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FIRST AMENDMENT TO ACQUISITION AND PARTICIPATION AGREEMENT
THIS FIRST AMENDMENT is made and entered into effective this 12th day
of October, 2000, by and between MRD GAMING, LLC, a California limited liability
company, 600 Whitney Ranch Drive, C-15, Henderson, NV 89014 ("MRD"); and LAKES
GAMING AND RESORTS, LLC, a Minnesota limited liability company, 130 Cheshire
Lane, Minnetonka, MN 55305 ("Lakes").
RECITALS:
WHEREAS, MRD and Lakes are parties to that certain Acquisition and
Participation Agreement made August 7, 2000, providing for certain transactions
including, but not limited to, MRD's purchase of all of the membership interests
in Pacific Cost Gaming - Santa Rosa, L.L.C. and Pacific Coast Gaming - Corning,
L.L.C. from United Gaming Holding Co., L.L.C. (the "Acquisition Agreement");
WHEREAS, MRD has filed with the California Secretary of State a form of
Articles of Conversion intended to change the state of MRD's organization from
Nevada to California; and
WHEREAS, Lakes and MRD desire to amend the terms of the Acquisition
Agreement as provided herein, primarily to reflect certain changes in the terms
of the Franklin Buy-out described therein, which has not yet occurred, as set
forth in a written Membership Purchase Agreement among United Gaming Holding
Co., L.L.C., certain of its affiliates and MRD, dated September 21, 2000;
NOW, THEREFORE, in consideration of the mutual promises of the parties
hereto, and the mutual benefits to be gained by the performance hereof, the
parties hereto agree to amend the Acquisition Agreement as follows:
Status of MRD and Identification of Tribes - Throughout the
Acquisition Agreement, all references to MRD's status as a "Nevada limited
liability company" are hereby changed to read "California limited liability
company". The last sentence of Section A of the Preliminary Statement and
Certain Definitions is hereby deleted in its entirety. - Throughout the
Acquisition Agreement, each reference to the "Paskenta Tribe" shall mean the
Paskenta Band of Nomlaki Indians, located in Corning, California; and each
reference to the "Cloverdale Tribe" shall mean the Cloverdale Rancheria of Pomo
Indians, located in Cloverdale, California, which is near Santa Rosa,
California.
Section C - The first sentence of Section C of the Preliminary
Statement and Certain Definitions is hereby amended to read as follows:
United Gaming Holding Co., L.L.C. is a Maryland limited
liability company ("United"), which is owned and controlled by FCG
Gaming Enterprise, L.L.C., a Maryland limited liability company that is
owned and controlled by both Franklin Capital Advisors Limited
Partnership, a Maryland limited partnership, and Franklin Capital G.P.
Corp., a Maryland corporation (collectively, except for
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United, "Franklin").
The last sentence of the same Section C is hereby amended to
read as follows:
Prior to the date of this Agreement, United has provided funds in the
amount of $1,115,737 to the Project Companies for development of the
Projects pursuant to the Project Contracts (the "Advanced Funds").
Section D - The first sentence of Section D of the Preliminary
Statement and Certain Definitions is hereby amended to read as follows:
Lakes and MRD have negotiated certain conditions under which
Lakes will provide certain financing for the Projects in the form of
loans to MRD and the Project Companies contemporaneous with and after
the acquisition by MRD of United's membership interests in the Project
Companies.
Section 1 - Section 1 is hereby deleted in its entirety and replaced
with the following:
ACQUISITION OF PROJECT COMPANIES, DEVELOPMENT RIGHTS, PROJECT
CONTRACTS AND OTHER ASSETS. As an express condition of any lending
under this Agreement, except for temporary funding to be provided by
Lakes under Section 17, Lakes requires MRD to purchase from United 100%
of the equity interests in the Project Companies (the "Franklin
Buy-out"), subject to the condition that the Project Companies shall
then hold all of the Project Assets not already held by MRD (including
without limitation those acquired from Michels), pursuant to the
Membership Purchase Agreement, dated September 21, 2000, among MRD,
United, Franklin and the Project Companies (the "the Membership
Purchase Agreement"), which is attached hereto (including its Exhibits)
as Exhibit A, is hereby represented by MRD to be true and complete, and
contains the terms and conditions of the Franklin Buy-out (the "Buy-out
Terms"). The Buy-out Terms include the payment by MRD of $200,000 to
United in exchange for United's transfer of its membership interests in
the Project Companies to MRD. The amounts to be loaned by Lakes to MRD
pursuant to Section 17 (and evidenced by that certain promissory note
dated August 8, 2000 and issued to Lakes by MRD in the maximum
principal amount of $1,000,000 (the "MRD Interim Note")) shall be
loaned by MRD to the Project Companies (the "Interim Amounts") for the
purposes set forth in Section 17. As part of the closing of the
Franklin Buy-out, Lakes will also loan to the Project Companies an
amount equal to the Advanced Funds (the "Advanced Funds Loan"), which
shall be used by the Project Companies to repay the Advanced Funds
loaned to the Project Companies by United. Pursuant to the Membership
Purchase Agreement, MRD and United have agreed to execute a consulting
agreement that documents the ongoing consulting arrangement between
them (the "Consulting Agreement"), a copy of which has been delivered
to Lakes as part of Exhibit A and is represented by MRD to be true
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and complete. In consideration of services rendered by United to MRD
under the Consulting Agreement, MRD will: (a) issue to United a
contingent promissory note in the principal amount of $2,000,000 (the
"United Consulting Note"), which will be payable, if at all, at the
times set forth in the United Consulting Note; and (b) pay to United an
additional contingent fee described in the Consulting Agreement and
relating to the Paskenta Project. MRD acknowledges and agrees that it
shall not agree or consent to any modifications to the Membership
Purchase Agreement, the Consulting Agreement, the United Consulting
Note or any other documents, agreements or instruments with or in favor
of United or Franklin and related to the transactions contemplated
thereby without the prior written consent of Lakes, which consent will
not be unreasonably withheld.
When MRD purchases the equity interests in the Project
Companies in the Franklin Buy-out, and when a portion of such interests
are thereafter assigned by MRD to Lakes (or its subsidiaries)
hereunder, such interests shall be free and clear of all liens and
encumbrances; the Project Assets then held by the Project Companies
shall also be free and clear of all liens and encumbrances, and the
Project Companies shall not have any debts or other liabilities or
obligations, except for (a) their obligations to repay the Advanced
Funds loaned to them by United, (b) any loans and funding commitments
owed to the Tribes under the Project Contracts and (c) their debts to
MRD under the Project Interim Notes defined in the following paragraph.
The parties acknowledge that the warranties, representations, and
covenants of indemnification given by Franklin to MRD under the
Membership Purchase Agreement are incomplete, because it was not
appropriate for Franklin to make representations with respect to
matters controlled by or known only to MRD or Matthew R. Daly and,
therefore, MRD hereby makes the additional representations and
warranties set forth in Supplement 1 attached to this Agreement. MRD
also represents and warrants to Lakes that Exhibit B attached hereto
contains a complete listing of all written (and a written summary of
any oral) Project Contracts and no others exist except as described
therein.
Before the closing of the Franklin Buy-out, MRD shall have
caused the Project Companies to issue to MRD promissory notes in the
form attached hereto as Exhibit N, pursuant to which each of the
Project Companies have agreed to repay its share of the Interim Amounts
loaned to the Project Companies by MRD, with interest as provided in
Section 5 (the "Project Interim Notes"). To facilitate the Franklin
Buy-out, and subject to the closing thereof, Lakes hereby agrees to
lend to MRD (a) $200,000, which shall be used by MRD only to purchase
United's membership interests in the Project Companies (the "Purchase
Loan"); and (b) upon MRD's request, up to 50% of any amounts due from
MRD to United under the United Consulting Note (excluding the Lakes
Consulting Note Payments to be paid by Lakes as the other 50% of such
amounts pursuant to the next paragraph of this Section 1), in the event
and to the extent that (i) MRD is required to make any such payment
under the United Consulting Note, and (ii)
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MRD's share of Net Cash Flows (as defined in Section 9) distributed to
MRD on or prior to the date thereof are insufficient to permit MRD to
make such payment when due (the "Consulting Loan Commitment"). If MRD
obtains any advances from Lakes pursuant to the Consulting Loan
Commitment (the "Consulting Loan"), such funds may only be used by MRD
to make payments to United pursuant to the United Consulting Note.
Lakes shall have the right at its option to make any advance under the
Consulting Loan Commitment directly to United together with the Lakes
Consulting Note Payment. The Purchase Loan and any Consulting Loan
amounts advanced to MRD under the Consulting Loan Commitment shall be
referred to collectively as the "MRD Loans." The net amount of the MRD
Loans, after the release given MRD by Lakes pursuant to Section 7(a),
shall not exceed $1,100,000, plus any loan made by Lakes to MRD to pay
MRD's share of any interest accrued and paid to United on the unpaid
balance of the United Consulting Note. The MRD Loans shall be subject
to the terms and conditions set forth in Section 4.
As part of the closing of the Franklin Buy-out: (a) Lakes
shall make the Purchase Loan to MRD; (b) Lakes shall deliver a written
guaranty in favor of United (in the form attached as an Exhibit to the
Membership Purchase Agreement) whereby Lakes Gaming, Inc., the sole
owner of Lakes, will guaranty MRD's payment of the United Consulting
Note to United; (c) Lakes shall make the $1,115,737 Advanced Funds Loan
to the Project Companies, which amount MRD shall cause the Project
Companies to pay to United in satisfaction of the Project Companies'
obligations to repay the Advanced Funds; and (d) subject to such
closing and MRD's assignment of an interest in each of the Project
Companies to Lakes pursuant to Section 7, Lakes hereby agrees to (i)
pay to United 50% of each of MRD's payments due under the United
Consulting Note, if the United Consulting Note becomes due and payable
(the "Lakes Consulting Note Payments"); and (ii) defend, indemnify and
hold MRD harmless from and against all liability of MRD to United for
payment of such 50%. The obligation of Lakes under the preceding clause
(d) will be separate and apart from Lakes' obligation to lend MRD the
other 50% due United under the United Consulting Note, pursuant to the
Consulting Loan Commitment.
As part of the closing of the Franklin Buy-out, the following
additional steps shall be taken: (a) the Project Companies shall issue
to Lakes promissory notes in the form attached hereto as Exhibit O,
pursuant to which each of the Project Companies will repay its share of
the Advanced Funds Loan to Lakes; (b) the Project Interim Notes shall
be assigned by MRD to Lakes in full satisfaction of MRD's obligations
to Lakes under the MRD Interim Note; (c) MRD shall issue to Lakes a
promissory note in the form attached hereto as Exhibit P, which shall
evidence the Purchase Loan and any Consulting Loan advances included in
the MRD Loans, and contain the terms and conditions required by the
Purchase Loan, the Consulting Loan Commitment and Section 4; and (d)
MRD shall execute and deliver to Lakes a written security agreement in
the form attached hereto as
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Exhibit Q and a written pledge agreement in the form attached hereto as
Exhibit R, each securing the MRD Loans and containing the terms and
conditions required by Section 4. The Advanced Funds Loan and each loan
evidenced by the Project Interim Notes (collectively, the "Project
Companies Loan"), and the MRD Interim Note issued to Lakes by MRD
before the Franklin Buy-out pursuant to Section 17, shall be subject to
the terms and conditions set forth in Section 5, to the extent provided
therein.
Section 2 - The second sentence of Section 2 is hereby amended to read
as follows:
This limit includes the Project Companies Loan, but excludes
the MRD Loans.
Section 4 - Throughout the Acquisition Agreement, all references to the
"Cloverdale Premium Loan" shall be deleted and replaced with the phrase "MRD
Loans". The third and fourth paragraphs of Section 4 are hereby deleted in their
entirety and replaced with the following:
Subject to the payment deferral provisions of the last paragraph of
this Section 4, the first payment by MRD on the MRD Loans shall be due
and shall be made no later than the 20th day of the first full month
beginning after the month in which both of the following events have
occurred: (a) MRD begins receiving its share of Net Cash Flows (as
defined in Section 9) from the Project Company engaged in the
Cloverdale Project; and (b) that share first exceeds the amount MRD is
obligated to pay United on the United Consulting Note for that month,
reduced by the amount Lakes is obligated to pay United on the United
Consulting Note for that month pursuant to clause (d) of the third
paragraph of Section 1, and continuing each month thereafter in which
such conditions have been met.
To secure MRD's obligation to repay the MRD Loans, MRD shall grant
Lakes a first priority security interest in: (a) MRD's Overhead Fees
(as defined in Section 10), (b) MRD's share of Net Cash Flows from the
Project Companies, (c) all Project Assets, (d) MRD's equity interests
in the Project Companies, and (e) any other assets hereafter acquired
by MRD that relate to the Projects (collectively, the "MRD Permanent
Collateral"); provided, however, that the security interest granted to
Lakes with respect to MRD's share of Net Cash Flows (as defined in
Section 9) from the Project Company engaged in the Paskenta Project may
be subject to the first priority security interest granted by MRD to
United in the form of the Security Agreement attached as an Exhibit to
the Membership Purchase Agreement, which secures MRD's deferred fee
obligation (other than the United Consulting Note) under Section 4(b)
of the Consulting Agreement to pay United a certain fraction of any
distributions paid to MRD with respect to the membership interest MRD
will acquire and retain in the Project Company involved in the Paskenta
Project. MRD shall have the right to prepay any and all amounts owed
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to Lakes under the MRD Loans without premium or penalty.
Section 5 - Throughout the Acquisition Agreement, all
references to the "Buy-out Reimbursement Loan" shall be deleted and
replaced with the phrase "Project Companies Loan", except such
reference in the fifth paragraph of Section 5 shall be replaced with
the phrase "loan of Interim Amounts to MRD under Section 17". The
second sentence of the first paragraph of Section 5 is hereby deleted
in its entirety and replaced with the following two sentences:
After the Franklin Buy-out and as a condition to Lakes'
obligation to make any Project Companies Loan, both Project Companies
shall agree to be jointly and severally liable for repayment of the
Project Companies Loan to Lakes and, in connection therewith, each of
them shall execute and deliver to Lakes its written guaranty (in the
form attached hereto as Exhibit S) of the other Project Company's
obligations under the Project Companies Loan and the other Project
Company's Project Development Loan. Interest on the Interim Amounts
loaned to MRD and in turn to the Project Companies, and interest on the
Project Companies Loan, shall accrue only on funds actually advanced by
Lakes to MRD or the Project Companies, or by MRD to the Project
Companies, as applicable, beginning when such funds are advanced.
The fourth paragraph of Section 5 is hereby deleted in its
entirety. The phrase "after it is assumed" found in the first sentence
of the sixth paragraph of Section 5 is hereby deleted in its entirety.
Section 7 - Section 7 shall be deleted in its entirety and replaced
with the following:
Upon completion of the Franklin Buy-out and in consideration
of (a) Lakes' written release (in the form attached as Exhibit T) of
MRD's obligation to repay one-half of the Purchase Loan; (b) Lakes'
agreement herein to make each of the Lakes Consulting Note Payments to
United; and to defend, indemnify and hold MRD harmless from and against
all liability of MRD to United for payment of such amounts; (c) Lakes'
Consulting Loan Commitment; (d) Lakes' agreement herein to make the
Project Companies Loans and the Project Development Loans and (e)
Lakes' future assistance in the planning, development and start-up of
each Project, MRD shall assign to Lakes a 65% equity interest in the
profits, losses and distributions of Net Cash Flows (as defined in
Section 9) of each of the Project Companies (with the other rights set
forth in Sections 8, 9 and 10). Upon completion of the Franklin
Buy-out, MRD shall contribute its right, title and interest (if any) in
any Project Assets not held by the Project Companies to the capital of
the Project Company involved in the Project that relates to such
Project Assets. MRD shall retain a 35% equity interest in the profits,
losses and distributions of Net Cash Flows of each of the Project
Companies (with the other rights set forth in Sections 8, 9, 10 and
12); and Lakes and MRD shall adopt the
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Project Company Documents with respect to each Project Company pursuant
to Section 6.
Section 9 - The first sentence of Section 9 is hereby amended to read
as follows:
For the consideration described in Section 7, Lakes shall
receive a 65% interest in the profits, losses and distributions of Net
Cash Flows (as defined below) of each Project Company.
The second paragraph of Section 9 is hereby deleted in its
entirety and replaced by the following:
"Net Cash Flows" with respect to a Project Company shall mean
the net sum of the following, as reasonably determined in good faith by
the governing body of the Project Company: (a) gross variable and fixed
lease fees (as defined in its Project Contracts) received by the
Project Company; plus (b) loan payments and all other fees, amounts and
payments received by the Project Company from the applicable Tribe
under its Project Contract or otherwise with respect to its Project;
plus (c) repayments received by the Project Company on any advances it
made to the other Project Company in the form of payments to Lakes of
amortized loan amounts due from the other Project Company to Lakes
under the Project Companies Loan or a Project Development Loan; plus
(d) any other cash revenues received by the Project Company without any
obligation to repay; less (e) franchise fees, third party financing
costs and other expenses paid to third parties; less (f) Overhead Fees
paid as described in Section 10; less (g) Project Manager Costs paid as
described in Section 11; less (h) payments of amortized amounts due
Lakes on the Project Development Loan and that portion of the Project
Companies Loan due Lakes from the Project Company; and less (i)
repayments made by the Project Company on any advances it received from
the other Project Company in the form of payments to Lakes of amortized
loan amounts due from the Project Company to Lakes under the Project
Companies Loan or a Project Development Loan. "Net Cash Flows" shall
not be reduced by depreciation, amortization, cost recovery deductions
or similar non-cash expense allowances. Attached hereto as Exhibit H
and hereby incorporated herein is an example showing the determination
of Net Cash Flows for the first 12 months of the each Project.
Section 10 - The second sentence of the third paragraph of Section 10
is hereby deleted in its entirety and replaced with the following two sentences:
If, during the second six (6) months after commencement of
payment of Overhead Fees, Net Cash Flows are insufficient to pay all of
the Overhead Fees in any given month, the aggregate amount of Overhead
Fees payable to Lakes and
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MRD by both of the Project Companies shall be limited to partial
payments that are equal to the greater of $30,000 or the available Net
Cash Flow from both Project Companies, with the remainder of the unpaid
Overhead Fees for that month to be forfeited. If, at any time after
such first twelve (12) months, Net Cash Flows from both of the Project
Companies are insufficient to pay all of the Overhead Fees in any given
month, the aggregate amount of Overhead Fees payable to Lakes and MRD
by both of the Project Companies shall be limited to partial payments
that are equal to the available Net Cash Flow from both Project
Companies, with the remainder of the unpaid Overhead Fees for that
month to be forfeited.
* Section 13 - The title and the first two paragraphs of Section 13 are
hereby deleted in their entirety and replaced with the following four
paragraphs:
* OUTSIDE FINANCING/GOVERNMENTAL APPROVALS/MATERIAL ADVERSE
EVENTS. MRD shall exert its reasonable best efforts, and Lakes and MRD
shall cooperate fully, to negotiate and secure third party debt
financing for each of the Projects, (a) in such amounts as they may
mutually agree in good faith are required; and (b) on such terms as
they may mutually accept in good faith, which acceptance shall not be
unreasonably withheld or conditioned or unduly delayed (the "Outside
Financing"); provided, however, that neither Lakes nor MRD shall be
required to guarantee any such Outside Financing.
* The placement in trust of all land that is necessary for a Project, and
also required by applicable law to be placed in trust, is hereinafter
referred to as a "Trust Designation." MRD shall also exert its
reasonable efforts to assist the Paskenta Tribe to complete its Trust
Designation (the "Paskenta Trust Designation"); and with respect to
both Projects, to obtain all necessary approvals (if any) of the NIGC,
the BIA, the Tribes and the State of California with respect to such
land, the Project Contracts, the Projects and their respective gaming
compacts under California and federal laws, including without
limitation a determination, if required under applicable law, that
Class III Indian Gaming (as defined in IGRA) may be lawfully conducted
pursuant to IGRA at (a) the proposed location of the Cloverdale
Project's casino on land being leased from an individual member of the
Cloverdale Tribe and subject to a Trust Designation, or (b) the
proposed location of the Paskenta Project's casino on land to be
subject to the Paskenta Trust Designation (collectively, the "Gaming
Approvals").
* During the period before all required Gaming Approvals (if any) are
received by the Paskenta Tribe and the Paskenta Trust Designation is
completed, Lakes shall not be required to advance under the Project
Development Loan for the Paskenta Project more than the sum of (a) any
Overhead Fees due MRD under this Agreement, and (b) up to $742,500 for
expenses of the Project Company and advances to the Paskenta Tribe by
the applicable Project Company pursuant to and for the purposes set
forth in Section 8.8.13 of its Project Funding and Loan
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Agreement, which is one of its Project Contracts. During the period
before all required Gaming Approvals (if any) are received by the
Cloverdale Tribe, the Cloverdale Tribe's compact is adopted and
approved under applicable laws, and a Trust Designation is completed
for any additional land to be acquired by the Cloverdale Tribe and
necessary for the Cloverdale Project (to the extent that a Trust
Designation is required by applicable law for such land), Lakes shall
not be required to advance under the Project Development Loan for the
Cloverdale Project more than the sum of (a) any Overhead Fees due MRD
under this Agreement, (b) up to $700,000 to be used by the Cloverdale
Project Company to make advances to the Cloverdale Tribe (under the
Project Funding and Loan Agreement) for acquisition of additional land
for the Cloverdale Project, and (c) up to $1,310,000 for expenses of
the Project Company and additional loan advances to the Cloverdale
Tribe for Cloverdale Project expenses, in the amounts specifically
listed on Exhibit U attached hereto; provided, however, that $750,000
of such $1,310,000 is contingent upon Gaming Approvals as described in
such Exhibit U.
* With respect to either of the Projects, Lakes shall have the option, in
its sole discretion, to cease further funding of that Project, cause
the liquidation of the Project Company responsible for that Project,
accelerate payment of the Project Companies Loans, the Project
Development Loan and any of the MRD Loans applicable to that Project if
any of the following events occurs with respect to that Project: (a)
any Gaming Approval required by applicable law for the Paskenta Project
shall not have been received by the Paskenta Tribe by May 1, 2001; (b)
the Paskenta Trust Designation shall not have been completed by May 1,
2001, and Lakes shall have determined (in its sole discretion) that the
Paskenta Trust Designation is not reasonably expected to be completed
within a short time thereafter on terms reasonably acceptable to Lakes;
(c) any Gaming Approval required by applicable law for the Cloverdale
Project shall not have been received by the Cloverdale Tribe by
December 31, 2001; (d) a Trust Designation shall not have been
completed by December 31, 2001, for any additional land that is to be
acquired by the Cloverdale Tribe, is necessary for the Cloverdale
Project and is required by applicable law to be subject to a Trust
Designation; (e) a legally binding commitment for Outside Financing,
subject only to conditions mutually acceptable to Lakes and MRD (as
provided above), is not obtained on the terms specified above for the
Project within six (6) months after the later of (i) the completion of
all Trust Designations required by applicable law for land necessary
for the Project, and (ii) the Tribe's receipt of all Gaming Approvals
required by applicable law for the Project; (f) any such commitment for
Outside Financing has been obtained, but is terminated for any reason
other than a Lakes Default (as defined in Section 19), before the
permanent Project casino is substantially completed and equipped,
unless substitute Outside Financing is obtained before any material
Project Company default occurs under the Project Contracts and is not
waived by the Tribe; (g) the Tribe terminates any of its Project
Contracts, or fails or refuses to perform any material obligation
thereunder, for any reason other
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than a Lakes Default (as defined in Section 19), with the result that
the Project is no longer commercially feasible for the applicable
Project Company; or (h) the Project's temporary casino is not opened
for public gaming by December 31, 2001. If Lakes elects to liquidate a
Project Company and accelerate the related portion of the MRD Loans and
other loans as provided in this paragraph, Lakes agrees that it shall
not have the right to foreclose on MRD's membership interest in such
Project Company during or subsequent to the process of such liquidation
unless an MRD Event of Default (other than any failure to repay such
portion of the MRD Loans, or any other MRD Event of Default that occurs
as a direct result of such election) has already occurred or occurs
during or subsequent to that process.
* Section 14 - The reference to "August 31, 2000" found in Section 14 is
hereby deleted and replaced with "September 29, 2000".
* Section 16 - The first sentence of Section 16 is hereby deleted in its
entirety and replaced with the following:
* MRD represents and warrants to Lakes that the statements contained in
this Section 16 are correct as of the date of this Agreement and will
be correct and complete as of the date on which MRD acquires United's
membership interests in the Project Companies (the "Closing Date"), as
though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Section 16, except as
otherwise set forth in the disclosure schedule delivered by MRD to
Lakes on the date hereof and attached hereto (the "MRD Disclosure
Schedule").
* Section 16(a) - The reference to the "State of Nevada" contained in
Section 16(a) is hereby deleted and replaced with the phrase "State of
California".
* Section 17 - The references to "August 31, 2000," found in Section 17
are hereby deleted and replaced with the date "September 29, 2000". In clause
(c) of the first paragraph of Section 17, the parenthetical phrase "(except for
money to be paid to Franklin for the Cloverdale Premium and for reimbursement of
Franklin's costs)" is hereby deleted and replaced with the parenthetical phrase
"(except for money to be paid to United upon or after the Franklin Buy-out)":
* Amendment - Except as expressly amended hereby, the Acquisition
Agreement shall continue in full force and effect.
Counterparts - This First Amendment may be executed in one or
more counterparts, each of which shall be deemed part of the original
document, but all of which shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed effective as of the day and year first above written.
MRD GAMING, LLC LAKES GAMING AND RESORTS, LLC,
By: /s/ Matthew R. Daly By: /s/ Timothy J. Cope
------------------------- ----------------------------
Its: Manager Its:CFO
-------- ---
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SUPPLEMENT 1
TO ACQUISITION AND PARTICIPATION AGREEMENT
(AS AMENDED)
MRD hereby represents to Lakes that the representations and warranties (modified
to substitute "the Buyer" (MRD) for "the Sellers" and/or "the Companies", and
otherwise to the extent set forth below) made in the following numbered Sections
of the Membership Purchase Agreement by the parties identified therein as "the
Sellers" and/or "the Companies" are true, except as otherwise disclosed to Lakes
by MRD in the Disclosure Schedule attached to this Supplement:
Section 3.3 (Membership Interest), which is also modified to (a) delete
the phrase "Subject to any claims Buyer and/or its members, managers,
officers, employees or other affiliates (including relatives of any
such persons, if individuals) may have in and to any of the Interests"
and (b) to add, at the end of each sentence, the phrase "of which Buyer
has Knowledge".
Section 3.4 (No Liabilities, etc.), which is modified to read as
follows: "Neither Buyer nor any of its agents (excluding the Sellers),
including without limitation Buyer's managers, members, officers and
employees, has taken any action, directly or indirectly whether on
their own behalf or on behalf of the Companies or the Sellers, under
which the Companies have incurred any commitment, entered into any
contract or incurred any liability, except as disclosed in Exhibit O
hereto."
Section 3.5 (Proceedings), which is also modified to (a) delete the
exceptions reading "Except as may already known to Buyer" and (b)
delete the third sentence.
Section 3.6 (Absence of Certain Changes and Events)), which is also
modified to (a) delete the phrase "Subject to any claims Buyer and/or
its members, managers, officers, employees or other affiliates
(including relatives of any such persons, if individuals) may have in
and to any of the Interests," and (b) to replace it with the phrase "To
Buyer's Knowledge,".
Section 3.9 (Brokers or Finders), which is modified to read as follows:
"Neither Buyer nor any of its agents (excluding the Sellers), including
without limitation Buyer's managers, members, officers and employees,
has incurred any obligation or liability on their own behalf or on
behalf of the Companies or the Sellers, contingent or otherwise, for
any brokerage or finders' fees or agents' commissions or other similar
payments in connection with this Agreement."
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