SECOND AMENDMENT TO ACCOUNT CONTROL AGREEMENT

 

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                                                                   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

 

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     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.

 

 

                                       2

 

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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 date