1
AMENDED AND RESTATED TRANSITION LOAN NOTE
$7,500,000 October 16, 2000
Dowagiac, Michigan
FOR VALUE RECEIVED, The Pokagon Band of Potawatomi Indians (the "Band")
promises to pay to Great Lakes of Michigan, LLC, a Minnesota limited liability
company ("Lakes"), such sums as may be advanced by Lakes to the Band under
Section 8.3 of a Development Agreement between the Band and Lakes Gaming, Inc.
dated as of July 8, 1999 (the "Development Agreement"), as assigned by Lakes
Gaming, Inc. to and assumed by Lakes pursuant to that certain Assignment and
Assumption Agreement of even date herewith by and among the Band, Lakes Gaming,
Inc. and Lakes (the "Assignment Agreement"), as amended by First Amendment of
near or even date (the "Development Agreement"); provided that the principal
amount due hereunder shall not exceed Seven Million Five Hundred Thousand
Dollars ($ 7,500,000.00).
1. Advances. Advances under this Note may, at Lakes' option, be funded
through transfer of funds from the Escrow Account; provided that interest shall
only accrue under this Note on funds advanced through the Escrow Account after
disbursement from the Escrow Account, and shall not begin to accrue on deposit
by Lakes into the Escrow Account.
2. Interest. No interest shall accrue on amounts outstanding hereunder
until two years after the date hereof. Beginning on the second annual
anniversary of the date hereof, interest shall begin accruing on the outstanding
balance as follows:
(a) if the Bank Closing occurs, at a fixed rate equal to the lesser of
(i) Base Rate as of the Bank Closing plus 1% or (ii) 10% (the "Band
Interest Rate"); or
(b) If the Bank Closing does not occur, at a variable rate equal to the
lesser of (i) Base Rate plus 1% or (ii) 10% (the lesser of (i) and (ii)
being referred to as the "Variable Interest Rate"). Lakes shall adjust
the Variable Interest Rate on the then unpaid principal balance, by way
of increase or decrease, in accordance with changes in the Base Rate.
Such changes shall be effective as of the change in the Base Rate (the
"Effective Date").
If the Bank Closing occurs after the second annual anniversary of the date
hereof,
2
interest accruing under this Note prior to the Bank Closing shall be adjusted
retroactively to reflect the Band Interest Rate. "Base Rate" means the lowest
Prime Rate as is published daily in The Wall Street Journal. In the event that
the Wall Street Journal ceases to publish the Prime Rate, then the holder hereof
may in its reasonable discretion select some other generally recognized
comparable indicator of the national Prime Rate.
3. Repayment.
If the Commencement Date occurs, the Band shall, beginning on the 15th
day of the month following the Commencement Date, make equal monthly payments to
Lakes of principal and interest in an amount sufficient to amortize the
principal amount outstanding as of the Commencement Date over a sixty (60) month
period at the Band Interest Rate, and shall thereafter continue to make payments
in such amount on the 15th day of each succeeding month to and including the
fifteenth day of the sixtieth month following the Commencement Date, when all
remaining principal and interest shall be due and payable.
If the Commencement Date does not occur, principal and interest shall
be repayable to the extent and in the manner provided in the Development
Agreement; provided that payments shall in any event be due and made only from
Subsequent Gaming Facility Revenues, in accordance with the Development
Agreement. If Gaming commences at such a facility and payment is due under this
Note in accordance with the Development Agreement, the Band shall, beginning on
the 15th day of the month following such commencement date, make equal monthly
payments to Lakes of principal and interest in an amount sufficient to amortize
the principal amount outstanding as of such commencement date over a sixty (60)
month period at the Variable Interest Rate, and shall thereafter continue to
make such payments on the 15th day of each succeeding month to and including the
fifteenth day of the sixtieth month following such commencement date, when all
remaining principal and interest shall be due and payable. As of the Effective
Date of a change in the Base Rate, Lakes shall adjust the monthly installments
of principal and interest as of the installment next following the Effective
Date so that the then unpaid principal balance would be amortized in full at the
revised Variable Interest Rate five years after such commencement of gaming.
Lakes shall promptly notify the Band in writing of any changes in the Base Rate
and in the instalment payment due.
4. Prepayment. This Note may be prepaid at any time without penalty.
5. Limited Recourse. The obligations of the Band under this Note and
any
3
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 and, after the Commencement Date occurs, funds on deposit in
the Dominion Account to the extent provided in ss. 9.2.1(x) of the Development
Agreement and the Dominion Agreement, or in any other dominion agreement
executed by the Band (except that, if the Commencement Date does not occur,
Lakes shall also have recourse to Subsequent Gaming Facility Revenues to the
extent provided in the Development Agreement). In no event shall Lakes or any
other claimant under this Note have recourse to (a) the physical property of the
Facility, (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), if the
Commencement Date does not occur, Subsequent Gaming Facility Revenues to the
extent provided in the Development Agreement, (ii), after the Commencement Date
occurs, funds on deposit in the Dominion Account to the extent provided in ss.
9.2.1(x) of the Development Agreement and the Dominion Agreement, or in any
other dominion agreement executed by the Band, and (iii) such Net Revenues of
the Enterprise).
6. Subordination. Payment of amounts due hereunder shall be
subordinated to the Bank Development Loan, the Equipment Loan and any other
third-party loans or equipment leases to the Band relating to the Facility or,
if the Commencement Date does not occur, or to any loans relating to any other
Gaming facility in Michigan owned by the Band. The holder of this Note agrees to
execute and deliver subordination agreements evidencing such subordination in
form reasonably acceptable to the Bank Lender, the Equipment Lender, or any
other third-party lender or equipment lessor.
7. Default; Acceleration. All outstanding principal together with
accrued interest shall become immediately due and payable in full, subject to
the limitations on recourse provided above, upon default in the payment of
principal or interest due under this Note if such default is not remedied within
thirty (30) days after receipt by the Band of written notice thereof as provided
in the Development Agreement.
8. Sovereign Immunity. The Band expressly waives its sovereign immunity
from suit for the purpose of permitting or compelling arbitration to enforce
this Note as provided in Article 14 of the Development Agreement and consents to
be sued in 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 Court of Appeals
for the Sixth Circuit, and the
4
United States Supreme Court for the purpose of compelling arbitration or
enforcing any arbitration award or judgment arising out of this Note. If the
United States District Court lacks jurisdiction, the Band consents to be sued in
the Michigan State Court system for the same limited purpose. The Band waives
any requirement of exhaustion of tribal remedies. Without in any way limiting
the generality of the foregoing, the Band expressly authorizes any governmental
authorities who have the right and duty under applicable law to take any action
authorized or ordered by any such court, and to take such action, including
without limitation, repossessing or foreclosing on any real property not in
trust, or otherwise giving effect to any judgment entered; provided, however,
that liability of the Band under any judgment shall always be Limited Recourse,
and in no instance shall any enforcement of any kind whatsoever be allowed
against any assets of the Band other than (i), if the Commencement Date does not
occur, Subsequent Gaming Facility Revenues to the extent provided in the
Development Agreement, (ii) Net Revenues of the Enterprise, and (iii), after the
Commencement Date occurs, funds on deposit in the Dominion Account to the extent
provided in ss. 9.2.1(x) of the Development Agreement and the Dominion
Agreement, or in any other dominion agreement executed by the Band. The Band
appoints the Chairman of the Pokagon Council and the Secretary of the Pokagon
Council as its agents for service of all process under or relating to the
Agreements. The Band agrees that service in hand or by certified mail, return
receipt requested, shall be effective for all purposes under or relating to the
Agreements if served on such agents.
9. Arbitration. All disputes, controversies or claims arising out of or
relating to this Note shall be settled by binding arbitration as provided in
Article 14 of the Development Agreement.
10. Business Purposes; Applicable Law. This Note evidences a loan for
business and commercial purposes and not for personal, household, family or
agricultural purposes, and shall be governed by the law of the State of Michigan
and, to the extent applicable, federal law.
11. Defined Terms. Capitalized terms used herein shall have the same
meanings assigned to them in the Development Agreement, and, if not defined in
the Development Agreement, in the Management Agreement between the Band and
Lakes of even date.
12. Miscellaneous.
a. Time is of the essence.
5
b. The benefits and obligations of this Note shall inure to and be
binding upon the parties hereto and their respective successors
and assigns, provided that any succession or assignment is
permitted under the Development Agreement.
c. Waiver of any one default shall not cause or imply a waiver any
subsequent default.
d. This Note, together with the Development Agreement, the
Management Agreement, the Escrow Agreement, the Transition Loan
Note and the Non-Gaming Land Acquisition Line of Credit the
exhibits thereto and all related documents of near or even date
herewith, sets forth the entire agreement between the parties
hereto with respect to the subject matter hereof. All agreements,
covenants, representations, and warranties, express or implied,
oral or written, of the parties with respect to the subject matter
hereof are contained herein and therein. This Note shall not be
supplemented, amended or modified by any course of dealing, course
of performance or uses of trade and may only be amended or
modified by a written instrument duly executed by officers of both
parties.
e. This Note has been executed and delivered as a complete
amendment and restatement in its entirety of that certain
Transition Loan Note dated as of July 8, 1999 made payable by the
Band to Lakes Gaming, Inc in the original principal amount of
$7,500,000, as assigned by Lakes Gaming, Inc. to Lakes pursuant to
the Assignment Agreement.
THE POKAGON BAND OF POTAWATOMI INDIANS
By:________________________________
Its: Council Chairman
By:________________________________
Its: Secretary
GREAT LAKES OF MICHIGAN, LLC
By:________________________________
Xxxxxxx X. Xxxx
Its Chief Financial Officer
