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AMENDMENT TO ACCOUNT CONTROL AGREEMENT
This Agreement is made the 16th day of October 2000, by and among Great
Lakes of Michigan, LLC, a Minnesota limited liability company ("Great Lakes"),
Lakes Gaming, Inc., a Minnesota corporation ("Lakes"), the Pokagon Band of
Potawatomi Indians (the "Band") and Firstar Bank, N.A., f/k/a Firstar Bank of
Minnesota, N.A. ("Firstar").
W I T N E S S E T H:
WHEREAS, the Band and Lakes have entered into a Development Agreement
dated as of July 8, 1999 (the "Development Agreement") and a Management
Agreement dated as of July 8, 1999 (the "Management Agreement"; collectively,
with the Development Agreement, the "Agreements"), pursuant to which the Band
has engaged Lakes to, among other things, assist the Band in the design,
development, construction and management of a gambling casino and certain
related amenities (as defined in the Development Agreement, the "Facility"); and
WHEREAS, pursuant to the Development Agreement Lakes has agreed to make
certain payments and advances to the Band, including without limitation the
Transition Loan, the Lakes Development Loan and the Non-Gaming Land Acquisition
Line of Credit (collectively the "Lakes Loans"), and the Scholarship Program
Fee, and has agreed to perform development services with regard to the Facility,
all on the terms set out in that Agreement; and
WHEREAS, pursuant to the Management Agreement Lakes has agreed to
manage the Facility on the terms set out in that Agreement; and
WHEREAS, the obligations of Lakes to the Band are secured by a Pledge
and Security Agreement between Lakes and the Band (the "Pledge Agreement") and
by an Account Control Agreement among Lakes, the Band and Firstar (the "Control
Agreement"), each dated as of July 8, 1999; and
WHEREAS, Lakes has informed the Band that it wishes to restructure its
corporate organization by forming a first tier subsidiary, Lakes Gaming and
Resorts, LLC, a Minnesota limited liability company ("LG&R"), to own the equity
in second-tier subsidiaries, including Great Lakes, that will be engaged in
gaming and gaming-related businesses (the "Restructuring"); and
WHEREAS, in connection with such restructuring Lakes has requested that
the Band consent to the assignment to Great Lakes of (i) Lakes' rights and
obligations
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under the Agreements, the Lakes Loans and all related documentation (the
"Obligations") , and (ii) the Account, as defined in the Control Agreement, and
related cash, financial assets and investment property credited thereto, subject
to the continuing first perfected security interest of the Band; and
WHEREAS, Lakes and LG&R have agreed, as a condition to the Band's
consent, to unconditionally guaranty the Obligations, as assumed by Great Lakes,
including without limitation the obligations of Great Lakes under the Pledge
Agreement and the Control Agreement; and
WHEREAS, it is the intent of the parties that the restructuring not
affect or impair the Band's rights and remedies under the Obligations or the
Band's first perfected security interest in the Account, other than the
conversion of Lakes from primary obligor to unlimited guarantor;
WHEREAS, under the Agreements Lakes cannot carry out such restructuring
without the Band's consent; and
WHEREAS, the Band is willing to so consent, but only on the terms and
conditions set out in this Agreement and in a certain Assignment and Assumption
Agreement of near or even date among the Band, Lakes, Great Lakes and LG&R (the
"Assignment Agreement");
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Recitals True. The above recitals are true.
2. Defined Terms. Capitalized terms used but not otherwise defined herein
and defined in the Pledge Agreement shall have the same meaning herein
as therein.
3. Assignment of Account. Lakes represents to Firstar that it has,
pursuant to the Assignment Agreement, assigned and transferred to Great
Lakes all rights of Lakes in and to the Account and all cash, financial
assets and investment property credited to the Account, subject to the
perfected first security interest of the Band. Firstar agrees to note
that assignment on its records, but the name of the Account shall
continue to be "Pokagon Collateral Account."
4. Acceptance of Assignment. Great Lakes accepts the assignment of the
Account and related cash, financial assets and investment property, and
agrees
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to perform and discharge Lakes' obligations under the Control Agreement
in accordance with the terms thereof as if Great Lakes had originally
been a party thereto. The liabilities so assumed by Great Lakes include
any obligations or liabilities of Lakes which have accrued under the
Control Agreement as of the date hereof, as well as those subsequently
accruing. Great Lakes recognizes and agrees that the Account and all
cash, financial assets and investment property credited to the Account
are and shall remain subject to the first perfected security interest
of the Band in accordance with the Pledge Agreement and the Account
Control Agreement.
5. Assets in Account. Firstar represents that the value and composition of
the assets in the Account as of October 16, 2000 are as shown on the
attached Schedule I.
6. Draws, etc. to be signed by Great Lakes. After the Effective Date all
draw requests, entitlement orders, directions and notices to be given
by Lakes under the Control Agreement shall be given by Great Lakes.
7. Amendment to Control Agreement. The Control Agreement is amended as
follows:
a. All references in the Control Agreement to Lakes, other than
in ss. 1(b), shall be deemed to refer to Great Lakes for all
purposes after the Effective Date unless otherwise stated in
this section.
b. Great Lakes is added as a party. Lakes is not deleted as a
party.
c. The section entitled "Background" is deleted and replaced in
its entirety with the following:
"Lakes and Great Lakes have granted Band a security
interest pursuant to a Pledge and Security Agreement
dated July 8, 1999, as amended by Amendment dated
October 16, 2000 (the "Security Agreement"), in a
securities account maintained by Bank for Great
Lakes, and in all related property. Lakes entered
into this Agreement, and Great Lakes is joining in
this Agreement, to perfect Band's security interest
in that account and those assets."
d. The definition of Band Notification of Lakes Default is
amended so that it reads in its entirety as follows:
"'BAND NOTIFICATION OF LAKES DEFAULT' means notification by
the
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Band to Bank that either of the following conditions have been
satisfied:
(A) A Manager Event of Default or a Lakes Event
of Default has occurred under the Agreements
and is continuing; (b) either (i) the time
for Lakes to demand arbitration under the
Agreements has expired, or (ii) Lakes timely
demanded arbitration, and the arbitrator's
award has found that a Manager Event of
Default or a Lakes Event of Default has
occurred; and (c) the Band is entitled to
payment of the property in the Account to
the extent specified therein; or
(B) A Guaranty Event of Default, as defined in a
Guaranty from Lakes and LG&R to the Band
dated October 16, 2000, has occurred.
The Band Notification of Lakes Default shall be in the form
attached hereto as Exhibit A-1."
e. Exhibit A to the Control Agreement is deleted and replaced by
the attached Exhibit A-1.
f. The definition of Joint Notice is amended so that it reads in
its entirety as follows:
"'JOINT NOTICE' means notification by the Band and
Great Lakes to Bank (a) that the Account shall be
terminated and directing the Bank to liquidate the
property in the Account and deliver the proceeds
thereof as directed in the Joint Notice, or (b) that
specified funds should be wired from the Account as
indicated in the Joint Notice. The Joint Notice
shall, as to termination of the Account, be in the
form attached hereto as Exhibit C. Any other Joint
Notice shall be sufficient if it is signed by both
the Band and Great Lakes."
g. Section 16(g) of the Control Agreement is amended so that it
reads in its entirety as follows:
"g. All income on property in the Account shall
be for the account of Great Lakes. Great
Lakes certifies that its IRS identification
number is 41-1973426, and agrees that
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income on the property in the Account shall
be reported in its name."
h. S. Eric Marshall is deleted from the list of persons to whom
copies of notices to the Band must be given.
i. The definition of "Secured Obligations" in ss.1(a) of the
Pledge Agreement is amended so that it reads in its entirety
as follows:
"'Secured Obligations' includes (i) the obligations
of Great Lakes and Lakes to the Band under or
relating to the Agreements, and (ii) the obligations
of Lakes and LG&R under their Guaranty to the Band
dated October 16, 2000."
j. The following person is added as a person to whom copies of
notices to Great Lakes must be given:
Brian J. Klein, Esq.
Mason Edelman Borman & Brand, LLP
3300 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402-4140
8. Reservation of Rights. By entering into this Agreement, the Band does
not waive or affect any rights against Lakes under the Pledge Agreement
or the Control Agreement.
9. Warranties and Representations - Great Lakes and Lakes. Each of Great
Lakes and Lakes warrants, represents and covenants to the Band that:
a. The Agreement and the Pledge Agreement each constitute the
legal, valid and binding obligation of Great Lakes and Lakes,
and are fully enforceable in accordance with their terms;
b. Neither the execution or delivery of this Agreement nor
fulfillment of or compliance with the terms and provisions
hereof will conflict with, or result in a breach of the terms,
conditions or provisions of, constitute a default under or
result in the creation of any lien, charge or encumbrance upon
any property or assets of Lakes or Great Lakes under any
agreement or instrument to which they or either of them is now
a party or by which they may be bound; and
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c. The Band has, and at all times until the termination of the
Control Agreement in accordance with ss. 8 thereof shall have,
a first perfected security interest in the Account and all
cash, financial assets and investment property credited to the
Account.
10. Warranties and Representations -- Bank. Bank represents to the Band
that Bank's representations in ss.1 of the Control Agreement are true
and correct as of the date of this Agreement.
11. Further Assurances. From time to time hereafter, Lakes, Great Lakes,
the Band and Firstar will execute and deliver, or will cause to be
executed and delivered, such additional instruments, certificates or
documents, and will take all such actions, as may reasonably be
requested by the other party or parties, for the purpose of
implementing or effectuating the provisions of this Agreement.
12. Governing Law. This Agreement shall be interpreted in accordance with
the law of the internal law of Minnesota.
13. Amendments, Assignments, Etc. Any provision of this Agreement may be
amended if, but only if, such amendment is in writing and is signed by
each of the parties hereto. No modification shall be implied from
course of conduct. Great Lakes may not further assign its rights in the
Account and its obligations under the Control Agreement without the
written consent of the Band.
14. Gender and Number; Counterparts. Whenever the context so requires the
masculine gender shall include the feminine and/or neuter and the
singular number shall include the plural, and conversely in each case.
This Agreement may be executed in separate counterparts and said
counterparts shall be deemed to constitute one binding document.
15. Notices to Great Lakes. Great Lakes agrees that any notice or demand
upon it shall be deemed to be sufficiently given or served if it is in
writing and is personally served or in lieu of personal service is
mailed by first class certified mail, postage prepaid, or be overnight
mail or courier service, addressed to Great Lakes at the address of
Lakes and with copies set forth in ss. 12 of the Control Agreement.
16. Arbitration; Limited Waiver of Sovereign Immunity. Any disputes under
this Agreement shall be subject to arbitration as provided in ss.14.2
of the Development Agreement; provided that any demand for arbitration
shall be made within 30 days after a notice of default, denominated as
such, is given under this Agreement. The Band's limited waiver of
sovereign immunity in ss.ss.
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14.1 and 14.3 of the Development Agreement shall apply to this
Agreement; provided that the liability of the Band under any judgment
shall always be Limited Recourse, and in no instance shall any
enforcement of any kind whatsoever be allowed against any assets of the
Band other than the limited assets of the Band specified in Section
14.3(i) of the Development Agreement.
17. Ratification. Except as expressly modified in this Agreement, the
Control Agreement is ratified and confirmed.
18. Interpretation. This Agreement, the related amendments to the
Agreements and to the Pledge Agreement (the "Amendments") and the
Obligations shall be interpreted in favor of the Band so as to ensure
for the Band the full benefit of its rights, powers and remedies under
the Obligations notwithstanding the Restructuring, this Agreement and
the Amendments; and to fully implement the intent of the parties that
the Restructuring, this Agreement and the Amendments not affect or
impair the Band's rights, powers and remedies under the Obligations,
other than the conversion of Lakes from primary obligor to unlimited
guarantor, or the Band's continuing first security interest in the
Account.
19. Effective Date; Prior Transactions not Affected: This Agreement shall
be effective as of October 16, 2000 (the "Effective Date"). This
Agreement shall not affect or impair any action taken under the Control
Agreement prior to the Effective Date.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the 16th day of October, 2000.
WITNESS:
GREAT LAKES OF MICHIGAN, LLC
BY:
NAME: Timothy J. Cope
ITS: Chief Financial Officer
LAKES GAMING, INC.
BY:
NAME: Timothy J. Cope
ITS: Chief Financial Officer
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THE POKAGON BAND OF POTAWATOMI
INDIANS
BY:
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John Miller
ITS: Council Chairman
BY:
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Marie Manley
ITS: Secretary
FIRSTAR BANK, N.A.
BY:
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NAME:
-----------------------------------
ITS:
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Seen and consented to:
LAKES GAMING AND RESORTS, LLC
BY:
NAME: Timothy J. Cope
ITS: Chief Financial Officer