EXHIBIT 10.12
SECURITY AGREEMENT ACKNOWLEDGMENT
This Security Agreement Acknowledgment (this "Acknowledgment") is made
and entered into as of the 22nd day of June, 2006, by the POKAGON GAMING
AUTHORITY ("DEBTOR"), a wholly owned unincorporated instrumentality of the
Pokagon Band of Potawatomi Indians, a federally recognized Indian Tribe (the
"BAND"), and Great Lakes Gaming of Michigan, LLC ("SECURED PARTY").
RECITALS
WHEREAS, the Band executed and delivered that certain First Amended and
Restated Security Agreement in favor of Secured Party dated as of January 25,
2006 (the "SECURITY AGREEMENT"), pursuant to which the Band granted Secured
Party a security interest in the Collateral referred to therein, comprising all
goods, furniture, furnishings and equipment required for or related to the
operation of the Enterprise referred to therein;
WHEREAS, pursuant to the Pokagon Gaming Authority Ordinance adopted by
the Band (the "ORDINANCE"), the Band created Debtor for the purposes of
conducting the Gaming Business (as defined in the Ordinance) which encompasses
the Enterprise, and, in connection therewith, all Gaming Assets and Gaming
Business Tribal Rights (each as defined in the Ordinance) were assigned and
allocated to Debtor;
WHEREAS, pursuant to an Assignment and Assumption Agreement dated as of
May 25,2006, by and among the Band, Debtor, Secured Party, Lakes Entertainment,
Inc., Lakes Gaming and Resorts, LLC, Pokagon Properties, LLC, and Filbert Land
Development, LLC (the "ASSIGNMENT AND ASSUMPTION AGREEMENT"), Debtor has
assumed all obligations of the Band under and has become bound as a new debtor
by the Security Agreement;
WHEREAS, Section 15 of the Assignment and Assumption Agreement
provides that the parties thereto will execute and deliver such additional
documents and take such additional actions as may be reasonably requested by a
party for the purpose of implementing or effectuating the provisions of the
Assignment and Assumption Agreement, and Secured Party has requested that this
Acknowledgment be so executed and delivered;
WHEREAS, contemporaneously herewith, Debtor is entering into an
equipment financing facility pursuant to a Loan Agreement by and among Debtor,
Xxxxx Fargo Bank Northwest, National Association ("WF"), and other parties
named therein, for which Banc of America Leasing & Capital, LLC is Arranger and
Administrative Agent (the indebtedness incurred by Debtor pursuant to which
being herein referred to as the "FF&E FINANCING"), the collateral for which,
granted pursuant to a Security Agreement dated as of June 22, 2006, by and
between Debtor and WF (the "FF&E Security Agreement"), will consist of
furniture, furnishings and equipment purchased with the
proceeds of such FF&E Financing and all other collateral described in the FF&E
Security Agreement (such collateral being referred to herein as the "FF&E
COLLATERAL"); and
WHEREAS, Debtor has requested that Secured Party not claim a security
interest in the FF&E Collateral until such time as the FF&E Financing shall have
been paid in full or otherwise discharged or defeased or the FF&E Collateral
shall no longer secure the FF&E Financing;
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. Acknowledgment. Debtor confirms each acknowledgment and
agreement set forth in Section 5 of the Assignment and Assumption Agreement.
Without limiting the generality of the foregoing, Debtor hereby confirms (i)
that the Security Agreement is binding upon Debtor as the Debtor thereunder, as
if Debtor had originally been a party thereto, (ii) that the Secured Obligations
(as defined in the Security Agreement) include both the obligations assumed by
the Debtor pursuant to the Assignment and Assumption Agreement and such
obligations as remain obligations of the Band in accordance with the provisions
of the Assignment and Assumption Agreement, and (iii) that the Tribal Commercial
Code and the Tribal UCC, as referenced in the Security Agreement, shall be
deemed to refer to the secured transactions code adopted by the Band and
applicable to Debtor as an instrumentality of the Band. Debtor further makes and
confirms, as of the date hereof, all representations and warranties of the
Debtor set forth in the Security Agreement. Debtor's notice addresses shall be
the same as those originally provided in the Security Agreement with respect to
the Band.
2. FF&E Collateral. Secured Party hereby agrees that,
notwithstanding anything in the Security Agreement or any other document,
agreement or instrument to the contrary, no security interest granted by Debtor
to Secured Party shall attach to the FF&E Collateral unless and until (i) the
FF&E Financing (and any renewal, refunding, replacement or refinancing thereof)
shall be paid in full or otherwise discharged or defeased, or (ii) with respect
to any item of FF&E Collateral, such item otherwise shall be released and no
longer constitute FF&E Collateral.
3. Counterparts. This Acknowledgment may be executed in any
number of counterparts and by facsimile, each of which when so executed and
delivered shall be deemed an original, but all of which shall together
constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Acknowledgment
to be duly executed and delivered under seal by their respective duly authorized
officers as of the date first above written.
DEBTOR:
POKAGON GAMING AUTHORITY
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
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Title: President/CEO
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SECURED PARTY:
GREAT LAKES GAMING OF MICHIGAN, LLC
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
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Title: President and Chief Financial Officer
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