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                                                                   EXHIBIT 10.5

                               TRUST AGREEMENT


     This TRUST AGREEMENT (this "Agreement"), dated as of _____________, 1998,
is entered into by and among GCI LAKES, INC., a Minnesota corporation
("Lakes"), GRAND CASINOS, INC., a Minnesota corporation ("Company"), and
_____________________________________, a New York banking corporation with
offices at _____________________________________, as Trustee (the "Trustee").

                                    RECITALS

     A. Lakes and Company have entered into a Distribution Agreement, dated as
of ____________, 1998 and certain ancillary agreements thereto (collectively,
the "Distribution Agreement"), which provide for, among other things, (i) the
transfer by Company to Lakes of all of the operations, assets and liabilities
of Company and its subsidiaries comprising the Non-Mississippi Business (as
defined therein) and (ii) the distribution (the "Distribution") to the holders
of Company's common stock of all of the outstanding shares of Lakes' common
stock.

     B. Lakes, Company, Hilton Hotels Corporation, Gaming Co., Inc. and Gaming
Acquisition Corporation ("Merger Sub") have entered into an Agreement and Plan
of Merger, dated as of June 30, 1998 (the "Merger Agreement" and, together with
the Distribution Agreement, the "Agreements"), which provides for, among other
things, the merger of Merger Sub with and into Company (the "Merger") with
Company as the surviving corporation.

     C. The Agreements provide that Lakes shall indemnify, save and hold
harmless Company and certain of its related parties, with respect to certain
matters upon the terms and subject to the conditions provided in the respective
Agreements and that as a source of payment therefor (and not in lieu thereof) a
trust estate shall be established for the protection of Company, its affiliates
and subsidiaries.

     D. A material condition to the consummation of the transactions
contemplated by both of the Agreements is that the parties hereto enter into
this Agreement and that Lakes, Company and the Trustee enter into a Pledge and
Security Agreement of even date (the "Pledge and Security Agreement").

     E. The Trustee has agreed to hold the Trust Estate (as defined herein) in
accordance with the terms and provisions contained herein, which Trust Estate
shall be held for the benefit of Company with a reversionary interest in Lakes.

                                   AGREEMENT

     In consideration of the foregoing and the mutual promises contained herein
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the parties, intending to be legally bound, hereby
agree as follows:


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     1. Defined Terms.

     For purposes of this Agreement:

     "Action"  means any action, claim, suit, arbitration, inquiry, proceeding
or investigation by or before any court, any governmental or other regulatory
or administrative agency or commission or any arbitration tribunal.

     "cash" means United States Dollars in such form as may, at the time, be
legal tender for the payment of debts in the United States.

     "Cash Equivalents" means Short-Term Treasuries or Joint Approval Cash
Equivalents.

     "Claim" has the meaning set forth in Section 5(a).

     "Counter Notice" has the meaning set forth in Section 5(a).

     "Event of Default" has the meaning assigned in the Pledge and Security
Agreement.

     "Joint Approval Cash Equivalents" means United States Dollar indebtedness
in any of the following forms, if and to the extent the Trustee has been
directed to invest in such indebtedness in a joint written investment direction
signed both by the Representative and by the Indemnitee's Agent:  (i) the
outstanding short-term debt Securities of any corporation so long as such debt
securities are rated at least "A" by Standard & Poor's Corporation and are not
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act of 1933, as amended, (ii) marketable direct obligations
guaranteed by the United States Government and backed by the full faith and
credit of the United States, issued after July 18, 1984 and maturing within 90
days from the date of acquisition thereof, (iii) marketable direct obligations
issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing
within 90 days from the date of acquisition thereof and, at the time of
acquisition, having a rating in one of the two highest rating categories
obtainable from either Standard & Poor's Corporation or Moody's Investors
Service, Inc. (or, if at any time, neither of such rating services shall be
rating such obligations, then from such other nationally recognized rating
services as may be acceptable to Company), (iv) certificates of deposit
maturing within 90 days from the date of acquisition thereof and issued by any
commercial bank which accepts deposits insured by the Federal Deposit Insurance
Corporation and which has a combined capital and surplus greater than $500
million and a long term certificate of deposit rating in one of the two highest
rating categories obtainable from either Standard & Poor's Corporation or
Moody's Investors Service, Inc. (or, if at any time, neither of such rating
services shall be rating such obligations, then from such other nationally
recognized rating services as may be acceptable to Company) (any such
commercial bank, an "Acceptable Bank"); (v) repurchase agreements, Eurodollar
deposits and bankers acceptances maturing within 90 days from the date of
acquisition thereof and issued by an Acceptable Bank; (vi) investments in money
market funds that invest solely in (a) Short-Term Treasuries or repurchase
agreements 

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secured by Short-Term Treasuries or (b) Joint Approval Cash Equivalents of the
type described in clauses (i) and (ii) above or repurchase agreements secured by
such Joint Approval Cash Equivalents; or (vii) any other instrument that is
specifically approved in writing by Lakes and Company, if the Trustee receives
opinions of counsel reasonably satisfactory to it stating that such writing has
been duly authorized, executed and delivered by each of them and is binding upon
and enforceable against each of them.  Notwithstanding the foregoing provisions
of this definition, any investment or security which otherwise would be a Joint
Approval Cash Equivalent but for the fact such investment or security has a
maturity date more than 90 days after the acquisition thereof, shall be deemed a
Joint Approval Cash Equivalent if it is otherwise convertible, at the option and
discretion of Trustee, into cash within 90 days of the date that the Trustee
provides a conversion notice to the issuer of the security.

     "Liabilities"  means any and all debts, liabilities and obligations,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, including all costs
and expenses relating thereto, and including, without limitation, those debts,
liabilities and obligations arising under any law, rule, regulation, Action,
threatened Action, order or consent decree of any governmental entity or any
award of any arbitrator of any kind, and those arising under any contract,
commitment or undertaking.

     "Notice" has the meaning set forth in Section 5(a).

     "Polo Plaza Project Liabilities" means any and all Liabilities relating to
or arising from the Nevada Resort Properties Polo Plaza Limited Partnership or
the purchase and/or development of the properties commonly known as the Polo
Plaza Property, the Shark Club Property, the Travelodge Property and the Cable
Center Property, including, but not limited to any and all Liabilities under
the Polo Plaza Partnership Purchase Agreement, dated as of October 3, 1996, by
and among Grand Casinos Nevada I, Inc. ("Nevada Sub") and Cloobeck Enterprises,
Normie Gagerman, Stephen J. Cloobeck, Polo Limited Group, Polo Limited Group
II, Samuel S. Lionel, and Bette Sawyer; Consulting Agreement by and between
Nevada Sub and Stephen J. Cloobeck, dated as of July 12, 1996; Consulting
Agreement by and among Nevada Sub and Nevada Resort Properties Polo Plaza
Limited Partnership (the "Polo Partnership") and Cloobeck Enterprises, dated as
of July 12, 1996; Polo Plaza FINOVA (Construction) Loan Agreement, dated as of
April 16, 1993, by and between Greyhound Financial Corporation, as Lender and
the Polo Partnership, as Borrower; Leasehold Termination Agreement, dated as of
June 23, 1997, by and among Cloobeck Enterprises, the Polo Partnership and
Nevada Sub; Ground Lease, dated as of July 31, 1996, by and between MacGregor
Income Properties West I, Inc. and Cloobeck Enterprises; Option Agreement,
dated as of October 3, 1996, by and among the Polo Partnership, Cloobeck
Enterprises and Nevada Sub; Option Agreement, dated as of October 3, 1996, by
and among Polo Partnership, Cloobeck Enterprises and Nevada Sub; Brooks Family
Trust Lease, dated as of June 17, 1996, by and among Nevada Sub and Cloobeck
Enterprises, as Tenants, and the Brooks Family Trust and Nevada Brooks Cook, as
Landlords; Assignment of Lease, dated as of September __, 1996, whereby
Cloobeck Enterprises assigned its rights and obligations under the Brooks Lease
to Nevada Sub; Guaranty, dated as of June 17, 1996, by Company in favor of
Brooks Landlords; Lease Termination Agreement, dated as of October 29, 1997, by
and between Nevada Sub (as successor Lessor) and Chartwell Vegas Corp. (as
successor Lessee); Lease 

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Agreement, dated as of May 1, 1992, by and between Brooks Family Trust, as
Lessor and Moving Forward, Inc., as Lessee, as amended; Hotel Management
Agreement, dated as of February 1, 1998, by and between Nevada Sub and Chartwell
Lodging, Inc., as Manager; and the Option Agreement, dated as of November 1,
1997, by and among Martin J. Cable and Olga B. Cable, as Trustees of the Cable
Family Trust and Nevada Sub.

     "Short-Term Treasuries" means United States Dollar indebtedness consisting
of marketable direct obligations issued by the United States Government or any
agency thereof and backed by the full faith and credit of the United States, in
the form of Book-entry Securities maintained by the Trustee or any nominee
acting for it, solely in its name, in an account at the Federal Reserve Bank of
New York under the Treasury/Reserve Automated Debt Entry System, issued after
July 18, 1984 and maturing within 90 days from the date of acquisition thereof.

     "Stratosphere Liabilities" has the meaning set forth for such term in the
Distribution Agreement.

     "Tax Liabilities" all Liabilities of Lakes arising out of its
indemnification obligations under that certain Tax Allocation and Indemnity
Agreement, dated ________, 1998, between Company and Lakes, to the extent such
indemnification obligations are not satisfied pursuant thereto.

     "Termination Date" has the meaning set forth in Section 6.

     2.  Declaration of Trust.  As a non-exclusive source of payment with
respect to the observance and performance by Lakes of each and all of its
present and future indemnities, liabilities and obligations at any time arising
under, pursuant to or in respect of any of the Agreements (collectively, the
"Indemnification Obligations"), and the covenants and conditions of this
Agreement and the Pledge and Security Agreement (collectively, including the
Indemnification Obligations, the "Secured Obligations"), Company grants and
transfers to the Trustee to hold, and the Trustee is hereby authorized and
directed by Lakes to accept, and the Trustee hereby accepts, in trust under this
Agreement, for the benefit of Company, its affiliates, subsidiaries and all
other present and future holders of any of the Secured Obligations and each and
all of their members, successors and assigns, all right, title and interest in
the following property:

           an agreement to pay, substantially in the form of Exhibit A,
      executed by Lakes in favor of the Trust Estate pursuant to which Lakes is
      obligated to pay to the Trust Estate: (a) $7.5 million in cash on the
      first anniversary of the date thereof, (b) an additional $7.5 million in
      cash on the second anniversary of the date thereof, (c) an additional
      $7.5 million in cash on the third anniversary of the date thereof and (d)
      an additional $7.5 million in cash on the fourth anniversary of the date
      thereof.

(collectively, the "Initial Trust Estate," and together with (i) all rights and
interests of the Trustee under the Pledge and Security Agreement, (ii) any and
all other property at any time hereafter transferred to the Trustee in trust
under this Agreement, and (iii) any and all present and future income,
distributions, substitutions, replacements and proceeds of or from the Initial
Trust Estate 

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and any other such property, the "Trust Estate").  The Trustee, its successors
in trust under this Agreement and its assigns and the assigns of its successors
and assigns in trust shall have and hold the foregoing Trust Estate until
released to Company or Lakes in accordance with the terms hereof, in trust under
and subject to the terms and conditions set forth herein for the benefit of
Company and as a source of funds for and for the enforcement of the payment,
observance and performance of all Secured Obligations.  Company and Lakes hereby
consent to the foregoing declaration of trust and agree that the Trust Estate is
to be held and applied by the Trustee subject to the further covenants,
conditions and trust set forth herein.

     3.  Appointment of Representative and Indemnitee's Agent.

         (a)    Lakes hereby designates its:

                             Chairman of the Board,
                     President and Chief Executive Officer
                          and Chief Financial Officer

each of whom is authorized to act alone, as their duly appointed agents and
attorneys-in-fact, with full power of substitution, in any and all capacities,
for all purposes of this Agreement (each, the "Representative").  Actions and
inactions by such Representatives under this Agreement shall be binding and
conclusive on Lakes and may be conclusively relied upon by the other parties
hereto.  Lakes, upon 10 days' written notice to the other parties, may remove
any person appointed as Representative or appoint another person as
Representative.  No Representative shall be liable for any action taken or
omitted by it, or any action suffered by it to be taken or omitted, in good
faith, and in the exercise of its own best judgment.

         (b)   Company hereby appoints its:

             Executive Vice President and Chief Financial Officer,
                      Senior Vice President and Treasurer,
                     Senior Vice President and Controller,
                              and General Counsel

each of whom is authorized to act alone, as their duly appointed agents and
attorneys-in-fact, with full power of substitution, in any and all capacities,
for all purposes of this Agreement (each, the "Indemnitee's Agent").  Actions
and inactions by the Indemnitee's Agent under this Agreement shall be binding
and conclusive on Company and may be conclusively relied upon by the other
parties hereto.  Company, upon 10 days' written notice to the other parties, may
remove any person appointed as Indemnitee's Agent or appoint another person as
Indemnitee's Agent.  No Indemnitee's Agent shall be liable for any action taken
or omitted by it, or any action suffered by it to be taken or omitted, in good
faith, and in the exercise of its own best judgment.






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         4. Investment and Valuation of Trust Estate.

            (a)  The Trustee hereby acknowledges receipt of the Initial Trust
Estate.

                 (i)  The Trustee shall keep all cash at any time held by it as
            part of the Trust Estate, from whatever source such cash may be
            derived, in an interest-bearing account in United States Dollars
            maintained by the Trustee solely in the name of the Trustee, as
            Trustee hereunder, except that:

                       (1) Such cash shall be invested and reinvested by the
                  Trustee in Short-Term Treasuries, (i) if the Trustee is so
                  directed in writing by the Indemnitee's Agent and if the
                  Indemnitee's Agent states in such writing that an Event of
                  Default has occurred and is continuing, and (ii) after the
                  Trustee receives written directions from the Representative,
                  stating that any and all cash held by the Trustee as part of
                  the Trust Estate shall be kept invested in Short-Term
                  Treasuries, and

                       (2) Notwithstanding the foregoing, such cash shall be
                  invested by the Trustee in Joint Approval Cash Equivalents if
                  and to the extent so directed by the Representative and the
                  Indemnitee's Agent, acting jointly; and

                 (ii)  Such cash and Cash Equivalents shall be invested and
            reinvested solely in the name of the Trustee or its nominee.

                  (b)  The Trustee shall be entitled to sell or redeem any such
investment as necessary to make any distributions required under this Agreement
and shall not be liable or responsible for any loss resulting from any such sale
or redemption or from any investment or failure to invest made in accordance
with this Agreement.

                  (c)   Income, if any, resulting from the investment of the
Trust Estate shall be for the account of Lakes, but shall be held as part of the
Trust Estate, subject to the provisions of this Agreement.

            5.   Payment of Claims.

                 (a) From time to time on or before the termination of this
Agreement, the Indemnitee's Agent may deliver a notice (a "Notice") to the
Representative and the Trustee specifying in reasonable detail the nature and
dollar amount of any claim (a "Claim") that Company has under the Merger
Agreement and/or the Distribution Agreement; Company may make more than one
Claim with respect to any underlying state of facts.  If Representative gives
notice to the Indemnitee's Agent and the Trustee disputing any Claim (a "Counter
Notice") within 15 days following its receipt of the Notice, such Claim shall be
resolved as provided in Section 5(b).  Lakes must have a reasonable basis in
giving any such Counter Notice and shall set forth in reasonable detail the
basis of its objection to the Claim in the Counter Notice.  If no 

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Counter Notice is received by the Trustee within such 15-day period, then (i)
the dollar amount of the Claim, as set forth in the Notice, shall be deemed
established for purposes of this Agreement and the agreement(s) under which the
Claim arose and (ii) at the end of such 15-day period, the Trustee shall pay to
Company the dollar amount claimed in the Notice from the Trust Estate; provided,
however, to the extent that the Trust Estate does not contain sufficient funds
to pay the Claim (after the liquidation of the assets comprising the Trust
Estate), such Claim shall be paid by Trustee to the extent of such funds and the
remaining portion of the Claim shall be paid by Trustee, with no further notice
to or consent required by the Representative, as soon as further deposits are
made by Lakes into the Trust Estate.

                  (b)  If a Counter Notice is received with respect to a Claim,
the parties (other than the Trustee) shall promptly meet and confer and attempt
in good faith to resolve the objection.  If they succeed, the parties (other
than the Trustee) shall promptly and jointly notify the Trustee in writing and
the Trustee shall act in accordance with such joint written notice.  If the
parties shall not succeed within 5 business days of Company's receipt of the
Counter Notice, they shall, within an additional 10 business days, commence and
thereafter promptly complete an arbitration proceeding in accordance with the
provisions of Section 21 hereof.  Thereafter, unless the parties shall otherwise
jointly instruct the Trustee in writing, the Trustee shall make payment with
respect to the Claim, if any, in accordance with the arbitrator's award when
received.

                  (c)  The Trustee (i) shall not be obligated to give any notice
under any of the foregoing provisions in this Section 5 and (ii) shall not be
entitled to object to any Notice given under any such provisions.

            6.   Termination of Agreement.

                  (a)  This Agreement shall terminate on the date after (i)
Company determines that all known material Indemnification Obligations with
respect to the Polo Plaza Project Liabilities, the Stratosphere Liabilities and
the Tax Liabilities have been completely settled (and with respect to any
settlement subject to court approval, such settlement shall have become final
and non-appealable) and satisfied, (ii) Company determines that no additional
material Indemnification Obligations are reasonably likely to arise out of, or
be asserted with respect to, the Polo Plaza Project Liabilities or the
Stratosphere Liabilities and (iii) Company and Lakes determine that no material
Indemnification Obligations are likely to arise out of, or be asserted with
respect to, any material Tax Liabilities (such date of termination, the
"Termination Date").  As promptly as practical after the Termination Date, the
Trustee shall release any remaining property (after the payment of (A) any and
all taxes owing with respect to the Trust Estate, if any, and (B) all of the
Trustee's fees, expenses and costs) in the Trust Estate to Lakes.

                  (b)  Upon the final distribution of all of the Trust Estate in
accordance with the terms of this Agreement, this Agreement shall terminate,
except that the provisions of Sections 10, 11, 14, 21 and 22 hereof shall
survive such termination.

                  (c)  Notwithstanding the foregoing, the Trustee shall not be
obligated to release or deliver any assets of the Trust Estate pursuant to this
Section 6 except if and to the extent (i) the Trustee receives joint written
instructions from the Representative and the 

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Indemnitee's Agent, directing such release or delivery, (ii) the Trustee (x)
receives notice from the Representative directing that such release or delivery
to be made on any date occurring after the Termination Date, (y) has given the
Indemnitee's Agent notice of the Trustee's receipt of such direction from the
Representative, and at least 30 days have elapsed since such notice was given to
the Indemnitee's Agent, and (z) has not received notice of objection to such
release or delivery from the Indemnitee's Agent, or (iii) in accordance with an
arbitrator's award, directing that such release or delivery be made on any date
occurring after the Termination Date, delivered in an arbitration proceeding
conducted in accordance with the provisions of Section 21 hereof.

            7.   Directions to Trustee.  Both prior to and after the occurrence
of any Event of Default, the Trustee shall (subject to Sections 9 and 10 hereof)
cooperate with Company, as Secured Party under the Pledge and Security
Agreement, in its efforts to exercise and enforce its rights and remedies under
the Pledge and Security Agreement in accordance with such instructions as the
Trustee from time to time may receive from Company, so long as such instructions
do not, in the good faith opinion of the Trustee, require it to engage in any
action which would violate any applicable law, regulation, judgment, order or
decree or expose it to liability for which it has not received indemnification
from Company pursuant to Section 11 hereof.

            8.   Tax Matters.  Each party to this Agreement shall provide a
completed IRS Form W-8 or Form W-9 to the Trustee upon request by the Trustee.

            9.   Duties of the Trustee.  The Trustee shall have no duties or
responsibilities other than those expressly set forth in this Agreement and the
Pledge and Security Agreement, and no implied duties or obligations shall be
read into this Agreement or the Pledge and Security Agreement against the
Trustee.  The Trustee shall have no duty to enforce any obligation of any
person, other than as provided herein.  The Trustee shall be under no liability
to anyone by reason of any breach or failure on the part of any party hereto or
any maker, endorser or other signatory of any document or any other person to
perform such person's obligations under any such document.

            10.  Liability of the Trustee; Withdrawal.

                  (a)  The Trustee shall not be liable for any action taken or
omitted by it, or any action suffered by it to be taken or omitted, in good
faith (except as provided in the immediately succeeding sentence), and may rely
conclusively and shall be protected in taking or omitting to take any action
based upon any order, notice, demand, certificate, opinion or advice of counsel
(including counsel chosen by the Trustee), statement, instrument, report or
other paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained) which is believed by the Trustee to be
genuine and to be signed or presented by the proper person(s).  The Trustee
shall not be held liable for any error in judgment made in good faith by an
officer of the Trustee unless it shall be proved that the Trustee was grossly
negligent in ascertaining the pertinent facts or acted intentionally in bad
faith.  The Trustee shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this Agreement or any of the terms
hereof,  

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unless evidenced by a writing delivered to the Trustee signed by the proper
party or parties and, if the duties or rights of the Trustee are affected,
unless it shall give its prior written consent thereto.

                  (b)  Without limitation of any other provision of this
Agreement, the Trustee shall not be responsible for and may conclusively rely
upon and shall be protected, indemnified and held harmless by Lakes or Company,
as the case may be, for the sufficiency or accuracy of the form of, or the
execution, validity, value or genuineness of any document or property received
(from any party), held or delivered by such party hereunder, or of the signature
or endorsement thereon, or for any description therein; nor shall the Trustee be
responsible or liable in any respect on account of the identity, authority or
rights of the persons executing or delivering or purporting to execute or
deliver an document, property or this Agreement.

                  (c)  No provision of this Agreement or the Pledge and Security
Agreement shall require the Trustee to expend or risk its own funds or incur any
liability. The Trustee may refuse to perform any duty or exercise any right or
power hereunder or thereunder unless it receives indemnity reasonably
satisfactory to it against any loss, liability or expense.

                  (d)  The Trustee makes no statement, promise, representation
or warranty whatsoever, and shall have no liability whatsoever, to Company or
its successors or assigns as to the authorization, execution, delivery,
legality, enforceability or sufficiency of this Agreement or the Pledge and
Security Agreement or as to the creation, perfection, priority or enforceability
of any security interest granted, or deemed to be granted, hereunder or
thereunder or as to the existence, ownership, quality, condition, value or
sufficiency of any of the Trust Estate or as to any other matter whatsoever,
except only that the Trustee represents and warrants to the other parties hereto
that (i) it has the right, power and authority, and all required licenses and
consents, to execute, deliver and perform its duties under this Agreement and
the Pledge and Security Agreement, and (ii) this Agreement and the Pledge and
Security Agreement have been duly executed and delivered by it, upon due
authorization, and (without representing as to the legality, binding effect or
sufficiency of any provision herein or therein) are binding upon and legally
enforceable against it, subject to laws generally affecting the enforcement of
creditors' rights and the effect of equitable principles, whether considered in
a court of law or equity.

                  (e)  In the event that the Trustee shall become involved in
any arbitration or litigation relating to the Trust Estate, the Trustee is
authorized to comply with any final, binding and nonappealable decision reached
through such arbitration or litigation.

                  (f)  The Trustee may resign at any time and be discharged from
its duties and obligations hereunder and under the Pledge and Security
Agreement, by giving notice to the other parties.  Such resignation shall not
discharge or otherwise effect the Trust Estate or any property comprising part
of the Trust Estate or any beneficial interest therein or the rights, powers and
liens created by or arising under this Agreement and the Pledge and Security
Agreement.  Such resignation shall take effect when a successor Trustee has been
appointed by Company and has accepted the trusts herein provided.  If a
successor Trustee does not take office 


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within 60 days after the retiring Trustee resigns, the retiring Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

                  (g)  A successor Trustee shall deliver a written acceptance of
its appointment to Lakes, the retiring Trustee and to Company.  Thereupon, the
resignation of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Agreement and all of the rights, powers and liens granted to the Trustee under
the Pledge and Security Agreement.  The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee provided all sums
owing to the retiring Trustee have been paid.

                  (h)  Notwithstanding the replacement of the Trustee pursuant
to this Section 10, the resigning Trustee shall continue to be entitled to the
rights, immunities and benefits provided under Sections 9, 10, 11 and 21 hereof.

            11.  Trustee's Fees and Indemnification.  All fees (as may from time
to time be agreed in writing by the Trustee and Lakes) and reasonable expenses
and disbursements of the Trustee for its services hereunder and under the Pledge
and Security Agreement, shall be paid by Lakes.  Company and Lakes, jointly and
severally, hereby agree to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without gross negligence or
willful misconduct on the part of the Trustee, including legal or other fees
arising out of or in connection with its entering into this Agreement and the
Pledge and Security Agreement and carrying out its duties hereunder or
thereunder, including the costs and expenses of defending itself against any
claim of liability in the premises or any action for interpleader.  The Trustee
shall be under no obligation to institute or defend any action, suit, or legal
proceeding in connection with this Agreement or the Pledge and Security
Agreement, unless first indemnified and held harmless to its satisfaction in
accordance with the foregoing, except that the Trustee shall not be indemnified
against any loss, liability or expense arising out of its bad faith, gross
negligence or willful misconduct.  Such indemnity shall survive the termination
or discharge of this Agreement or resignation of the Trustee.

            12.  Inspection.  All funds or other property held as part of the
Trust Estate shall at all times be clearly identified on the Trustee's accounts
as being held by the Trustee hereunder.  Any party hereto may at any time during
the Trustee's business hours (with reasonable notice) inspect any records or
reports relating to the Trust Estate.

            13.  Notices.  All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given (i) when received if
personally delivered, (ii) when receipt is automatically acknowledged if
transmitted by telecopy, electronic or digital transmission method, (iii) the
day after it is sent, if sent for next day delivery to an address within the
United States and Puerto Rico by recognized overnight delivery service (e.g.
Federal Express), (iv) the third day after it is sent, if sent for next day
delivery to any other address by recognized international delivery service, and
(v) and upon receipt, if sent by certified or registered mail, return receipt
requested. In each case notice shall be sent to:


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                  (a)  If to Lakes or the Representative:

                                     GCI Lakes, Inc.
                                     130 Cheshire Lane
                                     Minnetonka, Minnesota 55305
                                     Attn:  Chairman of the Board
                                     Telecopy:  (612) 449-8509

                       with a copy to:

                                     Maslon Edelman Borman & Brand, LLP
                                     3300 Norwest Center
                                     90 South Seventh Street
                                     Minneapolis, Minnesota  55402
                                     Attn:  Neil I. Sell
                                     Telecopy: (612) 672-8397

                  (b)  If to Company or Indemnitee's Agent:

                                     Grand Casinos, Inc.
                                     3930 Howard Hughes Parkway, 4th Floor
                                     Las Vegas, Nevada 89109
                                     Attn:  General Counsel
                                     Telecopy:  (702) 699-5179

                       with a copy to:




                 (c)  If to the Trustee:





            14.  Non-Exclusive Remedy.  Company and Lakes agree and acknowledge
that the Trust Estate shall not be Company's exclusive method of receiving
indemnification from Lakes pursuant to the Agreements and Lakes shall be and
remain in all respects personally liable for all Indemnification Obligations and
each liability may be enforced by any lawful means.

            15.  Modification: Waiver.  Subject to applicable law, this
Agreement may be amended, modified or supplemented, with respect to any of the
terms contained herein, only by 

                                     11


<PAGE>   12


written agreement of the parties and the rights, remedies, immunities and
benefits created hereby or arising hereunder in favor of any person may be
waived by it only by and instrument in writing signed by it.  No such right,
remedy, immunity or benefit shall be deemed waived by reason of such person's
failure to act, oral statements or course of conduct, including any grant of a
waiver on a different or prior occasion.

            16.  Interpretation.  When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.  Whenever the word "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation".  This Agreement shall not be construed for or against either party
by reason of the authorship or alleged authorship of any provision hereof or by
reason of the status of the respective parties.

            17.  Assignment.  This Agreement, and the rights, interests and
obligations hereunder, shall not be assigned by Lakes (whether by operation of
law or otherwise) without the prior written consent of Company.  Subject to the
foregoing provisions of this Section 17, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.

            18.  Governing Law.  This Agreement shall be construed and
interpreted, and the rights of the parties shall be determined, in accordance
with the laws of the State of New York (without reference to the choice of law
provisions).

            19.  Interest in Trust Estate.  Lakes has no interest in the Trust
Estate except only as to any property which has been released from the Trust
Estate and delivered to Lakes after the Termination Date as herein provided,
effective upon such release and delivery.

            20.  Severability.  Each party agrees that, should any court or
other competent authority hold any provision of this Agreement or part hereof to
be null, void or unenforceable, or order any party to take any action
inconsistent herewith or not to take an action consistent herewith or required
hereby, the validity, legality and enforceability of the remaining provisions
and obligations contained or set forth herein shall not in any way be affected
or impaired thereby.  Upon any such holding that any provision of this Agreement
is null, void or unenforceable, the parties will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated by this Agreement are consummated to the extent possible.  Except
as otherwise contemplated by this Agreement, to the extent that a party hereto
took an action inconsistent herewith or failed to take action consistent
herewith or required hereby pursuant to an order or judgment of a court or other
competent authority, such party shall incur no liability unless such party did
not in good faith seek to resist or object to the imposition or entering of such
order or judgment; provided, however, that nothing in this Section 20 shall be
deemed to limit or otherwise modify the Trustee's rights under Sections 10, 11
and 21 hereof.


                                     12


<PAGE>   13


            21.  Arbitration.  The parties hereto agree that any dispute,
controversy or disagreement between the parties related to the obligations of
the parties under this Agreement in respect of which resolution cannot be
reached shall be submitted for mediation and final and binding arbitration in
accordance with Section 9.14 of the Distribution Agreement, including Section
9.14(c) thereof regarding the parties' ability to seek specific performance or
injunctive relief thereof.

            Notwithstanding anything in the preceding paragraph of this Section
21 to the contrary, the parties shall have the right to submit to a court, in
accordance with the following provisions of this Section 21, (i) any claim
asserted by the Trustee, in its personal capacity, for the payment of fees,
expenses, disbursements or indemnification due to the Trustee under Section 14
hereof (or due under any indemnity given to the Trustee pursuant to Section 14
hereof), (ii) any claim asserted against the Trustee personally, seeking damages
or other relief against the Trustee (and not for purposes of binding the Trust
Estate) based on or relating to any alleged breach of any duty or other
actionable conduct of the Trustee, and (iii) any claim asserted by or against
the Trustee personally (and not for purposes of binding the Trust Estate)
otherwise relating in any manner to the rights, immunities and benefits granted
to the Trustee under Sections 12, 13 and 14 hereof (each of the claims described
in the foregoing clauses (i), (ii) and (iii) is a "Trustee Claim"); and, with
respect to solely to such claims:

                  (a)  No party shall be obligated or entitled to submit any
Trustee Claim to arbitration or be bound by any arbitrator's award that might in
any manner relate to any Trustee Claim;

                  (b)  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO ANY
TRUSTEE CLAIM MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF THOSE COURTS FOR PURPOSES OF
ADJUDICATION OF ANY TRUSTEE CLAIM. EACH PARTY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION FOR PURPOSES OF ADJUDICATION OF ANY TRUSTEE
CLAIM. SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS MAY BE MADE BY ANY
MEANS PERMITTED BY NEW YORK LAW.

                  (c)  EACH PARTY HERETO WAIVES ALL RIGHTS TO A TRIAL BY JURY OF
ANY TRUSTEE CLAIM AND AGREES THAT ANY TRUSTEE CLAIM SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH PARTY FURTHER AGREES
THAT ITS RIGHT TO A TRIAL BY JURY IS HEREBY WAIVED AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE PLEDGE AND 

                                     13


<PAGE>   14


SECURITY AGREEMENT OR ANY PROVISION HEREOF OR THEREOF, INSOFAR AS IT MAY CREATE
A DEFENSE TO ANY TRUSTEE CLAIM. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
PLEDGE AND SECURITY AGREEMENT.

            22.  Remedies Cumulative.  All rights and remedies of each party
hereto are cumulative of each other and of every other right or remedy such
party may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.

            23.  Counterparts.  This Agreement may be executed in two or more
counterparts, each of which will be considered one and the same instrument and
shall become effective when executed and delivered by each of the parties.

            24.  Specimen Signature.  Each person at any time appointed as the
Representative or the Indemnitee's Agent shall present a specimen signature to
the Trustee within a reasonable time.

                           [Signature page to follow]












                                     14


<PAGE>   15


                                        "Company"

                                        GRAND CASINOS, INC.,
                                        a Minnesota corporation



                                        By:_______________________
                                             Name:
                                             Title:



                                        "Lakes"

                                        GCI LAKES, INC,
                                        a Minnesota corporation



                                        By:_______________________
                                             Name:
                                             Title:


                                             "Trustee"

                                        [NAME OF TRUSTEE],
                                        a [national banking association]



                                        By:_______________________
                                             Name:
                                             Title:


<PAGE>   16

                                   EXHIBIT A

                                AGREEMENT TO PAY


     THIS AGREEMENT TO PAY (this "Agreement"), dated as of ___________ ___,
1998, is entered into by and among GCI LAKES, INC., a Minnesota corporation
("Lakes") and [NAME OF TRUSTEE], a [_________________] ("Payee"), in Payee's
capacity as (i) Trustee under that certain Trust Agreement, dated of even date
herewith (the "Trust Agreement"), by and among Lakes, Payee and GRAND CASINOS,
INC., a Minnesota Corporation ("Company") and (ii) a party to that certain
Pledge and Security Agreement, dated of even date herewith (the "Pledge and
Security Agreement") and, together with the Trust Agreement, the
"Indemnification Trust Agreements") among Lakes, and Payee and Company.

     In consideration for the consummation of the transactions contemplated by
the Merger Agreement (as defined in the Indemnification Trust Agreements) and
for other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, Lakes hereby agrees to pay to Payee the aggregate sum of
$30,000,000.  Such amount shall be payable as follows: (a) $7.5 million in cash
on the first anniversary of the date of this Agreement, (b) an additional $7.5
million in cash on the second anniversary of the date of this Agreement, (c) an
additional $7.5 million in cash on the third anniversary of the date of this
Agreement, and (d) an additional $7.5 million in cash on the fourth anniversary
of the date of this Agreement, payable pursuant to and in accordance with the
Indemnification Trust Agreements.

     Capitalized terms used, but not otherwise defined, herein shall have the
meanings set forth in the Merger Agreement.

     Each of this Agreement and the payments contemplated hereby is subject and
entitled to the benefits of the Indemnification Trust Agreements, the Merger
Agreement and the Distribution Agreement (as defined in the Indemnification
Trust Agreements), reference to each of which is hereby made for a more
complete statement of the terms and conditions under which the obligations
evidenced hereby are made and are to be paid.

     All payments due pursuant to this Agreement shall be made without defense,
set off or counterclaim, in lawful money of the United States of America, and
in same day funds and delivered to Payee in accordance with the terms of the
Indemnification Trust Agreements.

     Lakes acknowledges and agrees that Secured Party (as defined in the Pledge
and Security Agreement) is an intended third party beneficiary of this
Agreement.  Upon the occurrence of an Event of Default (as defined in the
Pledge and Security Agreement), Secured Party may exercise and enforce each and
all of its rights and remedies under the Pledge and Security Agreement.

<PAGE>   17


     THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.

     Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision of this
Agreement.

     This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which shall together constitute one and
the same agreement.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
executed and delivered by its duly authorized officer, as of the day and year
first written above.


                                                 "LAKES"
                                                 GCI LAKES, INC.,
                                                 a Minnesota corporation
                                                 
                                                 
                                                 By: __________________________
                                                 Name:
                                                 Title:
                                                 
                                                 
                                                 "PAYEE"
                                                 [__________]
                                                 a [__________]
                                                 
                                                 
                                                 By: __________________________
                                                 Name:
                                                 Title:






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