-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RNa/uVqPMt+dN9KX5qqNn36/gbNRJbaIO1YRV90fM0q5b5GxBXzQ+kQjaZAToY7B /MzdQyLeGakGGj5lfj5DqA== 0000950124-00-001959.txt : 20000405 0000950124-00-001959.hdr.sgml : 20000405 ACCESSION NUMBER: 0000950124-00-001959 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000404 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAKES GAMING INC CENTRAL INDEX KEY: 0001071255 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 411913991 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-24993 FILM NUMBER: 592930 BUSINESS ADDRESS: STREET 1: 130 CHESHIERE LANE CITY: MINNETONKA STATE: MN ZIP: 55305 BUSINESS PHONE: 6124499092 MAIL ADDRESS: STREET 1: 130 CHESHIRE LANE CITY: MINNETONKA STATE: MN ZIP: 55305 8-K 1 FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): March 31, 2000 LAKES GAMING, INC. (Exact name of registrant as specified in its charter) MINNESOTA 0-24993 41-1913991 (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 130 CHESHIRE LANE, MINNETONKA, MINNESOTA 55305 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (612) 449-9092 NOT APPLICABLE (Former name or former address, if changed since last report) 2 ITEM 5. OTHER EVENTS. The Registrant has executed an Agreement to Terminate Management Agreement (the "Termination Agreement") dated as of the 31st day of March 2000 between the Registrant, the Tunica-Biloxi Tribe of Louisiana, a federally recognized Indian Tribe (the "Tribe") and Grand Casinos of Louisiana, LLC - Tunica-Biloxi, a Minnesota limited liability company ("GCI-LLC") with respect to the management and operation of Grand Casino Avoyelles. Subject to the terms of the Termination Agreement, the Tribe has elected to exercise its option for the early buyout of the Amended and Restated Management and Construction Agreement (the "Management Agreement") dated as of November 1, 1991. The Management Agreement was scheduled to expire on June 3, 2001. The early buyout of the Management Agreement is provided for under the original terms of the Management Agreement and Lakes will be compensated for the management fees it would have received had it managed Grand Casino Avoyelles through June 3, 2001, discounted to present value. In addition to the receipt of compensation for the management fees that Lakes would have earned, pursuant to the terms of the Termination Agreement Lakes will also be repaid all outstanding indebtedness owed by the Tribe, Lakes will be released from certain bank guarantees and subordination agreements and Lakes will convey to the Tribe certain real estate owned by Lakes which is adjacent to Grand Casino Avoyelles. The Termination Agreement and the Press Release dated March 31, 2000 issued by the Registrant have been filed as Exhibits 10.1 and 99.1, respectively, to this Form 8-K and are incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits 10.1 Agreement to Terminate Management Agreement by and among the Registrant, The Tunica-Biloxi Indian Tribe of Louisiana, and Grand Casinos of Louisiana, LLC- Tunica- Biloxi dated as of March 31, 2000. 99.1 Press Release dated March 31, 2000. -2- 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LAKES GAMING, INC. (Registrant) Date: April 3, 2000 By: /s/Timothy J. Cope --------------------------------------------- Name: Timothy J. Cope Title: Chief Financial Officer -3- 4 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 10.1 Agreement to Terminate Management Agreement by and among the Registrant, The Tunica-Biloxi Tribe of Louisiana, and Grand Casinos of Louisiana, LLC- Tunica- Biloxi dated as of March 31, 2000. 99.1 Press Release dated March 31, 2000. -4- EX-10.1 2 AGREEMENT TO TERMINATE MANAGEMENT AGREEMENT 1 Exhibit 10.1 AGREEMENT TO TERMINATE MANAGEMENT AGREEMENT THIS AGREEMENT is made as of this 31st day of March, 2000, between THE TUNICA- BILOXI TRIBE OF LOUISIANA, a federally recognized Indian tribe (the "Tribe"), whose address is P.O. Box 331, Marksville, Louisiana 71351, GRAND CASINOS OF LOUISIANA, LLC- TUNICA-BILOXI, a Minnesota limited liability company ("GCI-LLC"), whose address is 130 Cheshire Lane, Minnetonka, Minnesota 55305, and LAKES GAMING, INC, a Minnesota corporation ("Lakes@), whose address is 130 Cheshire Lane, Minnetonka, Minnesota 55305. RECITALS WHEREAS, the Tribe and Grand Casinos of Louisiana, Inc.--Tunica-Biloxi, a Minnesota corporation ("Grand, Inc.") previously entered into that certain Amended and Restated Management and Construction Agreement dated November 1, 1991 (the "Management Agreement), pursuant to which Grand, Inc. was initially engaged and appointed as, among other things, the manager of the Tribe's gaming enterprise; all capitalized terms used and but not otherwise defined herein shall have the meanings ascribed thereto in the Management Agreement; and WHEREAS, all rights and obligations of Grand, Inc. under the Management Agreement and all related contracts and agreements with the Tribe were assigned to and assumed by GCI- LLC pursuant to that certain assignment and assumption agreement dated as of December 31, 1998 by and between Grand, Inc. and GCI-LLC, which assignment and assumption was consented to by the Tribe; and WHEREAS, Cottonport Bank ("Cottonport Bank") previously extended certain financing to the Tribe pursuant to that certain Commercial Loan Agreement dated March 17, 1997 (the "Hotel Loan Agreement"), pursuant to the terms of which Cottonport Bank agreed to loan to the Tribe up to $16,500,000 (the AHotel Loan@) for the purposes of, among other things, to construct and furnish a hotel facility and to purchase new gaming equipment, all as more fully set forth therein; and WHEREAS, in connection with such Hotel Loan, GCI-LLC and Lakes Gaming have granted to the Bank certain guaranties dated as of February 15, 1999 and Debt Subordination Agreements dated as of February 15, 1999, pursuant to which (a) GCI-LLC and Lakes Gaming have guaranteed the Hotel Loan and the obligations of the Tribe under the Hotel Loan Agreement, and (b) subordinated to the Cottonport Bank all liabilities and other obligations owing by the Tribe to either GCI-LLC or Lakes (respectively, the "Cottonport Guarantees" and the "Cottonport Debt Subordinations"); and 2 WHEREAS, Hibernia National Bank ("Hibernia Bank") previously extended certain financing to the Tribe pursuant to that certain Commercial Loan Agreement dated May 28, 1999 (the "Equipment Loan Agreement"), pursuant to the terms of which Hibernia Bank agreed to loan to the Tribe up to $6,000,000 (the "Equipment Loan") for the purposes of, among other things, to purchase new gaming equipment, all as more fully set forth therein; and WHEREAS, in connection with such Equipment Loan, GCI-LLC and Lakes Gaming have granted to the Hibernia Bank certain Debt Subordination Agreements dated as of May 28, 1999, pursuant to which GCI-LLC and Lakes Gaming have subordinated to Hibernia Bank all liabilities and other obligations owing by the Tribe to either GCI-LLC or Lakes (the "Hibernia Debt Subordinations"); and WHEREAS, the Tribe, GCI-LLC and Lakes desire to terminate the Management Agreement and all rights of GCI-LLC thereunder and to repay to GCI-LLC all outstanding loans owing by the Tribe, all pursuant to the terms and conditions set forth in this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and the mutual terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Tribe, GCI-LLC and Lakes agree as follows: 1. TERMINATION. The parties hereby mutually understand and agree that upon the receipt by GCI-LLC and Lakes of the Termination Payment and the Related Termination Documents, as hereinafter defined (the "Effective Date"), the Management Agreement (except as otherwise provided in Sections 4 and 6 of this Agreement) and all rights and obligations of GCI- LLC thereunder shall be deemed terminated. As consideration for such termination, GCI-LLC shall receive a payment from the Tribe calculated as of the Effective Date (assuming the Effective Date occurs on the date of this Agreement) of $ 23,027,191.83 equal to the sum of the following (collectively, the "Termination Payment"): (a) an amount equal to $17,651,509.88 (representing the mutually agreed upon fee for termination of the Management Agreement; and (b) the amount of $27,514.38 (representing the outstanding general accounts receivable owing by the Enterprise to GCI-LLC); and (c) the amount of $5,348,167.57 (representing the sum of (1) the aggregate outstanding principal balance of all loans owing by the Tribe to GCI-LLC as of the date hereof equal to $5,305,325.25, together with accrued interest of $42,842.32, with interest accruing thereon at the rate of $1,465.25 per day). -2- 3 On the date hereof, the Termination Payment shall be wire transferred to GCI-LLC pursuant to the following wire instructions: Chase Manhattan Bank New York, NY ABA #021000021 For credit to Goldman Sachs Account # 9301011483 For further credit to Lakes Gaming, Inc. Account #020-52628-1 2. RELATED TERMINATION DOCUMENTS. On the date hereof, the Tribe has obtained and shall deliver to GCI-LLC and Lakes the following documents (collectively, the "Related Termination Documents"): (a) Cottonport Bank Release. A written release from Cottonport Bank in favor of GCI-LLC and Lakes releasing each of them from the Cottonport Guarantees, the Cottonport Debt Subordinations and any and all other obligations owed to Cottonport Bank with respect to the Hotel Loan and the Hotel Loan Agreement, and which shall otherwise be in form and substance acceptable to GCI-LLC and Lakes; and (b) Hibernia Bank Release. A written release from Hibernia Bank in favor of GCI-LLC and Lakes releasing each of them from the Hibernia Debt Subordinations and any and all other obligations owed to Hibernia Bank with respect to the Equipment Loan and the Equipment Loan Agreement, and which shall otherwise be in form and substance acceptable to GCI-LLC and Lakes; and (c) Certified Tribal Resolution. A resolution of the Tribal Council of the Tribe authorizing the termination of the Management Agreement, the execution, delivery and performance of this Termination Agreement by the Tribe, and each of the terms and provisions contained herein, which resolution shall be certified by the Secretary of the Tribal Council as being true, correct, complete and in full force and effect as of the date hereof. 3. LAND CONVEYANCE. In exchange for the agreements of the Tribe set forth in this Agreement, GCI-LLC and Lakes agree to convey to the Tribe -3- 4 contemporaneously with the occurrence of the Effective Date all real property owned by such entities, if any, and located adjacent to the Facility. Such conveyance shall be made at the sole expense of the Tribe and on an "AS-IS" "WHERE-IS" basis, without any representations or warranties whatsoever. GCI-LLC and Lakes shall pay in full and shall hold the Tribe forever free and harmless from the payment of any amount (including the Tribe's reasonable attorneys' fees incurred in the defense of any claim made against the Tribe) with respect to unpaid amounts owed on that certain Cash Sale filed on December 29, 1992 at Entry No. 92-9253 of the records of the office of the Clerk of Court for Avoyelles Parish. 4. CONTINUATION OF LITIGATION INDEMNITY AND INSURANCE PROVISIONS. The parties hereto acknowledge and agree that notwithstanding Section 1 of this Agreement, (a) the terms and provisions of Section 5.8.2.4 of the Management Agreement, relating to litigation indemnities among the Tribe, GCI-LLC and the Enterprise, shall continue in full force and effect for any applicable litigation currently existing or hereafter commenced on or prior to the two (2) year anniversary of the Effective Date (collectively, the "Subject Litigation") and shall thereafter terminate with respect to the Subject Litigation at such time that all Subject Litigation has been finally settled, dismissed or satisfied and all rights to appeal by any party thereto have been exhausted (the "Indemnity Termination Date"); and (b) the terms of Section 12 of the Management Agreement (relating to the maintenance of insurance by the Tribe and the Enterprise) shall continue in full force and effect until the Indemnity Termination Date. The Tribe further acknowledges and agrees that all claims (including, without limitation, all litigation now or hereafter commenced in connection therewith) listed on the attached "Grand Casinos Avoyelles Guest Lost Damage Report" annexed hereto as Exhibit A, shall constitute claims and litigation against the Enterprise for purposes of Section 5.8.2.4 of the Management Agreement and the same, including, without limitation, the costs of defense thereof by the Tribe and/or GCI-LLC, shall constitute "Operating Expenses" of and are to be paid by the Enterprise. 5. TRANSITION. The Tribe, GCI-LLC and Lakes agree to take all reasonable steps necessary to insure a smooth transition to the Tribe or any successor manager of all duties and responsibilities of GCI-LLC under the Management Agreement. The Tribe agrees to reimburse GCI-LLC and Lakes for -4- 5 any reasonable out-of-pocket expenses incurred in connection with the turnover of any records and any other transition related actions taken with prior notice to or made at the request of the Tribe. 6. DISPUTE RESOLUTION. The Tribe, GCI-LLC and Lakes hereby acknowledge and agree that with respect to the Tribe, on the one hand, and GCI- LLC and Lakes on the other hand, the terms of Sections 20, 22 and 23 of the Management Agreement relating to the Tribe's limited waiver of sovereign immunity and submission to jurisdiction and arbitration shall apply to the interpretation and enforcement of the terms and conditions of this Agreement (together with any provisions of the Management Agreement that are to survive the Effective Date pursuant to the express terms of this Agreement) as if fully set forth herein and are hereby incorporated by reference. 7. MISCELLANEOUS. Each of the parties hereto agrees that upon request of any other party, it shall execute and deliver such additional agreements and documents as may be reasonably necessary to effectuate the intents and purposes of this Agreement. If it is ever determined that the approval of the National Indian Gaming Commission or the Bureau of Indian Affairs is required for the execution, delivery and performance of this Agreement by the parties hereto, the Tribe, GCI-LLC and Lakes agree to take all reasonable action necessary to obtain such approval on the terms and conditions contained herein and to be proponents of all of such terms. This Agreement shall be binding on the Tribe, GCI-LLC and Lakes, and their respective successors and assigns. This Agreement may be executed in counterparts, each of which shall be considered an original and together shall constitute one and the same instrument. If any provision of this Agreement is prohibited by, or is unlawful or unenforceable under, any applicable law of any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition without invalidating the remaining provisions hereof. [The remainder of this page has been intentionally left blank.] -5- 6 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written. THE TUNICA-BILOXI TRIBE OF LOUISIANA, By: /s/ Earl J. Barbry, Sr. ------------------------------------- Earl J. Barbry, Sr., Chairman [SIGNATURE PAGE TO AGREEMENT TO TERMINATE MANAGEMENT AGREEMENT] -6- 7 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written. GRAND CASINOS OF LOUISIANA, LLC-TUNICA-BILOXI By: /s/ Timothy J. Cope ---------------------------------------------- Timothy J. Cope, Chief Financial Officer LAKES GAMING, INC. By: /s/ Timothy J. Cope ---------------------------------------------- Timothy J. Cope, Chief Financial Officer [SIGNATURE PAGE TO AGREEMENT TO TERMINATE MANAGEMENT AGREEMENT] -7- 8 EXHIBIT A TO AGREEMENT TO TERMINATE MANAGEMENT AGREEMENT (ATTACH COPY OF GRAND CASINO AVOYELLES GUEST LOST DAMAGE REPORT) -8- EX-99.1 3 PRESS RELEASE 1 Exhibit 99.1 Friday, March 31, 2000 COMPANY PRESS RELEASE LAKES GAMING ANNOUNCES CONCLUSION OF MANAGEMENT CONTRACT FOR GRAND CASINO AVOYELLES MINNEAPOLIS--March 31, 2000--Lakes Gaming, Inc. (Nasdaq "LACO") today announced that it has reached an agreement with the Tunica-Biloxi Tribe of Louisiana, effective March 31, 2000 for the early buyout of the management contract for Grand Casino Avoyelles. The Tunica-Biloxi Tribe of Louisiana has elected to exercise its option for the early buyout of the contract which was scheduled to expire on June 3, 2001. The early buyout of the contract was provided for in the original seven-year management agreement and, under the agreement, Lakes will be compensated for the management fees the company would have received had it managed Grand Casino Avoyelles through the original contract expiration date of June 3, 2001, discounted to their present value. Lakes will also be repaid all amounts owing to it under its loan agreements with the Tribe, and will convey to the Tribe certain real estate which is adjacent to the casino. Grand Casino Avoyelles was developed into a full-scale destination resort during the term of the management agreement. Lakes managed all aspects of development and operations for the property from master planning and financing to construction and marketing, with particular emphasis on training and development of the casino's tribal employees. The Tunica-Biloxi Tribe of Louisiana and Lakes have enjoyed a successful partnership over a six-year period. Both entities are proud of the resort operation in Louisiana, which is considered to be among the most profitable and well-run Indian gaming establishments in the United States. Earl J. Barbry, Chairman of the Tunica-Biloxi Tribe commented, "We are grateful for the leadership and direction provided by Lyle Berman and the entire Lakes' management team. Both the Tribe and Lakes Gaming have benefitted greatly from their association during the course of the management agreement. We now look forward to the opportunities before us as we independently advance the Tribe's interests in other business opportunities." Lakes continues to manage one casino resort in Louisiana, Grand Casino Coushatta in Kinder, Louisiana. On February 7, 2000 Lakes announced the renewal of the Coushatta management agreement which will become effective in January, 2002 when the current contract term expires. The renewal term of the Coushatta management agreement runs through January 2007. The new contract is subject to National Indian Gaming Commission approval. Lakes also has executed development and management agreements for new casino resort managed locations with the Pokagon Band of Potawatomi Indians in Michigan, the Shingle 2 Springs Band of Miwok Indians near Sacramento, California and with the Jamul Indian Village near San Diego, California. Lakes Gaming, Inc. is a publicly held casino management company that was formed through a distribution to shareholders of Grand Casinos, Inc. effected in December 1998. Lakes operates an Indian casino management business and holds various other assets previously owned by Grand Casinos, Inc., consisting primarily of land in Las Vegas, NV. The company's revenues will be derived almost exclusively from the management fees it earns at Grand Casino Coushatta, located in Kinder, Louisiana. The casino is managed under an agreement on behalf of the Coushatta Tribe of Louisiana. Lakes Gaming, Inc. common shares are traded on the Nasdaq National Market under the trading symbol "LACO". The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by the Company) contains statements that are forward-looking, such as statements relating to plans for future expansion and other business development activities as well as other capital spending, financing sources and the effects of regulation (including gaming and tax regulation) and competition. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. These risks and uncertainties include, but are not limited to, those relating to development and construction activities, dependence on existing management, domestic or global economic conditions, activities of competitors and the presence of new or additional competition, fluctuations and changes in customer preferences and attitudes, changes in federal or state tax laws or the administration of such laws and changes in gaming laws or regulations (including the legalization of gaming in certain jurisdictions). For more information, review the Company's filings with the Securities and Exchange Commission. - ------------------------------------------------------------------------------ Contact: Lakes Gaming, Inc. Timothy J. Cope 612-449-7030 -2- -----END PRIVACY-ENHANCED MESSAGE-----