Exhibit 10.3
TRUST AGREEMENT
This Trust Agreement is made this 24th day of July, 2001 (this
"AGREEMENT" or this "TRUST"), by and between ARGOSY GAMING COMPANY, a Delaware
corporation ("ARGOSY"), and LASALLE BANK NATIONAL ASSOCIATION, a national
banking association (the "TRUSTEE").
WHEREAS, the ILLINOIS GAMING BOARD, a board established within the
Illinois Department of Revenue (the "BOARD"), is authorized to regulate
riverboat gambling in Illinois pursuant to the Illinois Riverboat Gambling Act,
230 ILCS 10/1 et seq., and the rules promulgated thereunder (collectively, the
"ACT");
WHEREAS, Alton Gaming Company, a wholly-owned subsidiary of Argosy, is
the holder of an Owner's License (as defined below) for a riverboat gambling
operation in Alton, Illinois (the "ALTON CASINO");
WHEREAS, Empress Casino Joliet Corporation ("EMPRESS"), a wholly-owned
subsidiary of Horsehoe Gaming Holding Corp. ("HORSESHOE"), is the holder of an
Owner's License for a riverboat gambling operation in Joliet, Illinois (the
"EMPRESS CASINO");
WHEREAS, on April 12, 2001, Argosy and Horseshoe entered into an
Agreement and Plan of Merger (the "MERGER AGREEMENT"), a copy of which has been
delivered to the Board, pursuant to which Argosy, through a wholly-owned
subsidiary, agreed to merge with Empress so that Empress shall become a
wholly-owned subsidiary of Argosy (the "MERGER"), subject to the terms and
conditions set forth in the Merger Agreement, including approval of the Merger
by all appropriate regulatory authorities;
WHEREAS, following the Merger, Argosy, through its subsidiaries, will own
the Alton Casino and the Empress Casino;
WHEREAS, Argosy has sought approval from the Board for the Merger;
WHEREAS, Illinois Public Act 91-40, adopted in 1999, amended certain
portions of the Act (the "AMENDMENTS") by, among other amendments, deleting
Section 7(a)(7) (the "SECTION 7(a)(7) DELETION"), which previously provided
that, "[a] person, firm or corporation is ineligible to receive an owner's
license if... the person, firm or corporation owns more than a 10% ownership
interest in any entity holding an owner's license issued under [the] Act";
WHEREAS, on October 8, 1999, a lawsuit (Case No. 99 MR 793) was filed in
the Circuit Court of the Nineteenth Judicial Circuit, Lake County, Illinois (the
"LAWSUIT"), challenging the constitutionality of certain provisions of Public
Act 91-40;
WHEREAS, if the Lawsuit is successful, all or certain portions of the
Amendments could be ruled invalid;
WHEREAS, the Board has expressed concern over approving the Merger in
light of the Lawsuit and the possibility the Section 7(a)(7) Deletion may be
reinstated due to all or part of Public Act 91-40 being found invalid;
WHEREAS, Argosy and the Board desire to minimize disruption and
diminution in value of the Empress Casino if the Section 7(a)(7) Deletion is
reinstated;
WHEREAS, the Board desires that Argosy prepare for the contingency that
the Section 7(a)(7) Deletion may be reinstated and Argosy has agreed to
voluntarily transfer into trust the Trust Property (as defined below), relating
to the Empress Casino in the event that the Section 7(a)(7) Deletion is
reinstated;
WHEREAS, on the date hereof, Argosy and the Board have entered into a
Transfer of Ownership Agreement (the "TRANSFER OF OWNERSHIP AGREEMENT"),
attached hereto as EXHIBIT A, wherein Argosy agreed to execute and the Board
agreed to approve this Agreement, and Argosy agreed to allow the Trustee to hold
the Trust Property in the event that the Section 7(a)(7) Deletion is reinstated;
and
WHEREAS, the Trustee has indicated that it is willing and able to serve
as Trustee pursuant to this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING PREMISES, THE MUTUAL
AGREEMENTS AND COVENANTS HEREINAFTER CONTAINED AND FOR OTHER GOOD AND VALUABLE
CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE
PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS.
1.1. The following terms shall have the following meanings when
used in this Agreement:
"ARGOSY CERTIFICATE" shall mean a certificate in substantially the
form attached hereto as EXHIBIT C, signed by an authorized officer of Argosy,
which shall be issued only with the prior approval of the Board, directing the
Trustee to take a particular action in accordance with the terms of this
Agreement.
"BOARD CERTIFICATE" shall mean a certificate in substantially the
form attached hereto as EXHIBIT B, signed by the Administrator of the Board,
directing the Trustee to take a particular action in accordance with the terms
of this Agreement.
"DIRECTORS LIST" shall mean the list of individuals, attached
hereto as EXHIBIT E, approved by Argosy and Empress to fill vacancies on the
board of directors of Empress in accordance with (and only in accordance with)
SECTION 4.4.2 of this Agreement. The Directors List may be amended from time to
time in writing signed by Argosy, Empress and the Board.
"EMPRESS CERTIFICATE" shall mean a certificate in substantially
the form attached hereto as EXHIBIT D, signed by either the President, Secretary
or Assistant Secretary of Empress, which shall be issued to the Board and the
Trustee, directing the Trustee to take a particular
2
action.
"OWNER'S LICENSE" shall mean an Illinois riverboat gambling
owner's license, issued in accordance with the Act.
"TRUSTEE" shall mean LaSalle Bank National Association, a national
banking association, or a successor appointed in accordance with the terms of
this Agreement.
"TRUST PROPERTY" shall mean all of the shares of Empress owned by
Argosy.
"VOTING RIGHTS" shall mean the voting rights which accompany the
Trust Property.
Capitalized terms not otherwise defined herein shall have the
meaning ascribed thereto in the Transfer of Ownership Agreement.
2. ACCEPTANCE OF OBLIGATIONS.
2.1. ACCEPTANCE OF OBLIGATIONS. The Trustee hereby accepts its
obligations as Trustee in accordance with the terms of this Agreement and the
Transfer of Ownership Agreement.
3. QUALIFICATIONS OF TRUSTEE.
3.1. QUALIFICATIONS OF TRUSTEE.
3.1.1. The Trustee is a national banking association,
qualified to act as a trustee under Illinois law. If the Trustee at any time is
no longer qualified to act as Trustee in accordance with the terms of this
Agreement, it shall resign in accordance with SECTION 5.2 of this Agreement.
3.1.2. The Trustee agrees that if it is notified in writing
that Argosy has violated the terms of this Agreement, it will immediately notify
the Board.
4. TRUSTEE'S DUTIES, POWERS AND ADMINISTRATION OF TRUST.
4.1. POWERS OF THE TRUSTEE. The Trustee shall have, in addition
to all powers granted by law, all rights incident to the ownership of the Trust
Property, and shall be vested with all powers, authority, and duties necessary
to the exercise of such rights. This grant of powers to the Trustee is not
intended to supersede any duties imposed on the Trustee by SECTION 4.2 of this
Agreement.
4.2. TRUSTEE'S DUTIES. On execution of this Agreement, and upon
the transfer of all or a portion of the Trust Property into the Trust, the
Trustee's duties shall include, but shall not be limited to, the following:
(a) accepting the transfer into its name of the stock
certificates associated with the Trust Property and
executing such documents as shall be requested by
3
the Agent to evidence its continuing lien upon the Trust
Property;
(b) keeping records of all of its business and transactions as
Trustee under this Agreement and making such records
available to the Board (Argosy expressly consents to the
Trustee allowing the Board to view the Trustee's records of
its business as Trustee);
(c) upon receipt of an Argosy Certificate properly completed,
endorsing and transferring all or a part of the stock
certificates associated with the Trust Property to the
Agent, or such other party or parties as may be designated
by Argosy;
(d) upon receipt of an Argosy Certificate properly completed,
endorsing and transferring all or a part of the stock
certificates associated with the Trust Property to the
shareholders of Argosy or other parties following a spin-off
or an initial public offering of the Trust Property;
(e) providing the Board any information the Board deems
reasonably necessary for it to ascertain the Trustee's
compliance with the terms of this Agreement and all
applicable rules and laws;
(f) retaining any property transferred to the Trustee, without
liability for any loss;
(g) voting, in person or by proxy, the Voting Rights, in
accordance with (and only in accordance with) SECTION 4.4 of
this Agreement;
(h) taking all other action necessary to fulfill its
obligations and duties as specifically set forth in this
Agreement; and
(i) notifying Argosy and the Board in writing of any action
it takes in accordance with the terms of this SECTION 4.2
within two (2) business days of its having taken such
action.
4.3. FIDUCIARY DUTY OF TRUSTEE. The Trustee shall exercise its
rights and powers and discharge its duties pursuant to this Agreement with
reasonable care, skill and diligence.
4.4. VOTING. The Trustee shall exercise the Voting Rights under
the following circumstances and in the following manner:
4.4.1. Upon receipt of a Board Certificate properly
completed, the Trustee shall exercise the Voting Rights in the manner authorized
by the Board certified resolutions attached to such Board Certificate.
4.4.2. Upon receipt of an Empress Certificate properly
completed, indicating that all of Empress's board of director positions are
simultaneously vacant (whether due to the death, resignation or removal of the
directors or otherwise), the Trustee shall exercise
4
the Voting Rights to electone or more directors (which number shall be equal to
the number of directors serving on the board prior to the vacancies, as
specified in the Empress Certificate). The Trustee shall vote to elect the first
one or more, as applicable, individuals listed on the Directors List (in the
order so listed) to become the new member(s) of the board of directors of
Empress.
5. TRUSTEE AND RELATED PROVISIONS.
5.1. REMOVAL OF TRUSTEE. The Board shall have the right at any
time to remove the Trustee for cause.
5.2. RESIGNATION OF TRUSTEE. The Trustee shall have the right to
resign as Trustee under this Agreement on thirty (30) days' written notice to
Argosy, Empress and the Board; provided, however, that the resignation by the
Trustee shall not be effective unless and until a successor trustee has been
appointed and installed. Any successor trustee so appointed shall meet the
qualifications set forth in SECTION 5.3 of this Agreement and shall be subject
to the approval of Argosy and the Board. If no successor trustee shall have been
so appointed, installed and approved within thirty (30) days after the Trustee
issues its notice of resignation, the Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, which
successor trustee shall meet the requirements set forth in SECTION 5.3 of this
Agreement.
5.3. SUCCESSOR TRUSTEE. In the event of a vacancy, Argosy may
propose a successor trustee, subject to the approval of the Board. If no such
successor trustee is proposed within five (5) business days of the
disqualification, resignation, or removal of the Trustee in accordance with the
terms of this Agreement, the Board shall be empowered to appoint as a successor
trustee any corporation that has trust powers under Illinois law, or which is a
national bank with capital and surplus in excess of five million dollars
($5,000,000). The successor trustee shall promptly execute and deliver to Argosy
and the Board a copy of this Agreement. On the disqualification, resignation, or
removal of the Trustee in accordance with the terms of this Agreement, the Trust
Property shall be transferred to the successor trustee, and it shall hold the
Trust Property, and shall have all of the powers, authorities, rights,
discretions, immunities, estates, titles, duties and obligations of the original
Trustee, without the necessity of any conveyance or the taking or any action
whatsoever.
5.4. MERGER OR CONSOLIDATION. Any company into which the Trustee
may be merged or converted or with which it may be consolidated or any company
resulting from any merger, conversion or consolidation to which it shall be a
party or any company to which all or substantially all of the corporate trust
business of the Trustee may be sold or transferred, shall be the successor to
the Trustee and be bound to the obligations and duties of the Trustee pursuant
to this Agreement without the execution or filing of any paper or the
performance of any further act, unless such successor delivers written notice of
its resignation pursuant to SECTION 5.2 of this Agreement; provided, however,
that any such successor must satisfy the requirements set forth in SECTION 5.3
of this Agreement.
5.5. LIABILITY OF TRUSTEE. The Trustee shall incur no
responsibility to Argosy, as holder of the Trust Property or otherwise, except
in instances in which an action or omission constitutes gross negligence or
willful misconduct.
5
5.6. WAIVER OF BOND AND JUDICIAL SUPERVISION. The Trustee shall
not be required to obtain the approval of any court in the exercise of any power
or discretion herein conferred upon the Trustee, unless such authority or
approval is specifically required by law and may not be hereby waived. The
Trustee shall not be required, in the absence of overriding statute or order, to
make any report or accounting to any court, or to furnish any bond or security
thereon for the proper performance of the Trustee's duties.
5.7. TRUSTEE'S RELIANCE ON DOCUMENTS AND LEGAL COUNSEL. In taking
any action whatsoever hereunder, the Trustee may rely and shall be protected in
relying upon any notice, certificate, affidavit, or other paper or document
believed by the Trustee to be genuine, any evidence deemed by the Trustee to be
sufficient, and the opinion of legal counsel.
5.8. COMPENSATION OF TRUSTEE. In consideration for its services
as trustee pursuant to this Agreement, the Trustee shall be entitled to receive
from Empress the compensation set forth in EXHIBIT F attached hereto, as well as
the reimbursement of all reasonable out-of-pocket expenses (as described in
EXHIBIT F) actually incurred by the Trustee in the performance of its duties
pursuant to this Agreement, subject to approval in advance by Empress. If the
Trustee performs extraordinary services, it shall be entitled to reasonable
extra compensation therefor, and to reimbursement for reasonable extraordinary
expenses in connection therewith, including reasonable attorneys' fees,
provided, that if such extraordinary services or extraordinary expenses are
occasioned by the Trustee's negligence or willful default, it shall not be
entitled to payment and reimbursement for such extraordinary services and
extraordinary expenses.
5.9. INDEMNIFICATION OF TRUSTEE. Argosy agrees to indemnify and
hold harmless the Trustee to the fullest extent permitted by law from and
against all taxes (other than taxes based on income), suits, actions, claims,
losses, damages, expenses (including reasonable legal fees), penalties,
assessments, liabilities, or other charges incurred by or assessed against the
Trustee arising out of any action or omission in connection with the performance
of its duties under this Agreement, except in instances in which an action or
omission constitutes gross negligence or willful misconduct. The rights of the
Trustee under this Section shall survive the termination of this Agreement
regardless of whether any taxes (other than taxes based on income), suits,
actions, claims, losses, damages, expenses, penalties, assessments, liabilities,
or other charges are incurred or assessed prior or subsequent to the termination
of this Agreement.
5.10. RIGHTS OF THE TRUSTEE. The Trustee shall have no duties or
responsibilities except those expressly set forth herein.
6. MISCELLANEOUS.
6.1. TERMINATION OF TRUST AGREEMENT. This Agreement and the Trust
that it creates shall automatically terminate at any time that all of the Trust
Property is transferred or distributed out of the Trust in accordance with an
Argosy Certificate.
6.2. DUTIES OF ARGOSY. Argosy shall notify the Trustee
immediately on the occurrence of a Trigger Event or a Reverse Trigger Event, as
those terms are defined in the Transfer of Ownership Agreement, and shall
cooperate with all necessary parties to accomplish
6
the transfer of the Trust Property to the Trustee.
6.3. EFFECTIVE DATE OF TRUST. The Trust instituted by this
Agreement shall become effective following the execution of this Agreement by
the parties, the final approval of this Agreement by the Board, the delivery of
all necessary documents and the transfer of all or a part of the Trust Property
into the Trust in accordance with the terms of this Agreement, but in no event
shall the Trust Property be transferred to the Trustee prior to the occurrence
of a Trigger Event, as that term is defined in the Transfer of Ownership
Agreement.
6.4. BENEFITS OF AGREEMENT. Nothing in this Agreement, expressed
or implied, shall give to any person, other than Argosy, the Trustee or the
Board and their permitted successors and assigns, any benefit or any legal or
equitable right, remedy, or claim under this Agreement.
6.5. ASSIGNABILITY. Neither Argosy nor the Trustee shall assign
their rights under this Agreement without the prior written consent of the other
party and the Board.
6.6. AMENDMENT; WAIVER. This Agreement may not be amended,
modified, or supplemented, nor may any provisions of this Agreement be waived,
discharged, or revoked, without the prior written consent of Argosy, the Board
and the Trustee.
6.7. HEADING. The various headings of the Sections of this
Agreement are for reference purposes only and shall in no way affect the meaning
or interpretation of this Agreement.
6.8. INVALIDITY. The invalidity of any provision of this
Agreement shall not be deemed to impair or affect in any manner the validity or
enforceability of the remainder of this Agreement.
6.9. PERFORMANCE. Argosy may perform any of its obligations or
duties pursuant to this Agreement through one or more subsidiaries, in its
discretion, subject to the prior approval of the Board.
6.10. NOTICES. All notices required hereunder shall be in writing
and shall be deemed properly served if delivered in person, by facsimile or if
sent by registered or certified mail, with postage prepaid and return receipt
requested, to the following addresses (or to such other addresses as either
party may subsequently designate):
If to Argosy: Argosy Gaming Company
000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Telecopy: (000) 000-0000
With a copy to:
Xxxxx Fargo Bank, National Association
0000 Xxxxxxx Xxxx, Xxxxx 000
0
Xxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
If to the Trustee: LaSalle Bank National Association
000 X. XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. XxXxxxxx
Telecopy: (000) 000-0000
If to the Board: Illinois Gaming Board
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Administrator
Telecopy: (000) 000-0000
All notices required hereunder shall be deemed received on the date of delivery,
or attempted delivery, if delivered in person, or if sent by facsimile, on the
date such facsimile is sent, or if mailed, on the date which is two (2) days
after the date such notice is deposited in the mail.
6.11. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when executed and delivered shall be an original and
both of which together will constitute the same Agreement.
6.12. VARIATIONS IN PRONOUNS. All pronouns and any variations
thereof refer to the masculine, feminine, or neuter, singular or plural, as the
identity of the person or persons may require.
6.13. WAIVERS. No delay on the part of any party in exercising any
right, power, or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any right, power, or privilege
hereunder, nor any single or partial exercise of any right, power, or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
right, power, or privilege hereunder. The rights and remedies provided herein
are cumulative and are not exclusive of any rights or remedies that any party
may otherwise have at law or in equity.
6.14. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of Illinois, including the Act, and
nothing herein shall be construed to limit the rights of Argosy, Empress, the
Board or the Trustee to take any action required or permitted by law.
* * * * *
8
IN WITNESS WHEREOF, Argosy and the Trustee have caused this Agreement to
be executed and delivered as of the date first above written.
ARGOSY GAMING COMPANY
By: /s/ Xxxx X. Xxxxx
---------------------------------
Its: Senior Vice President and CFO
Date:
-------------------------------
LASALLE BANK NATIONAL ASSOCIATION
By:
---------------------------------
Its: First Vice President
Date:
-------------------------------
9
EXHIBIT A
TRANSFER OF OWNERSHIP AGREEMENT
A-1
EXHIBIT B
FORM OF BOARD CERTIFICATE
LaSalle Bank National Association, as Trustee
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. XxXxxxxx
Pursuant to its regulatory authority, the Illinois Gaming Board (the
"BOARD") through its Administrator, the undersigned, hereby directs you, as
Trustee, pursuant to that certain Trust Agreement between Argosy Gaming Company
and LaSalle Bank National Association, as approved by the Board, dated as of
July 24, 2001 (the "TRUST AGREEMENT"), to vote the shares of Empress in
accordance with the certified resolutions of the Board dated [___________], a
copy of which is attached hereto. Any capitalized term used herein and not
defined shall have its respective meaning as set forth in the Trust Agreement.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Board
Certificate as of the [_____] day of [_______________], [_________].
ILLINOIS GAMING BOARD
By:
---------------------------------
Its:
--------------------------------
B-1
EXHIBIT C
FORM OF ARGOSY CERTIFICATE
LaSalle Bank National Association, as Trustee
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. XxXxxxxx
The undersigned, a duly authorized officer of Argosy Gaming Company,
("ARGOSY"), hereby directs you, as Trustee, pursuant to that certain Trust
Agreement between Argosy and LaSalle Bank National Association, as approved by
the Illinois Gaming Board, dated as of July 24, 2001 (the "TRUST AGREEMENT"), to
take the action(s) outlined herein. Any capitalized term used herein and not
defined shall have its respective meaning as set forth in the Trust Agreement.
Upon receipt of this Argosy Certificate, you are directed, pursuant to
Section of the Trust Agreement, to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Approval from the Illinois Gaming Board (the "BOARD") for Argosy to issue
this Argosy Certificate to the Trustee was obtained from the Board on the [____]
day of [___________], [________].
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Argosy Certificate as of the [_______] day of [____________], [________].
ARGOSY GAMING COMPANY
By:
---------------------------------
Its:
--------------------------------
C-1
EXHIBIT D
FORM OF EMPRESS CERTIFICATE
LaSalle Bank National Association, as Trustee
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. XxXxxxxx
The undersigned, the [President][Secretary][Assistant Secretary] of
Empress Casino Joliet Corporation ("EMPRESS"), hereby certifies that all of
Empress's Board of Director positions are simultaneously vacant as of the date
hereof.
The undersigned hereby directs you, as Trustee, pursuant to that certain
Trust Agreement between Argosy Gaming Company and LaSalle Bank National
Association, as approved by the Illinois Gaming Board, dated as of July 24, 2001
(the "TRUST AGREEMENT"), to take the action(s) outlined herein. Any capitalized
term used herein and not defined shall have its respective meaning as set forth
in the Trust Agreement.
Upon receipt of this Empress Certificate, you are directed, pursuant to
SECTION 4.4.2 of the Trust Agreement, to exercise the Voting Rights to elect the
first individual listed (in the order so listed) on Exhibit E of the Trust
Agreement to become the new member of the board of directors of Empress.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Empress Certificate as of the [______] day of [_________], [__________].
EMPRESS CASINO JOLIET CORPORATION
By:
---------------------------------
Its: [President] [Secretary]
[Assistant Secretary]
cc: Administrator, Illinois Gaming Board
D-1
EXHIBIT E
DIRECTORS
1. Xxxxx X. Xxxxxxxxxxx
2. Xxxxxxx X. Xxxxxxx
3. F. Xxxxx Xxxxxx
E-1
EXHIBIT F
TRUSTEE
SCHEDULE OF FEES
Acceptance Fee: $500.00
Annual Administration Fee: $2,500.00
The Acceptance Fee and the first year's Annual Administration Fee (for
the year ending _________, 2002) are due upon execution of the Trust Agreement.
All reasonable out-of-pocket expenses will be billed at the Trustee's
cost. Out-of-pocket expenses include, but are not limited to, professional
services (e.g., legal or accounting), travel expenses, telephone and facsimile
transmission costs, postage (including express mail and overnight delivery
charges), and copying charges.
F-1
