Exhibit 10.78
EXECUTION VERSION
SECOND AMENDMENT TO ACCOUNT CONTROL AGREEMENT
This Agreement is made as of the 22nd day of December, 2004, by and among
Great Lakes Gaming of Michigan, LLC, a Minnesota limited liability company
("Great Lakes"), Lakes Entertainment, Inc., f/k/a Lakes Gaming, Inc., a
Minnesota corporation ("Lakes"), the Pokagon Band of Potawatomi Indians (the
"Band") and U.S. Bank National Association, f/k/a Firstar Bank, N.A.
("Firstar").
WITNESSETH:
WHEREAS, the Band and Lakes entered into a Development Agreement dated as
of July 8, 1999 (the "1999 Development Agreement") and a Management Agreement
dated as of July 8, 1999 (the "1999 Management Agreement"; collectively, with
the 1999 Development Agreement, the "1999 Agreements"), pursuant to which the
Band 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 1999 Development Agreement, the
"Facility"); and
WHEREAS, pursuant to the 1999 Development Agreement Lakes 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 1999 Management Agreement Lakes agreed to manage
the Facility on the terms set out in that Agreement; and
WHEREAS, Lakes assigned its rights and obligations under the 1999
Agreements to Great Lakes pursuant to an Assignment and Assumption Agreement
dated as of October 16, 2000, subject to the terms and conditions set out in
that Agreement; and
WHEREAS, the 1999 Agreements were amended and restated by First Amended and
Restated Development Agreement dated as of October 16, 2000 and by First Amended
and Restated Management Agreement dated as of October 16, 2000 (the "First
Amended and Restated Agreements"); and
WHEREAS, the obligations of Lakes and Great Lakes to the Band under the
First Amended and Restated Agreements were secured by a Pledge and Security
Agreement between Lakes and the Band (the "Security Agreement") and by an
Account Control Agreement among Lakes, the Band and Firstar (the "Control
Agreement"), each dated as of July 8, 1999 and as each was amended by first
amendments dated as of October 16, 2000; and
WHEREAS, Great Lakes, Lakes and the Band have entered into a Second Amended
and Restated Development Agreement dated as of December 22, 2004 and a Second
Amended and Restated Management Agreement dated as of December 22, 2004 (the
"Second Amended and Restated Agreements"); and
WHEREAS, the parties wish to amend the Control Agreement to reflect the
execution of the Second Amended and Restated Agreements, and to provide that the
Control Agreement will secure the obligations of Lakes and Great Lakes to the
Band under the Second Amended and Restated Agreements;
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 Security Agreement shall have the same meaning herein as
therein.
3. Assets in Account. Firstar represents that the value and composition of the
assets in the Account as of December 22, 2004 are as shown on the attached
Schedule I.
4. Amendment to Control Agreement. The Control Agreement is amended as
follows:
a. 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 First Amendment dated as of October 16, 2000 and
Second Amendment dated as of December 22, 2004 (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 the Band's security interest in that account and those
assets."
b. The following definitions are amended so that each reads in its
entirety as follows:
"Development Agreement" means the development agreement dated as
of July 8, 1999 between Lakes and the Band, as assumed by Great
Lakes under the Assignment and Assumption Agreement dated as of
October 16, 2000, and as amended and restated by First Amended
and Restated Development Agreement dated as of October 16, 2000
and by Second Amended and Restated Development Agreement dated as
of December 22, 2004.
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"Band Notification of Lakes Default" means notification by the
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, as
amended by First Amendment dated as of December 22, 2004,
has occurred.
The Band Notification of Lakes Default shall be in the form
attached hereto as Exhibit A-1.
"Firstar" shall mean Firstar Bank N.A, n/k/a U.S. Bank National
Association, and its successors in interest.
c. The following definition is added:
"Agreements" means the Development Agreement and the Second
Amended and Restated Management Agreement between Great Lakes and
the Band dated as of December 22, 2004.
5. Reservation of Rights. By entering into this Agreement, the Band does not
waive or affect any rights against Lakes under the Security Agreement or
the Control Agreement.
6. Warranties and Representations - Great Lakes and Lakes. Each of Great Lakes
and Lakes warrants, represents and covenants to the Band that:
a. The Control Agreement and the Security 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
c. The Band has, and at all times until the termination of the Control
Agreement in accordance with Section 8 thereof shall have, a first
perfected security interest in the
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Account and all cash, financial assets and investment property
credited to the Account.
7. Warranties and Representations - Bank. Bank represents to the Band that
Bank's representations in Section 1 of the Control Agreement are true and
correct as of the date of this Agreement.
8. 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.
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 Great Lakes at the address of Lakes and with copies
set forth in Section 12 of the Control Agreement.
13. Arbitration; Limited Waiver of Sovereign Immunity. Any disputes under this
Agreement shall be subject to arbitration as provided in Section 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 'Sections 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 the definition of Limited Recourse
and Section 14.3(a) of the Development Agreement.
14. Ratification. Except as expressly modified in this Agreement, the Control
Agreement is ratified and confirmed and remains in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the 22nd day of December, 2004.
WITNESS: GREAT LAKES GAMING OF MICHIGAN, LLC
BY: /s/ Timothy Cope
- ------------------------------------- ------------------------------------
NAME: Timothy J. Cope
ITS: President
LAKES ENTERTAINMENT, INC., f/k/a LAKES
GAMING, INC.
BY: /s/ Timothy Cope
- ------------------------------------- ------------------------------------
NAME: Timothy J. Cope
ITS: President
THE POKAGON BAND OF POTAWATOMI INDIANS
BY: /s/ John Miller
- ------------------------------------- ------------------------------------
John Miller
ITS: Council Chairman
BY: /s/ Daniel Rapp
- ------------------------------------- ------------------------------------
Daniel Rapp
ITS: Secretary
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U.S. BANK NATIONAL ASSOCIATION, f/k/a
FIRSTAR BANK, N.A.
BY:
- ------------------------------------- ------------------------------------
NAME:
----------------------------------
ITS:
-----------------------------------
Seen and consented to:
LAKES GAMING AND RESORTS, LLC
BY:
- ------------------------------------- ------------------------------------
NAME: Timothy J. Cope
ITS: President
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EXHIBIT A-1
BAND NOTIFICATION OF LAKES DEFAULT
TO: U.S. Bank National Association
101 East Fifth Street
St. Paul, MN 55101
attn: Frank P. Leslie
RE: DEFAULT UNDER CERTAIN AGREEMENTS BY AND BETWEEN THE POKAGON BAND OF
THE POTAWATOMI INDIANS (THE "BAND") AND LAKES GAMING, INC. ("LAKES")
Dear Sir:
(Note: Capitalized terms used herein without definition shall have the
meanings assigned to them in a certain Control Agreement (the "Control
Agreement") dated as of July 8, 1999 by and among the Band, Lakes and U.S. Bank
National Association, f/k/a Firstar Bank ("Bank"), as amended and restated by
First Amendment dated as of October 16, 2000 and by Second Amendment dated as of
December 22, 2004)
Notice is hereby given to you under the Control Agreement that either of
the following conditions has 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, as
amended by First Amendment dated as of December 22, 2004,
has occurred.
You are hereby directed to:
i. immediately cease complying with Entitlement Orders or other
directions concerning the Account originated by Lakes, whether
pursuant to a Lakes Draw Request or otherwise;
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ii. immediately cease purchasing or selling securities in the Account
or making any distributions from the Account, except with the
prior written consent of Band;
iii. immediately cease distributing to Lakes interest and dividends on
property in the Account; and
iv. not less than thirty (30) nor more than forty-five (45) days
after your receipt hereof, and unless otherwise enjoined by an
Order, liquidate all property in the Account and transfer the
proceeds thereof and all interest, dividends and other income
thereon to the following account by wire transfer:
Amount: The entire proceeds of the Account
(indicate which
is applicable) or
$__________________________
Wire to:
Account Number: ________________________________________
Bank: ________________________________________
ABA Number: ________________________________________
Reference: ________________________________________
Dated: ___________, ______ THE POKAGON BAND OF POTAWATOMI INDIANS
By:
------------------------------------
Its: Council Chairman
By:
------------------------------------
Its: Secretary
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SCHEDULE I
ACCOUNT STATEMENT
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