DOMINION ACCOUNT AGREEMENT

 

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                                                                   Exhibit 10.77

 

                                                   DATED AS OF DECEMBER 22, 2004

 

                                    [FORM OF]

                           DOMINION ACCOUNT AGREEMENT

 

     THIS DOMINION ACCOUNT AGREEMENT, (the "Agreement"), dated effective as of

December 22, 2004 (the "Effective Date"), between the POKAGON BAND OF POTAWATOMI

INDIANS, a federally recognized Indian Tribe (the "Borrower"), GREAT LAKES

GAMING OF MICHIGAN, LLC, a Minnesota limited liability company f/k/a Great Lakes

of Michigan, LLC ("Great Lakes") and _________________________ BANK, as Agent

for and on behalf of Great Lakes (the "Agent");

 

                                   WITNESSETH:

 

     WHEREAS, the Borrower has the inherent power to conduct and regulate gaming

on its lands, subject only to the restrictions imposed by the Indian Gaming

Regulatory Act of 1988, Public Law 100-497 ("IGRA"); and

 

     WHEREAS, in accordance with IGRA, the Borrower has entered into a

Tribal-State Compact for the Conduct of Class III Gaming within the State of

Michigan; and

 

     WHEREAS, the Borrower operates a gaming facility in New Buffalo, Michigan

(the "Casino") on lands the U.S. Department of the Interior has taken into

trust; and

 

     WHEREAS, the Borrower and Lakes Entertainment, Inc., f/k/a Lakes Gaming,

Inc. ("Lakes") have previously entered into a Development Agreement dated as of

July 8, 1999, as assigned by Lakes to Great Lakes pursuant to that certain

Assignment and Assumption Agreement dated October 16, 2000, by and among the

Borrower, Great Lakes and Lakes, and as amended and restated by that certain

First Amended and Restated Development Agreement dated October 16, 2000 by and

between the Borrower and Great Lakes, and as amended and restated by that

certain Second Amended and Restated Development Agreement dated as of December

22, 2004 by and between the Borrower and Great Lakes (collectively and as

heretofore and hereafter amended, the "Development Agreement"), pursuant to

which Great Lakes has agreed to, among other things, make certain loans to the

Borrower in connection with the development, construction and equipping of the

Casino and certain related amenities; and

 

     WHEREAS, the Borrower and Lakes Gaming, Inc. ("Lakes") have previously

entered into a Management Agreement dated as of July 8, 1999, as assigned by

Lakes to Great Lakes pursuant to that certain Assignment and Assumption

Agreement dated October 16, 2000, by and among the Borrower, Great Lakes and

Lakes, and as amended and restated by that certain First Amended and Restated

Management Agreement dated October 16, 2000 by and between the Borrower and

Great Lakes, and as amended and restated by that certain Second Amended and

Restated Management Agreement dated as of December 22, 2004 by and between the

Borrower and Great Lakes (collectively and as heretofore and hereafter amended,

the "Management

 

 

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Agreement"), pursuant to which the Borrower and Great Lakes have agreed that

Great Lakes shall manage the Casino and certain related amenities as more

specifically set forth therein; and

 

     WHEREAS, Borrower and Great Lakes desire to enter into this Agreement in

order to provide for the receipt, deposit and disbursement of Gross Revenues

derived by the Borrower with respect to the Enterprise, and to grant Great Lakes

a first priority security interest in such revenues and certain related

collateral (subject to subordination as provided herein), each for the purposes

and in accordance with the terms set forth herein.

 

     NOW, THEREFORE, in consideration of the mutual agreements herein contained

and other good and valuable consideration, the receipt and sufficiency of which

are hereby acknowledged, the parties hereto do hereby agree as follows:

 

                                    ARTICLE 1

                                   DEFINITIONS

 

     Section 1.1 Unless the context otherwise requires, capitalized terms which

are not defined herein shall have the meaning ascribed to them in the

Development Agreement or the Management Agreement, as applicable.

 

     Section 1.2 Defined Terms. The following terms when used herein shall have

the following meanings:

 

     "Business Day" means a day other than (i) a Saturday or Sunday and (ii) any

day on which banks located in the State of Michigan are required or authorized

by law to remain closed.

 

     "Collateral" means the Enterprise Revenues and the Dominion Account and the

cash and/or cash equivalents and other investment property deposited or credited

thereto from time to time, each whether now or hereafter owned, existing,

arising or acquired, and including any proceeds of the foregoing.

 

     "Dominion Account" means that certain Account No. __________ owned and

maintained by the Borrower with the Agent formed by and subject to the terms of

this Agreement together with any replacement account related thereto.

 

     "Enterprise" shall have the meaning assigned to such term in the Management

Agreement and which shall include, without limitation, the Casino.

 

     "Enterprise Revenues" shall mean the Gross Revenues (as such term is

defined in the Management Agreement) of the Enterprise.

 

     "Obligations" shall mean all amounts owing by the Borrower to Great Lakes

with respect to the Lakes Development Note, the Lakes Facility Note, the

Non-Gaming Land Acquisition Line of Credit and, the Transition Loan Note, the

Minimum Payments Note, the Working Capital Advance Note and any other

Transaction Documents (as each of such terms are defined in the

 

 

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Development Agreement) and the Management Fees (as such term is defined in the

Management Agreement), together with any costs, expenses or other amounts

hereafter owing by the Band to Agent or Great Lakes pursuant to the terms of

this Agreement, each of the foregoing, whether now existing or hereafter

incurred or arising.

 

                                    ARTICLE 2

                                GENERAL COVENANTS

 

     Section 2.1 Creation of Dominion Account/Legal Opinion. There is hereby

created with the Agent the Dominion Account in the name of Borrower, which

account is subject to the terms and conditions of this Agreement. The Agent

shall deposit into the Dominion Account, as received, each and every payment of

Enterprise Revenues or proceeds thereof delivered to the Agent in accordance

with Section 2.2. Notwithstanding any other term or provision contained herein

or in the Development Agreement (other than Section 9.2.1(j) thereof) or

Management Agreement, only Great Lakes shall have the authority to make

withdrawals from or exercise any other rights with respect to the Dominion

Account; but Great Lakes' rights with regard to the Dominion Agreement shall be

terminated as provided in, and shall be subject to, the provisions of Sections

9.2.1(j) of the Development Agreement. Agent hereby acknowledges the security

interest in the Collateral granted to Great Lakes by Borrower. On the date of

execution of this Agreement, the Borrower shall cause to be delivered to Great

Lakes (a) such financing statements and similar documents necessary to perfect

the security interest granted to Great Lakes pursuant to Section 3.1 hereof (the

"Financing Statements") and (b) a legal opinion in form and substance reasonably

acceptable to Great Lakes, opining as to the due authorization, execution, and

delivery of this Agreement and the Financing Statements by the Band, together

with opinions as to the Band's sovereign immunity waiver and noncontravention

with laws and agreements.

 

     Section 2.2 Deposit of Enterprise Revenues. The Borrower agrees that it

will direct the Manager and any other applicable parties to cause all Enterprise

Revenues to be transferred to the Agent on each Business Day for deposit into

the Dominion Account. If any Enterprise Revenues are initially deposited in

collection bank(s) (which shall be permitted provided the collecting bank(s)

execute and deliver the Joinder Agreement attached hereto as Exhibit A with the

Borrower, Great Lakes and the collecting banks in form mutually acceptable to

each of such parties), the Borrower shall transfer or cause to be transferred

all such Enterprise Revenues or other Collateral, consisting of cash and other

collected funds directly by wire transfer of immediate available funds to the

Dominion Account, on each Business Day. In the event that the Borrower receives

any payment that should have been deposited into the Dominion Account as

provided pursuant to this Agreement, the Borrower agrees that it will hold such

amounts in trust for the benefit of Great Lakes, and shall not commingle any

such funds with any of its funds or other property and shall immediately

transfer such amounts to the Agent for deposit into the Dominion Account. The

Borrower agrees that the Agent's officers, agents and employees are irrevocably

authorized by it to endorse for payment to the Agent any instruments received by

the Agent for deposit into the Dominion Account.

 

 

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     Section 2.3 Withdrawals from Dominion Account. Great Lakes acknowledges and

agrees that during each calendar month it shall make such transfers from the

Dominion Account to and for the benefit of each of the Borrower and Great Lakes

in such amounts, for such purposes and as and when required pursuant to the

terms of (a) Sections 4.19.6 and 5.5 of the Management Agreement, including,

without limitation, to the extent of available cash proceeds, payment to the

Borrower of the Monthly Distribution Payment, and (b) Section 9.2.1(j) of the

Development Agreement. Great Lakes further acknowledges and agrees that

transfers from the Dominion Account to Disbursement Accounts under Section

4.19.6 of the Management Agreement (other than Monthly Distribution Payments to

the Band) and payment of the Minimum Guaranteed Monthly Payment shall be timely

made notwithstanding any provision of this Dominion Agreement, any Band Event of

Default or any Event of Default under this Agreement. In connection with any

such withdrawals and transfers and any other aspects of the Dominion Account,

the Agent shall acknowledge and comply with only the withdrawal requests and

other directions received from Great Lakes, except as provided in an arbitration

award in an arbitration to which Great Lakes and the Borrower are parties.

 

     Section 2.4 Interest. The Dominion Account shall bear interest, and subject

to Section 3.2 of this Agreement, funds in that account shall be invested in

money market or other cash equivalent assets that are reasonably acceptable to

Borrower and Great Lakes. All interest accruing with respect to amounts now or

hereafter on deposit with respect to the Dominion Account shall be deposited

into the Dominion Account and become part of the proceeds of the Collateral and

distributed as part of such proceeds.

 

     Section 2.5 Monthly Reporting. On or before the ___ Business Day of each

calendar month, the Agent shall provide to the Borrower and Great Lakes an

account statement with respect to the Dominion Account reflecting all deposits

to, withdrawals from and charges credited against the Dominion Account, and

specifying the financial assets held in such account.

 

                                    ARTICLE 3

                     PLEDGE AND GRANT OF SECURITY INTERESTS

 

     Section 3.1 Grant of the Security Interest. As security for the payment and

performance of all of the Obligations, the Borrower hereby pledges to Great

Lakes and grants a continuing security interest to Great Lakes all of the

Borrower's right, title and interest in and to the Collateral. Such security

interest shall be subordinated as and when required by and in accordance with

Sections 9.2.1(d) and (j) of the Development Agreement, and Great Lakes agrees

to execute and deliver subordination agreements reasonably acceptable to the

senior parties described in those subsections of the Development Agreement. The

grant of a security interest in the Collateral as security for the Minimum

Payments Note does not alter the limitations on Great Lakes' limited right to

recoup Minimum Guaranteed Payment Advances as provided in such Note and in

Section 5.6.2 of the Management Agreement, and Great Lakes shall only be

entitled to payment on such Note from Collateral to the extent that it is

entitled to receive such recoupment under the Note and Section 5.6.2 but does

not receive such recoupment.

 

 

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     Section 3.2 Control. Agent covenants and agrees that it will comply with

all instructions, requests or other directions originated by Great Lakes

concerning the Dominion Account at any time without further consent by Borrower.

Except as otherwise provided in this Agreement, Agent shall accept investment

instructions with respect to the Collateral held in the Dominion Account at the

direction of Borrower or its authorized representatives and Great Lakes until

such time as Great Lakes delivers a written notice to Agent and the Borrower in

accordance with Section 5.2 that Great Lakes is thereby exercising exclusive

control over the Account ("Notice of Exclusive Control"), provided that the

proceeds of any such investments are deposited in or credited to the Dominion

Account contemporaneously with such transaction; and provided, further, such

investment instructions shall not affect the type or nature of Collateral for

attachment and perfection purposes under the Michigan Uniform Commercial Code

(as may be amended from time to time). Without limiting the foregoing, all

investments that are not in the form of cash credited to the Dominion Account

shall be legally titled in the name of the Agent (and not in the record name of

either the Borrower or Lakes), as a securities intermediary and for the benefit

each of the Borrower and Great Lakes in accordance with this Agreement. In

addition, no investments shall be subject to or held in a margin account. After

Agent receives the Notice of Exclusive Control, it will immediately cease

complying with any investment instructions concerning the Dominion Account

originated by Borrower or its representatives and shall comply with only such

investment instructions as are originated by Great Lakes.

 

     Section 3.3 Duration. The pledge and security interests granted herein in

the Collateral will respectively continue with respect to Great Lakes until

cancelled or terminated by Great Lakes under a written cancellation instrument

signed by such party or except as otherwise provided in an arbitration award in

an arbitration to which Great Lakes and the Borrower are parties. Great Lakes

acknowledges and agrees that it shall cause the termination of this Agreement as

and when required pursuant to the applicable terms and provisions of the

Development Agreement and Management Agreement.

 

     Section 3.4 Transfers free of Security Interest. Without modifying the

terms of Section 2.1 and 2.3 hereof, all funds transferred from the Dominion

Account as provided herein, including without limitation any funds transferred

by or at the direction of Great Lakes to Disbursement Accounts pursuant to

Sections 4.19.6, 5.3 and 5.5 of the Management Agreement, as well as all Minimum

Guaranteed Monthly Payments, Monthly Distribution Payments, and other funds

distributed to the Borrower, shall be free of the security interest of Great

Lakes immediately upon their transfer from the Dominion Account.

 

                                    ARTICLE 4

                               BORROWER COVENANTS

 

     Section 4.1 Covenants of the Borrower. During the term of this Agreement,

the Borrower will observe and comply with the following requirements, unless

Great Lakes shall otherwise consent in writing:

 

     (a) Further Assurance. The Borrower will promptly execute and deliver all

instruments and documents, and take such actions that may be necessary or that

the Agent or

 

 

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Great Lakes may reasonably request, in order to perfect and protect the security

interests granted hereby or, after an Event of Default, to enable the Agent or

Great Lakes to exercise and enforce its right and remedies hereunder with

respect to any Collateral in accordance with this Agreement. Without limiting

the generality of the foregoing, the Borrower will execute and file such

financing statements or continuation statements in respect thereof, or

amendments thereto, and such other instruments of notices, as may be necessary

or desirable, or as the Agent or Great Lakes may reasonably request, in order to

perfect, preserve, and enhance the security interests granted hereby. The

Borrower hereby authorizes the Agent, with the prior written consent of Great

Lakes, or Great Lakes to file this Agreement (if the Borrower shall fail to

provide an appropriate financing statement within ten (10) business days after

request) or one or more continuation statements in respect thereof, relating to

all or any part of Dominion Account and the Enterprise Revenues without the

additional signature or consent of the Borrower where permitted by law. A

photocopy or other reproduction of this Agreement or any financing statement

covering the Dominion Account and Enterprise Revenues or any part thereof shall

be sufficient as a financing statement where permitted by law.

 

     (b) No Revocation. The Borrower shall not revoke any direction or

authorization required or authorized to be given to the collection bank(s) and

Agent pursuant to Article 2 or elsewhere herein unless authorized pursuant to an

arbitration award to which Great Lakes and the Borrower are parties.

 

     (c) Financial Statements. After the occurrence of a Band Event of Default

and termination of the Management Agreement, the Borrower will furnish the

following to Great Lakes upon request:

 

          (i)  Within thirty (30) days after the end of each month and one

               hundred twenty (120) days after the end of each fiscal year,

               financial and operating statements of the Enterprise for such

               month (and year-to-date) or fiscal year, as applicable, including

               a balance sheet and a profit and loss statement, all in

               reasonable detail and conforming to generally accepted accounting

               principles for casinos. The monthly statements shall be prepared

               and certified by the Borrower as being true and correct

               representations of the information set forth therein and the

               annual financial statements shall be prepared, audited and

               certified by independent certified public accountants with casino

               auditing experience employed or retained by the Borrower. Great

               Lakes agrees that any such information, as well as any other

               information it may receive from Borrower relating to the

               Enterprise, shall be and remain subject to the provisions of

               Section 15.13 of the Development Agreement.

 

          (ii) Within fifteen (15) days after the filing thereof, a copy of the

               Borrower's regulatory filings under IGRA and its Compact for each

               calendar year during the term hereof, with all schedules

               attached.

 

          (iii) With each of the annual audited and monthly unaudited financial

               statements delivered pursuant to this subsection a certificate of

               the chief financial officer of the Borrower or an appropriate

               officer of the manager

 

 

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               of the Enterprise substantially in the form set forth in Exhibit

               B stating that, except as explained in reasonable detail in such

               certificate, all Gross Revenues with respect to the Enterprise

               have been deposited into the Dominion Account for the period