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EXHIBIT 10.173
EXECUTION VERSION
THIRD AMENDED AND RESTATED ACCOUNT CONTROL AGREEMENT
This
Third Amended and Restated Account Control Agreement ("Control
Agreement") is made as of the 25th day of January, 2006, 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"
or "Bank").
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 the 1999 Development Agreement; and
WHEREAS, pursuant to the 1999 Management Agreement Lakes agreed to
manage
the Facility on the terms set out in the 1999 Management 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 (the Assignment and Assumption Agreement, as the
same has been by
a First Amendment dated as of December 22, 2004 and a Second
Amended and
Restated Assignment and Assumption Agreement dated as of January
25, 2006 and
may be modified, restated, amended and substituted, is hereinafter
called the
"Assignment Agreement"); and
WHEREAS, the 1999 Agreements were amended and restated by a First
Amended
and Restated Development Agreement dated as of October 16, 2000 and
by a First
Amended and Restated Management Agreement dated as of October 16,
2000
(collectively, the "First Amended and Restated Agreements") and by
a Second
Amended and Restated Development Agreement dated as of December 22,
2004 and a
Second Amended and Restated Management Agreement
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dated as of December 22, 2004 (collectively, the "Second Amended
and Restated
Agreements"); and
WHEREAS, 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, a Second Amendment
dated as of
December 22, 2004 and a Third Amended and Restated Pledge and
Security Agreement
dated as of January 25, 2006 (collectively, the "Security
Agreement"), in a
securities account maintained by Bank for Great Lakes, and in all
related
property. Lakes entered into an Account Control Agreement among the
Band and
Firstar dated as of July 8,1999, and Great Lakes joined therein to
perfect the
Band's security interest in that account and those assets (the
"Control
Agreement").
WHEREAS, the Control Agreement was amended by first amendments
dated as of
October 16, 2000 and second amendments dated as of December 22,
2004; and
WHEREAS, Great Lakes, Lakes and the Band have entered into a Third
Amended
and Restated Development Agreement dated as of January 25, 2006 and
a Third
Amended and Restated Management Agreement dated as of January 25,
2006
(collectively, the "Third Amended and Restated Agreements");
and
WHEREAS, the parties wish to amend and restate the Control
Agreement to
reflect the execution of the Third 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 Third Amended and Restated
Agreements;
NOW,
THEREFORE, for valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the parties agree as follows:
1. 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 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 Security Agreement and
this
Account Control Agreement.
2. The
Account.
Bank
represents and warrants to the Band that:
a.
Bank maintains
account number 5522000 (the "Account") for Great Lakes
under the name "Pokagon Collateral Account."
b.
Lakes has
deposited $20,900,000 in the Account, subject to this
Account Control Agreement. Bank represents that the value and
composition of the assets in the Account as of January 25, 2006
are
shown on the attached Schedule 1.
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c.
Great Lakes
shall make such further deposits into the Account as may
be required under the Agreements, including without limitation
such
amounts as are needed to maintain a $2,000,000 balance in the
Account
in accordance with Section 8.2 of the Third Amended and
Restated
Development Agreement.
d.
Bank does not
know of any claim to or interest in the Account, except
for claims and interests of the parties referred to in this
Control
Agreement
3.
Definitions.
a.
The following
terms shall have the indicated meanings:
"AGREEMENTS" means the Third Amended and Restated Development
Agreement and
the Third Amended and Restated Management Agreement between Great
Lakes and the
Band dated as of January 25, 2006, as the same may be further
amended, restated,
substituted or modified.
"AWARD" means the award of an arbitrator relating to the Account in
an
arbitration conducted in accordance with Article 14 of the Third
Amended and
Restated Development Agreement.
"BAND ACCOUNT" means a bank account in the name of the Band on
which Great
Lakes does not have signatory authority, which account is
designated by the Band
pursuant to Section 13 (a) of this Control Agreement to receive
transfers from
the Account on account of the Transition Loan and the Non-Gaming
Acquisition
Line of Credit and $900,000 of the Signing Fee.
"BAND NOTIFICATION OF EXCLUSIVE CONTROL" means a Band Notification
of a
Lakes Default or a Band Notification of Termination.
"BAND NOTIFICATION OF LAKES DEFAULT" means notification by the Band
to Bank
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 Third Amended and Restated Agreements and is continuing;
(b)
either (i) the time for Lakes to demand arbitration under the
Third
Amended and Restated 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, and a Second Amended and
Restated
Unlimited Guaranty dated as of January 25, 2006 has occurred.
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The Band Notification of Lakes Default shall be in the form
attached
hereto as Exhibit A.
"BAND NOTIFICATION OF TERMINATION" means notification by the Band
to Bank
that (a) the Third Amended and Restated Agreements have been
terminated; (b)
either (i) the time for Great Lakes to demand arbitration under the
Third
Amended and Restated Agreements has expired, or (ii) Great Lakes
timely demanded
arbitration, and the arbitrator's award has confirmed that
termination; and (c)
the Band is entitled to payment from the property in the Account to
the extent
specified therein. The Band Notification of Termination shall be in
the form
attached hereto as Exhibit B.
"BAND REPRESENTATIVES" means one or more persons designated by the
Band in
writing to give consents and receive notices on behalf of the Band
under this
Control Agreement.
"COURT" means the United States District Court for the District in
which
the Gaming Site is located (or, if the Gaming Site has not been
designated, for
the Western District of Michigan-Southern Division), the United
States Appeals
for the Sixth Circuit, and the United States Supreme Court; or if
Great Lakes or
the Band delivers to the Bank the written opinion of their
respective counsel
that such federal courts lack jurisdiction, the courts of the State
of Michigan.
"THIRD AMENDED AND RESTATED 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 a First Amended and
Restated
Development Agreement dated as of October 16, 2000, by a Second
Amended and
Restated Development Agreement dated as of December 22, 2004 and by
a Third
Amended and Restated Development Agreement dated as of January 25,
2006, and as
the same may be further amended, restated, substituted or
modified.
"ENTERPRISE ACCOUNT" means a bank account in the name of the Band
on which
Great Lakes has signatory authority as agent for the Band pursuant
to the Third
Amended and Restated Development Agreement, which account is
designated by the
Band and Great Lakes pursuant to Section 13 (b) of this Control
Agreement to
receive transfers from the Account on account of Development
Expenditures with
regard to the Facility or the Enterprise.
"ENTITLEMENT ORDER" means a notification to Bank from Great Lakes
or the
Band directing the Bank to transfer or redeem any securities,
property, cash or
other property in the Account.
"FINAL ORDER" means an order, judgment or decree of a Court entered
after
notice and hearing (a) enjoining transfer of property in the
Account, or (b)
mandating compliance with, or otherwise enforcing, an Award,
provided that the
time for appeal from any such Order has expired or, if the Band has
taken an
appeal from such order, that the appeal has been denied and the
Order is now
final.
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"FIRSTAR" shall mean Firstar Bank N.A, n/k/a U.S. Bank National
Association, and its successors in interest.
"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.
"LAKES DRAW REQUEST" means notification by Great Lakes to the Bank,
prior
to receipt by Bank of a Band Notification to transfer funds from
the Account,
which notification shall be in the form of Exhibit D-l (as to
transfers to the
Band Account) or D-2 (as to transfers to the Enterprise
Account).
"ORDER" means an order, judgment or decree of a Court entered after
notice
and hearing (a) enjoining transfer of property in the Account, or
(b) mandating
compliance with, or otherwise enforcing, an Award.
b.
Capitalized
terms used herein without definition shall have the
meanings assigned to them in the Third Amended and Restated
Development Agreement
4. Control by
the Band.
Bank
will comply with Entitlements Orders as follows:
a.
Prior to receipt
by Bank of a Band Notification of Exclusive Control.
Prior to receipt by Bank of a Band Notification of Exclusive
Control,
Bank shall transfer funds from the Account in accordance with a
Lakes
Draw Request if the Band gives its prior written consent to
such
request. Such consent shall be in the form attached as Exhibit
E.
b.
Joint Notice.
After receipt by Bank of a Joint Notice, Bank shall
liquidate the property in the Account and transfer the proceeds
thereof, and all interest, dividends and other income thereon,
in
accordance with the directions in such Joint Notice.
c.
Band
Notification of Exclusive Control. After receipt by Bank of a
Band Notification of Exclusive Control, Bank shall:
i. immediately
cease complying with Entitlement Orders or other
directions concerning the Account originated by Great Lakes,
whether pursuant to a Lakes Draw Request or otherwise;
ii. immediately cease
purchasing or selling securities in the Account
or making any distributions from the Account, except with the
prior written consent of
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Band;
iii. immediately cease distributing to Great Lakes interest and
dividends on property in the Account; and
iv. not less than
thirty (30) nor more than forty-five (45) days
after receipt by Bank of a Band Notification of Exclusive
Control, 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 Band
Account,
or such other account as the Band may direct in writing.
d.
Award. Bank
shall comply with any Award not less than thirty (30) nor
more than forty-five (45) days after receipt by Bank of a copy of
the
Award, unless enjoined by an Order of Court.
e.
Order: Final
Order. Bank shall comply with any Order or Final Order;
provided that Bank shall not distribute property out of the
Account
without the Band's written consent except pursuant to a Final
Order.
5. Lakes' Rights
in Account.
a.
Until Bank
receives a Band Notice of Exclusive Control, Bank may
distribute to Great Lakes all interest and regular cash dividends
on
property in the Account. Bank shall not distribute any other
property
in the Account, including without limitation securities or the
proceeds of the sale of any securities, to or at the direction
of
Great Lakes except to the extent provided in Section 4.
b.
Until Bank
receives a Band Notice of Exclusive Control, Great Lakes
may direct the investment of all property in the Account in
accordance
with Section 8.2 of the Third Amended and Restated Development
Agreement, provided that (a) property the Account shall not
include
equities, swaps, derivatives or commodities; (b) no
instruments,
certificated securities or financial assets, as defined in the
Minnesota Uniform Commercial Code, shall be held in the name of
Great
Lakes, and all such assets shall be held in the name of the
Account;
and (c) any cash balances shall be invested in money market or
other
financial assets, unless needed to make distributions in
accordance
with this Control Agreement. Subject to that limitation, Bank may
rely
conclusively on Great Lakes' direction as to investment of property
in
the Account unless and until Bank receives a Band Notice of
Exclusive
Control.
c.
Bank will not
comply with any Entitlement Order originated by Lakes
that would require Bank to violate this Control Agreement.
6. Priority of
Bank's Security Interest: Bank's Fees and Expenses: No Third
Party Entitlement Orders.
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a.
Bank
subordinates in favor of Band any security interest, lien, or
right of setoff it may have, now or in the future, against the
Account
or property in the Account, except that Bank will retain its
prior
lien on property in the Account to secure payment for property
purchased for the Account, normal commissions and fees for the
Account, and its reasonable fees (including attorneys fees) and
expenses relating to the Account. Bank is authorized to deduct
such
commissions, fees and expenses from the Account. To the extent
that
the property in the Account is not sufficient to pay such
commissions,
fees and expenses, the Band and Great Lakes jointly and
severally
agree to pay such to Bank promptly on demand.
b.
Bank will not
agree with any third party that Bank will comply with
Entitlement Orders originated by the third party with regard to
the
Account or property in the Account.
7. Statements.
Confirmations and Notices of Adverse Claims.
a.
Bank will send
copies of all statements and confirmations for the
Account simultaneously to Great Lakes and Band. Bank will use
reasonable efforts promptly to notify Band and Great Lakes if
any
other person claims that it has a property interest in property in
the
Account and that it is a violation of that person's rights for
anyone
else to hold, transfer or deal with the property. Bank will also
send
the Band copies of all other communications sent by Bank to
Great
Lakes relating to the Account, and shall furnish the Band with
such
other information concerning the Escrow Account as Band may
reasonably
request.
b.
Great Lakes
shall send Band a copy of all communications sent by Great
Lakes to Bank, including without limitation all Lakes Draw
Requests;
shall inform the Band of the nature and terms of the financial
instruments in which the escrowed funds are invested; and shall
furnish the Band with such other information concerning the Account
as
Band may request.
c.
The Band shall
send Great Lakes a copy of all communications sent by
the Band to Bank relating to the Account.
8. Bank's
Responsibility.
a.
Except for
permitting a withdrawal, delivery or payment in violation
of Sections 4 or 5, Bank wil
