intercreditor Agreement.
Section 5. Money to be Held in Trust. GCI and each Subsidiary agree that if
any Intercreditor Party receives any money, funds or other property in respect
of the Vessel in violation of the terms and conditions of this Agreement, such
money, funds or other property shall not discharge any secured obligation held
by the Intercreditor Party receiving such money, funds or other property. In the
event that any payment in respect of, or distribution to, an Intercreditor Party
is made in breach of Section 2 hereof before all Indebtedness secured by
Intercreditor Collateral is paid in full, such payment or distribution shall be
held in trust for the benefit of, and shall be paid over to, the Intercreditor
Parties in accordance with Section 2 hereof.
Section 6. Communications. Each of the Intercreditor Parties agrees to
transmit to each of the other Intercreditor Parties a copy of any communication
sent by such party to GCI, any Subsidiary or any other Person (contemporaneously
with the transmittal of any such communication) with respect to any event of
default any acceleration of any Indebtedness, or any notice of sale of any
Intercreditor Collateral as a result of a default. Any failure by any
Intercreditor Party to furnish a notice pursuant to this Section 6 hereof shall
in no way diminish the rights of such party hereunder.
Section 7. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, and shall be binding upon
and inure to, the benefit of the Intercreditor Parties, GCI, the Subsidiaries,
and their respective successors, designees and assigns.
Section 8. UCC Terms. All terms used herein which are defined in the New
York Uniform Commercial Code shall have the meanings therein stated, unless the
context otherwise requires.
Section 9. Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be given by personal delivery
or United States mail, first class, registered or certified, postage prepaid,
return receipt requested, addressed to the parties at the addresses indicated on
the signature pages hereof. Each such notice or other communication shall be
deemed given on (a) the date of receipt of personal delivery thereof, or (b) if
not by mail (as aforesaid), the date which is three (3) business days after such
communication is deposited in the mail postage prepaid as aforesaid). Any party
may change its address for notice by notice to the other Intercreditor Parties
in accordance with the foregoing.
Section 10. Additional Actions. Each of the Intercreditor Parties
(including the Indenture Trustee), upon the request of any Intercreditor Party,
shall execute and deliver and cause to be recorded in all applicable filing
offices an intercreditor agreement substantially in the form of this Agreement,
which intercreditor agreement shall be effective if and only if all
Intercreditor Parties shall have executed and delivered the same or a
counterpart thereof. Simultaneously with the repayment or other discharge of any
Indebtedness and other obligations secured by any Intercreditor Collateral, the
Intercreditor Party whose Indebtedness is so repaid or discharged shall execute
and deliver such instruments as may be reasonably required by any of the other
Intercreditor Parties to release or extinguish such Intercreditor Party's
interest in the Intercreditor Collateral.
Section 11. No Liability. No Intercreditor Party shall be liable to any
other Intercreditor Party for any action taken by it, including the payment of
any monies hereunder, in connection with this Agreement, provided the same was
taken in good faith and did not constitute gross negligence or willful
misconduct.
Section 12. Confirmation of Rights. Except as otherwise provided in this
Agreement, each Intercreditor Party shall have the right to alter or amend its
respective loan agreements (including leases) and documents and to release or
take additional collateral pursuant thereto. Nothing in this agreement is
intended to alter or amend the obligations of any Intercreditor Party with
respect to GCI or any of its Subsidiaries under its respective loan agreements
(including leases) and documents. Except as expressly stated in this Agreement,
nothing herein is intended to confer upon GCI or any of its Subsidiaries any
right or benefit with respect to any other Intercreditor Party, and GCI and its
Subsidiaries hereby acknowledge that except as to such rights, they have no
right to enforce the terms hereunder against any Intercreditor Party. Except as
limited by this Section 12, the signatures of the Subsidiaries of GCI hereto
(except GCA which is an Intercreditor Party) are merely to acknowledge this
Agreement, which is for the sole benefit of the Intercreditor Parties.
Section 13. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
Section 14. Headings. The headings of the parts of this Agreement are for
convenience only and shall have no legal effect or otherwise be used in
connection with the construction or interpretation of this Agreement. Indenture
Trustee, on the one hand, and Vessel Trustee, on the other hand, agree to give
to the other party written notice at least 10 days prior to (or
contemporaneously within the event of exigent circumstances) the commencement of
any foreclosure proceedings in respect of the Intercreditor Collateral.
Section 15. Notices; Indemnification. Each of the Intercreditor Parties
covenant to keep the proceeds of the Vessel free of all liens, claims,
deductions or set-off created by, through or under each of them and any losses
suffered as a result any such lien shall be indemnified by such person.
Section 16. Pari Passu Lender Bound by This Agreement. By executing and
delivering signature pages to this Agreement, countersigned by the parties
hereto, each Pari Passu Lender who signs this Agreement agrees to be bound by
the terms and conditions of this Agreement as of the date it obtained an
interest in the Intercreditor Collateral.
Section 17. Termination of this Intercreditor Agreement.
(a) Notwithstanding anything in this Agreement to the contrary, the
Trustee, Vessel Trustee, Agent and any Lender shall have the right to
contest in an appropriate judicial or administrative forum (including in a
Bankruptcy Proceeding) (i) the characterization of the Casino Barges (or
after redocumentation, the Vessel) as a "vessel" under the Ship Mortgage
Act and/or general maritime law or (ii) whether the Barge Equipment
constitutes "appurtenances" under maritime law.
(b) Upon a final, non-appealable determination by a court or
administrative authority of competent jurisdiction that the Casino Barges
(or the Intercreditor Collateral, after redocumentation) is not a "vessel"
under the Ship Mortgage Act and general maritime law, or the Barge
Equipment is not an "appurtenance" to such Vessel, this Agreement shall
terminate and all of the rights and obligations of the Intercreditor
Parties under this Agreement shall become unenforceable.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Indenture Trustee, the Agent, the Vessel Trustee,
the Trustee, any Pari Passu Lender and GCI and GCA have caused this Agreement to
be duly executed as of the date first above written.
INTERCREDITOR PARTIES
BA LEASING & CAPITAL CORPORATION, as Agent
By: /s/ DAVID F. SCULLY
Name: David F. Scully
Title: Vice President
Address for notices:
BA Leasing & Capital Corporation
Four Embarcadero Center
Suite 1200
San Francisco, CA 94111
Attention: Sonia Delen, Assistant Vice President
Telephone: (415) 765-7372
Facsimile: (415) 765-7373
AMERICAN BANK NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ FRANK P. LESLIE III
Name: Frank P. Leslie III
Title: Vice President
By:
Name:
Title:
Address for notices:
American Bank National Association
101 East Fifth Street
St. Paul, MN 55101
Attention: Frank P. Leslie III, VP
Telephone: (612) 229-2600
Facsimile: (612) 229-6415
FIRST SECURITY BANK OF UTAH, N.A.,
in its capacity as Vessel Trustee
By: /s/ GREG A. HAWLEY
Name: Greg A. Hawley
Title: Vice President
Address for notices:
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Services
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
GRAND CASINOS, INC.
By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer
Address for notices:
13705 First Avenue North
Plymouth, MN 55441
Attention: Timothy J. Cope
Telephone: (612) 449-7030
Facsimile: (612) 449-7022
GCA ACQUISITION SUBSIDIARY, INC.,
as Guarantor
By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer
Address for notices:
13705 First Avenue North
Plymouth, MN 55441
Attention: Timothy J. Cope
Telephone: (612) 449-7030
Facsimile: (612) 449-7022
BL DEVELOPMENT CORP.
By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer
Address for notices:
13705 First Avenue North
Plymouth, MN 55441
Attention: Timothy J. Cope
Telephone: (612) 449-7030
Facsimile: (612) 449-7022
ACKNOWLEDGED AND ACCEPTED:
GRAND CASINOS RESORTS, INC.
GRAND CASINOS OF MISSISSIPPI, INC.-GULFPORT
GRAND CASINOS OF MISSISSIPPI, INC.-BILOXI
GRAND CASINOS BILOXI THEATER, INC.
GCI BILOXI HOTEL ACQUISITION CORPORATION
GCI GULFPORT HOTEL ACQUISITION CORPORATION
GRAND CASINOS OF LOUISIANA, INC.-TUNICA-BILOXI
GRAND CASINOS OF LOUISIANA, INC.-COUSHATTA
MILLE LACS GAMING CORPORATION
By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer