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FIRST AMENDED AND RESTATED LAKES NOTE
$46,000,000 October 16, 2000
Dowagiac, Michigan
FOR VALUE RECEIVED, the Pokagon Band of Potawatomi Indians (the "Band")
promises to pay to Great Lakes of Michigan, LLC, a Minnesota limited liability
company ("Lakes"), such sums as may be advanced by Lakes to the Band in
accordance with ss.ss. 8.4 and 9.2.1 of a Development Agreement between the Band
and Lakes Gaming, Inc. dated as of July 8, 1999, as assigned by Lakes Gaming,
Inc. to and assumed by Lakes pursuant to that certain Assignment and Assumption
Agreement of even date herewith by and among the Band, Lakes Gaming, Inc. and
Lakes (the "Assignment Agreement"), as amended by First Amendment of near or
even date (the "Development Agreement"); provided that the principal amount due
hereunder shall not exceed Forty-Six Million Dollars ($46,000,000.00).
1. Advances; Funding. Advances under this Note shall be made (a) upon
written request by the Band to Lakes in the form of Draw Request attached as
Exhibit A, (b) through a Draw Request approved by the Band pursuant to the
Control Agreement, or (c) through advances by Lakes to the Enterprise Bank
Accounts to pay Development Expenditures in accordance with either (I) the
Approved Development Budget or, prior to the adoption of the Approved
Development Budget, the approval of the Business Board or the Band; and (II) the
Development Agreement. Draw Requests submitted by the Band shall be sent in
accordance with ss. 15.4 of the Development Agreement. Advances under this Note
may, at Lakes' option, be funded through transfer of funds from the Escrow
Account; provided that interest shall only accrue under this Note on funds
advanced through the Escrow Account after transfer from the Escrow Account to
the Band Enterprise Account, and shall not begin to accrue on deposit by Lakes
into the Escrow Account. All Draw Requests submitted by the Band shall be funded
within ten (10) days of the date of the draw request. By making any advance to
the Enterprise Bank Accounts or otherwise under the Development Agreement, Lakes
shall certify that the amounts so advanced are necessary for, and shall be used
to pay, Development Expenditures in accordance with either (a) the Approved
Development Budget or, prior to the adoption of the Approved Development Budget,
the approval of the Business Board or the Band; and (b) the Development
Agreement.
2. Interest. Interest shall accrue on the outstanding balance under
this note as follows:
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(a) if the Bank Closing occurs, at a fixed rate equal to the lesser of
(i) Base Rate as of the Bank Closing plus 1% or (ii) 10% (the "Band
Interest Rate"); or
(b) If the Bank Closing does not occur, at a variable rate equal to the
lesser of (i) Base Rate plus 1% or (ii) 10% (the lesser of (i) and (ii)
being referred to as the "Variable Interest Rate"). Lakes shall adjust
the Variable Interest Rate on the then unpaid principal balance, by way
of increase or decrease, in accordance with changes in the Base Rate.
Such changes shall be effective as of the change in the Base Rate (the
"Effective Date").
Upon the Bank Closing, interest accruing under this Note prior to the Bank
Closing shall be adjusted retroactively to reflect the Band Interest Rate. "Base
Rate" means the lowest Prime Rate as is published daily in The Wall Street
Journal. In the event that the Wall Street Journal ceases to publish the Prime
Rate, then the holder hereof may in its reasonable discretion select some other
generally recognized comparable indicator of the national Prime Rate.
3. Repayment.
I. If the Commencement Date occurs, the Band shall repay
the Lakes Development Loan as follows: (a) the amount
outstanding under First Tranche - Lakes Note as of
such Commencement Date shall be repaid monthly in
arrears, beginning on the 15th day of the month after
the month in which the Commencement Date occurs, in
equal monthly payments of principal and interest for
the successive 60 months of the term; and (b)
principal and interest on Second Tranche - Lakes Note
shall be repaid either (I) at Bank Closing, to the
extent the Bank Development Loan has been increased
from $28,000,000 to $36,000,000 plus accrued interest
on such Second Tranches, and such increment is
available first to fund any undisbursed amounts of
the Second Tranche - Lakes Note and the Second
Tranche - Non-Gaming, or (II) from distributions
made under ss.ss.5.5.5 and 5.5.6 of the Management
Agreement; and, if not sooner paid, in full at the
end of the Term.
II. If the Commencement Date does not occur, principal
and interest shall be repayable to the extent and in
the manner provided in the Development Agreement;
provided that payments shall in any event be due and
made only from Subsequent Gaming Facility
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Revenues in accordance with the Development
Agreement. If Gaming commences at such a facility and
payment is due under this Note in accordance with the
Development Agreement, the Band shall, beginning on
the 15th day of the month following such commencement
date, make equal monthly payments to Lakes of
principal and interest in an amount sufficient to
amortize the principal amount outstanding as of such
commencement date over a sixty (60) month period at
the Variable Interest Rate, and shall thereafter
continue to make such payments on the 15th day of
each succeeding month to and including the fifteenth
day of the sixtieth month following such commencement
date, when all remaining principal and interest shall
be due and payable. As of the Effective Date of a
change in the Base Rate, Lakes shall adjust the
monthly installments of principal and interest as of
the installment next following the Effective Date so
that the then unpaid principal balance would be
amortized in full at the revised Variable Interest
Rate five years after such commencement of gaming.
Lakes shall promptly notify the Band in writing of
any changes in the Base Rate and in the instalment
payment due.
4. Prepayment. This Note may be prepaid at any time without penalty.
5. Subordination. Payment of amounts due hereunder shall be
subordinated to the Bank Development Loan, the Equipment Loan and any other
third-party loans or equipment leases to the Band relating to the Facility or,
if the Opening Date - Non-Gaming does not occur, or to any loans relating to
any other Gaming facility in Michigan owned by the Band. The holder of this Note
agrees to execute and deliver subordination agreements evidencing such
subordination in form reasonably acceptable to the Bank Lender, the Equipment
Lender, or any other third-party lender or equipment lessor.
6. Limited Recourse. The obligations of the Band under this Note and
any related awards, judgments or decrees shall be payable solely out of
undistributed or future Net Revenues of the Enterprise and shall be a Limited
Recourse obligation of the Band, with no recourse to tribal assets other than
(i) such Net Revenues, (ii) mortgages, if any, held by Lakes to the extent that
the mortgaged premises have not been transferred into trust, and (iii), after
the Commencement Date occurs, funds on deposit in the Dominion Account to the
extent provided in ss. 9.2.1(x) of the Development Agreement and the Dominion
Agreement, or in any other dominion agreement executed by the Band (except that,
if the Commencement Date does not
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occur, Lakes shall also have recourse to Subsequent Gaming Facility Revenues to
the extent provided in the Development Agreement). In no event shall Lakes or
any other claimant under this Note have recourse to (a) the physical property of
the Facility, (b) Tribal Distributions, (c) assets of the Band purchased with
Tribal Distributions, (d) revenues or assets of any other gaming facility owned
or operated by the Band, or (e) any other asset of the Band (other than (i), if
the Commencement Date does not occur, Subsequent Gaming Facility Revenues to the
extent provided in the Development Agreement, (ii) such Net Revenues of the
Enterprise, (iii) such mortgages on the Gaming Site prior to its transfer into
trust and (iv) after the Commencement Date occurs, funds on deposit in the
Dominion Account to the extent provided in ss. 9.2.1(x) of the Development
Agreement and the Dominion Agreement, or in any other dominion agreement
executed by the Band). Such mortgages shall be subject to the provisions of the
Development Agreement, including, without limitation, Article 14 thereof. Lakes
covenants and agrees that it shall promptly release any such mortgages upon
transfer of such lands into trust or as otherwise provided in the Development
Agreement.
7. Default; Acceleration. All outstanding principal together with
accrued interest shall become immediately due and payable in full, subject to
the limitations on recourse provided above, upon default in the payment of
principal or interest due under this Note if such default is not remedied within
thirty (30) days after receipt by the Band of written notice thereof as provided
in the Development Agreement.
8. Band's Waiver of Sovereign Immunity and Consent to Suit. The Band
expressly waives its sovereign immunity from suit for the purpose of permitting
or compelling arbitration to enforce this Note as provided in Article 14 of the
Development Agreement and consents to be sued in the United States District
Court for the District in which the Gaming Site is located (or, if the Gaming
Site has not been designated, for the Western District of Michigan - Southern
Division), the United States Court of Appeals for the Sixth Circuit, and the
United States Supreme Court for the purpose of compelling arbitration or
enforcing any arbitration award or judgment arising out of this Note. If the
United States District Court lacks jurisdiction, the Band consents to be sued in
the Michigan State Court system for the same limited purpose. The Band waives
any requirement of exhaustion of tribal remedies. Without in any way limiting
the generality of the foregoing, the Band expressly authorizes any governmental
authorities who have the right and duty under applicable law to take any action
authorized or ordered by any such court, and to take such action, including
without limitation, repossessing or foreclosing on any real property not in
trust, or otherwise giving effect to any judgment entered; provided, however,
that liability of the Band under any judgment shall always be Limited
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Recourse, and in no instance shall any enforcement of any kind whatsoever be
allowed against any assets of the Band other than (i), if the Commencement Date
does not occur, Subsequent Gaming Facility Revenues to the extent provided in
the Development Agreement, (ii) Net Revenues of the Enterprise, (iii) mortgages
to the extent the mortgaged property has not been transferred into trust and
(iv) after the Commencement Date occurs, funds on deposit in the Dominion
Account to the extent provided in ss. 9.2.1(x) of the Development Agreement and
the Dominion Agreement, or in any other dominion agreement executed by the
Band). The Band appoints the Chairman of the Pokagon Council and the Secretary
of the Pokagon Council as its agents for service of all process under or
relating to the Agreements. The Band agrees that service in hand or by certified
mail, return receipt requested, shall be effective for all purposes under or
relating to the Agreements if served on such agents.
9. Arbitration. All disputes, controversies or claims arising out of or
relating to this Note shall be settled by binding arbitration as provided in
Article 14 of the Development Agreement.
10. Business Purposes; Applicable Law. This Note evidences a loan for
business and commercial purposes and not for personal, household, family or
agricultural purposes, and shall be governed by the law of the State of Michigan
and, to the extent applicable, federal law.
11. Notices. All notices under this Note shall be given in accordance
with ss.15.4 of the Development Agreement; except that copies of draw requests
need not be sent to attorneys.
12. Defined Terms. Capitalized terms used herein shall have the same
meanings assigned to them in the Development Agreement, and, if not defined in
the Development Agreement, in the Management Agreement between the Band and
Lakes, as amended.
13. Miscellaneous.
a. Time is of the essence.
b. The benefits and obligations of this Note shall inure to
and be binding upon the parties hereto and their respective
successors and assigns, provided that any succession or
assignment is permitted under the Development Agreement.
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c. Waiver of any one default shall not cause or imply a waiver
any subsequent default.
d. This Note, together with the Development Agreement, the
Management Agreement, the Escrow Agreement, the Transition
Loan Note and the Non-Gaming Land Acquisition Line of Credit,
the exhibits thereto and all related documents, as each has
been amended to date, sets forth the entire agreement between
the parties hereto with respect to the subject matter hereof.
All agreements, covenants, representations, and warranties,
express or implied, oral or written, of the parties with
respect to the subject matter hereof are contained herein and
therein. This Note shall not be supplemented, amended or
modified by any course of dealing, course of performance or
uses of trade and may only be amended or modified by a written
instrument duly executed by officers of both parties.
e. This Note has been executed and delivered as a complete
amendment and restatement in its entirety of that certain
Lakes Note dated as of July 8, 1999 made payable by the Band
to Lakes Gaming, Inc in the original principal amount of
$43,000,000, as assigned by Lakes Gaming, Inc. to Lakes
pursuant to the Assignment Agreement.
THE POKAGON BAND OF POTAWATOMI INDIANS
By:
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Its: Council Chairman
By:
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Its: Secretary
GREAT LAKES OF MICHIGAN, LLC
By:
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Timothy J. Cope
Its Chief Financial Officer