Common use of Development Loan Clause in Contracts

Development Loan. (a) Lakes has made certain pre-development and development advances to the Tribe, and, as of November 22, 2011, the total aggregate principal advanced and accrued interest thereon as of the Effective Date (the “Development Advance Amount”) is $2,622,613.62 in principal and $55,681.37 in accrued interest. (b) The Tribe and the Authority (i) acknowledge and hereby assume this indebtedness, and are accordingly indebted to Lakes (as agent for itself and any Affiliate of Lakes) for the Development Advance Amount, without defense, offset or counterclaim, (ii) acknowledge that the Development Advance Amount will be payable to Lakes pursuant to the terms of this Agreement, and (iii) acknowledge that the principal portion of the Development Advance Amount has accrued interest from the date advanced a rate per annum equal to the Applicable Federal Rate through the Opening Date, such rate adjusted monthly and determined on the first business day of each month, and shall accrue interest from the Opening Date until the Development Loan is fully repaid at a rate per annum equal to the Prime Rate plus two percent (2%), such rate adjusted monthly and determined on the first business day of each month. (c) Subject to Section 2.5(h), Lakes shall make (or cause to be made) additional pre-development and development advances to the Tribe or the Authority as approved and detailed in the Initial Pre-Development Budget including any amendments to the Initial Pre-Development Budget and any subsequently approved Pre-Development Budget; however, Lakes is not obligated to make any additional development advances to the Tribe other than the amounts set forth in the Initial Pre-Development Budget, not to exceed $6,595,697.48 in total. The additional advances when added to the principal amount of the Development Advance Amount is collectively being referred to herein as the “Development Loan”. (d) The Development Loan shall be evidenced by a promissory note prepared by Lakes, substantially in the form attached as Exhibit E to this Agreement, as the same may be amended from time to time (the “Development Loan Note”), executed on behalf of the Tribe and the Authority, and dated the date hereof, to be payable from and secured by the Collateral. (e) With respect to the Development Loan Note: (i) interest shall continue to accrue on the unpaid principal amount of the Development Loan Note at the rate per annum determined on a monthly basis pursuant to Section 2.5(b) above; (ii) unless the Development Loan Note becomes payable in accordance with other provisions of this Agreement before the occurrence of the Opening Date, all accrued and unpaid interest as of the Opening Date shall be capitalized as of the Opening Date and added to the unpaid principal amount of the Development Loan Note, the resulting sum to be deemed the aggregate unpaid principal amount as of the Opening Date; (iii) from and after the Opening Date, interest on such aggregate unpaid principal amount shall be payable monthly in arrears, commencing on the Initial Payment Date and continuing on each Payment Date thereafter until payment in full of the Development Loan Note; (iv) from and after the Opening Date, such aggregate unpaid principal amount of the Development Loan Note shall be payable over the same term as the Development Financing Loan in equal monthly installments of principal (the sum of which shall equal the unpaid principal amount of the Development Loan Note as of such Opening Date), commencing on the Initial Payment Date and continuing on each Payment Date thereafter until the Development Loan Note has been paid in full; and (v) notwithstanding anything in this subparagraph (e) to the contrary, in accordance with other provisions of this Agreement under the circumstances described therein all unpaid principal, accrued interest and other amounts due under the Development Loan Note shall become due and payable upon the expiration or earlier termination of this Agreement in accordance with such provisions. (f) Sections 2.5(e)(iii) and (iv) provide for monthly payments of interest on and principal of the Development Loan Note. For the sake of clarity, such monthly payments shall be applied first to the payment of accrued interest, and the remainder to be applied to the unpaid principal amount of the Development Loan Note. (g) The Tribe or the Authority may prepay all or part of the Development Loan Note without penalty at any time (any such prepayment to be made together with accrued interest on the principal amount so prepaid, and partial principal prepayments to be applied to principal installments in inverse order of maturity). (h) Lakes may, in its sole discretion after consultation with the Tribe, terminate its obligation to advance additional funds under the Development Loan if and only if any of the following events occur: (i) during the Initial Period, the State of California or the California Department of Transportation notifies the Tribe that it will not process and cease working on the Tribe’s application for an encroachment permit; (ii) after the Initial Period, a court of competent jurisdiction enjoins development or construction relating to the Gaming Facility or access to the Gaming Facility; or (iii) Lakes terminates this Agreement pursuant to Section 9.3 herein. In the event Lakes elects to terminate its obligation to advance additional funds as provided for in the proceeding sentence without terminating this Agreement, Lakes shall provide the Tribe with written notice of its intent and the effective date of termination no later than ten (10) days after the occurrence of either (i) or (ii) above; however, Lakes shall, unless this Agreement is terminated, continue to fund the Tribal Support Loan in the amounts referenced in the Initial Pre-Development Budget for the remainder of the Initial Period. Within ten (10) days after the Tribe’s receipt of Lakes’s written notice to terminate funding of the Development Loan, the Tribe and Lakes shall meet in good faith to discuss and amend the Pre-Development Plan and Pre-Development Budget in light of the circumstances; however, each party reserves its right to terminate the Agreement in accordance with the provisions of Section 9.7, Section 9.3 and Section 9.4. If the Parties are unable to reach agreement to amend the Initial Pre-Development Plan and Initial Pre-Development Budget and neither party exercises its right to terminate under Section 9.7, Section 9.3 or Section 9.4, this Agreement shall automatically terminate and the Tribe shall be required to pay the Lakes Notes in accordance with the provisions of Section 9.7(b)(i) or exercise its rights under Section 9.8 and all other obligations under this Agreement shall automatically terminate and be of no force and effect.

Development Loan. (a) Lakes has made certain pre-development and development advances to the Tribe, and, as of November 22, 2011, the total aggregate principal advanced and accrued interest thereon as of the Effective Date (the “Development Advance Amount”) is $2,622,613.62 in principal and $55,681.37 in accrued interest. (b) The Tribe and the Authority (i) acknowledge and hereby assume this indebtedness, and are accordingly indebted to Lakes (as agent for itself and any Affiliate of Lakes) for the Development Advance Amount, without defense, offset or counterclaim, (ii) acknowledge that the Development Advance Amount will be payable to Lakes pursuant to the terms of this Agreement, and (iii) acknowledge that the principal portion of the Development Advance Amount has accrued interest from the date advanced a rate per annum equal to the Applicable Federal Rate through the Opening Date, such rate adjusted monthly and determined on the first business day of each month, and shall accrue interest from the Opening Date until the Development Loan is fully repaid at a rate per annum equal to the Prime Rate plus two percent (2%), such rate adjusted monthly and determined on the first business day of each month. (c) Subject to Section 2.5(h), Lakes shall make (or cause to be made) additional pre-development and development advances to the Tribe or the Authority as approved and detailed in the Initial Pre-Development Budget including any amendments to the Initial Pre-Development Budget and any subsequently approved Pre-Development Budget; however, Lakes is not obligated to make any additional development advances to the Tribe other than the amounts set forth in the Initial Pre-Development Budget, not to exceed $6,595,697.48 in total. The additional advances when added to the principal amount of the Development Advance Amount is collectively being referred to herein as the “Development Loan”. (d) The Development Loan shall be evidenced by a promissory note prepared by Lakes, substantially in the form attached as Exhibit E to this Agreement, as the same may be amended from time to time (the “Development Loan Note”), executed on behalf of the Tribe and the Authority, and dated the date hereof, to be payable from and secured by the Collateral. (e) With respect to the Development Loan Note: (i) interest shall continue to accrue on the unpaid principal amount of the Development Loan Note at the rate per annum determined on a monthly basis pursuant to Section 2.5(b) above; (ii) unless the Development Loan Note becomes payable in accordance with other provisions of this Agreement before the occurrence of the Opening Date, all accrued and unpaid interest as of the Opening Date shall be capitalized as of the Opening Date and added to the unpaid principal amount of the Development Loan Note, the resulting sum to be deemed the aggregate unpaid principal amount as of the Opening Date; (iii) from and after the Opening Date, interest on such aggregate unpaid principal amount shall be payable monthly in arrears, commencing on the Initial Payment Date and continuing on each Payment Date thereafter until payment in full of the Development Loan Note; (iv) from and after the Opening Date, such aggregate unpaid principal amount of the Development Loan Note shall be payable over the same term as the Development Financing Loan in equal monthly installments of principal (the sum of which shall equal the unpaid principal amount of the Development Loan Note as of such Opening Date), commencing on the Initial Payment Date and continuing on each Payment Date thereafter until the Development Loan Note has been paid in full; and (v) notwithstanding anything in this subparagraph (e) to the contrary, in accordance with other provisions of this Agreement under the circumstances described therein all unpaid principal, accrued interest and other amounts due under the Development Loan Note shall become due and payable upon the expiration or earlier termination of this Agreement in accordance with such provisions. (f) Sections 2.5(e)(iii) and (iv) provide for monthly payments of interest on and principal of the Development Loan Note. For the sake of clarity, such monthly payments shall be applied first to the payment of accrued interest, and the remainder to be applied to the unpaid principal amount of the Development Loan Note. (g) The Tribe or the Authority may prepay all or part of the Development Loan Note without penalty at any time (any such prepayment to be made together with accrued interest on the principal amount so prepaid, and partial principal prepayments to be applied to principal installments in inverse order of maturity). (h) Lakes may, in its sole discretion after consultation with the Tribe, terminate its obligation to advance additional funds under the Development Loan if and only if any of the following events occur: (i) during the Initial Period, the State of California or the California Department of Transportation notifies the Tribe that it will not process and cease working on the Tribe’s application for an encroachment permit; (ii) after the Initial Period, a court of competent jurisdiction enjoins development or construction relating to the Gaming Facility or access to the Gaming Facility; or (iii) Lakes terminates this Agreement pursuant to Section 9.3 herein. In the event Lakes elects to terminate its obligation to advance additional funds as provided for in the proceeding sentence without terminating this Agreement, Lakes shall provide the Tribe with written notice of its intent and the effective date of termination no later than ten (10) days after the occurrence of either (i) or (ii) above; however, Lakes shall, unless this Agreement is terminated, continue to fund the Tribal Support Loan in the amounts referenced in the Initial Pre-Development Budget for the remainder of the Initial Period. Within ten (10) days after the Tribe’s receipt of Lakes’s written notice to terminate funding of the Development Loan, the Tribe and Lakes shall meet in good faith to discuss and amend the Pre-Development Plan and Pre-Development Budget in light of the circumstances; however, each party reserves its right to terminate the Agreement in accordance with the provisions of Section 9.7, Section 9.3 and Section 9.4. If the Parties are unable to reach agreement to amend the Initial Pre-Development Plan and Initial Pre-Development Budget and neither party exercises its right to terminate under Section 9.7, Section 9.3 or Section 9.4, this Agreement shall automatically terminate and the Tribe shall be required to pay the Lakes Notes in accordance with the provisions of Section 9.7(b)(i) or exercise its rights under Section 9.8 and all other obligations under this Agreement shall automatically terminate and be of no force and effect.of