Sample Business Contracts

Promissory Note - Kean Argovitz Resorts-Shingle Springs LLC and Lakes Shingle Springs Inc.

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                                 PROMISSORY NOTE

$970,000.00                                                       Houston, Texas
                                                                  July 29, 1999

NEVADA LIMITED LIABILITY COMPANY ("MAKER"), promises to pay to the order of
States of America, in immediately available funds, at such place as the holder
hereof may from time to time designate, or in the absence of such designation,
at the office of the Lender, 130 Cheshire Lane, Minnetonka, Minnesota 55305, the
principal sum of NINE-HUNDRED SEVENTY THOUSAND DOLLARS ($970,000.00), or the
aggregate unpaid principal amount of all advances made to Maker pursuant to
Section 4 of that certain Letter Agreement dated as of the date hereof among
Lakes Gaming, Inc. and Kean Argovitz Resorts-Shingle Springs, L.L.C. (the
"Letter Agreement"), a copy of which is attached hereto as Exhibit A, whichever
is less, plus interest thereon from the date of such advances, in like money, in
accordance with the following terms and provisions:

         1. Capitalized terms used herein and not defined shall have the
meanings given them in the Letter Agreement.

         2. Lender hereby agrees to loan to Maker up to $970,000.00 to be loaned
in more than one advances (each, an "Advance") as entered on the Schedule of
Advances attached hereto as Schedule I (such borrowing , in the aggregate, the
"Loan"). Each Advance shall bear interest at the Interest Rate from and
including the date the proceeds of such Advance are advanced (such date the
"Funding Date" of such Advance) through the date of payment.

         3. Maker shall repay the loan solely from the Cash Flow (as defined in
the Letter Agreement) of Lakes KAR-Shingle Springs, L.L.C. (the "Company"), as
provided in paragraph 9 of the Letter Agreement and the Operating Agreement of
the Company. There shall be no recourse against Maker for any deficiency in the
payment of principal or interest of the Loan.

         4. The Interest Rate means, as to each Advance, an interest rate equal
to the prime rate of Chase Manhattan Bank, NA. (or any successor Bank), fixed as
of the first business day of each calendar month, plus one percent (1%), per
annum. Interest at the foregoing rate shall accrue and be compounded monthly and
shall be payable from the Cash Flow of the Company as provided in paragraph 9 of
the Letter Agreement and the Operating Agreement of the Company. Interest shall
be computed for the actual number of days elapsed on the basis of a year
consisting of 360 days. It is intended that the rate of interest hereon shall
never exceed the maximum rate, if any, which may be legally charged on the Loan
evidenced by this Note ("Maximum Rate"),

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and if the provisions for interest contained in this Note would result in a rate
higher than the Maximum Rate, interest shall nevertheless be limited to the
Maximum Rate and any amounts which may be paid toward interest in excess of the
Maximum Rate shall be applied to the reduction of principal, or, at the lawfully
exercised option of the Lender, returned to Maker.

         5 Maker hereby authorizes Lender to endorse on the Schedule of Advances
annexed to this Note all Advances made to the Maker and all payments of
principal amounts in respect of such Advances, which endorsements shall, in the
absence of manifest error, be conclusive as to the outstanding principal amount
of all Advances; provided, however, that the failure to make such notation with
respect to any Advance or payments shall not limit or otherwise affect the
obligations of Maker.

         6. This Note is secured by a Pledge Agreement of even date herewith
(the "PLEDGE") given by Maker for the benefit of the holder hereof encumbering
all of Maker's interest in the Company. This Note and the Pledge and any other
documents or instruments evidencing or securing the Loan are collectively
referred to herein as the "LOAN DOCUMENTS."

         7. If any default occurs in the payment of any principal, interest or
any other sums when due hereunder, or in the performance of any covenant or
agreement hereunder or in any of the other Loan Documents, and such default
continues for a period of thirty (30) days after written notice thereof to
Maker, then the outstanding principal amount of the Loan, any interest accrued
thereon from time to time, and any other sums then remaining unpaid hereunder,
at the option of the holder hereof and without notice, shall become immediately
due and payable. Failure to exercise any such option shall not constitute a
waiver of the right to exercise the same at a later time or in the event of any
subsequent default.

         8. Maker and all endorsers, guarantors hereby waive to the fullest
extent permitted by law presentment, demand, protest, notice of protest, notice
of dishonor and notice of any other kind (except as specifically required herein
or in the other Loan Documents) in connection with this Note.

         9. Maker agrees to pay all costs and out-of-pocket expenses (including,
but not limited to, reasonable attorneys' fees and expenses) incurred by Lender
in connection with the collection or enforcement of this Note, the Pledge or any
other Loan Documents.

         10. This Note shall be construed in accordance with and governed by the
internal laws and decisions of California, without giving effect to California
choice of law principles.

         11. The parties hereto intend and believe that each provision of this
Note comports with all applicable local, state and federal laws and judicial
decisions. However, if any provision or provisions, or if any portion of any
provision or provisions of this Note or the other Loan Documents is found by a
court of law to be in violation of any applicable local, state or federal
ordinance, statute law, administrative or judicial decision, or public policy,
and if such court should declare such portion, provision or provisions of this
Note or other Loan Documents to be

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illegal, invalid, unlawful, void or unenforceable as written, then it is the
intent of all parties hereto that such portion, provision or provisions shall be
given force to the fullest possible extent that it or they are legal, valid and
enforceable, that the remainder of this Note and other Loan Documents shall be
construed as if such illegal, invalid, unlawful, void or unenforceable portion,
provision or provisions were not contained herein, and that the rights,
obligations and interest of Maker and holder hereof under the remainder of this
Note shall continue in full force and effect.

         12. No modification, waiver, amendment, discharge or change of this
Note shall be valid unless the same is in writing and signed by the party
against which the enforcement of such modification, waiver, amendment, discharge
or change is sought.

         13. Time is hereby declared to be of the essence of this Note and of
every part hereof.

         14. This Note shall inure to the benefit of and shall be binding on the
parties hereto and their respective successors and assigns. Any reference to the
Lender shall be deemed to include and apply to every subsequent holder of this

         15. Any notice, demand, request or other communication which any party
hereto may be required or may desire to give hereunder shall be given in
accordance with Section 17 of the Pledge Agreement.

         IN WITNESS WHEREOF, Maker has caused this Note to be executed and
delivered as of the date first above written.


                                         KEAN ARGOVITZ RESORTS-
                                         SHINGLE SPRINGS, L.L.C.

                                         By: __________________________________
                                         Name: ________________________________