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EXHIBIT 10.1
RELEASE AND ASSUMPTION AGREEMENT
This RELEASE AND ASSUMPTION AGREEMENT (the "Agreement") dated
as of December 31, 1998, among Hibernia National Bank ("Bank"), the Coushatta
Tribe of Louisiana (the "Tribe"), the Coushatta Tribe of Louisiana Building
Authority (the "Authority"), Grand Casinos of Louisiana, Inc. -- Coushatta
("GCI"), Grand Casinos, Inc. ("Grand"), Lakes Gaming, Inc., a Minnesota
corporation and a subsidiary of Grand ("Lakes") and Grand Casinos of Louisiana,
LLC-Coushatta, a Minnesota limited liability company and a subsidiary of Lakes
("GCI LLC").
WITNESSETH:
WHEREAS, Bank, entered into that certain Commercial Loan
Agreement dated May 1, 1997 (the "Hotel Loan Agreement") under the terms of
which the Bank agreed to loan to the Tribe and the Authority up to
$25,000,000.00 (the "Hotel Loan") to be used to construct and furnish a hotel
facility, to purchase new gaming equipment, and to make certain renovations, all
as more fully set forth therein;
WHEREAS, in connection with the Hotel Loan, Grand and GCI
executed in favor of the Bank that certain Commercial Guaranty Agreement dated
May 1, 1997 (the "Hotel Loan Guaranty") under the terms of which Grand and GCI
guaranteed up to the maximum sum of $25,000,000.00 of the Hotel Loan Obligations
(herein defined);
WHEREAS, in connection with the Hotel Loan Agreement, Grand
and GCI executed the Hotel Loan Subordination Agreements (herein defined);
WHEREAS, the Bank and the Tribe entered into that certain
Commercial Loan Agreement dated December 17, 1997 (the "First Equipment Loan
Agreement"), under the terms of which the Bank agreed to loan to the Tribe up to
$6,000,000.00 (the "First Equipment Loan") to purchase new gaming equipment and
other assets;
WHEREAS, in connection with the First Equipment Loan
Agreement, Grand and GCI executed the First Equipment Loan Subordination
Agreements (herein defined);
WHEREAS, in connection with the Hotel Loan and the First
Equipment Loan, the Bank, GCI and Grand entered into that certain Intercreditor
Agreement dated as of February 4, 1998 (the "First Intercreditor Agreement");
WHEREAS, the Bank and the Tribe entered into that certain
Commercial Loan Agreement dated as of December 18, 1998 (the "Second Equipment
Loan Agreement"), under the terms of which the Bank agreed to loan to the Tribe
up to $15,000,000.00 (the "Second Equipment Loan") to purchase new gaming
equipment and other assets and to sometime before September 30, 1999, refinance
the First Equipment Loan;
WHEREAS, in connection with the Second Equipment Loan
Agreement, Grand and GCI executed the Second Equipment Loan Subordination
Agreements (herein defined);
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WHEREAS, in connection with the Hotel Loan, the First
Equipment Loan and the Second Equipment Loan, the Bank, GCI and Grand entered
into that certain Second Intercreditor Agreement dated as of December 18, 1998
(the "Second Intercreditor Agreement");
WHEREAS, capitalized terms used herein shall have the meanings
ascribed thereto in the Second Intercreditor Agreement unless otherwise defined
herein;
WHEREAS, pursuant to that certain Merger Agreement dated June
30, 1998 (the "Merger Agreement") among Grand, Lakes, Hilton Hotels Corporation,
a Delaware corporation ("Hilton"), Park Place Entertainment Corporation , a
Delaware corporation and a subsidiary of Hilton ("Park Place"), Gaming
Acquisition Corporation, a Minnesota corporation and a subsidiary of Park Place
(the "Merger Subsidiary"), such parties intend to cause the following
transactions to occur effective as of closing on December 31,1998 (collectively,
the "Grand Transactions"):
(a) all right, title, interest, duties and obligations of Grand and GCI
in, to and under: (i) the Management Agreement (as defined in the Hotel Loan
Agreement), (ii) the Indemnity Agreement, (iii) the Indemnity Collateral
Documents, and (iv) any other security agreements, mortgages, deeds of trust,
contracts, agreements, instruments and documents of whatever nature between or
among the Tribe and/or the Authority and either or both of Grand and/or GCI,
including, without limitation, any debts, liabilities or other obligations owing
by the Tribe and/or the Authority to either or both of Grand and/or GCI, shall
be forever and absolutely assigned to and assumed by Lakes or GCI LLC, as
applicable (the "Assignment Transaction");
(b) GCI shall merge with and into Lakes, with Lakes remaining as the
surviving entity (the "GCI-Lakes Merger");
(c) Hilton will spin-off 100% of the capital stock of Park Place to its
public shareholders;
(d) Grand will spin-off 100% of the capital stock of Lakes to its
public shareholders; and
(e) the Merger Subsidiary shall merge with and into Grand, with Grand
remaining as the surviving entity (the "Park Place-Grand Merger");
WHEREAS, the Tribe has consented to the Grand Transactions and
Grand, GCI, Lakes and GCI LLC are also requesting the consent of the Bank to the
Grand Transactions and to amend the Loan Documents (herein defined) as set forth
herein, including without limitation, the release of GCI from and assumption by
GCI LLC of all obligations of GCI to the Bank under the applicable Loan
Documents to which it is a party; and
WHEREAS, the Bank is willing to grant such consent pursuant to
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the Bank,
the Tribe, the Authority, GCI, Grand, Lakes and GCI LLC agree as follows:
SECTION 1. CONSENT AND WAIVER. The Bank hereby consents to the Grand
Transactions (as described hereinabove) and waives any and all provisions
(including, without limitation, any change in control provisions) contained in
the Loan Documents that would restrict or otherwise give rise to an event of
default under the Loan Documents on account of the Grand Transactions. As used
herein the term
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"Loan Documents" shall individually or collectively, as the
context may require, mean the First Equipment Loan Agreement, the First
Equipment Loan Collateral Documents, the First Equipment Loan Subordination
Agreements, the Second Equipment Loan Agreements, the Second Equipment Loan
Collateral Documents, the Second Equipment Loan Subordination Agreement, the
Hotel Loan Agreement, the Hotel Loan Collateral Documents, the Hotel Loan
Guaranty, the Hotel Loan Subordination Agreements, the First Intercreditor
Agreement, the Second Intercreditor Agreement and all other instruments,
documents and agreements related thereto.
SECTION 2. RELEASE OF GCI AND REAFFIRMATION BY GRAND. Upon the
occurrence of the Release Effective Date (as hereinafter defined), the Bank
shall be deemed to have (a) forever released GCI from all debts, liabilities and
obligations whatsoever now or hereafter owing to the Bank under any of the Loan
Documents, including, without limitation, the Hotel Loan Guaranty, and (b)
terminated each of the First Equipment Loan Subordination Agreements, the Second
Equipment Loan Subordination Agreements and the Hotel Loan Subordination
Agreements (collectively, the "Existing Subordination Agreements") to which GCI
is a party thereto. Grand hereby confirms that each and all of the obligations
of Grand under the Loan Documents, including, without limitation, the Hotel Loan
Guaranty, remain, and will remain, in full force and effect in accordance with
their original terms, without waiver or modification, notwithstanding the
completion of the Grand Transaction. If the Release Effective Date has not
occurred on or before February 1, 1999, the same shall, at the option of the
Bank, constitute a breach of the Hotel Loan Guaranties.
The "Release Effective Date" shall be defined as and be deemed to have occurred
on the date that each of the following agreements and documents shall have been
executed and delivered to the Bank, each in form and substance acceptable to the
Bank (collectively, the "Release Documents"):
(aa) An acknowledgment and certification of Park Place that (i) the
release of Grand from Grand's obligations under the Loan Documents is not a
condition to the completion of the Park Place-Grand Merger, (ii) the Park
Place-Grand Merger has been legally effectuated and Grand has become the
wholly-owned subsidiary of Park Place, and (iii) no material adverse change has
occurred with respect to the post-merger pro forma financial statements of Grand
set forth in that certain Form S-4 Registration Statement of Park Place and
Grand and filed with the Securities and Exchange Commission on October 23, 1998;
(bb) An opinion of counsel of Grand, GCI, Lakes and GCI LLC (which
counsel shall be acceptable to the Bank) that (i) each of such entities (1) is
duly organized and existing under the laws of the state of its incorporation or
organization, and (2) has duly executed and deliver, and has taken all corporate
action necessary to authorize the execution, delivery and performance of, such
documents to the extent it is a party thereto; and (ii) the completion of the
Park Place-Grand Merger in accordance with applicable Minnesota law and the
Merger Agreement will not in and of itself create a defense to enforcement of
the Hotel Loan Guaranty with respect to Grand under Minnesota law;
(cc) Evidence that the Assignment Transaction has been completed;
(dd) Evidence that all Louisiana gaming approvals required in
connection with the Assignment Transaction have been obtained by Lakes and/or
GCI LLC, as applicable;
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(ee) An opinion rendered by Ropes & Xxxx that the approval of the
Bureau of Indian Affairs to the transactions contemplated herein is not required
or advised;
(ff) The Lakes Guaranty and the Lakes Subordinations;
(gg) The GCI LLC Guaranty and the GCI LLC Suboridinations;
(hh) Payment of the costs and expenses by the Bank required by
Section 8.8 hereof.
(ii) Lakes and GCI LLC shall each have executed a counterpart signature
page to the Second Intercreditor Agreement to to incorporate and reflect the
release of GCI, the assumption by Lakes LLC and the addition of the GCI LLC
Guaranty, the GCI LLC Subordination, the Lakes Guaranty and Lakes
Subordinations.
SECTION 3. ASSUMPTION OF GCI OBLIGATIONS. GCI LLC hereby
unconditionally assumes each and every debt, liability and obligation of
whatever nature owing by GCI to the Bank under the Loan Documents, including,
without limitation, the Hotel Loan Guaranty, to the same extent as though GCI
LLC was originally a party thereto. In furtherance thereof, GCI LLC shall
execute and deliver to the Bank prior to the Release Effective Date such
additional documents as may be necessary to evidence or effectuate such
assumption, including, without limitation, the following:
(a) a Commercial Loan Guaranty pursuant to which GCI LLC shall guaranty
the payment of the Hotel Loan on terms and conditions substantially
similar to the Hotel Loan Guaranty (the "GCI LLC Guaranty"); and
(b) a Subordination Agreement pursuant to which GCI LLC shall grant
debt subordinations to the Bank on terms substantially similar to the
Existing Subordination Agreements (the "GCI LLC Subordinations").
SECTION 4. GUARANTY AND SUBORDINATION OF LAKES. To induce the Bank to
enter into this Agreement, Lakes hereby agrees to execute and deliver to the
Bank prior to the Release Effective Date the following:
(a) a Commercial Loan Guaranty, pursuant to which Lakes shall guaranty
the payment of the Hotel Loan on terms and conditions substantially
similar to the Hotel Loan Guaranty (the "Lakes Guaranty"); and
(b) a Subordination Agreement, pursuant to which Lakes shall grant debt
subordinations to the Bank on terms substantially similar to the
Existing Subordination Agreements (the "Lakes Subordinations").
SECTION 5. FURTHER ASSURANCES. Each of the parties hereto agrees that
upon the request of any other party it shall execute and deliver such additional
agreements and documents as may be reasonably necessary to effectuate the
intents and purposes of this Agreement,.
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SECTION 6. EFFECT OF THIS AGREEMENT.
6.1 The foregoing provisions shall supersede any provisions to
the contrary contained in the Loan Documents. Except as expressly set forth
hereinabove, this Agreement shall not alter, change or modify the terms of or
the effects of the Loan Documents.
6.2 This Agreement shall not be binding upon the parties
hereto and shall not become effective (the "Effective Date") until such time as
(a) the Bank, the Tribe, the Authority, Grand, GCI, Lakes and GCI LLC have
signed this Agreement and (b) Grand shall have delivered to the Bank by
facsimile or otherwise a written notice confirming that the proposed Park
Place-Grand Merger has been commenced and is in a position to concurrently close
with the transactions contemplated by this Agreement.
SECTION 7. MISCELLANEOUS.
7.1 Notices. Except as otherwise provided herein, any notice
or demand which, by provision of this Agreement, is required or permitted to be
given or served by a party shall be deemed to have been sufficiently given and
served for all purposes: (a) (if mailed) seven (7) calendar days after being
deposited, postage prepaid, in the United States Mail, registered or certified
mail; or (b) (if delivered by express courier) one Business Day after being
delivered to such courier; or (c) (if delivered in person) the same day as
delivery or until another address or addresses are given in writing by a party
to the other parties as follows:
To GCI LLC: Grand Casinos of Louisiana, LLC.- Coushatta
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: President
Fax: (000) 000-0000
To Lakes: Lakes Gaming, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: President
Fax: (000) 000-0000
To Grand: Grand Casinos, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: President
Fax: (000) 000-0000
To Bank: Hibernia National Bank
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Legal Administration Department
Fax: (000) 000-0000
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To Tribe: The Coushatta Tribe of Louisiana
X.X. Xxx 000
Xxxxx, XX 00000
Attention: Lovelin Poncho
Fax: (000) 000-0000
7.2 Governing Law. This Agreement shall be construed in
accordance with and governed the laws of the State of Louisiana.
7.3. Severability. If any provision of this Agreement is
prohibited by, or is unlawful or unenforceable under, any applicable law of any
jurisdiction, such provision shall, as to such jurisdiction, be ineffective to
the extent of such prohibition without invalidating the remaining provisions
hereof.
7.4 Captions. Captions herein are for convenience only and
shall not be deemed part of this Agreement.
7.5 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their respective successors and
assigns.
7.6 Amendments. This Agreement may not be amended, modified,
waived, canceled or terminated, except in writing executed by all of the parties
hereto.
7.7 Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which when executed and
delivered shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
7.8 Expenses. All attorneys fees, costs and expenses of the
Bank associated with the preparation, execution and delivery of this Agreement
and the Release Documents shall be jointly and severally paid by Grand, GCI,
Lakes and GCI LLC prior to the Release Effective Date.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
HIBERNIA NATIONAL BANK
By: /s/ Xxxxxxxxxxx X. Xxxxxx
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Xxxxxxxxxxx X. Xxxxxx
Assistant Vice President
COUSHATTA TRIBE OF LOUISIANA
By: /s/ Lovelin Poncho
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Lovelin Poncho
Chairman
COUSHATTA TRIBE OF LOUISIANA
BUILDING AUTHORITY
By: /s/ Lovelin Poncho
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Lovelin Poncho
Chairman
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GRAND CASINOS OF LOUISIANA, INC. -
COUSHATTA
By: /s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx, its Chief Financial Officer
GRAND CASINOS OF LOUISIANA, LLC -
COUSHATTA
By: /s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx, its Chief Financial Officer
GRAND CASINOS, INC.
By: /s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx, its Chief Financial Officer
LAKES GAMING, INC.
By: /s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx, its Chief Financial Officer
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EXHIBIT A
(ATTACH LAKES AMENDMENT TO INTERCREDITOR AGREEMENT)
