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AMENDMENT TO PLEDGE AND SECURITY 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"), and the Pokagon
Band of Potawatomi Indians (the "Band").
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 Bank, N.A.,
f/k/a Firstar Bank of Minnesota, N.A. (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 and related cash, financial assets and
investment property, as defined in the Control Agreement, 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 the Band 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 first perfected
security interest of the Band.
4. Acceptance of Assignment. Great Lakes accepts the assignment of the Account
and all related cash, financial assets and investment property, and agrees
to perform and discharge Lakes' obligations under the Pledge
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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 Pledge 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. Amendment to Pledge Agreement. The Pledge Agreement is amended as follows:
a. All references in the Pledge Agreement to Lakes (other than in the
recitals) or to Pledgor shall be deemed to refer to each of Lakes and
Great Lakes.
b. S. Eric Marshall is deleted from the list of persons to whom copies of
notices to the Band must be given.
c. 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."
d. 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
6. Reservation of Rights. The Band expressly reserves all rights against
Lakes under the Pledge Agreement.
7. Warranties and Representations. Each of Great Lakes and Lakes
warrants, represents and covenants to the Band that:
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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; and
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
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.
8. Further Assurances. From time to time hereafter, Lakes, Great Lakes
and/or the Band 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.
9. Governing Law. This Agreement shall be interpreted in accordance with
the law of the internal law of Minnesota.
10. 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.
11. 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.
12. 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
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Great Lakes at the address of Lakes and with copies set forth in ss. 8
of the Pledge Agreement.
13. 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. 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.
14. Ratification. Except as expressly modified in this Agreement, the
Pledge Agreement is ratified and confirmed.
15. Interpretation. This Agreement, the related amendments to the
Agreements and to the Control 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.
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:
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NAME: Timothy J. Cope
ITS: Chief Financial Officer
LAKES GAMING, INC.
BY:
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NAME: Timothy J. Cope
ITS: Chief Financial Officer
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THE POKAGON BAND OF POTAWATOMI
INDIANS
BY:
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NAME: ---------------------------
ITS: Council Chairman
BY:
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NAME: ---------------------------
ITS: Secretary
Seen and consented to:
LAKES GAMING AND RESORTS, LLC
BY:
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NAME: Timothy J. Cope
ITS: Chief Financial Officer