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Exhibit 10.171
EXECUTION VERSION
THIRD AMENDED AND RESTATED
DEVELOPMENT AGREEMENT
BETWEEN THE
POKAGON BAND OF POTAWATOMI INDIANS
AND
GREAT LAKES GAMING OF MICHIGAN, LLC,
(F/K/A GREAT LAKES OF MICHIGAN, LLC)
DATED AS OF JANUARY 25, 2006
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TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS AND
OBJECTIVES...................................... 3
Section 1.1.
Definitions................................................
3
"Account"............................................................
3
"Accrued
Expenses"...................................................
3
"Agreement"..........................................................
3
"Agreements".........................................................
3
"Approved
Construction Costs"........................................
3
"Approved
Development Budget"........................................
3
"Architect"..........................................................
3
"Assignment and Assumption
Agreement"................................ 3
"Band
Designee"......................................................
4
"Band
Designee Guarantee"............................................
4
"Band
Designee Mortgage".............................................
4
"Band
Event of Default"..............................................
4
"Band
Interest Rate".................................................
4
"Band
Mortgage"......................................................
4
"Band Security
Agreement"............................................ 4
"Band
Working Capital Advances"......................................
4
"Bank
Closing".......................................................
4
"Bank
Lender"........................................................
4
"Bank
Loan"..........................................................
4
"Bank Loan
Agreement"................................................
4
"Bank
Note"..........................................................
5
"BIA"................................................................
5
"Business
Board".....................................................
5
"Change of
Control"..................................................
5
"Class II
Gaming"....................................................
5
"Class III
Gaming"...................................................
5
"Commencement
Date"..................................................
5
"Compact"............................................................
5
"Completion
Date"....................................................
5
"Constitution".......................................................
6
"Construction
Costs".................................................
6
"Construction
Documents".............................................
6
"Construction Guaranty
Payments"..................................... 6
"Control
Agreement"..................................................
6
"Corporate
Commission"...............................................
6
"CRC"................................................................
7
"Design
Agreement"...................................................
7
"Design
Packages"....................................................
7
"Development
Expenditures"...........................................
7
"Development Soft
Costs"............................................. 7
"Disbursement
Accounts"..............................................
7
"Dominion
Account"...................................................
7
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"Dominion
Agreement".................................................
7
"Economically
Feasible"..............................................
7
"Enterprise".........................................................
7
"Enterprise
Accounts"................................................
8
"Equipment
Lender"...................................................
8
"Equipment
Loan Agreement"...........................................
8
"Equipment
Loan".....................................................
8
"Equipment
Note".....................................................
8
"Facility"...........................................................
8
"Final
Scope of Work"................................................
8
"Firstar"............................................................
9
"Force
Majeure"......................................................
9
"Furnishings and
Equipment".......................................... 9
"Gaming".............................................................
9
"Gaming
Ordinance"...................................................
9
"Gaming
Regulatory Authority" or "GRA"...............................
9
"Gaming
Site"........................................................
9
"Gaming
Site Acquisition Advances"...................................
9
"Governmental
Action"................................................
10
"Great
Lakes"........................................................
10
"Guaranty"...........................................................
10
"Guaranty
Reserve"...................................................
10
"Initial
Phase"......................................................
10
"Initial
Scope of Work"..............................................
10
"IGRA"...............................................................
10
"Insider"............................................................
10
"Lakes"..............................................................
10
"Lakes Development
Loan"............................................. 10
"Lakes
Development Note".............................................
11
"Lakes
Event of Default".............................................
11
"Lakes
Facility Loan"................................................
11
"Lakes
Facility Note"................................................
11
"Lakes'
Internal Expenses"...........................................
11
"Lakes
Refinancing Guaranty".........................................
11
"Lakes
Security Agreement"...........................................
11
"Lakes
Working Capital Advance Note".................................
11
"Lakes
Working Capital Advances".....................................
11
"Legal
Requirements".................................................
11
"Limited
Recourse"...................................................
12
"Loans"..............................................................
12
"Local
Agreement"....................................................
12
"Management
Agreement"...............................................
12
"Material
Adverse Change"............................................
12
"Material
Breach"....................................................
12
"Memorandum of
Understanding"........................................ 13
"Minimum
Payments Note"..............................................
13
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"Monthly
Payments"...................................................
13
"National
Indian Gaming Commission" or "NIGC"........................
13
"Net
Revenues".......................................................
13
"NIGC
Approval"......................................................
13
"NIGC
Disapproval"...................................................
13
"Non-Gaming
Land"....................................................
13
"Non-Gaming Land Acquisition Line of
Credit"......................... 13
"252 MM
Shortfall"...................................................
13
"Operating
Expense"..................................................
14
"Plans and
Specifications"...........................................
14
"Pokagon
Council"....................................................
14
"Preliminary Development
Budget"..................................... 14
"Project"............................................................
14
"Remaining
Loan Availability Amount".................................
14
"Reserve
Amount".....................................................
14
"Restoration
Act"....................................................
14
"Restricted
Territory"...............................................
14
"Road
Service Agreement".............................................
14
"Scholarship Program
Fee"............................................ 14
"Signing
Fee"........................................................
14
"Specific
Performance Restriction"...................................
14
"State"..............................................................
14
"Subsequent Gaming Facility
Revenues"................................ 15
"Term"...............................................................
15
"Transaction
Documents"..............................................
15
"Transition
Loan"....................................................
15
"Transition Loan
Note"............................................... 15
"Tribal
Distributions"...............................................
15
"Tribal
UCC Code"....................................................
15
Section 1.1.
Independent
Agreement.................................... 15
ARTICLE 2. ACQUISITION OF GAMING SITE AND NON-GAMING
LANDS................. 15
Section 2.1.
Selection of
Gaming Site................................. 15
Section 2.2.
Purchase of
Gaming Site; Funding......................... 15
Section 2.3.
[intentionally
omitted].................................. 16
Section 2.4.
Assignment of
Other Options.............................. 16
Section 2.5.
Selection of
Non-Gaming Lands............................ 16
Section 2.6.
Closing on
Non-Gaming Lands; Funding..................... 16
Section 2.7.
Mortgages Prior
to Transfer into Trust................... 17
ARTICLE 3. CONSTRUCTION
PHASES............................................. 17
Section 3.1.
Initial
Phase............................................ 17
Section 3.2.
Final Scope of
Work...................................... 17
Section 3.3.
Modification of
Final Scope of Work...................... 17
Section 3.4.
Bank Loans and
Equipment Loans........................... 18
ARTICLE 4. DESIGN
PHASE....................................................
18
Section 4.1.
Employment of
Architect.................................. 18
Section 4.2.
Design and
Construction Budgets.......................... 18
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Section 4.3.
Gaming
Regulatory Authority Expenses..................... 19
Section 4.4.
[intentionally
omitted].................................. 19
Section 4.5.
Concept Design
and Engineering........................... 19
Section 4.6.
Preliminary
Program Evaluation........................... 19
Section 4.7.
Design
Development....................................... 19
Section 4.8.
Plans and
Specifications................................. 20
Section 4.9.
Compliance with
Construction Standards. Environmental
Laws and Regulations.....................................
20
Section 4.10.
Advance of Funds for
Design Work. Long Lead Time Items
and Preliminary Site Work................................
20
ARTICLE 5. CONSTRUCTION
PHASE.............................................. 21
Section 5.1.
Selection of
Contractor or Construction Manager.......... 21
Section 5.2.
Vendor
Preferences....................................... 21
Section 5.3.
Proposal
Review.......................................... 21
Section 5.4.
Contracts................................................
21
Section 5.5.
Construction
Document Provisions......................... 22
Section 5.6.
Construction
Administration.............................. 22
Section 5.7.
Construction
Commencement and Completion................. 22
Section 5.8.
Determination of
Approved Construction Costs; Cost
Overruns.................................................
23
ARTICLE 6. FURNISHINGS AND
EQUIPMENT....................................... 23
Section 6.1.
Selection of
Furnishings and Equipment................... 23
ARTICLE 7.
TERM............................................................
23
Section 7.1.
Term.....................................................
23
ARTICLE 8. PAYMENTS AND COMMITMENTS BY GREAT LAKES BEFORE APPROVAL
OF
MANAGEMENT
AGREEMENT....................................................
24
Section 8.1.
Fees Payable By
Great Lakes to the Band.................. 24
Section 8.2.
Deposit into the
Account................................. 25
Section 8.3.
Transition
Loan.......................................... 25
Section 8.4.
Advances on
Lakes Development Loan....................... 26
Section 8.5.
Non-Gaming Land
Acquisition Line of Credit............... 26
ARTICLE 9. PAYMENTS AND COMMITMENTS BY GREAT LAKES AFTER APPROVAL
OF
MANAGEMENT
AGREEMENT....................................................
27
Section 9.1.
Scholarship
Program Fee.................................. 27
Section 9.2.
Development and
Equipment Loans.......................... 27
ARTICLE 10. EXCLUSIVITY;
NON-COMPETITION................................... 39
Section 10.1.
Exclusivity Regarding
Facility........................... 39
Section 10.2.
Exclusivity in
Michigan.................................. 39
Section 10.3.
Indiana
Casino........................................... 39
Section 10.4.
Non-Competition..........................................
39
Section 10.5.
Assignment; Change of
Control............................ 39
Section 10.6.
Restrictions on
Collateral Development................... 40
ARTICLE 11.
REPRESENTATIONS, WARRANTIES, AND COVENANTS....................
41
Section 11.1.
Representations and
Warranties of the Band............... 41
Section 11.2.
Band
Covenants........................................... 41
Section 11.3.
Representations and
Warranties of Lakes and Great Lakes.. 43
Section 11.4.
Covenants of Lakes and
Great Lakes....................... 43
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ARTICLE 12. EVENTS OF
DEFAULT.............................................. 44
Section 12.1.
Events of Default by
the Band............................ 44
Section 12.2.
Events of Default by
Lakes or Great Lakes................ 45
Section 12.3.
Material Breach: Right
to Cure........................... 46
ARTICLE 13.
TERMINATION....................................................
47
Section 13.1.
Voluntary
Termination.................................... 47
Section 13.2.
Termination if No NIGC
Approval.......................... 47
Section 13.3.
Great Lakes Right to
Terminate on Band Event of Default.. 47
Section 13.4.
Band Right to
Terminate on Lakes Event of Default........ 47
Section 13.5.
Band Right to
Terminate for Material Adverse Change...... 47
Section 13.6.
Termination on
Buyout.................................... 48
Section 13.7.
Involuntary
Termination Due to Changes in Legal
Requirements.............................................
48
Section 13.8.
Repair or
Replacement.................................... 50
Section 13.9.
Recoupment and
Setoff.................................... 50
ARTICLE 14. DISPUTE RESOLUTION; LIQUIDATED
DAMAGES......................... 50
Section 14.1.
Band's Waiver of
Sovereign Immunity and Consent to Suit.. 50
Section 14.2.
Arbitration..............................................
51
Section 14.3.
Limitation of
Actions.................................... 52
Section 14.4.
Damages on Termination
for Failure to Obtain NIGC
Approval.................................................
53
Section 14.5.
Liquidated Damages and
Limitations on Remedies........... 53
Section 14.6.
Lakes' and Great
Lakes' Continuing Obligations........... 55
Section 14.7.
Termination of
Exclusivity............................... 55
Section 14.8.
Remedies.................................................
55
Section 14.9.
Fees not
Damages......................................... 55
Section 14.10.
Damages for Governmental Action..........................
56
ARTICLE 15.
GENERAL........................................................
56
Section 15.1.
Nature of
Agreement...................................... 56
Section 15.2.
Great Lakes's
Interest................................... 56
Section 15.3.
Situs of the
Agreement................................... 56
Section 15.4.
Notice...................................................
56
Section 15.5.
Relationship.............................................
57
Section 15.6.
Further
Actions.......................................... 57
Section 15.7.
Waivers..................................................
57
Section 15.8.
Captions.................................................
57
Section 15.9.
Third Party
Beneficiary.................................. 58
Section 15.10.
Survival of Covenants....................................
58
Section 15.11.
Estoppel Certificate.....................................
58
Section 15.12.
Periods of Time; Time of the Essence.....................
58
Section 15.13.
Confidential and Proprietary Information.................
58
Section 15.14.
Government Savings Clause................................
58
Section 15.15.
Successors and Assigns...................................
59
Section 15.16.
Severability.............................................
59
Section 15.17.
Entire Agreement.........................................
59
Section 15.18.
Consents.................................................
61
Section 15.19.
[intentionally omitted]..................................
61
Section 15.20.
Limited Joinder..........................................
61
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EXHIBIT LIST
EXHIBIT A Third
Amended and Restated Pledge and Security Agreement
EXHIBIT B Third
Amended and Restated Account Control Agreement
EXHIBIT C Form
of Dominion Account Agreement
EXHIBIT D
Description of Gaming Site
EXHIBIT E Third
Amended and Restated Lakes Development Note
EXHIBIT F First
Amended and Restated Lakes Facility Note
EXHIBIT G First
Amended and Restated Security Agreement
EXHIBIT H First
Amended and Restated Lakes Working Capital Advance Note
EXHIBIT I First
Amended and Restated Lakes Minimum Payments Note
EXHIBIT J Third
Amended and Restated Non-Gaming Land Acquisition Line of
Credit Agreement
EXHIBIT K Third
Amended and Restated Transition Loan Note
EXHIBIT L Band
Litigation
EXHIBIT M
Conditional Release and Termination Agreement between Lakes and
CRC
dated May 20,1999, as amended by Amendment dated on or about
July
7, 1999, as amended by Amendment dated on or about
January 2, 2003
EXHIBIT N
General Release from CRC to the Band and its members
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THIRD AMENDED AND RESTATED DEVELOPMENT AGREEMENT
This
Third Amended and Restated Development Agreement is made as of
the
25th day of January, 2006, by and between the POKAGON BAND OF
POTAWATOMI INDIANS
(the "Band"), and GREAT LAKES GAMING OF MICHIGAN, LLC, a Minnesota
limited
liability company (f/k/a Great Lakes of Michigan, LLC, ("Great
Lakes").
RECITALS
A.
The Band, pursuant to 25 U.S.C. Sections 1300j et seq. (the
"Restoration
Act"), is a federally recognized Indian tribe recognized as
eligible by the
Secretary of the Interior for the special programs and services
provided by the
United States to Indians because of their status as Indians and is
recognized as
possessing powers of self-government.
B.
As authorized by the Restoration Act, the Band intends to acquire
the
Gaming Site in the State of Michigan, to be held by the federal
government in
trust for the Band, on which the Band intends to construct and
operate a
permanent Class III gaming facility (the "Facility"); and the Band
will possess
sovereign governmental powers over the Gaming Site pursuant to the
Band's
recognized powers of self government, and the Band desires to use
the Gaming
Site to improve the economic conditions of its members.
C.
The Band and Lakes Entertainment, Inc., f/k/a Lakes Gaming,
Inc.
("Lakes") entered into a Development Agreement dated as of July 8,
1999 (the
"Development Agreement") which contains provisions relating to the
development
of the Facility.
D.
The Band has ratified the Development Agreement on August 26, 1999,
and
the Development Agreement is now in full force and effect.
E.
Lakes has assigned its rights and obligations under the
Development
Agreement 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.
F.
Great Lakes and the Band entered into a First Amended and
Restated
Development Agreement dated as of October 16, 2000 (the "First
Amended
Development Agreement").
G. Pursuant to the
First Amended Development Agreement, Great Lakes agreed
to increase the Lakes Development Loan from $43,000,000 to
$46,000,000 and the
Non-Gaming Land Acquisition Line of Credit from $10,000,000 to
$15,000,000,
thereby agreeing to loan the Band an additional $8,000,000 for
immediate use by
the Band in acquiring both gaming and non-gaming land. The Band and
Great Lakes
agreed to construct the Facility in a phased approach, with the
Initial Phase
having a then estimated cost of approximately $97,000,000. Great
Lakes also
agreed, due to uncertainty in the capital markets over the
availability of
financing for the Facility, to provide a greater proportion of the
initial phase
of project financing from its own funds, and affirmed its
commitment to finance
all phases of the project entirely from its own funds if financing
at an
interest rate of 13% or less is not available from the capital
markets. The Band
in turn agreed to extend the term of the Management Agreement from
five to seven
years and to enter into a Dominion Agreement granting Great Lakes a
security
interest in the
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Dominion Account as defined in the Management Agreement.
H.
Great Lakes and the Band entered into a Second Amended and
Restated
Development Agreement dated as of December 22, 2004 (the "Second
Amended
Development Agreement"), the primary purposes of which were to
extend the
termination date in Section 8.l(c) of the Development Agreement,
relating to the
time period during which the Monthly Payments may be required to be
made by
Great Lakes to the Band, from August 26, 2004 to August 26, 2007,
and to make
corresponding changes in Sections 13.2 and 14.4 of the Development
Agreement to
change the August 26, 2004 date to August 26, 2007.
I.
Pursuant to the Second Amended Development Agreement, the Band and
Great
Lakes acknowledged and agreed that the cost of developing,
constructing and
equipping the Initial Phase of the Project totaled, as of December
22, 2004,
approximately $197,000,000, which the parties agreed would be
financed as
follows: the Lakes Development Loan in the amount of $46,000,000
and an
additional $151,000,000 to be provided by an Equipment Loan and a
Bank Loan. To
the extent that the Band was unable to raise additional funding of
$151,000,000
from third parties at an interest rate not to exceed 13% (the
"151MM
Shortfall"), Great Lakes agreed to provide $54,000,000 (or such
lesser amount as
may be necessary to make up the 151MM Shortfall) through, at its
option, a
direct loan, third party loans enabled by credit enhancements
provided by Great
Lakes, or third-party loans with interest subsidies provided by
Great Lakes, in
each case at an interest rate not to exceed 13%, such $54,000,000
loan and the
Lakes Development Loan to be subordinated to certain other
third-party
financing. Great Lakes did not have any other responsibility to
fund, or provide
credit enhancements or interest subsidies for, the 151MM Shortfall
(if any).
J.
The cost of developing, constructing and equipping the Initial
Phase of
the Project is now understood as totaling approximately
$298,000,000, which will
be financed as follows: the Lakes Development Loan in the amount of
$46,000,000
and an additional $252,000,000 to be provided by an Equipment Loan
and a Bank
Loan. To the extent that the Band is unable to raise additional
funding of
$252,000,000 from third parties at an interest rate not to exceed
13% (the
"252MM Shortfall"), Great Lakes shall, at the request of the Band,
provide
$54,000,000 (or such lesser amount as may be necessary to make up
the 252MM
Shortfall) through, at its option, a direct loan, third party loans
enabled by
credit enhancements provided by Great Lakes, or third-party loans
with interest
subsidies provided by Great Lakes, in each case at an interest rate
not to
exceed 13%, such $54,000,000 loan and the Lakes Development Loan to
be
subordinated to such third-party financing and to the Bank Loan and
the
Equipment Loan. Great Lakes shall not have any other responsibility
to fund, or
provide credit enhancements or interest subsidies for, the 252MM
Shortfall (if
any).
K.
Great Lakes and the Band have agreed that the term of this
Agreement
shall begin on the date the Management Agreement, this Agreement
(if required)
and the Lakes Development Note (if required) are approved by the
Chairman of the
NIGC, and/or the BIA (if required), and continue until, unless
earlier
terminated in accordance with its terms, seven (7) years from
commencement of
Gaming at the Initial Phase of the Facility, provided that the Term
of the
Management Agreement will be five (5) years from the Commencement
Date if (a)
the Development Expenditures of the Initial Phase of the Facility
are equal to
or more than $138,000,000, and (b) Lakes' Financial Support for
such Initial
Phase has not exceeded
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$46,000,000, as provided in Section 3.2 of the Management
Agreement.
L.
Great Lakes has agreed to fund under the Lakes Development Loan,
and has
advanced funds for architectural work, engineering services,
long-lead-time
items, and to permit the Band to complete preliminary site
work.
M.
This Third Amended and Restated Development Agreement
incorporates
changes to reflect the expected increased cost of the Initial Phase
of the
Project as now contemplated, as described in Section J above, and
its impact on
the composition of the financing for such Initial Phase, as well as
to reflect
the parties' desire to have flexibility to modify the scope of the
Initial Phase
as the parties agree depending on the availability and suitability
of financing.
NOW,
THEREFORE, in consideration of the mutual covenants, conditions
and
promises herein contained, the receipt and sufficiency of which are
expressly
acknowledged, the Band and Great Lakes hereby agree as follows:
ARTICLE 1.
DEFINITIONS AND OBJECTIVES
Section 1.1. Definitions. Capitalized terms not otherwise defined
herein
shall have the meanings set forth in the Management Agreement. In
addition to
other terms which are defined elsewhere in this Agreement, the
following terms,
for purposes of this Agreement, shall have the meanings set forth
in this
Section.
"Account" means the account at Firstar established pursuant to
Section 8.2
that is subject to the Control Agreement.
"Accrued Expenses" shall mean the accrued unpaid development costs
and
expenses relating to the Gaming Site and the Enterprise.
"Agreement" shall mean this Development Agreement.
"Agreements" shall mean this Agreement and the Management
Agreement.
"Approved Construction Costs" shall mean the Architect's estimate
of
Construction Costs approved by the Band and Great Lakes pursuant to
Section 5.8.
"Approved Development Budget" has the meaning set out in Section
4.2.
"Architect" shall have the meaning described in Section 4.1.
"Assignment and Assumption Agreement" means the Assignment and
Assumption
Agreement among Great Lakes, Lakes and the Band dated as of October
16, 2000, as
amended by First Amendment dated as of December 22, 2004 as further
amended and
restated by a Second Amended and Restated Assignment and Assumption
Agreement
dated as of January 25, 2006.
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"Band Designee" shall mean Pokagon Properties, LLC, a Delaware
limited
liability company, Filbert Land Development, LLC, an Indiana
limited liability
company, or such other entities as may be designated by the Band in
writing.
"Band Designee Guarantee" shall mean the guarantee by the Band
Designee to
Great Lakes of amounts advanced by Great Lakes under the Lakes
Development Note
and the Non-Gaming Land Acquisition Line of Credit, which shall be
substantially
in the form of the guaranty executed by Pokagon Properties, LLC in
favor of
Lakes dated March 9, 2000.
"Band Designee Mortgage" means, individually and collectively,
each
mortgage granted by a Band Designee to Great Lakes securing the
applicable Band
Designee Guarantee, which shall be substantially in the form of the
mortgage
granted by Pokagon Properties, LLC to Lakes dated March 9,
2000.
"Band Event of Default" has the meaning described in Section
12.1.
"Band Interest Rate" shall mean the lesser of (i) Wall Street
Journal prime
rate as of the Bank Closing plus 1%, or (ii) 10%.
"Band Mortgage" means, individually and collectively, each mortgage
granted
by the Band to Great Lakes securing the Lakes Development Note and
the
Non-Gaming Land Acquisition Line of Credit, which shall be
substantially in the
form of the mortgage granted by Pokagon Properties, LLC to Lakes
dated March 9,
2000, with appropriate changes reasonably acceptable to Great Lakes
and the Band
reflecting the change to the Band as mortgagor and to Great Lakes
as mortgagee.
"Band Security Agreement" shall mean the pledge and security
agreement
between Lakes and the Band granting the Band a lien and security
interest in the
Account, in the form attached hereto as Exhibit A, as the same may
be amended
from time to time.
"Band Working Capital Advances" shall have the meaning defined in
the
Management Agreement.
"Bank Closing" means the closing on the Bank Loan Agreement.
"Bank Lender" shall mean one or more financial institutions or
bond
trustees described as the lender or bond trustee in the Bank Loan
Agreement.
"Bank Loan" shall mean the loan evidenced by the Bank Note.
"Bank Loan Agreement" shall mean (a) the capital leases, loan
agreements
and/or bond indentures to be entered into between the Band and the
Bank Lender
for the Initial Phase in a principal amount of approximately
$193,000,000,
which will, when added to the Lakes Development Loan and the
Equipment Loan,
finance all Development Expenditures for the Initial Phase,
provided that the
amount of the Bank Loan may be increased or decreased as
4
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agreed upon by Great Lakes and the Band; and (b) the subsequent or
amended
capital leases, loan agreements and/or bond indentures in an
additional
approximate amount of $38,000,000, which along with the additional
Equipment
Loan for the Final Scope of Work will finance all Development
Expenditures
associated with the expansion of the Facility to the Final Scope of
Work;
provided that the additional amount of the Bank Loan may be
increased or
decreased as agreed upon by Great Lakes and the Band. The amount
borrowed under
the Bank Loan Agreement may also be increased and the added
proceeds thereof
used to refinance all or portions of the Lakes Development Loan,
provided that
amounts used for such refinancing shall be in addition to (a) the
sums needed to
fund Development Expenditures for the Initial Phase (as to
financing for the
Initial Phase) and Final Scope of Work (as to financing for the
Final Scope of
Work), in the respective maximum amounts set out above, and (b) any
sums which
the Band is able to borrow without Great Lakes' guaranty, credit
enhancements or
interest subsidy to expand the Initial Scope of Work to include all
or a portion
of the Final Scope of Work.
"Bank Note" shall mean the promissory notes or bonds to be executed
by the
Band pursuant to the Bank Loan Agreement.
"BIA" shall mean the Bureau of Indian Affairs under the Department
of the
Interior of the United States of America.
"Business Board" shall mean the decision making body created
pursuant to
Section 3.4 of the Management Agreement.
"Change of Control" shall have the meaning set out in Section
10.5(c).
"Class II Gaming" shall mean Class II Gaming as defined in the
IGRA.
"Class III Gaming" shall mean Class III Gaming as defined in the
IGRA.
"Commencement Date" shall mean the first date that Gaming is
conducted
pursuant to the terms of the Management Agreement in a Facility,
including
Gaming conducted on completion of the Initial Phase of the
Facility.
"Compact" shall mean the Compact between the Band and the State
dated
December 3, 1998 and approved in 64 Fed. Reg. No. 32, Thursday,
February 18,
1999, at 8111, as the same may, from time to time, be amended; or
such other
compact or consent decree that may be substituted therefor.
"Completion Date" shall mean the date upon which Great Lakes
receives, as
to the Initial Phase or the Final Scope of Work:
(i) an architect's certificate from the Architect chosen pursuant
to
this Agreement as having responsibility for the design and
supervision
of construction, equipping and furnishing of the Facility
certifying
that the Initial Phase or the Final Scope of Work, as the case may
be,
has been fully constructed substantially in accordance with the
Plans
and
5
<PAGE>
Specifications;
(ii) certification from the division, department or designee of
Great
Lakes having responsibility to assure compliance with any
operational
standards stating that the Initial Phase or the Final Scope of
Work,
as the case may be, as completed, is in substantial compliance
with
any such standards;
(iii) a permanent or temporary certificate of occupancy, if
required,
from the regulatory entity within the Band Government with
authority
to grant such a certificate, permitting the use and operation of
the
Initial Phase or the Final Scope of Work, as the case may be,
in
accordance with this Agreement; and
(iv) certificates of such professional designers, inspectors or
consultants or opinions of counsel, as Great Lakes may
reasonably
determine to be appropriate, verifying construction and furnishing
of
the Initial Phase or the Final Scope of Work, as the case may be,
in
compliance with all Legal Requirements.
"Constitution" shall mean the document or documents which govern
the
actions of the Band and, upon enactment, the Constitution of the
Pokagon Band of
Potawatomi Indians as ultimately approved by the Band and approved
by the
Secretary of the Interior.
"Construction Costs" means the costs of acquiring the Gaming Site
and
designing, developing, constructing, furnishing and equipping the
Facility,
including all related planning and professional fees, Furnishings
and Equipment,
and a contingency not to exceed 10% of such costs (excluding
Furnishings and
Equipment).
"Construction Documents" shall have the meaning described in
Section 5.4.
"Construction Guaranty Payments" shall have the meaning described
in
Section 9.2.1(a)(i)
"Control Agreement" shall mean the Account Control Agreement among
Firstar,
Lakes and the Band dated July 8, 1999, as amended by Amendment to
Account
Control Agreement dated October 16, 2000 and as further amended and
restated by
Second Amendment to Account Control Agreement dated December 22,
2004 and by a
Third Amended and Restated Account Control Agreement dated January
25, 2006,
perfecting the Band's lien and security interest in the Account, a
true copy of
which is attached as Exhibit B, as the same may be amended from
time to time.
"Corporate Commission" shall mean a body corporate and politic
established,
at the Band's discretion, by the Pokagon Council to own the
Enterprise and such
other businesses and assets as the Band may deem appropriate.
6
<PAGE>
"CRC" means Casino Resource Corporation, a Minnesota corporation
and its
Insiders.
"Design Agreement" shall have the meaning described in Section
4.1.
"Design Packages" shall have the meaning described in Section
4.1.
"Development Expenditures" shall mean all Approved Construction
Costs; all
other costs of equipping and opening the Facility, including but
not limited to
all related planning and professional fees, costs of
infrastructure, fixtures,
Furnishings and Equipment (including gaming equipment), and pre
opening costs,
fees and expenses; all legal, lobbying, public relations and other
professional
costs and expenses related to transferring Gaming Lands and
Non-Gaming Lands
into trust and to the Compact between the Band and the State of
Michigan; and
all legal, lobbying and other fees and expenses previously incurred
by the Band
in obtaining, or litigating with regard to, the Compact with the
State of
Michigan, not to exceed $20,000, as well as all other such fees and
expenses
subsequently incurred by the Band that the Band reasonably chooses
to include in
the Development Budget, together with all other Development Soft
Costs.
"Development Soft Costs" shall mean legal, lobbying, public
relations and
other professional fees and expenses for work related to the
Compact, litigation
relating to transfer of the Gaming Site into trust or otherwise
affecting the
Project, development of Band ordinances required under the Local
Agreement or
otherwise needed for development of the Project, and other services
reasonably
related to development of the Project, subject in each case to
limitations, if
any, set forth in this Agreement.
"Disbursement Accounts" shall mean those accounts described in
Section
4.19.3 of the Management Agreement.
"Dominion Account" means the collateral account in favor of Great
Lakes
established under Section 4.19.2 of the Management Agreement.
"Dominion Agreement" means the collateral agreement granting Great
Lakes a
security interest in the Dominion Account and perfecting such
interest, which
shall be in the form attached as Exhibit C, as the same may be
amended from time
to time.
"Economically Feasible" means for purposes of Sections 13.7 and
14.5
hereof, that the Net Revenues from any operations of the Enterprise
in question
shall on a monthly basis exceed the aggregate debt service payments
due and
payable during such month on each of the Loans and any other
indebtedness to
which Great Lakes has subordinated its liens.
"Enterprise" shall mean the enterprise of the Band created by the
Band to
engage in Class II and Class III Gaming at the Facility, and which
shall include
all gaming at the Facility and any other lawful commercial activity
allowed in
the Facility, including but not limited to the sale of alcohol,
tobacco, gifts
and souvenirs; provided, however, the Enterprise shall only include
any hotel
operated by the Band, ancillary non-Gaming activity within the
Facility, or
other commercial enterprise conducted by the Band which is not
generally related
to Class II or Class III Gaming if such hotel, non-Gaming activity
or other
commercial enterprise (a) is financed by,
7
<PAGE>
or through the guaranty of, Manager, (b) is specifically included
within the
Initial Scope of Work or the Final Scope of Work, or is not a
material expansion
of the Initial Scope of Work or the Final Scope of Work, or (c) is
specified by
the Business Board and the Pokagon Council as being included in the
Enterprise,
in which case depreciation and other expenses relating to such
hotel, non-Gaming
activity or other commercial enterprise shall be an Operating
Expense, all
related revenues shall be included in Gross Revenues, and interest
on all
related financing shall be paid by the Enterprise; and provided
further that the
Enterprise shall not include a tribal gift/craft business which the
Band may
elect to operate, rent free, on an area of about 2,400 square feet
at the
Facility. The design and operation of such gift/craft shop shall be
consistent
with the theme and quality of the Facility, and the location of
such gift/craft
shop shall be approved by the Business Board.
"Enterprise Accounts" shall mean those accounts described in
Section 4.19.1
of the Management Agreement.
"Equipment Lender" shall mean the financial institution described
as the
lender in the Equipment Loan Agreement.
"Equipment Loan Agreement" shall mean (a) the bond indentures,
loan
agreements and/or equipment leases in a principal amount of
approximately
$59,000,000 to be entered into between the Band and the Equipment
Lender to
finance acquisition of the Furnishings and Equipment for the
Initial Phase,
provided that the amount of the Equipment Loan may be increased or
decreased as
agreed upon by Great Lakes and the Band; and (b) the subsequent or
amended bond
indenture, loan agreement and/or equipment lease in an additional
approximate
amount of $6,000,000, which will finance the acquisition of the
Furnishings and
Equipment for expansion of the Facility to the Final Scope of Work;
provided
that the additional amount of the Equipment Loan may be increased
or decreased
as agreed upon by Great Lakes and the Band.
"Equipment Loan" means the loan or lease under the Equipment
Loan
Agreement.
"Equipment Note" shall mean the promissory note or bond to be
executed by
the Band pursuant to the Equipment Loan Agreement.
"Facility" shall mean the permanent buildings, structures and
improvements
located on the Gaming Site and all fixtures, Furnishings and
Equipment attached
to, forming a part of, or necessary for the operation of the
Enterprise.
"Final Scope of Work" means the final gaming facility and
associated
amenities that the parties intend to complete, unless otherwise
agreed by Great
Lakes and the Band, no later than the third anniversary of the
Commencement
Date, which, together with the Initial Phase, shall include not
less than
110,000 sq. ft. of gaming space, 110 gaming tables, 3,000 slot
machines, a 3,100
car garage and additional surface parking for guests, oversized
vehicles and
employees as needed, a 200 room hotel, expanded food and beverage
facilities,
and a 2,500 seat bingo and events center, and which shall contain
approximately
(excluding the hotel and bingo/events center) at least 350,000 to
370,000 sq.
ft. of space. The Final Scope of Work will include and be
integrated with the
Initial Phase.
8
<PAGE>
"Firstar" shall mean Firstar Bank N.A., n/k/a U.S. Bank
National
Association, and its successors in interest.
"Force Majeure" shall mean acts of God, fire, flood, storm,
earthquake,
war, civil disorder, governmental acts, regulations, orders or
restrictions,
accidents not caused by a party's negligence, strikes or labor
disturbances.
"Furnishings and Equipment" shall mean all furniture, furnishings
and
equipment required for the operation of the Enterprise in
accordance with the
standards set forth in this Agreement, including, without
limitation:
(i) cashier, money sorting and money counting equipment,
surveillance
and communication equipment, and security equipment;
(ii) slot
machines, video games of chance, table games, keno equipment
and other gaming equipment;
(iii) office furnishings and equipment;
(iv) specialized equipment necessary for the operation of any
portion
of the Enterprise for accessory purposes, including equipment
for
kitchens, laundries, dry cleaning, cocktail lounges,
restaurants,
public rooms, commercial and parking spaces, and recreational
facilities; and
(iv) hotel equipment (to the extent a hotel is included in the
Enterprise);
(v) all other furnishings and equipment hereafter located and
installed in or about the Facility which are used in the operation
of
the Enterprise in accordance with the standards set forth in
this
Agreement.
"Gaming" shall mean any and all activities defined as Class II and
Class
III Gaming pursuant to IGRA.
"Gaming Ordinance" shall have the meaning described in Section
8.4(c).
"Gaming Regulatory Authority" or "GRA" shall mean the Band body
created
pursuant to the Band Gaming Ordinance to regulate the Class II and
Class III
Gaming of the Band in accordance with the Compact, the IGRA and the
Gaming
Ordinance.
"Gaming Site" shall mean the parcels of land in New Buffalo,
Michigan
described on the attached Exhibit D.
"Gaming Site Acquisition Advances" shall mean funds advanced under
the
Lakes
9
<PAGE>
Development Loan in such amount or amounts as are needed to option
or acquire
the Gaming Site, provided that the total amount of Gaming Site
Acquisition
Advances shall not exceed $11,000,000.
"Governmental Action" means any resolution, ordinance, statute,
regulation,
order or decision of the Band or any instrumentality or agency of
the Band,
regardless of how constituted, that has the force of law.
"Great Lakes" means Great Lakes Gaming of Michigan, LLC, a
Minnesota
limited liability company (f/k/a Great Lakes of Michigan, LLC).
"Guaranty" means the Unlimited Guaranty dated as of October 16,
2000 from
Lakes Gaming, Inc. and Lakes Gaming and Resorts, LLC to the
Band.
"Guaranty Reserve" shall have the meaning described in Section
9.2.1(a)((ii)(A).
"Initial Phase" shall mean the first phase of the Facility, which
shall
include the facilities described in the Initial Scope of Work. The
Initial Phase
shall be designed and constructed so that it will be an integral
part of the
Final Scope of Work.
"Initial Scope of Work" means a facility including not less than
110,000
sq. ft. of gaming space, 110 gaming tables, 3,000 slot machines, a
buffet,
casual dining outlet, steakhouse, casino cafe, seafood outlet,
coffee/pastry
shop, employee dining, Kids Quest/Arcade, and a 2,100 space garage
and 1,200
surface parking spaces for guests, parking spaces for oversized
vehicles and
approximately 700 employee spaces, and which shall contain at least
300,000 sq.
ft. of space but shall not include a hotel; provided, however, that
depending on
the availability and suitability of financing, upon the agreement
of Great Lakes
and the Band the Initial Scope of Work may be expanded or
contracted to include
greater or lesser amounts of the Final Scope of Work.
"IGRA" shall mean the Indian Gaming Regulatory Act of 1988, P.L.
100-497,
25 U.S.C. Section 2701 et seq. as it may from time to time be
amended.
"Insider" has the meaning defined in 11 U.S.C. Section 101(31),
assuming
Lakes and Great Lakes were both the debtor in that definition, and
shall include
persons or entities that become Insiders after the date of this
Agreement,
whether as the result of a merger, acquisition, restructuring or
otherwise.
"Lakes" shall mean both Lakes Entertainment, Inc., f/k/a Lakes
Gaming,
Inc., a Minnesota corporation, and Lakes Gaming and Resorts, LLC, a
Minnesota
limited liability company.
"Lakes Development Loan" shall mean the loan to the Band to be made
by
Great Lakes under the Lakes Development Note in a principal amount
of up to
$46,000,000 (which amount is subject to increase in accordance with
Section
9.2.1 hereof), comprised of (a) up to $ 11,000,000 for Gaming Site
Acquisition
Advances and (b) the balance for Development Expenditures other
than acquisition
of the Gaming Site.
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<PAGE>
"Lakes Development Note" shall mean the promissory note dated as of
January
25, 2006 and executed by the Band to evidence the Lakes Development
Loan, which
is in the form attached hereto as Exhibit E, together with all
amendments,
substitutions, restatements, modifications and renewals
thereof.
"Lakes Event of Default" has the meaning described in Section
12.2.
"Lakes Facility Loan" shall mean the Loan to be made by Great Lakes
to the
Band, or facilitated by Great Lakes through guarantees, credit
enhancements or
interest subsidies, pursuant to Section 9.2.4 of this Agreement.
The Lakes
Facility Loan shall not include any loan to the extent it is
subject to a Lakes
Refinancing Guaranty.
"Lakes Facility Note" shall mean the promissory note dated as of
January
25, 2006 and executed by the Band to evidence the Lakes Facility
Loan if such
Loan is made directly by Great Lakes, which is in the form attached
hereto as
Exhibit F, together with all amendments, substitutions,
restatements,
modifications and renewals thereof.
"Lakes' Internal Expenses" shall mean Lakes' and Great Lakes'
corporate
overhead, including without limitation salaries or benefits of any
of Lakes's
and Great Lakes' officers and employees, whether or not they
perform services
for the Project or the Enterprise, and any travel or other expenses
of Lakes's
and Great Lakes' employees.
"Lakes Refinancing Guaranty" means a guaranty of, or other
credit
enhancement furnished by, Great Lakes or Lakes, to the extent that
the proceeds
of the debt so guaranteed or benefited refinances all or a portion
of the Lakes
Development Loan or any other obligation of the Band to Great
Lakes.
"Lakes Security Agreement" shall mean the security agreement dated
as of
January 25, 2006 and executed by the Band in favor of Great Lakes
to secure the
Lakes Facility Note, the Lakes Development Note and other
obligations as
described in Section 9.2.l(j), which agreement is in the form
attached hereto as
Exhibit G, as the same may be amended, substituted, restated,
modified and
renewed from time to time.
"Lakes Working Capital Advance Note" shall mean the promissory note
dated
as of January 25, 2006 and executed by the Band to evidence Lakes
Working
Capital Advances, which is in the form attached hereto as Exhibit
H. together
with all amendments, substitutions and renewals thereof.
"Lakes Working Capital Advances" shall have the meaning defined in
the
Management Agreement.
"Legal Requirements" shall mean any and all present and future
judicial,
administrative, and tribal rulings or decisions, and any and all
present and
future federal, state, local and tribal laws, ordinances, rules,
regulations,
permits, licenses and certificates, in any way applicable to the
Band, Lakes,
the Gaming Site, the Facility, and the Enterprise, including
without limitation,
11
<PAGE>
the IGRA, the Compact, and the Band Gaming Ordinance.
"Limited Recourse"
shall mean that all Loans and all liabilities of the
Band under or related to the Agreements and the other Transaction
Documents, the
Enterprise or the Gaming Regulatory Authority, and any related
awards, judgments
or decrees, shall be payable solely out of undistributed or future
Net Revenues
of the Enterprise and shall be a limited recourse obligation of the
Band, with
no recourse to tribal assets other than such Net Revenues (except
(i), as to the
Equipment Loan, a security interest in the Furnishings and
Equipment purchased
with Equipment Loan proceeds, (ii) as to Great Lakes, a security
interest in the
Furnishings and Equipment to the extent proceeds of the Lakes
Facility Loan or
the Lakes Development Loan were used to fund acquisition of
Furnishings and
Equipment, and as otherwise permitted under Section 9.2.1(j) of
this Agreement,
(iii) if the Commencement Date does not occur, Subsequent Gaming
Facility
Revenues to the extent provided in this Agreement, (iv) mortgages
on the Gaming
Site and Non-Gaming Lands prior to their transfer into trust, and
(v) after the
Commencement Date occurs, funds on deposit in the Dominion Account
to the extent
provided in Section 9.2.1(j) of the Development Agreement and the
Dominion
Agreement, or in any other dominion agreement executed by the
Band). In no event
shall Great Lakes, Lakes or any lender or other claimant have
recourse to (a)
the physical property of the Facility (other than Furnishings and
Equipment
subject to the security interest securing the Equipment Loan), (b)
Tribal
Distributions, (c) assets of the Band purchased with Tribal
Distributions, (d)
revenues or assets of any other gaming facility owned or operated
by the Band,
or (e) any other asset of the Band (other than (i) as to Great
Lakes, if the
Commencement Date does not occur, Subsequent Gaming Facility
Revenues to the
extent provided in this Agreement, (ii) as to the Lakes Development
Note and the
Non-Gaming Acquisition Line of Credit, mortgages on the Gaming Site
and
Non-Gaming Lands prior to their transfer into trust, (iii) funds on
deposit in
the Dominion Account to the extent provided in the Agreements, the
Dominion
Agreement and any other dominion agreement executed by the Band,
and (iv) such
Net Revenues of the Enterprise).
"Loans" shall mean the
Lakes Development Loan, the Lakes Facility Loan, the
Lakes Working Capital Advances, the Minimum Payment Note, the Bank
Loan and the
Equipment Loan.
"Local Agreement" means the Local Agreement dated March 13, 2000
among the
Band, the City of New Buffalo and the Township of New Buffalo, as
it may be
supplemented or amended.
"Management Agreement" shall mean the Third Amended and Restated
Management
Agreement of near or even date, pursuant to which Great Lakes shall
manage the
Enterprise.
"Material Adverse Change" shall mean a material adverse change in
Lakes' or
Great Lakes' financial condition which materially and substantially
impairs
Lakes' or Great Lakes' respective ability to perform under the
Agreements and
the Guaranty.
"Material Breach" means a failure of either party to perform any
material
duty or obligation on its part, if such party fails to (i) cure the
specified
default within thirty (30) days following receipt of the notice
provided under
Section 12.3, or (ii) if the default is not capable of being
12
<PAGE>
cured within 30 days, commences such cure within 30 days, proceeds
diligently to
complete the cure, and completes the cure no later than 90 days
after receipt of
such notice.
"Memorandum of Understanding" means the Memorandum of Understanding
between
the Band and the Secretary of the Interior executed on behalf of
the Secretary
on January 11, 1999.
"Minimum Payments Note" shall mean the promissory note dated as of
January
25, 2006 and executed by the Band to evidence Minimum Guaranteed
Payment
Advances, which is in the form attached hereto as Exhibit I,
together with all
amendments, substitutions, restatements, modifications and renewals
thereof.
"Monthly Payments" shall have the meaning described in Section
8.1(c).
"National Indian Gaming Commission" or "NIGC" means the
commission
established pursuant to 25 U.S.C. Section 2704.
"Net
Revenues" shall have the meaning set forth in the Management
Agreement, and shall include "Net Revenues (gaming)" and "Net
Revenues (other)"
as defined in the Management Agreement.
"NIGC Approval" means the written approval by the NIGC of the
Management
Agreement.
"NIGC Disapproval" means a written determination by the NIGC that
the
Management Agreement should be disapproved under 25 C.F.R. Section
533.6(c), if
within 120 days after notification of the NIGC decision Lakes and
Great Lakes
have not cured the reason for such disapproval.
"Non-Gaming Land" means any parcels of land in Michigan or Indiana
(other
than the Gaming Site) which are (a) identified in a writing
executed by the Band
as suitable for reservation homelands for the Band in accordance
with the
Memorandum of Understanding, and (b) meet the requirements of
United States of
America to be accepted in trust for the Band for Gaming or
non-Gaming purposes;
provided that the Gaming Site and the Non-Gaming Land shall not
exceed 4,700
acres in the aggregate.
"Non-Gaming Land Acquisition Line of Credit" shall mean an internal
line of
credit in favor of the Band established by Great Lakes in the
amount of
$15,000,000, pursuant to the Third Amended and Restated Non-Gaming
Land
Acquisition Line of Credit Agreement in the form attached hereto as
Exhibit J,
to enable the Band to option or acquire Non-Gaming Lands, together
with all
amendments, substitutions, restatements, modifications and renewals
thereof.
"252
MM Shortfall" means the difference, if any, between (a)
$252,000,000
and (b) the aggregate amount of bank commitments and firm
underwriting
commitments the Band obtains for the Initial Phase for the Bank
Loan and the
Equipment Loan, without any guaranty, credit enhancement or
interest subsidy
from Great Lakes or Lakes for such Loans (other than a Lakes
13
<PAGE>
Refinancing Guaranty) and on terms not less favorable to the Band
than
those set out in Sections 9.2.2, 9.2.3 and 9.2.5 with regard to
those Loans.
"Operating Expense" has the meaning provided in Section 2 of the
Management
Agreement.
"Plans and Specifications" shall mean the final Plans and
Specifications
approved for the Facility as described in Section 4.8.
"Pokagon Council" shall mean the duly elected governing legislative
body of
the Band described pursuant to 25 U.S.C. Section 1300j-4(b) or, at
the option of
the Band, a designed committee or council created pursuant to
resolution or
ordinance of the Pokagon Council.
"Preliminary Development Budget" shall have the meaning described
in
Section 4.2.
"Project" shall have the meaning described in Section 4.1.
"Remaining Loan Availability Amount" shall have the meaning
described in
Section 9.2.1(a)((ii)(A).
"Reserve Amount" shall have the meaning described in Section
9.2.1(a)(ii)(A).
"Restoration Act" shall mean 25 U.S.C. Sections 1300j et seq.
"Restricted Territory" shall mean the States of Ohio, Illinois,
Indiana and
Michigan.
"Road Service Agreement" shall mean that certain Service,
Maintenance and
Reconstruction of County Roads Agreement dated October 24, 2001 by
and among the
Band, Great Lakes, Lakes and the Board of County Road Commissioners
of Berrien
County, Michigan.
"Scholarship Program Fee" shall mean the $1,000,000 non-refundable
fee paid
by Lakes under Section 9.1 of this Agreement.
"Signing Fee" shall have the meaning described in Section
8.1(b).
"Specific Performance Restriction" shall mean that no arbitrator or
court
shall have the power to compel, overturn, negate or in any manner
modify any
Governmental Action; but such restriction shall not prevent an
arbitrator from
determining that the taking of any Governmental Action or the
failure to take
any Governmental Action, which is not caused by a breach of Great
Lakes or
Lakes' obligations under the Agreements or the Guaranty,
constitutes a breach of
this Agreement by the Band or the impairment of rights of Great
Lakes under this
Agreement; and which therefore results in liability on the part of
the Band for
damages in favor of Great Lakes as provided in this Agreement and
enforcement of
the obligations of the Band to Great Lakes, including any security
agreements
and collateral instruments, in accordance with their terms.
"State" shall refer to the State of Michigan.
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<PAGE>
"Subsequent Gaming Facility Revenues" means gaming revenues from a
gaming
facility (including the Facility) owned or operated by the Band in
Michigan, but
only to the following extent: (i) all Class III Gaming Net Revenue
and (ii)
Class II Gaming Net Revenue, to the extent that such Net Revenue
exceeds
$1,000,000 per annum.
"Term" shall mean the term of this Agreement as described in
Section 7.1.
"Transaction Documents" shall mean, individually or collectively,
as the
context may require, this Agreement, the Management Agreement, the
Dominion
Account Agreement, the Band Mortgages, the Security Agreement, and
any other
documents, instruments and agreements between Great Lakes and the
Band
referenced therein, each as heretofore and hereafter amended.
"Transition Loan" shall have the meaning described in Section
8.3.
"Transition Loan Note" shall mean the promissory note dated as of
January
25, 2006 and executed by the Band evidencing the Transition Loan,
which is in
the form attached hereto as Exhibit K. together with all
amendments,
substitutions, restatements, modifications and renewals
thereof.
"Tribal Distributions" shall mean Monthly Distribution Payments,
Minimum
Guaranteed Monthly Payments and any other payments received by the
Band pursuant
to or in connection with the Management Agreement.
"Tribal UCC Code" shall have the meaning assigned to such term in
Section
9.2.5(m) hereof.
Section 1.1. Independent Agreement. The objective of the Band and
Great
Lakes in entering into and performing this Agreement is to provide
a legally
enforceable procedure and agreement pursuant to which Great Lakes
will pay
certain fees to the Band and make certain loans to the Band, and
whereby the
Band and Great Lakes can proceed as far as possible with
development of the
Facility prior to the approval of the Management Agreement by the
NIGC so that
the Facility can be opened to the public as soon as possible after
the approval
of the Management Agreement by the NIGC; and to set forth the
rights and
obligations of the parties if approval of the Management Agreement
by the NIGC
does not occur or on the occurrence or non-occurrence of certain
other events.
This is intended to be a legally enforceable agreement, independent
of the
Management Agreement, which shall enter into effect when executed
and delivered
by the parties and be enforceable between the parties regardless of
whether or
not this Agreement or the Management Agreement is approved by the
Chairman of
the NIGC.
ARTICLE 2.
ACQUISITION OF GAMING SITE AND NON-GAMING LANDS
Section 2.1. Selection of Gaming Site. The parties have selected
the Gaming
Site for the Facility.
Section 2.2. Purchase of Gaming Site; Funding. The Band, through
the Band
Designee, has purchased the Gaming Site using funds provided by
Lakes or Great
Lakes under
15
<PAGE>
the Lakes Development Loan. All amounts so advanced by Lakes or
Great Lakes,
together with option or acquisition payments made by Lakes or Great
Lakes prior
to such purchase, are Development Expenditures and have been
advanced under the
Lakes Development Note.
2.2.1. The Band Designee has executed and delivered the Band
Designee
Guarantee to Great Lakes. The Band Designee has executed and
delivered to Great
Lakes a Band Designee Mortgage securing that guarantee.
Section 2.3. [intentionally omitted]
Section 2.4. Assignment of Other Options. Great Lakes shall at the
Band's
sole and absolute discretion assign or cause to be assigned to the
Band or the
Band Designee any or all options (other than the Gaming Site
Option) it, or any
other nominee, Insider or agent of Lakes or Great Lakes may have
on, or other
interests in, the following properties: (a) all lands acquired by
Lakes, Great
Lakes or any agent or Insider of Lakes or Great Lakes relating to
the
development of the Facility and related amenities, and (b) any
other land
located within the 20-mile radius described in Section 10.6 below,
unless the
Band consents in writing to their retention of specified options or
interests
for specified purposes. Any such consent given by the Band shall be
irrevocable
as to the specified property and purposes. Any such assignments
shall be without
warranty or other recourse. Option payments or acquisition payments
made by
Lakes or Great Lakes or Lakes' or Great Lakes' other nominees or
agents prior to
such assignment shall be advances under the Non-Gaming Land
Acquisition Line of
Credit and repayable in accordance with its terms.
Section 2.5. Selection of Non-Gaming Lands. As soon as reasonably
possible
after the date of this Agreement, the Pokagon Council shall select
the
Non-Gaming Lands. The Band shall have sole discretion over the
selection and
terms of acquisition of the Non-Gaming Lands.
Section 2.6. Closing on Non-Gaming Lands; Funding. The Band or the
Band
Designee shall thereafter proceed to purchase the Non-Gaming Lands.
Such
purchase shall occur on or immediately following NIGC Approval; as
may be
required to avoid expiration of options or deadlines set in
purchase agreements,
as they may be extended with the consent of the owners of the
proposed
Non-Gaming Lands; or as otherwise agreed by the parties. Great
Lakes shall
advance funds in such amount or amounts as shall be needed to
option and/or
acquire the Non-Gaming Lands, including without limitation all
related fees and
transfer taxes, provided that the total amount Great Lakes shall be
required to
advance shall not exceed $15,000,000. All amounts so advanced by
Great Lakes
shall be advanced under the Non-Gaming Land Acquisition Line of
Credit, which
shall be Limited Recourse, shall bear interest at the Band Interest
Rate, and
shall be repayable in 60 equal monthly installments of principal
and interest
commencing on the 15th day of the month after the month in which
the
Commencement Date occurs.
2.6.1. Funding where Non-Gaming Land Acquired by Band Designee. If
the
Band opts to have the Band Designee enter into options or purchase
agreements
for Non-Gaming Lands, or acquire any of the Non-Gaming Lands, the
cost of
obtaining such options and agreements, and of closing under such
options and
agreements, including all related fees,
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commissions and expenses, shall be advanced by Great Lakes to the
Band under the
Non-Gaming Land Acquisition Line of Credit, through a designee
other than Great
Lakes, which designee shall be the nominee of and agent for Great
Lakes. The
Band shall in turn advance or contribute such amounts to or for the
benefit of
the Band Designee. The Band Designee shall execute and deliver to
Great Lakes
the Band Designee Guarantee. The Band Designee shall also execute
and deliver to
Great Lakes' nominee a Band Designee Mortgage securing that
guarantee, or an
amendment to such mortgage, upon each closing on the Band
Designee's acquisition
of any such real property. Great Lakes' Designee shall act solely
as agent and
nominee for Great Lakes in advancing funds under the Non-Gaming
Land Acquisition
Line of Credit and holding the Band Designee Mortgage, and shall
not have any
independent capacity; shall be subject to all claims and defenses
of the Band
and the Band Designee against Great Lakes and Lakes, to the same
extent as if
the property in question had been acquired by the Band and
mortgaged by the Band
to Great Lakes or Lakes; and shall be subject to the arbitration,
limited waiver
of immunity, Limited Recourse and other provisions of Article 14 of
the
Development Agreement. Great Lakes' designee shall only be entitled
to enforce
the Band Designee Mortgage against the Band Designee to the extent
that, and in
the same manner as, Great Lakes would be entitled to enforce a Band
Mortgage
against the Band. Any Great Lakes' designee shall execute and
deliver to the
Band an agency agreement reasonably acceptable to the Band and
Great Lakes.
Section 2.7. Mortgages Prior to Transfer into Trust. Prior to
transfer of
the Gaming Site or Non-Gaming Lands into trust, amounts advanced
under the Lakes
Development Note and under the Non-Gaming Land Acquisition Line of
Credit shall
be secured by a Band Mortgage or Band Designee Mortgage on all such
properties.
Lakes and Great Lakes shall release such mortgages upon transfer of
the
respective lands subject to such mortgages into trust, or as
otherwise provided
in this Agreement.
ARTICLE 3.
CONSTRUCTION PHASES
Section 3.1. Initial Phase. The Facility shall be constructed in
two
phases, the Initial Phase and the Final Scope of Work. Great Lakes
and the Band
agree to proceed with the Design Phase and the Construction Phase
of the Initial
Phase in accordance with Articles 4 and 5, and to equip the Initial
Phase of the
Facility in accordance with Article 6. The intent of the parties is
to take all
steps necessary in accordance with Articles 4 and 5 to permit the
Band to
commence construction of the Initial Phase immediately upon the
taking into
trust of the Gaming Site and receipt of NIGC Approval, and to
complete
construction of the Initial Phase, equip the Initial Phase of the
Facility and
commence Gaming as soon as reasonably practicable thereafter.
Section 3.2. Final Scope of Work. No later than six months after
the
Commencement Date, Great Lakes shall submit to the Band a proposed
Preliminary
Development Budget, plans and specifications for the Final Scope of
Work. Upon
approval of such budget, plans and specifications, Great Lakes and
the Band
shall proceed in accordance with Articles 4, 5 and 6 to design,
construct and
equip the Facility in accordance with the Final Scope of Work in a
timely manner
so as to permit opening of the Facility expansion no later than two
years after
the Commencement Date.
Section 3.3. Modification of Final Scope of Work. Notwithstanding
any
provision of
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this Article, the Final Scope of Work may be reduced as follows:
The Band and
Great Lakes may at any time notify the other party that it believes
that
unanticipated material adverse changes in local gaming market
conditions (not
including changed economic conditions, whether locally or in the
economy
generally) make construction of the Facility to the Final Scope of
Work not
economically feasible. In that event both parties shall negotiate
in good faith
to determine what adjustments, if any, in the Final Scope of Work
are
appropriate in light of the changed local gaming market conditions;
provided
that such adjustments shall not result in a Facility smaller than
the Initial
Phase. The Band and Great Lakes shall mutually agree upon the final
budget,
plans and specifications for the Final Scope of Work.
Section 3.4. Bank Loans and Equipment Loans. Any references in
Articles 4,
5 and 6 to the Bank Loan, the Equipment Loan or the Bank Closing
shall refer to
such loans or closings as they pertain to the financing of the
Initial Phase or
the expansion to the Final Scope of Work, as appropriate.
ARTICLE 4.
DESIGN PHASE
Section 4.1. Employment of Architect. Great Lakes shall recommend
to the
Band a minimum of three duly licensed architects, who shall be
familiar with the
design of gaming facilities, for interview by the Pokagon Council,
and the Band
shall select an architect from the group or, if none of the first
group is found
acceptable to the Band, groups recommended by Great Lakes. The Band
shall employ
such architect (the "Architect") for the purpose of performing
certain services
in connection with the design and construction of the Facility,
including site
development. The Band's agreement with the Architect shall be in
the form of a
contract (the "Design Agreement") approved by Great Lakes and the
Pokagon
Council. The scope of the project contemplated by this Agreement
(the "Project")
shall be stated and established in the Design Agreement and shall
be subject to
the mutual approval of the parties, but shall incorporate at a
minimum the
Initial Phase and the Final Scope of Work (subject to the
provisions of Section
3.3). The scope of design shall not include, but the design shall
facilitate,
the possibility of the Band later designing and constructing phased
expansions
of the hotel, theme retail space, golf course and other amenities.
The Design
Agreement shall also provide for and establish appropriate design
packages
("Design Packages"), each pertaining to a discrete portion or phase
of the
Project. The Design Agreement shall allow Great Lakes the right
and
responsibility to supervise, direct, control and administer the
duties,
activities and functions of the Architect and to efficiently carry
out its
covenants and obligations under this Agreement; but the Design
Agreement shall
provide that the Architect will consult closely with the Band and
the Band's
advisers, and that all design elements shall be subject to review
and approval
by the Band.
Section 4.2. Design and Construction Budgets. Great Lakes, with
the
assistance and input of the Architect and subject to the approval
of the Pokagon
Council, shall establish a preliminary Development Budget (the
"Preliminary
Development Budget") for designing, constructing, furnishing and
equipping the
Facility and related costs and Development Expenditures. The
Preliminary
Development Budget, as approved by the Pokagon Council and as it
may be amended
with the approval of the Pokagon Council, is referred to as the
"Approved
Development Budget." The Approved Development Budget shall reflect
the Initial
Phase and, as
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to the expansion to include the Final Scope of Work, the Final
Scope of Work
(subject to revision as provided in Section 3.3), as well as any
other planned
phasing. Great Lakes may, after notice to and approval by the
Pokagon Council,
revise the aggregate Approved Development Budget from time to time
as necessary
or appropriate to reflect any unpredicted changes, variables or
events or to
include additional and unanticipated Project costs. Great Lakes
may, at is sole
discretion after notice to and approval by the Business Board,
reallocate part
or all of the amount budgeted with respect to any line item to
another line item
and to make such other modifications to the Approved Development
Budget as Great
Lakes deems necessary or appropriate, provided that: (i) the
cumulative
modifications of the Approved Development Budget for all Design
Packages shall
not, without Great Lakes' prior approval and the Pokagon Council's
prior
approval, exceed the aggregate Approved Development Budget, and
(ii) any
modifications shall not otherwise conflict with the terms of this
Agreement.
Approved Development Budget adjustments which otherwise vary from
the terms of
the Agreement, shall, in addition to requiring Great Lakes'
approval, require
the approval of the Pokagon Council. The Band acknowledges that the
Approved
Development Budget is intended only to be a reasonable estimate of
Project
costs, subject, however, to the provisions of Section 5.8 with
regard to cost
overruns.
Section 4.3. Gaming Regulatory Authority Expenses. The Approved
Development
Budget shall include such amounts as the Band determines, after
consultation
with Great Lakes, are reasonable and necessary to assure that the
GRA is able to
fulfill its regulatory role in a manner that does not slow the
opening of the
Facility; provided that the cost of final preparation and approval
of the Gaming
Ordinance shall not exceed $20,000.
Section 4.4. [intentionally omitted].
Section 4.5. Concept Design and Engineering. Great Lakes, after
consultation with the Business Board and the Architect, shall
prepare for the
review and approval of the Pokagon Council, a statement of
requirements for the
Facility, if any, including, but not limited to, planned phasing,
if any, a
program of preliminary objectives, schedule requirements, design
criteria,
including assumptions regarding HVAC demands, space requirements
and
relationships, special equipment and site requirements.
Section 4.6. Preliminary Program Evaluation. Great Lakes shall
prepare for
review by the Business Board and approval of the Pokagon Council, a
preliminary
evaluation of the proposed Project including, but not limited to,
planned
phasing, if any, schedule, Development Budget requirements, and
alternative
approaches to Project design and construction. Based upon the
agreed-upon
schedule, Development Budget requirements and design, the Architect
shall
prepare schematic design documents consisting of drawings and other
documents
illustrating the scale and relationship of the Facility and any
other Enterprise
components, as well as a preliminary estimate of Enterprise costs
based upon the
proposed area, size and scope of the Enterprise.
Section 4.7. Design Development. After review by the Business Board
and
upon final approval of the schematic design documents by the
Pokagon Council and
Great Lakes, the Architect shall prepare design development
documents consisting
of drawings and other
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documents to fix and describe the size and character of the Project
as to
architectural, structural, mechanical and electrical systems,
materials and such
other elements and/or Design Packages as may be appropriate.
Further, the
Architect shall advise Great Lakes with respect to, and update, any
Development
Budget estimates. Great Lakes shall submit to the Pokagon Council,
for its
review and approval, finalized versions of the design development
documents
prepared by the Architect and agreed to by Great Lakes.
Section 4.8. Plans and Specifications. Based upon the approved
design
development documents and any further adjustments in the scope and
quality of
the Project or in the Development Budget, the Architect shall
prepare for
approval by Great Lakes and the Business Board constraction
documents consisting
of preliminary drawings and specifications setting forth the
general
requirements for construction of the Project. The Architect shall
proceed with
completion of detailed plans and specifications (the "Plans and
Specifications")
as they relate to construction of portions of the Facility in the
order such
portions are to be completed or in the order required for
sequential completion,
and shall proceed with completion of all Plans and Specifications
as soon as
reasonably possible given construction scheduling and the intended
progress of
Project work. The Architect shall advise the Business Board of any
adjustments
to previous Development Budget estimates. The Plans and
Specifications of the
Initial Phase shall be designed to accommodate the addition of
further
amenities, including without limitation a hotel, expansion of the
parking
garage, and a bingo/multi-purpose entertainment hall.
As
portions of the detailed Plans and Specifications are completed
for
segments of the Project, the Architect shall be required to submit
duplicate
copies of those portions of the Plans and Specifications to Great
Lakes and to
the Business Board (for approval prior to release of such documents
to
prospective bidders for bidding and prior to commencement of
construction of
such portions) and to the Pokagon Council (for information).
Section 4.9. Compliance with Construction Standards, Environmental
Laws and
Regulations. The Facility shall be designed and constructed so as
to adequately
protect the environment and the public health and safety and to
comply with all
requirements of IGRA and the NIGC. The design, construction and
maintenance of
the Facility shall, except to the extent a particular requirement
or
requirements may be waived in writing by the Pokagon Council, meet
or exceed all
reasonable minimum standards pertaining to the Band and national,
State and
local building codes, fire codes and safety and traffic
requirements (but
excluding planning, zoning and land use laws, ordinances,
regulations and
requirements), which would be imposed on the Enterprise by existing
State or
Federal statutes or regulations which would be applicable if the
Facility were
located outside of the jurisdictional boundaries of the Band, even
though those
requirements may not apply within the Band's jurisdictional
boundaries. To the
extent that the Band has adopted or may in the future adopt more
stringent
requirements, those requirements shall govern. Nothing in this
subsection shall
grant to the State or any political subdivision thereof any
jurisdiction
(including but not limited to, jurisdiction regarding zoning or
Gaming Site use)
over the Facility or Enterprise or its development, management and
operation.
Section 4.10. Advance of Funds for Design Work, Long Lead Time
Items and
Preliminary Site Work. Notwithstanding any lack of approval of the
Management
Agreement or this Agreement by the NIGC, Great Lakes shall advance
such funds
under the Lakes Development Loan as are reasonably necessary to
proceed prior to
Bank Closing with site and
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facility planning, architectural renderings and plans, including
payments to the
Architect pursuant to the Design Agreement, engineering and
environmental
services, Development Soft Costs, working drawings and construction
contract
bidding documents. Great Lakes has also advanced under the Lakes
Development
Loan, notwithstanding lack of such approvals, such funds (in the
approximate
amount of $4,500,000) as were reasonably necessary to order
long-lead-time items
and to permit the Band to begin preliminary site work. All amounts
so advanced
by Great Lakes prior to NIGC Approval and Bank Closing shall be a
part of the
development cost of the Enterprise and shall be advanced under the
Lakes
Development Note as part of the Lakes Development Loan.
ARTICLE
5.
CONSTRUCTION PHASE
Section 5.1. Selection of Contractor or Construction Manager. Great
Lakes
shall, in consultation with the Architect and the Business Board,
initiate a
pre-bid selection process in order to pre-qualify prospective
general
contractors and/or construction management in connection with the
construction
of the Facility. Great Lakes shall submit the list of pre-qualified
general
contractors and/or construction managers to the Pokagon Council,
together with
Great Lakes' recommendations, for
