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EXHIBIT 10.4
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SUBORDINATION AGREEMENT
GRANTED BYGRAND CASINOS OF LOUISIANA, LLC,
IN FAVOR OF HIBERNIA NATIONAL BANK
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This Subordination Agreement (the "Agreement") is entered into as
of February 15, 1999 (the "Effective Date"), by:
GRAND CASINOS OF LOUISIANA, LLC (hereinafter referred to as
"Coushatta LLC"), a Minnesota limited liability
company, whose permanent mailing address is 130
Chesire Lane, Minnetonka, Minnesota, 55305,
represented herein by Timothy Cope, its duly
authorized Chief Financial Officer.
Couhsatta LLC hereby represents, covenants and agrees as follows:
1. As used herein, the term "Subordinated Claims" shall mean all debts,
liabilities and obligations of the Coushatta Tribe of Louisiana
(hereinafter referred to as the "Tribe"), a federally recognized Indian
tribe, and/or the Coushatta Tribe of Louisiana Building Authority (the
"Authority"), an instrumentality of the Tribe (the "Tribe and the
Authority are sometimes collectively referred to as the "Borrowers" and
individually as a "Borrower") to Couhsatta LLC, whether such debts,
liabilities and obligations now exist or are hereafter incurred or
arise, or whether the obligation of the Borrowers thereon be direct,
contingent, primary, secondary, joint and several, or otherwise, and
irrespective of whether such debts, liabilities or obligations are
evidenced by note, contract, open account or otherwise, and
irrespective of the person or entity in whose favor such debts or
liabilities may, at their inception, have been, or may hereafter be
created, or the manner in which they have been or may hereafter be
acquired by Lakes Gaming, including, without limitation, the following
documents in which Lakes Gaming acquired interests pursuant to that
certain ___________ dated ________________ executed by Grand Casinos,
Inc., a Minnesota corporation, and by Grand Casinos of Louisiana,
Inc.-Coushatta, a Minnesota corporation, (collectively the "Grand
Entities") in favor of Lakes Gaming, Inc., a Minnesota corporation, and
Coushatta LLC:
(a) That certain Indemnity Agreement dated as of May 1, 1997, between
the Borrowers in favor of Grand Casinos and Grand Casinos of
Louisiana, Inc.- Coushatta (collectively the "Grand Entities");
(b) That certain Mortgage, Assignment of Leases and Rents and Security
Agreement dated as of May 1, 1997, executed by the Authority in
favor of the Grand Entities;
(c) An Assignment of Construction Contract of Borrower dated as of May
1, 1997, executed by the Tribe in favor of the Grand Entities; and
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(d) An Assignment of Architect's Contract of Borrower dated as of May
1, 1997, executed by the Tribe in favor of the Grand Entities.
2. For and in consideration of the Hibernia Indebtedness (herein defined)
under the Hibernia Documents (herein defined), and in order to induce
the Hibernia National Bank ("Hibernia"), acting in its discretion in
each instance, to make loans or otherwise to give, grant or extend
credit at any time or times to the Borrowers under the Hibernia
Documents, Coushatta LLC hereby agrees:
(a) To subordinate, and does hereby subordinate, the payment by each
Borrower of the Subordinated Claims, together with any and all
interest accrued or to accrue thereon, to the payment to Hibernia
of any and all debts, liabilities and obligations for which each
Borrower may now or hereafter be under obligation to Hibernia (the
"Hibernia Indebtedness"), under:
(i) that certain Commercial Loan Agreement dated as of May 1,
1997, between Hibernia, as lender, and the Borrowers, as
co-borrowers, as amended by that certain First Amendment
to Commercial Loan Agreement dated ________, 1998, and by
that certain Second Amendment to Commercial Loan Agreement
dated ________, 1998 (herein referred to as the "Loan
Agreement");
(ii) that certain Promissory Note dated as of May 1, 1997,
executed by the Borrowers in favor of Hibernia in the
original principal sum of $25,000,000.00 as amended by
that certain First Allonge to Promissory Note dated
________, 1998 and as amended by that certain Second
Allonge to Promissory Note dated ________, 1998 (herein
referred to as the "Note");
(iii) that certain Dominion Account Agreement dated as of May 1,
1997, executed by the Tribe and Grand Casinos of
Louisiana, Inc.- Coushatta in favor of Hibernia, which
agreement encumbers the proceeds from the gaming
operations at the Tribe's casino operations as well as the
Casino Bank Accounts which are more fully described
therein (the "Dominion Account Agreement")
(iv) that certain Commercial Security Agreement dated as of May
1, 1997, executed by the Borrowers, as debtors, in favor
of Hibernia, as secured party, which agreement covers
certain equipment referred to therein (the "Security
Agreement");
(v) that certain Non-Standard Financing Statement executed by
the Borrowers, as the debtors, in favor of the Hibernia,
as the
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secured party, on or about May 1, 1997, regarding the
Collateral (as defined in the aforesaid Dominion Account)
which instrument has been recorded in the public records
of Allen Parish, Louisiana, together with any subsequent
financing statements executed by the Borrowers in
connection with the security interests granted in the
Security Agreement (the "Financing Statements"); and
(vi) that certain "Agreement Restricting the Transfer or
Encumbrance of Property" dated as of May 1, 1997, which
was executed by the Borrowers in favor of Hibernia which
instrument has been recorded in the public records of
Allen Parish, Louisiana (the "Negative Pledge").
(the Loan Agreement, Note, Dominion Account Agreement,
Security Agreement, Financing Statements and the Negative
Pledge are sometimes collectively referred to as the
"Hibernia Documents")
(whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligation of the Borrowers
thereon be direct, contingent, primary, secondary, joint and
several, or otherwise, and irrespective of whether such debts or
liabilities be evidenced by note, contract, open account or
otherwise).
(b) Not to ask, demand, sue for, take or receive all or any part of
the Subordinated Claims, or any interest thereon, unless or until
that portion of the Hibernia Indebtedness then due shall have been
fully paid and discharged; provided however, unless and until
Hibernia notifies Coushatta LLC at the address noted above that an
Event of Default has occurred under the terms of the Loan
Agreement, Coushatta LLC may continue to receive scheduled
payments from the Tribe under the Subordinated Claims;
(c) That, if any payment(s) is (are) made on account of the
Subordinated Claims contrary to the terms of this Agreement, each
and every amount so paid shall be held in trust by Coushatta LLC
on behalf of Hibernia and Coushatta LLC will promptly pay such
amounts to Hibernia to be credited and applied to any Hibernia
Indebtedness (principal and/or interest) then owing to Hibernia by
the Borrowers whether matured or unmatured;
(d) That any liens, security interests, judgments liens, charges or
other encumbrances upon the assets of each Borrower securing
payment of the Subordinated Claims shall be and remain inferior
and subordinate to any liens, security interests, judgment liens,
charges or other
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encumbrances upon the assets of each Borrower securing payment of
the Hibernia Indebtedness;
(e) If Coushatta LLC forecloses upon any of the Subordinated Claims or
obtains possession of the property of a Borrower in lieu of
foreclosure, all assets of each such Borrower or proceeds thereof
obtained thereby shall be held in trust by Coushatta LLC on behalf
of Hibernia and Coushatta LLC will promptly pay such amounts to
Hibernia to be credited and applied to any Hibernia Indebtedness
(principal and/or interest) then owing to Hibernia by the
Borrowers, whether matured or unmatured;
(f) That, upon any distribution of the assets or readjustment of
indebtedness of either Borrower whether by reason of
reorganization, liquidation, dissolution, bankruptcy,
receivership, assignment for the benefit of creditors, or any
other action or proceeding involving the readjustment of all or
any of the Subordinated Claims, or the application of assets of
either Borrower to the payment or liquidation thereof, either in
whole or in part, Hibernia shall be entitled to receive payment in
full of any and all of the Hibernia Indebtedness then owing to
Hibernia by such Borrower prior to the payment of all or any
portion of the Subordinated Claims; and
(g) Not to transfer, assign, encumber or subordinate at any time while
this Agreement remains in effect, any right, claim or interest of
any kind in or to any of the Subordinated Claims, either principal
or interest, unless such is done expressly subject to the terms
and provisions of this Agreement.
4. This Agreement is complete and effective upon execution by Coushatta
LLC and delivery of this Agreement to Hibernia.
5. This is a continuing Agreement and shall remain in full force and
effect and be binding upon Coushatta LLC and its legal representatives,
successors or assigns, until all of the Hibernia Indebtedness has been
paid in full and the aforesaid Loan Agreement has been terminated.
6. This Agreement shall be deemed to be made under and shall be governed
by the laws of the State of Louisiana in all respects, including
matters of construction, validity and performance.
7. None of the terms or provisions of this Agreement may be waived,
altered, modified or amended except in writing duly signed for and on
behalf of Hibernia and Coushatta LLC.
8. Hibernia will not alter, modify or amend any of the Hibernia Documents
with the prior written consent of Coushatta LLC, which consent will not
be unreasonably withheld.
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IN WITNESS WHEREOF, the undersigned has executed this Agreement before
the undersigned witnesses on the date shown below, but effective as of the
Effective Date.
WITNESSES: GRAND CASINOS OF LOUISIANA, LLC
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By: /s/ Timothy Cope
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Timothy Cope, Its Chief Financial
Officer
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ACCEPTED:
HIBERNIA NATIONAL BANK
By
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, its
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Date:
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STATE OF MINNESOTA,
COUNTY OF __________.
On this day of , 1999, before me
appeared TIMOTHY COPE, to me known, who, being by me duly sworn, did say:
That he is the Chief Financial Officer of GRAND CASINOS OF
LOUISIANA, LLC, Minnesota limited liability company, and that the foregoing
instrument was signed in behalf of said corporation by authority of its Managers
and Members, and said Appearer acknowledged said instrument to be the free act
and deed of said corporation.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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NOTARY PUBLIC in and for
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