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EXHIBIT 10.4
Prepared by and when recorded mail to:
[EXECUTION COPY]
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street, 48th Floor
Los Angeles, California 90071
Attention: Mark A. Spitzer, Esq.
(213) 620-1780
TRUST AGREEMENT
dated as of September 29, 1997
between
BL RESORTS I, LLC and GCG RESORTS I, LLC
as Initial Grantors,
and
HANCOCK BANK
as Trustee
This instrument secures a line of credit to be used primarily for business,
commercial or agricultural purposes and is entitled to the lien protection
provisions in Section 89-1-49 of the Mississippi Code of 1972, as amended.
INDEXING INSTRUCTIONS:
This instrument is to be filed and indexed in the Indefinite Index of the
Chancery Clerk's Office in Tunica County, Mississippi and in the Indefinite
Index of the First Judicial District of the Harrison County Chancery Clerk's
Office, Gulfport, Mississippi.
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TABLE OF CONTENTS
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ARTICLE I THE TRUST ESTATE
1.1. Appointment, Authorization and Direction to Trustee................................................1
1.2. Declaration and Purpose............................................................................1
ARTICLE II COLLECTIONS AND DISTRIBUTIONS
2.1. Collections and Remittances by the Trustee.........................................................2
2.2. Distribution of Payments...........................................................................3
2.3. Effect of Sales by the Trustee.....................................................................3
ARTICLE III CERTAIN PROVISIONS RESPECTING TRUSTEE
3.1. Acceptance of Trusts and Duties....................................................................4
3.2. Limitation of Power................................................................................4
3.3. Notice of Event of Default.........................................................................4
3.4. Action Upon Instructions...........................................................................4
3.5. Certain Duties and Responsibilities of the Trustee.................................................5
3.6. Certain Rights of Trustee..........................................................................6
3.7. No Representations or Warranties as to Any Applicable Leased
Property or Documents...........................................................................8
3.8. Status of Moneys Received..........................................................................8
3.9. Permitted Activities...............................................................................9
3.10. Resignation or Removal of Trustee..................................................................9
3.11. Estate and Rights of Successor Trustee............................................................9
3.12. Merger or Consolidation of Trustee...............................................................10
3.13. Co-Trustees......................................................................................10
3.14. Books and Records................................................................................10
ARTICLE IV TERMINATION OF AND AMENDMENTS TO TRUST
4.1. Termination.......................................................................................10
4.2. Distribution of Trust Estate Upon Termination.....................................................11
4.3. Distribution from of Trust Estate Upon Permitted Termination of a Facility Lease..................11
4.4. Amendments........................................................................................11
ARTICLE V MISCELLANEOUS
5.1. Compensation and Indemnification..................................................................12
5.2. Notices...........................................................................................13
5.3. Governing Law.....................................................................................13
5.4. Tax Reports; Information Reporting................................................................13
5.5. Headings..........................................................................................13
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5.6. Successors and Assigns............................................................................13
5.7. Severability......................................................................................13
5.8. Only Written Waivers..............................................................................14
5.9. Counterparts......................................................................................14
5.10. Rights in Trust Agreement........................................................................14
5.11. Payment of Trustee Fees, Costs and Expenses......................................................14
5.12. Additional Grantors..............................................................................14
5.13. Identification of Trust..........................................................................15
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TRUST AGREEMENT
THIS TRUST AGREEMENT (as amended and supplemented from time to time,
this "Trust Agreement") dated as of September 29, 1997, is entered into by and
between HANCOCK BANK, a Mississippi banking corporation (in its individual
capacity, the "Bank"; the Bank, not in its individual capacity but solely as
trustee, and any institution that shall act as a successor trustee in accordance
with the terms of Section 3.10, being the "Trustee"); and BL RESORTS I, LLC, a
Minnesota limited liability company, and GCG RESORTS I, LLC, a Minnesota limited
liability company, as Grantors (each an "Initial Grantor", and together with
each additional Grantor which becomes party hereto pursuant to Section 5.12
hereof, the "Grantors"). For purposes hereof, capitalized terms used in this
Trust Agreement without specific definition herein shall have the meanings
assigned thereto in Appendix 1 to the Participation Agreement, dated as of
September 29, 1997, among the Trustee; the Lenders; the Co-Agents; the Lead
Manager; the Initial Grantors and the other Lessees described therein, as
Lessees; Grand Casinos, Inc. and certain of its Subsidiaries, as Guarantors; and
BA Leasing & Capital Corporation, as Arranger and Administrative Agent.
ARTICLE II
THE TRUST ESTATE
SECTION II.1. Appointment, Authorization and Direction to Trustee. Each
Grantor hereby requests that the Bank act as Trustee of the trust created
hereunder (the "Trust"), and Bank hereby accepts its appointment as trustee of
such Trust, effective as of the date hereof. The Lenders and the Grantors
authorize and direct the Trustee, subject to the Lenders' satisfaction or waiver
of all appropriate conditions set forth in the Participation Agreement, to enter
into, execute and deliver:
(a) from time to time (including on each applicable Advance
Date), the Operative Documents to which the Trust or the Trustee is to
become a party on each such date;
(b) from time to time, the Notes in the manner and subject to
the terms and conditions provided in the Participation Agreement and
the Loan Agreement; and
(c) all other documents, and to do all such things and take
all such actions, as may be necessary or convenient to consummate the
transactions contemplated by the Operative Documents and to perform the
terms and conditions of this Trust Agreement, all as contemplated
herein or in the Operative Documents.
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SECTION II.2. Declaration and Purpose.
(a) Trustee hereby declares, undertakes and agrees that it
will and does receive, take and hold all estate, right, title and
interest of the Trustee in and to the "Trust Estate" (as defined below)
for the Trust, in trust for the use and benefit of the Grantors,
subject to the terms hereof and of the Operative Documents.
(b) The purpose of the Trust is to acquire and hold title to
certain Leased Property identified in Bills of Sale and Improvement
Deeds made by Grantors in favor of Trustor as donations into the Trust
Estate, including leasehold interests in one or more Facility Sites and
Facility F,F&E to be located on such Facility Sites, as and when the
same become subject to the Master Lease and one or more Lease
Supplements relating thereto (such documents being collectively,
herein, the "Facility Lease" with respect to a particular Facility), as
collateral security for the obligations of the Trustee under the Loan
Agreement, to discharge such obligations in accordance with the
provisions of the Loan Agreement and the other Operative Documents and
to engage in activities ancillary and incidental thereto as set forth
in the Operative Documents. Except in connection with the foregoing,
the Trustee in its capacity as trustee shall not (i) engage in any
business or activity, (ii) have any property, rights or interest,
whether real or personal, tangible or intangible, (iii) incur any legal
liability or obligation, whether fixed or contingent, matured or
unmatured, other than in the normal course of the administration of the
Trust or (iv) subject any part of the corresponding Trust Estate to any
mortgage, lien, security interest or other claim or encumbrance, other
than in favor of the Administrative Agent and the Lenders pursuant to
the provisions of the Operative Documents. THE TRUST IS NOT A BUSINESS
TRUST. THE SOLE PURPOSE OF THE TRUST IS TO ACQUIRE AND HOLD TITLE TO
THE LEASED PROPERTY SUBJECT TO A FACILITY LEASE AND TO COLLECT AND
CONSERVE THE VALUE THEREOF AND OF THE TRUST ESTATE, SUBJECT TO THE
RIGHTS OF THE ADMINISTRATIVE AGENT AND THE GRANTOR THEREOF, FOR THE
BENEFIT OF THE LENDERS. THE TRUSTEE MAY NOT TRANSACT BUSINESS OF ANY
KIND WITH RESPECT TO THE TRUST ESTATE NOR SHALL THIS TRUST AGREEMENT BE
DEEMED TO BE, OR CREATE OR EVIDENCE THE EXISTENCE OF A CORPORATION DE
FACTO OR DE JURE, OR A MASSACHUSETTS TRUST, OR ANY OTHER TYPE OF
BUSINESS TRUST, ASSOCIATION OR JOINT VENTURE BETWEEN THE TRUSTEE, THE
ADMINISTRATIVE AGENT AND THE LENDERS.
ARTICLE III
COLLECTIONS AND DISTRIBUTIONS
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SECTION III.1. Collections and Remittances by the Trustee. Trustee
agrees that, subject to the provisions of this Trust Agreement, it will, during
the term of the Trust, administer that portion of the Trust Estate related to
each Facility (referred to herein as the corresponding "Trust Estate") and, at
the direction of the Agents, or if all obligations under the Loan Agreement and
the Notes have been fully discharged, the Grantor thereof (the appropriate
Person permitted to give instructions being hereafter called the "Instructing
Party") take steps to collect all sums payable to the Trustee by the Grantor or
any other Person under the corresponding Facility Lease and the other Operative
Documents. The Trustee agrees to distribute all proceeds received from the Trust
Estate in accordance with the Loan Agreement and Sections 2.2 and 2.3 hereof.
The Trustee shall make such distribution promptly upon receipt of such proceeds
(if such proceeds are available for distribution) by the Trustee, it being
understood and agreed that the Trustee shall not be obligated to make such
distribution until the funds for such distribution have been received by the
Trustee in cash or its equivalent reasonably acceptable to the Trustee. All
distributions to a Lender shall be made by the Trustee to the order of such
Lender at its address referred to in Section 9.3 of the Participation Agreement.
SECTION II.2. Distribution of Payments.
(a) Payments to the Trustee for the benefit of the Lenders and
Administrative Agent. Until the Loan Agreement shall have been fully
discharged pursuant to its terms, all Rent, insurance proceeds and
requisition or other payments of any kind included in the Trust Estate
(other than Excluded Amounts) payable to and received by the Trustee
shall be held by Trustee for the benefit of the Lenders and the
Administrative Agent for distribution in accordance with the provisions
of Article III of the Loan Agreement; provided, however, that any
payments received by the Trustee from a Grantor with respect to the
Trustee's fees and disbursements, or pursuant to Section 5.1 hereof,
shall be retained by the Trustee and applied toward the purpose for
which such payments were made.
(b) Excluded Amounts. Any Excluded Amounts received by the
Trustee at any time shall be promptly paid by the Trustee to the Person
to whom such Excluded Amounts are payable under the provisions of the
Participation Agreement or any other Operative Document.
SECTION III.3. Effect of Sales by the Trustee. Any sale of all or any
part of the Trust Estate by the Trustee permitted hereunder shall bind the
Lenders and shall be effective for the benefit of the purchasers thereof and
their respective successors and assigns to divest and transfer all right, title
and interest vested in the Trustee or the Lenders hereunder in the property so
sold, and no purchaser shall be required to inquire as to compliance by the
Trustee with any of the terms hereof or to see to the application of any
consideration paid for such property.
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ARTICLE IV
CERTAIN PROVISIONS RESPECTING TRUSTEE
SECTION IV.1. Acceptance of Trusts and Duties. Bank accepts the trust
hereby created and agrees to perform the same as herein expressed and agrees to
receive and disburse all moneys constituting part of the Trust Estate in
accordance with the terms hereof.
SECTION IV.2. Limitation of Power. Trustee shall have no power, right,
duty or authority to manage, control, possess, use, sell, lease, dispose of or
otherwise deal with any Leased Property subject to any Facility Lease or any
other property at any time constituting a part of the Trust Estate, or otherwise
to take or refrain from taking any action under or in connection with the
Operative Documents, except (a) to execute and deliver the Operative Documents
to which the Trustee is to be a party, (b) to exercise and carry out or cause to
be exercised and carried out the rights, duties and obligations of the Trustee
hereunder, (c) to exercise and carry out or cause to be exercised and carried
out the rights, duties and obligations of the Trustee under the Operative
Documents, (d) to receive, collect and distribute and deal with the sums due
under each Facility Lease and with the Leased Property subject thereto and the
proceeds thereof as provided in each such Facility Lease, the Loan Agreement and
in this Trust Agreement, and (e) as expressly provided in written instructions
from the Instructing Party given pursuant to Section 3.3 or 3.4. Other than as
expressly provided in this Trust Agreement, the Trustee shall not have the
authority to make management decisions relating to the Trust Estate and may take
only ministerial actions without consent of the Agents. For purposes of this
Trust Agreement neither any Grantor nor, if applicable, the Parent, shall have
the right to direct the Trustee to exercise and carry out or cause to be
exercised and carried out the rights, duties and obligations of the Trustee
hereunder and under the Operative Documents until the Loan Agreement and Notes
have been paid and discharged in full.
SECTION IV.3. Notice of Event of Default. If a Responsible Officer of
the Trustee has actual knowledge of a Lease Event of Default or Loan Event of
Default, the Trustee shall give prompt written notice of such event to the
Lenders, the Grantors and the Administrative Agent in the manner specified in
Section 5.2. Subject to Section 3.4, the Trustee shall take such action, and
only such action, with respect to any such event as shall be specified in
written instructions from the Instructing Party. For all purposes of the
Operative Documents, in the absence of such actual knowledge, the Trustee shall
not be deemed to have knowledge of a Lease Event of Default or a Loan Event of
Default unless any of its Responsible Officers is notified in writing by a
Lender or the Administrative Agent. Trustee shall have no obligation and shall
not take any action in the event it receives no direction from the applicable
Instructing Party.
SECTION IV.4. Action Upon Instructions. Subject to Sections 3.5, 3.6
and 5.1 and the Loan Agreement, upon the written instructions at any time and
from time to time of the Instructing Party, the Trustee shall take such of the
following actions, and only such actions, as may be specified in such
instructions:
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(a) give such notice or direction or exercise such right or
power under any Facility Lease or any other Operative Document as shall
be specified in such instructions;
(b) approve as satisfactory to it all matters required by the
terms of any Operative Document to be satisfactory to the Trustee;
(c) upon expiration of the Lease Term and discharge in full of
the Loan Agreement and the Notes pursuant to its terms, convey all of
Trustee's right, title and interest in and to the Trust Estate
(including the related Leased Property) to the Grantor; and
(d) any other action as specified by the Instructing Party.
SECTION IV.5. Certain Duties and Responsibilities of the Trustee.
(a) (i) The Trustee undertakes to perform such duties and only
such duties as are specifically set forth herein and in the
other Operative Documents, and no implied covenants or
obligations shall be read into this Trust Agreement against
the Trustee, and the Trustee agrees that it shall not, nor
shall it have a duty to, manage, control, use, sell, maintain,
insure, register, lease, operate, modify, dispose of or
otherwise deal with any Leased Property or any other part of
the Trust Estate in any manner whatsoever, except as required
by the Operative Documents and as otherwise provided herein.
(ii) In the absence of bad faith or gross negligence
on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Trust
Agreement.
(b) No provision of this Trust Agreement or any other
Operative Document, including, without limitation, Articles VII and
VIII of the Participation Agreement, shall be construed to relieve the
Bank or the Trustee of liability for its gross negligence or willful
misconduct or its negligence in the handling of funds, it being
understood that, without limiting the foregoing:
(i) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Trustee, unless it shall be proved that the Trustee was
grossly negligent;
(ii) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the
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Instructing Party pursuant to the express provisions hereof;
it being understood that the Trustee shall be liable if it
takes any action pursuant to instructions from any Grantor
prior to receiving notice from Administrative Agent that the
Loan Agreement has been discharged in full pursuant to its
terms;
(iii) no provision hereof shall require the Bank or
Trustee to expend or risk its own funds in the performance of
any of its duties hereunder or under any of the other
Operative Documents, or in the exercise of any of its rights
or powers; and
(iv) the Bank shall be liable for (A) any taxes on,
with respect to or measured by any amounts paid to it as
compensation for services as the Trustee hereunder or
otherwise under the Operative Documents, (B) acts or omissions
not related to the transactions contemplated by the Operative
Documents, (C) the inaccuracy of representations and
warranties made by the Bank in the Participation Agreement or
any certificate or document delivered pursuant thereto, and
(D) its negligence in the handling of funds.
(c) Trustee shall not be required to take any action hereunder
or under the other Operative Documents, nor shall any other provision
of this Trust Agreement or any other Operative Document be deemed to
impose a duty on the Trustee to take any action, if the Trustee
determines, or is advised by counsel, that such action is likely to
result in personal liability or is contrary to Applicable Law or the
Operative Documents.
(d) Whether or not therein expressly so provided, except where
expressly provided otherwise, every provision of this Trust Agreement
relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this
Section 3.5.
SECTION IV.6. Certain Rights of Trustee. Except as otherwise provided
in Section 3.5:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any signature, resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order or other paper or document reasonably believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction or authorization by any party
hereto or to any other Operative Document shall be sufficiently
evidenced by a request, direction or authorization in writing,
delivered to the Trustee and signed in the name of such party by the
president, any vice president, the treasurer or the secretary of such
party, as the case may be, and any resolution of the board of directors
or committee thereof of such party shall be sufficiently evidenced by a
copy of such resolution certified by the secretary or
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an assistant secretary of such party, as the case may be, to have been
duly adopted and to be in full force and effect on the date of such
certification, and delivered to the Trustee;
(c) whenever in the administration of this Trust Agreement the
Trustee deems it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Trustee
may in good faith rely upon a certificate in writing, delivered to the
Trustee and signed by the president, any vice president, any assistant
vice president, the treasurer, any assistant treasurer, the secretary
or any assistant secretary of a Lender;
(d) the Trustee may exercise its powers and perform its duties
by or through such attorneys, agents and servants as it may appoint,
and it shall not be liable for the conduct or misconduct of such
attorneys, agents and servants, provided, that the Trustee shall use
due care in the appointment of such attorneys, agents and servants; and
it shall be entitled to the advice of counsel and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice if such advice pertains to such matters as
the Trustee may reasonably presume to be within the scope of such
counsel's area of expertise;
(e) Trustee shall not be under any obligation to exercise any
of the rights or powers vested in it by this Trust Agreement or any
other Operative Document at the request or direction of the Instructing
Party, unless the Instructing Party offers to the Trustee reasonable
security or indemnity against the costs, expenses (including reasonable
fees and expenses of its legal counsel) and liabilities which may be
incurred by it in compliance with such request or direction; and
(f) provided that Responsible Officer has actual knowledge of
the inaccuracy thereof, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee determines to
make such further inquiry or investigation, it shall be entitled to
examine the books and records of any Grantor related to the Leased
Property under lease by such Grantor subject to a particular Facility
Lease to reasonably determine whether the Grantor thereof is in
compliance with the terms and conditions of such Facility Lease and to
examine such Leased Property, by agent or attorney, all upon the terms
and conditions contained in the Facility Lease.
Notwithstanding Section 3.5, the Trustee shall not have any duty (i) to
see to any recording or filing of the Operative Documents or any Uniform
Commercial Code financing statements or to see to the maintenance of any such
recording or filing, (ii) to see to any insurance on the Leased Property subject
to any Facility Lease or to effect or maintain any such
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insurance, whether or not the Grantor thereof is in default with respect
thereto, other than to forward promptly to the Lenders copies of all
certificates, reports and other written information it receives from such
Grantor pursuant to such Facility Lease (unless the Lenders are to receive such
certificates, reports and other written information directly from such Grantor),
(iii) to see to the payment or discharge of any tax, assessment or other
government charge or any Lien owing with respect to, assessed or levied against
any part of the Trust Estate for any Designated Trust, other than Lessor Liens
attributable to it, (iv) to confirm or verify any financial statements of any
Grantor or any other Person, or (v) to inspect the Leased Property subject to
any Facility Lease at any time or ascertain or inquire as to the performance or
observance of any of a Grantor's or any other Person's (other than its or the
Bank's) covenants under the Operative Documents with respect to such Leased
Property.
SECTION IV.7. NO REPRESENTATIONS OR WARRANTIES AS TO ANY APPLICABLE
LEASED PROPERTY OR DOCUMENTS. THE BANK IS NOT A BUILDER, DEVELOPER OR
MANUFACTURER OF THE LEASED PROPERTY SUBJECT TO ANY FACILITY LEASE OR A DEALER IN
OR VENDOR OF SIMILAR LEASED PROPERTY AND HAS NOT INSPECTED AND WILL NOT INSPECT
SUCH LEASED PROPERTY BEFORE DELIVERY TO AND ACCEPTANCE BY A GRANTOR. THE BANK
HAS NOT MADE NOR DOES IT MAKE (A) ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO ANY ENVIRONMENTAL MATTER OR CONDITION, VALUE, DESIGN, OPERATION,
CONDITION, QUALITY, DURABILITY, SUITABILITY, MERCHANTABILITY OR FITNESS FOR USE
OR FITNESS FOR A PARTICULAR PURPOSE, ABSENCE OF LATENT OR OTHER DEFECTS WHETHER
OR NOT DISCOVERABLE, ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR
COPYRIGHT, OR ANY OTHER WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO
ANY OF SUCH LEASED PROPERTY, OR AS TO TITLE THERETO, OR (B) ANY REPRESENTATION
OR WARRANTY AS TO THE VALIDITY, LEGALITY OR ENFORCEABILITY OF THE OPERATIVE
DOCUMENTS (OTHER THAN AS TO THIS TRUST AGREEMENT AGAINST THE BANK), OR AS TO THE
CORRECTNESS OF ANY STATEMENT CONTAINED IN ANY THEREOF, EXCEPT AS SET FORTH IN
SECTION 4.3 OF THE PARTICIPATION AGREEMENT.
SECTION IV.8. Status of Moneys Received. All moneys received by the
Trustee or the Bank under or pursuant to this Trust Agreement or any other
Operative Document (other than Excluded Amounts to be paid to the Bank) shall
constitute trust funds for the purpose for which they were paid or are held, but
need not be segregated in any manner from any other moneys and may be deposited
by the Trustee under such conditions as may be prescribed or permitted by
Applicable Law for trust funds, or, at the direction of the Agents, may be
invested in Cash Equivalents.
SECTION IV.9. Permitted Activities. The Trustee or any corporation in
or with which the Trustee may be interested or affiliated or any officer or
director of any such corporation may
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have commercial relations and otherwise deal with any Grantor or any other
Person or with any other corporation having relations with such Grantor to the
full extent permitted by Applicable Law.
SECTION IV.10. Resignation or Removal of Trustee. Bank or any successor
thereto as Trustee may resign as Trustee at any time without cause by giving at
least 60 days' prior written notice to each Lender, the Administrative Agent and
each Grantor, and the Required Lenders (or Grantors, if there exists no Event of
Default and then at the expense of Grantors) may at any time remove the Trustee
without cause by an instrument in writing delivered to the Trustee, the
Administrative Agent and each Grantor, such resignation or removal to be
effective on the later of the date specified in such notice or written
instrument or the date on which a successor trustee is appointed hereunder. With
the written consent of the Administrative Agent (and, so long as a Lease Event
of Default shall not have occurred and be continuing, each Grantor), the
Required Lenders may, at any time upon 30 days' prior written notice to the
Administrative Agent and each Grantor by an instrument in writing, appoint a
successor trustee; provided, however, so long as a Lease Event of Default shall
not have occurred and be continuing and with the written consent of the Required
Lenders and at the expense of Grantors, the Grantors may, after 30 days from the
date of such consent by an instrument in writing, appoint a successor trustee;
provided, further, that any successor trustee shall be a bank or trust company
organized under the laws of the United States of America or any state thereof
that has a combined capital and surplus of at least $100,000,000; and provided,
further, that, if required by Applicable Law, the Mississippi Gaming Commission
shall have made a determination of suitability with respect to such successor
trustee. If the Required Lenders do not appoint a successor trustee within 30
days after the giving of notice of such resignation or removal, the
Administrative Agent or the Trustee may apply to any court of competent
jurisdiction to appoint a successor trustee to act until a successor or
successors is appointed by the Required Lenders as above provided. Any successor
trustee so appointed by such court shall immediately and without further act be
superseded by a successor trustee appointed by the Required Lenders within one
year from the date of the appointment by such court.
SECTION IV.11. Estate and Rights of Successor Trustee. Any successor
Trustee, whether appointed by the Required Lenders or a court, shall execute and
deliver to the predecessor Trustee an instrument accepting such appointment, and
thereupon each successor trustee, without further act, shall become vested with
all the estates, properties, rights, powers, duties and trust of the predecessor
Trustee in the trust hereunder with like effect as if originally named Trustee
herein, but nevertheless upon the written request of such successor trustee,
such predecessor Trustee shall execute and deliver an instrument transferring to
such successor Trustee, upon the trust herein expressed, all the estates,
properties, rights, powers and trusts of such predecessor Trustee, and such
predecessor Trustee shall duly assign, transfer, deliver and pay over to such
successor trustee any property or moneys then held by such predecessor Trustee
upon the trusts herein expressed.
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SECTION IV.12. Merger or Consolidation of Trustee. Any corporation into
which the Bank serving as Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Bank serving as Trustee is a party, or any corporation to which
substantially all of the business of the Trustee may be transferred, shall be a
successor trustee under this Trust Agreement without further act.
SECTION IV.13. Co-Trustees. At any time, for the purpose of meeting any
legal requirements of any jurisdiction in which any part of the Trust Estate may
at the time be located, the Instructing Party and the Trustee jointly shall have
the power, and shall execute and deliver all instruments, to appoint one or more
Persons approved by the Required Lenders and the Trustee, to act as co-trustee,
or co-trustees, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of such Trust Estate, and to vest in such Person or
Persons, in such capacity, such title to such Trust Estate or any part thereof,
and such rights, powers, duties, trusts or obligations as the Required Lenders
and the Trustee may consider necessary or desirable. If the Instructing Party
has not joined in such appointment within 15 days after the receipt by it of a
request to do so, the Trustee alone shall have power to make such appointment.
The Trustee shall not be liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.13.
SECTION IV.14. Books and Records. Trustee shall be responsible for
keeping the customary books and records relating to the receipt and disbursement
of all moneys actually received and disbursed by it.
ARTICLE V
TERMINATION OF AND AMENDMENTS TO TRUST
SECTION V.1. Termination. The Trust created and provided for hereby
shall cease and be terminated in any one of the following events, whichever
shall first occur:
(a) If the Required Lenders shall by notice in writing to the
Trustee, the Lenders, the Administrative Agent and the Grantor revoke
and terminate the Trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from
the date of mailing such notice, then on the date specified in such
notice, such trust created and provided for hereby shall cease and
terminate, provided, however, that the Trust shall not be subject to
revocation or termination by the Lenders prior to the payment in full
and discharge of the Loans and all other indebtedness secured by the
Operative Documents and the termination of the Operative Documents and
the release of the Liens granted thereby; or
(b) the sale or other final disposition by the Trustee of all
property constituting the Trust Estate and the final disposition by the
Trustee of all moneys or other property or
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proceeds constituting part of Trust Estate in accordance with the terms
hereof; provided, however, that Trust Estate shall be subject to sale
or other final disposition by the Trustee prior to the payment in full
and discharge of the Loans and all other indebtedness secured by the
Operative Documents and the release of the Operative Documents and the
Liens granted thereby and the payment in full of the Commitment
Amounts; or
(c) 110 years after the date hereof.
SECTION V.2. Distribution of Trust Estate Upon Termination. Upon any
termination of the Trust pursuant to Section 4.1, the Trustee shall convey the
Trust Estate to such purchaser or purchasers thereof or other Persons entitled
thereto and for such amount and on such terms as are specified in written
instructions from the Required Lenders delivered to the Trustee before the date
of termination; provided that (a) if at the time of any termination the
corresponding Facility Lease remains in force and effect, then such Trust Estate
shall be conveyed as a unit subject to such Facility Lease and not in parcels,
and (b) if such written instructions are not delivered to the Trustee on or
before the date of termination, the Trustee shall transfer title to such Trust
Estate to the Lenders. Upon making such transfer or sale the Trustee shall be
entitled to immediate receipt of any sums due and owing to the Trustee,
including, without limitation, any expenses (including reasonable attorneys'
fees and expenses) incurred pursuant hereto or as compensation for services
rendered hereunder and not theretofore paid and the Trustee shall be discharged
and free of any further liability hereunder subject to Section 3.5(b).
SECTION V.3. Distribution from Trust Estate Upon Permitted Termination
of a Facility Lease. Upon any termination of any Facility Lease pursuant to
Article V of the Master Lease, the Trustee shall convey the portion of the Trust
Estate under such Facility Lease to such purchaser or purchasers thereof (or
other Persons entitled thereto) and for such amount and on such terms as are
specified in written instructions from the Required Lenders delivered to the
Trustee before the date of termination; provided that if such written
instructions are not delivered to the Trustee on or before the date of
termination, the Trustee shall transfer title to such portion of the Trust
Estate to the Lenders or their designee. Upon making such transfer or sale the
Trustee shall be discharged and free of any further liability with respect to
such released portion of the Trust Estate, subject to Section 3.5(b).
SECTION V.4. Amendments. Subject to Section 6.1(b) and Section 9.5 of
the Participation Agreement, at any time and from time to time, upon the written
request of the Instructing Party, (i) the Trustee shall execute a supplement
hereto for the purpose of adding provisions to, or changing or eliminating
provisions of, this Trust Agreement as specified in such request, and (ii) the
Trustee shall enter into or consent to such written amendment of or supplement
to the other Operative Documents as the Grantors or the Administrative Agent, as
may be required by such document(s), may agree to and as may be specified in
such request, or execute and deliver such written waiver or modification of the
terms of the Operative Documents as may be specified in such request; provided,
however, if in the reasonable opinion of the
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Trustee, any document required to be executed by it pursuant to this Section 4.4
affects any right or duty of, or immunity or indemnity in favor of, the Trustee
under this Trust Agreement or the other Operative Documents, the Trustee may in
its reasonable discretion decline to execute such document.
ARTICLE VI
MISCELLANEOUS
SECTION VI.1. Compensation and Indemnification. Trustee shall receive
reasonable compensation for its services hereunder from the Grantors and shall
be reimbursed by the Grantors for the Trustee's reasonable fees and expenses
(including the reasonable disbursements and fees of counsel). If a Lease Event
of Default or a Loan Event of Default shall have occurred and be continuing and
the Trustee is required pursuant to this Trust Agreement to take any action in
connection therewith, it shall be reimbursed by the Grantors for any expenses it
may incur in relation to taking any such action. Subject to any limitations and
rights agreed to by Trustee in the Participation Agreement, including, without
limitation, the terms and provisions set forth in Articles VII and VIII of the
Participation Agreement, whether or not the transactions contemplated by the
Operative Documents are consummated, Grantors shall reimburse and indemnify and
save the Trustee harmless from and against any and all losses, damages,
liabilities, claims, actions, suits, obligations, penalties, demands,
disbursements and expenses, including taxes, counsel fees, and including tort
claims for which the Trustee is strictly liable, which may be asserted against
or incurred by reason of the Bank's being the Trustee or acting as the Trustee
hereunder or under the other Operative Documents or the performance or
enforcement of any of the terms hereof, or arising out of or relating to this
Trust Agreement or the other Operative Documents or the Trust, the Trust Estate
or any Leased Property, or any Rent or other sums payable therefor, or the
building, manufacture, purchase, installation, acceptance, rejection, ownership,
delivery, lease, possession, use, operation, condition, sale, return or other
disposition of any applicable Leased Property or in any way relating to or
arising out of the Trust Estate or the action or the inaction of the Trustee
hereunder or by reason of any occurrence while so acting. In no event shall the
Grantors be so obligated in respect of any such losses, damages, liabilities,
claims, actions, suits, obligations, penalties, demands, disbursements and
expenses, including taxes and counsel fees pursuant to this Section 5.1, arising
from or as a result of (a) the willful misconduct or gross negligence of the
Bank or the negligence of the Bank in the handling of funds, (b) any taxes on,
with respect to or measured by any amounts paid to the Bank as compensation for
services as Trustee hereunder or otherwise under the Operative Documents, or (c)
the inaccuracy of representations and warranties made by the Bank in the
Participation Agreement or in any certificate or documents delivered pursuant
thereto. The provisions of this Section 5.1 and Articles VII and VIII of the
Participation Agreement (other than the requirements for compensation of the
Trustee after its resignation, which shall terminate upon the resignation or
removal of the Trustee) shall continue in force and effect notwithstanding the
termination of the Trust, the resignation or removal of the Trustee or the
obligation of any other party to any
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other Operative Document to make any payment to the Trustee which the Grantors
are required to make pursuant to this Section 5.1.
SECTION VI.2. Notices. All notices and communications provided for
herein shall be in writing and shall be deemed to have been given in accordance
with Section 9.3 of the Participation Agreement. Trustee shall deliver to each
Lender promptly after receipt copies of all notices, certificates and reports
delivered to it pursuant to any Operative Document.
SECTION VI.3. GOVERNING LAW. THE TRUST IS CREATED PURSUANT HERETO, IN
THE STATE OF NEW YORK AND THE VALIDITY, CONSTRUCTION AND ALL RIGHTS UNDER THE
TRUST SHALL BE GOVERNED BY THE LAWS OF THAT STATE, INCLUDING SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER WITHOUT REGARD TO
THE CHOICE OF LAWS AND CONFLICTS OF LAWS RULES OF SUCH STATE; PROVIDED, HOWEVER,
THAT THE EXERCISE OF CERTAIN RIGHTS OR REMEDIES HEREUNDER AND UNDER THE
OPERATIVE DOCUMENTS MAY REQUIRE COMPLIANCE WITH GAMING LAWS. IF ANY PROVISION OF
THIS TRUST AGREEMENT SHALL BE INVALID OR UNENFORCEABLE, THE REMAINING PROVISIONS
HEREOF SHALL CONTINUE TO BE FULLY EFFECTIVE, PROVIDED THAT SUCH REMAINING
PROVISIONS DO NOT INCREASE THE OBLIGATIONS OR LIABILITIES OF THE TRUSTEE.
SECTION VI.4. Tax Reports; Information Reporting. The Trustee agrees to
promptly forward to each Lender any communications with respect to taxes
pertaining to the Trust Estate received by the Trustee from tax authorities or
from the Grantors.
SECTION VI.5. Headings. The headings of the various Sections herein are
for convenience of reference only and shall not define or limit any of the terms
or provisions hereof.
SECTION VI.6. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns. Grantor may not assign,
transfer or otherwise dispose of its interest in any Designated Trust, except as
expressly contemplated in the Operative Documents.
SECTION VI.7. Severability. Any provision of this Trust Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition on
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provisions in any other jurisdiction.
SECTION VI.8. Only Written Waivers. No term or provision of this Trust
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing
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signed by the party or other person against whom enforcement of the change,
waiver, discharge or termination is sought; and any waiver of the terms hereof
shall be effective only in the specific instance and for the specific purpose
given.
SECTION VI.9. Counterparts. This instrument may be simultaneously
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original, and such counterparts together shall constitute and be
one and the same instrument.
SECTION VI.10. Rights in Trust Agreement. Except as expressly provided
to the contrary in the Operative Documents, nothing in this Trust Agreement,
whether express or implied, shall be construed to give any Person other than the
Trustee and each Lender and their respective successors and assigns, any legal
or equitable right, remedy or claim under or in respect of this Trust Agreement.
SECTION VI.11. Payment of Trustee Fees, Costs and Expenses. Grantors
shall pay to the Trustee for its services hereunder such fees and expenses as
heretofore have been agreed upon by Trustee and Grantors, and shall also pay to
Trustee such fees and expenses as may be reasonably incurred by the Trustee as a
result of taking any direction of any Instructing Party. Trustee agrees that it
shall have no right against the Lenders or Administrative Agent for any fee as
compensation for its services hereunder, except as hereafter expressly agreed
upon by the Lenders, the Administrative Agent and the Trustee.
SECTION VI.12. Additional Grantors. From time to time following the
initial execution of this Trust Agreement, additional wholly-owned Subsidiaries
of Parent approved by the Required Lenders who execute and deliver to Trustee a
Certificate of Joinder, in the form attached as Exhibit A hereto, shall thereby
become additional Grantors hereunder and parties hereto. Upon acceptance thereof
by the Trustee, notice of which acceptance is hereby waived by Grantors, each
such additional Grantor shall be as fully a party hereto as if an original
signatory hereof. Each Grantor expressly agrees that its obligations hereunder
and under any other Operative Documents to which it is party, and the liens upon
its property granted in connection therewith, shall not be affected or
diminished by the addition or release of additional Grantors hereunder. This
Trust Agreement shall be fully effective as to any Grantor who is or becomes a
party hereto regardless of whether any other Person becomes or fails to become
or ceases to be a Grantor hereunder.
SECTION VI.13. Identification of Trust. The name of the trust created
hereby is the GCI Trust 1997-1.
[signature pages follow]
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IN WITNESS WHEREOF, the Bank and each Initial Grantor have caused this
Trust Agreement to be duly executed all as of the day and year first above
written with actual execution on the dates set forth in the respective
acknowledgments below.
HANCOCK BANK,
as Bank and as Trustee
By:
------------------------------------
Name: Arnold Wethey
Title: Vice President & Trust Officer
Address: 2510 14th Street
One Hancock Plaza
Gulfport, MS 39501
Attn: Arnold Wethey
Telephone No.: (601) 868-4579
Telecopier No.: (601) 868-4098
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BL RESORTS I, LLC,
as Grantor
By:
---------------------------------
Name: Timothy J. Cope
Title: Chief Financial Officer
GCG RESORTS I, LLC,
as Grantor
By:
---------------------------------
Name: Timothy J. Cope
Title: Chief Financial Officer
Address for both Initial Grantors:
130 Cheshire Lane
Minnetonka, MN 55305
Telephone No.: (612) 449-7030
Telecopier No.: (612) 449-7064
20
SECTION PAGE
CORPORATE-ACKNOWLEDGMENT
(BANK-TRUSTEE)
STATE OF ___________ )
) ss:
COUNTY OF __________ )
Personally appeared before me, the undersigned authority in
and for the said county and state, on this ________ day of __________, _____,
within my jurisdiction, the within named ______________________ who acknowledged
that he is ____________________________ of Hancock Bank, a state banking
association, and that for and on behalf of the said bank, and as its act and
deed in the representative capacity therein stated, he executed the above and
foregoing instrument, after first having been duly authorized by said bank to do
so.
----------------------------------
NOTARY PUBLIC
My Commission expires:
- --------------------------------
(Affix official seal, if applicable)
21
SECTION PAGE
CORPORATE-ACKNOWLEDGMENT
(GRANTOR)
STATE OF ____________ )
) ss:
COUNTY OF ___________ )
Personally appeared before me, the undersigned authority in
and for the said county and state, on this ________ day of _________, _____,
within my jurisdiction, the within named Timothy J. Cope who acknowledged that
he is the Chief Financial Officer of BL RESORTS I, LLC, a Minnesota limited
liability company, and that for and on behalf of the said company, and as its
act and deed he executed the above and foregoing instrument, after first having
been duly authorized by said company to do so.
----------------------------------
NOTARY PUBLIC
My Commission expires:
- ---------------------------------------
(Affix official seal, if applicable)
22
SECTION PAGE
CORPORATE-ACKNOWLEDGMENT
(GRANTOR)
STATE OF ____________ )
) ss:
COUNTY OF ___________ )
Personally appeared before me, the undersigned authority in
and for the said county and state, on this ________ day of _________, _____,
within my jurisdiction, the within named Timothy J. Cope who acknowledged that
he is the Chief Financial Officer of GCG RESORTS I, LLC, a Minnesota limited
liability company, and that for and on behalf of the said company, and as its
act and deed he executed the above and foregoing instrument, after first having
been duly authorized by said company to do so.
----------------------------------
NOTARY PUBLIC
My Commission expires:
- ------------------------------------
(Affix official seal, if applicable)
23
SECTION PAGE
Prepared by and when recorded mail to:
EXHIBIT A TO
Sheppard, Mullin, Richter & Hampton LLP TRUST AGREEMENT
333 South Hope Street, 48th Floor
Los Angeles, California 90071
Attention: Mark A. Spitzer, Esq.
(213) 620-1780
CERTIFICATE OF JOINDER TO TRUST AGREEMENT
This Certificate of Joinder is entered into by the person signing below
(the "Joining Party"), with reference to the Trust Agreement dated as of
September 29, 1997 as filed in Book _____, Page ______ in the Office of the
Chancery Clerk of Tunica County, Mississippi and Book _____, Page ______ in the
First Judicial District in the Chancery Clerk's Office of Harrison County,
Gulfport, Mississippi (the "Trust Agreement") by and between Hancock Bank, a
Mississippi banking corporation, in its capacity as trustee ("Trustee"), and BL
Resorts I, LLC, a Minnesota limited liability company, and GCG Resorts I, LLC, a
Minnesota limited liability company, as Initial Grantors (and together with each
person who also becomes party thereto pursuant to the terms thereof, the
"Grantors").
AGREEMENT
1. Terms used but not defined in this Certificate of Joinder shall have
the meanings defined for those terms in the Participation Agreement
dated as of September 29, 1997 ("Participation Agreement") among the
Trustee; the Lenders; the Co-Agents; the Lead Manager; the Lessees;
Grand Casinos, Inc. and certain of its Subsidiaries, as Guarantors; and
BA Leasing & Capital Corporation, as Arranger and Administrative Agent.
This instrument secures a line of credit to be used primarily for business,
commercial or agricultural purposes and is entitled to the lien protection
provisions in Section 89-1-49 of the Mississippi Code of 1972, as amended.
INDEXING INSTRUCTIONS:
[Lessee to provide]
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SECTION PAGE
2. By this Certificate of Joinder, the Joining Party executing the same
becomes a "Grantor" under and pursuant to Section 5.12 of the Trust
Agreement. The Joining Party agrees that, upon its execution hereof, it
will be bound by all terms, conditions, and duties applicable to a
Grantor under the Trust Agreement. Substantially contemporaneously
herewith, the Joining Party is granting certain property to Trustee,
pursuant to one or more Improvement Deeds and/or one or more Bills of
Sale, to hold as part of the Trust Estate.
3. The effective date of this Joinder is _________, 19___.
"Joining Party"
----------------------
By:
----------------------------
Title:
--------------------------
ACKNOWLEDGED:
BA LEASING & CAPITAL CORPORATION,
as Administrative Agent
By:
----------------------------
Title:
--------------------------