Exhibit 10.1
DEVELOPMENT FINANCING
AND
SERVICES AGREEMENT
between
JAMUL GAMING AUTHORITY
a governmental component and instrumentality of the
Jamul Indian Village,
JAMUL INDIAN VILLAGE
a federally recognized tribe
and
LAKES JAMUL DEVELOPMENT, LLC
a Minnesota limited liability company
Dated: January 17, 2006

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     THIS DEVLOPMENT FINANCING and SERVICES AGREEMENT (hereinafter referred to
as the “Agreement”) is made and entered into this 17th day of January, 2006 by
and between Jamul Indian Village, a federally recognized Indian tribe
(hereinafter referred to as the “Tribe”), located in the State of California
with tribal offices located at P.O. Box 612 14191 Hwy 94 #16, Jamul, California
91935, the Jamul Gaming Authority (hereinafter referred to as the “Authority”),
a governmental component and instrumentality of the Tribe, whose business office
is also located at P.O. Box 612 14191 Hwy 94 #16, Jamul, California 91935, and
Lakes Jamul Development, LLC, a Minnesota limited liability company (hereinafter
referred to as “Lakes”), whose business office is located at 130 Cheshire Lane,
Minnetonka, Minnesota 55305.
RECITALS
     A. The Tribe is a federally recognized Indian tribe eligible for the
special programs and services provided by the United States to Indians because
of their status as Indians and is recognized as possessing powers of
self-government.
     B. The United States government holds lands in the State of California in
trust for the benefit of the Tribe over which the Tribe exercises jurisdiction
and possesses sovereign governmental powers (the Tribe’s “Indian Lands”).
     C. In compliance with the Indian Gaming Regulatory Act of 1988, P.L.
100-497, 25 U.S.C. §2701 et seq. as it may from time to time be amended, the
Executive Committee of the Tribe has or will enact a tribal ordinance regulating
the operation of gaming activities on the Tribe’s Indian Lands (hereinafter
referred to as the “Gaming Control Ordinance”), creating the Jamul Gaming
Control Board, and authorizing Class II Gaming and Class III Gaming on the
Tribe’s Indian Lands subject to the provisions of the Gaming Control Ordinance
and a Tribal-State Compact or gaming procedures issued by the Secretary of the
U.S. Department of the Interior.
     D. As a tribal governmental entity, the Authority is vested with the
sovereign immunity of the Tribe, and the Tribe has established the Authority, a
governmental component and instrumentality of the Tribe, as the legal entity
which will own and operate any gaming projects which are to be developed by the
Tribe.
     E. The Authority, on behalf of the Tribe, intends to develop and construct
a gaming facility and related ancillary facilities on the Tribe’s Indian Lands
(hereinafter referred to as the “Project”).
     F. The Authority believes that the development and construction of the
Project will provide employment and improve the social, economic, education, and
health needs of the Tribe’s members; increase the revenues of the Tribe; and
enhance the Tribe’s economic self-sufficiency and self-determination.
     G. The Authority does not presently have the resources or expertise to
finance and develop the Project on its own and desires to engage the financing
assistance and services of a

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financing/development company with knowledge and experience in the gaming
industry to provide start-up financing and development services in connection
with the Authority’s planned Project.
     H. Lakes has represented to the Authority that it has (1) the financial
capacity to provide financing for the funds necessary to develop, construct and
equip the Project contemplated by this Agreement; and (2) the development and
construction management expertise to provide design and construction management
services to efficiently plan and built the Project.
     I. Lakes desires to advance to the Authority, subject to the terms and
conditions of the Development Financing Loan described herein, sums sufficient
to finance the design and construction of the Project contemplated by this
Agreement; and subject to the terms and conditions described herein, to provide
development design and construction management services in conjunction with the
Authority’s development of the Project.
     J. Any dispute regarding this Agreement between the parties is to be
subject to the dispute resolution and governing law provisions contained herein,
as well as the Resolutions of Limited Waiver attached hereto as Exhibit E and
Exhibit F.
     K. The Authority, the Tribe and Lakes intend that this Agreement shall
become effective and binding upon the date of execution by the parties.
     L. In connection with a previously proposed gaming project of the Tribe, a
Lakes Affiliate previously advanced to the Tribe funds; and it is the intent of
the parties hereto to make all such advances and accrued interest thereon
subject to the terms and conditions of the Development Financing Loan in
accordance with the provisions of Section 2.1 hereof.
     NOW, THEREFORE, in consideration of the hereinafter mutual promises and
covenants, and for other good and valuable consideration as set forth herein,
the receipt and sufficiency of which are expressly acknowledged, the Authority,
the Tribe and Lakes agree as follows:
ARTICLE 1
Definitions
     As they are used in this Agreement, the terms listed below shall have the
meaning assigned to them in this Article:

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     “Affiliate” means, with respect to any specified Person, any other Person
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with the specified Person. For the
purposes of this definition, “control” (including the terms controlling,
controlled by, or under common control with) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities,
partnership or member interests, by contract or otherwise.
     “Agreement” means this Development Financing and Services Agreement, as it
may be amended, supplemented, restated or replaced from time to time.
     “Ancillary Facilities” means any hotel, convention center, food and
beverage outlets, retail outlets, and any other enterprise designed to promote,
support, or enhance the Gaming Facility.
     “Architect” any architectural or engineering firm duly licensed to provide
architectural services for the Project Facilities.
     “Authority” means the Jamul Gaming Authority, a governmental component and
instrumentality of the Tribe, duly established by action of the Tribe’s General
Council under tribal law, whose business office is located at P.O. Box 612 14191
Hwy 94 #16, Jamul, California 91935
     “BIA” means the Bureau of Indian Affairs, established within the United
States Department of Interior.
     “Capital Expenditures” means any expenditure that is considered a capital
expenditure under GAAP.
     “Claim” means any dispute, claim, question, or disagreement between the
Authority or the Tribe and Lakes that is directly or indirectly related to this
Agreement, the Note, any Transaction Documents contemplated by this Agreement,
or the Project Facilities, whether arising under law or in equity, whether
arising as a matter of contract or a tort, and whether arising during or after
the expiration of this Agreement or the maturity of the Note.
     “Class II Gaming” means class II gaming as defined in IGRA.
     “Class III Gaming” means class III gaming as defined in IGRA.
     “Collateral” is defined in Section 2.1(a).
     “Compact” means any Tribal-State Compact executed between the Tribe and the
State of California entered into and approved by the United States Secretary of
the Interior either before or after the Effective Date of this Agreement, and
any amendments or modifications thereto.
     “Completion” means the completion of the Gaming Facility, or portions
thereof, in

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substantial accordance with the Plans and Specifications, as evidenced by a
completion certificate from the Architect that the Gaming Facility, or portions
thereof, have been substantially completed in accordance with the Plans and
Specifications, and by the issuance of a certificate of occupancy by the tribal
governmental authority having jurisdiction, and certificates of such
professional designers, inspectors or consultants or opinions of counsel, as
Lakes may reasonably determine to be appropriate, verifying construction and
furnishing of the Gaming Facility is in compliance with all Legal requirements.
     “Contractor” means any Person providing materials or services for the
design, construction and furnishing of the Project pursuant to a contract.
     “Design Professional” means any Person other than an Architect engaged in
the business of providing engineering, landscape, interior design or other
design services.
     “Effective Date” means the date the parties execute this Agreement.
     “Equipment Contract” means any contract to finance or acquire equipment or
personal property for use in connection with the Project Facilities, exclusive
of personal property to be provided pursuant to a Project Construction Contract,
whether constituting or characterized as a loan or credit agreement, purchase
agreement, financing lease, capital lease, participating lease, license or
otherwise.
     “Equipment Vendor” means any Person that sells, leases or licenses personal
property to the Authority for use in connection with the Project Facilities.
     “Furnishings and Equipment” shall mean all furniture, furnishings and
equipment required for the operation of the Project Facilities, including,
without limitation:
     (i) cashier, money sorting and money counting equipment, surveillance and
communication equipment, and security equipment;
     (ii) slot machines, video games of chance, table games, keno equipment and
other gaming equipment;
     (iii) office furnishings and equipment;
     (iv) specialized equipment necessary for the operation of any portion of
the Project Facilities for accessory purposes, including equipment for kitchens,
laundries, dry cleaning, cocktail lounges, restaurants, public rooms, commercial
and parking spaces, and recreational facilities;
     (v) hotel equipment, furniture and furnishings (to the extent a hotel is
included in the Project Facilities); and
     (vi) all other furnishings and equipment now or hereafter located and
installed in or about the Project Facilities which are used in the operation of
the Project Facilities.

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     “GAAP” means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession.
     “Gaming Commission”means any tribal commission or body of the Tribe that is
lawfully performing the obligations and exercising the rights of the tribal
gaming regulatory agency established pursuant to the Tribe’s Gaming Ordinance.
     “Gaming Facility”means, in connection with the Project, all buildings,
structures and improvements, together with all furniture, fixtures and equipment
and personal property (whether tangible or intangible) to be used in connection
with the operation of Class II Gaming and/or Class III Gaming.
     “Gaming Facility Site”means the lands as legally described on Exhibit A
attached hereto.
     “Gaming Operation”means a “gaming operation” as defined in NIGC
regulations, 25 C.F.R. § 502.10.
     “Gaming Ordinance”means any valid gaming ordinance of the Tribe that is in
effect for purposes of and to the extent required by IGRA or the Compact.
     “Governmental Authority”means the United States, the BIA, the State of
California, the Tribe and any governmental court, agency, department,
commission, board, bureau or instrumentality of the foregoing (including the
NIGC), but only to the extent it has legal jurisdiction over Class II Gaming or
Class III Gaming at the Gaming Facility, the construction of the Project
Facilities, or Authority’s, the Tribe’s or Lakes’ obligations under this
Agreement or the Note or any Transaction Documents.
     “IGRA” means the Indian Gaming Regulatory Act of 1988, P.L. 100-497, 25
U.S.C. §§ 2701, el seq., as it may be amended from time to time, and all
regulations of the NIGC promulgated thereunder.
     “Lakes” means Lakes Jamul Development, LLC, a Minnesota limited liability
company and a wholly-owned subsidiary of Lakes Gaming and Resorts, LLC.
     “Lakes Event of Default”is defined in Section 8.1.
     “Legal Requirements”means the Compact and all applicable present and future
federal, state, local and Tribe laws, ordinances, resolutions, rules,
regulations, permits, licenses and certificates, and any and all present and
future orders of courts and administrative bodies of competent jurisdiction,
applicable to the Project, the Project Facilities, this Agreement, the Note, or
any Transaction Documents.

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     “Material Breach”by any party means (a) a material failure of the party to
perform a material obligation under this Agreement for reasons not excused under
Section 11.5 (Force Majeure); or (b) any material representation or warranty
made by a party to this Agreement proves to be knowingly false or erroneous in
any material way when made or at any time shall fail to be true and correct in
all material respects.
     “Net Income” means with respect to any period of time, Revenues less
(a) amounts paid out as, or paid for, prizes; and (b) operating expenses of the
Project Facilities in accordance with GAAP.
     “NIGC” means the National Indian Gaming Commission, established by IGRA.
     “Note” means the promissory note executed by the Authority in favor of
Lakes in connection with the Development Financing Loan as described in
Section 2.1 (a).
     “Opening Date” means the first day on which the Gaming Facility is open to
the public for the conduct of Class II Gaming and/or Class III Gaming.
     “Person” means any entity, whether an individual, trustee, corporation,
general partnership, limited partnership, limited liability company, limited
liability partnership, joint stock company, trust, estate, unincorporated
organization, business association, Indian tribe, commission, instrumentality,
firm, joint venture, Governmental Authority, or otherwise.
     “Project” means the development, construction and equipping and future
expansion of the Gaming Facility at the Gaming Facility Site and the
development, construction and equipping of one or more Ancillary Facilities in
connection with the Project, whether such work shall occur simultaneously or in
phases during the term of this Agreement, which the parties anticipate to be
developed under this Agreement.
     “Project Architect” is defined in Section 3.1 (a).
     “Project Architectural Agreement”is defined in Section 3.1(b).
     “Project Budget” is defined in Section 3.3.
     “Project Construction Contract”is defined in Section 4.1.
     “Project Costs” means (a) all costs of any nature (whether considered an
expense or Capital Expenditure) incurred by or on behalf of the Authority, or by
or on behalf of Lakes, in connection with the Project in accordance with this
Agreement, including all amounts advanced by Lakes to the Authority for the
Project, including but not limited to all amounts advanced under the Development
Financing Loan and all amounts evidenced by the Note; and (b) all other amounts
mutually agreed upon by Lakes and the Authority necessary for the development,
construction and equipping of the Project.
     “Project General Contractor”is defined in Section 4.1.

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     “Project Facilities” means the Gaming Facility and the Ancillary Facilities
in connection with the Project.
     “Project Plans and Specifications”is defined in Section 3.1(b).
     “Proprietary Interest”means proprietary interest in a Gaming Operation
within the meaning of IGRA.
     “Revenues” means, with respect to any period of time, all revenues of any
nature derived directly or indirectly from the operation of the Project
Facilities and permitted under GAAP to be included in the Project Facilities’
total revenues for that period, less any credits or refunds made to customers,
guests, or patrons of the Project Facilities, not considered a cost of
operations and not applied in any prior period to reduce Revenues. “Revenues”
shall include any monies received by the Authority or the Tribe as damages or
settlement recovery in connection with any litigation involving actions based
upon any dispute concerning the Compact or the Authority or the Tribe’s right to
conduct gaming on any lands held or to be acquired by either for such purposes.
“Revenues” shall not include (i) any gratuities or service charges added to the
bill of a customer, guest or patron of the Project Facilities and payable to
employees of the Project Facilities, (ii) promotional allowances for which there
is not a direct offsetting item treated as a cost of operations, (iii) any
sales, excise, gross receipt, admission, entertainment, tourist or other taxes
or charges (or assessments equivalent thereto, or payments made in lieu thereof)
that are received from a customer, guest or patron and passed on to governmental
or quasi-governmental entities unrelated to the Authority, (iv) any lawful
federal, state, or local taxes or impositions (including any payment or fee in
lieu of the foregoing) that are collected from patrons of or vendors to the
Project Facilities, (v) proceeds of indebtedness of the Authority, and (vi)
proceeds from insurance or condemnation (other than proceeds of business
interruption insurance and other proceeds received to reimburse the Project
Facilities for any item accounted for under GAAP as a cost of operations).
“Term” of this Agreement is defined in Section 9.1.
     “Transaction Document”and ‘Transaction Documents” means, collectively, this
Agreement, the Note, and each and every dominion account agreement, security
agreement or other agreement, document or instrument in favor of Lakes or any
Affiliate of Lakes contemplated hereby or thereby or otherwise executed and
delivered hereunder or thereunder or in connection with or relating to any
agreement, document or instrument relating to the Project Facilities.
     “Tribal Event of Default” is defined in Section 8.3.
     “Tribe” means the Jamul Indian Village, a federally-recognized tribe as
listed on the BIA’s federal register notice pursuant to 25 U.S.C. §479a-l.
     “UCC Financing Statements”means UCC-1 financing statements naming the
Authority and/or the Tribe as debtor, as the case may be, and naming Lakes as
the secured party, in the form approved by the parties.

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ARTICLE 2
Development Financing Loan
Section 2.1 Project Development Loan. Subject to the terms and conditions in
this Article 2, Lakes shall make advances as needed from time to time to the
Authority with respect to the Authority’s payment of Project development,
construction, financing and equipping costs (collectively the “Development
Financing Loan”) in an aggregate amount to be agreed to by the parties, such
amount so agreed to be not less than $300,000 but not to exceed $350,000,000
(the “Development Cap”). Lakes shall have no obligation whatsoever to advance
any funds under the Development Financing Loan in excess of the Development Cap.
The parties agree that all sums previously advanced by a Lakes Affiliate to the
Tribe plus accrued interest thereon under any contract or instrument in
connection with any proposed gaming project (exclusive of any advances made for
land purchase purposes associated with property listed on Exhibit B hereto)
shall constitute advances and accrued interest under the Development Financing
Loan, shall be credited to Lakes’ obligations hereunder and shall be subject to
the terms of the Development Financing Loan as of January 17, 2006; and that as
of January 16, 2006 Lakes’ Affiliates have advanced $16,922,740 with $4,469,305
in accrued interest thereon to the Tribe (as detailed on Exhibit C hereto) in
connection with proposed gaming projects (exclusive of any advances made for
land purchase purposes associated with property listed on Exhibit B hereto).
Each of the Authority and the Tribe represents and warrants to Lakes that, in
connection with the advance of such sums and in connection with other
activities, the Authority, the Tribe and their respective officers, directors or
controlling persons have a preexisting, personal or business relationship with
Lakes and, in any event, the Authority and Tribe have the capacity to protect
their own interests in connection with the Development Financing Loan and other
transactions contemplated by this Agreement. The Development Financing Loan and
Lakes’ obligation to advance funds to the Authority thereunder shall be subject
to the following requirements:

  (a)   All advances made pursuant to the Development Financing Loan shall be
evidenced by a promissory note prepared by Lakes, substantially in the form
attached as Exhibit D to this Agreement (the “Note”), executed on behalf of the
Authority, and dated the date hereof, to be payable from and secured by a pledge
in (i) all Revenues from the Project without any cross collateralization from
other projects of the Authority and without any other liability or guarantee on
the part of the Authority except the security interests described herein; and
(ii) the Project’s Furnishings and Equipment. Such Revenues described in the
foregoing clause (i) and Furnishings and Equipment described in foregoing clause
(ii) are collectively referred to herein as the “Collateral”.     (b)   If the
principal amount of the Note is exceeded by any pending advance on the
Development Financing Loan, prior to such advance being made and prior to Lakes
having any obligation to fund such advance, the Authority shall execute and
deliver to Lakes an amendment to the Note, increasing the principal amount of
the Note by an amount at least equal to the pending advance.

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  (c)   With respect to each advance made under the Development Financing Loan,
the interest rate applicable to such advance under Development Financing Loan
shall be an annual rate equal to the annual interest rate charged to Lakes in
obtaining its financing necessary for the advance (as reasonably determined by
Lakes) plus five percent (5%), such annual rate to be fixed as of the date of
such advance. Interest shall be payable solely from the Collateral and interest
shall be computed for the actual number of days elapsed on the basis of a year
consisting of 360 days. Anything herein to the contrary notwithstanding, if
during any period for which interest is computed hereunder, the applicable
interest rate, together with all fees, charges and other payments which are
treated as interest under applicable law, as provided for herein or in any other
Transaction Document, would exceed the maximum rate of interest which may be
charged, contracted for, reserved, received, or collected by Lakes in connection
with this Agreement under applicable law (“Maximum Rate”), the Authority shall
not be obligated to pay, and Lakes shall not be entitled to charge, collect,
receive, reserve or take, interest in excess of the Maximum Rate, and during any
such period the interest payable hereunder shall be limited to the Maximum Rate.
    (d)   Unless otherwise agreed by the parties in writing, principal and
interest accrued on the Development Financing Loan shall become due and payable
as follows:

(i) all interest accrued on advances outstanding as of the Opening Date shall be
capitalized as of the Opening Date (such capitalized amount, together with
interest thereon accruing at a rate determined by Section 2.1(c) as if such
amount were an advance made under the Development Financing Loan on the Opening
Date, herein referred to as the “Opening Date Amount”), and payment of such
Opening Date Amount shall be made in monthly payments, beginning on the date
occurring thirty (30) days after the Opening Date (the “Initial Payment Date”)
and continuing on the same day of each calendar month thereafter until such
Opening Date Amount shall have been paid in full, the amount of each such
monthly payment to be determined as follows: with respect to each month in which
such a monthly payment is payable, (1) the Authority shall retain the first
$500,000 of that month’s Net Income from operation of the Project Facilities;
(2) if in such month the Authority receives Net Income from operation of the
Project Facilities in excess of $500,000, the Authority shall pay to Lakes as
such monthly payment for application against the Opening Date Amount the excess
of Net Income over $500,000; and (3) if in such month the Authority receives Net
Income from operation of the Project Facilities in excess of $1,000,000, the
Authority shall pay, for application against the Opening Date Amount in addition
to the amount payable pursuant to the foregoing subclause (2), an amount equal
to 50% of the Net Income it receives that month from operation of the Project
Facilities in excess of $1,000,000; such payments to be made until the tenth
anniversary of the Opening Date, at which time

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any remaining balance of the Opening Date Amount will be due and payable to
Lakes;
(ii) in addition to the payments to be made under the foregoing clause (i),
monthly interest-only payments with respect to interest accrued from and after
the Opening Date on the Development Financing Loan, each such monthly payment in
an amount equal to all interest so accrued to the date of such payment, payable
beginning on the Initial Payment Date and continuing on the same day of each
calendar month thereafter until the tenth anniversary of the Opening Date; and
(iii) a principal balloon payment in the amount of all advances made by Lakes
under the Development Financing Loan plus any remaining accrued interest due
thereon and any remaining balance of the Opening Date Amount, such payment to be
made on the tenth anniversary of the Opening Date.

      Notwithstanding the foregoing, the Development Financing Loan shall become
due and owing in its entirety upon termination of this Agreement under
Article 9. The parties further agree that any fees or other costs charged to
Lakes in connection with obtaining its financing necessary for the Development
Financing Loan shall be considered an advance and included as principal under
the Development Financing Loan.     (e)   The Development Financing Loan may not
be prepaid other than as required by this Agreement, except that any interest
accrued as of the Opening Date on the Development Financing Loan may be prepaid
without penalty.     (f)   No amounts shall be loaned under the Development
Financing Loan except for Project Costs set forth in the Project Budget, and
Lakes shall have no obligation to advance funds for such costs unless the costs
constitute payments properly due within the terms and scope of Project
Contractors’ contracts; upon any such payment by Lakes, an advance on the
Development Financing Loan shall automatically occur.     (g)   The Development
Financing Loan, together with interest thereon, shall be payable from and
secured by a pledge of the Collateral. To that end, the Authority and the Tribe
hereby pledge and grant a security interest in all the Collateral to Lakes to
secure the Authority’s and the Tribe’s obligations under this Agreement and
under the Note, and further agree to enter into standard and customary dominion
account agreements/security agreements, each in a form acceptable to Lakes,
necessary to evidence and effectuate such liens, and authorize Lakes to file
those UCC Financing Statements and similar documents and agreements as Lakes may
believe appropriate to perfect such liens.

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  (h)   Notwithstanding anything to the contrary in this Article 2, Lakes shall
not be obligated to fund any advances on the Development Financing Loan after
the earliest of:

  (i)   the third anniversary of the first advance under the Development
Financing Loan;     (ii)   the failure of the Authority or the Tribe to cure,
within the time prescribed in this Agreement, any default under this Agreement,
the Note, or any related documents or agreements for which the Authority or the
Tribe receives written notice;     (iii)   sixty (60) days after written notice
by Lakes that a reasonable basis exists for concluding that this Agreement or
the development of the Project is not lawful;     (iv)   any determination by
Lakes that a reasonable basis exists for concluding that any material terms of
this Agreement or the Note are not valid or binding obligations of the Authority
or the Tribe;     (v)   any reasonable determination by Lakes (which may be
based on the advice of legal counsel) that any representations or warranties of
the Authority or the Tribe contained in this Agreement are not true and correct;
    (vi)   the commencement of any litigation which, in the reasonable
determination of Lakes, has a reasonable likelihood of delaying the completion
of the Project Facilities for more than 24 months after the Effective Date of
this Agreement; and     (vii)   the reasonable determination of Lakes that
financing and operation of the Project Facilities will be substantially impaired
by changes in federal law relating to permitted Class II and Class III gaming on
Indian lands.

     Section 2.2 Conditions Precedent to First Advance of Development Financing
Loan or to Perform any Obligations. Notwithstanding Section 2.1, Lakes is not
required to make any advance under the Development Financing Loan or perform any
obligations under this Agreement until Lakes receives each of the following in
form and substance reasonably satisfactory to Lakes:

  (a)   copy of tribal laws in a form sufficient as determined by Lakes to
perfect the security interests and liens granted to it under Section 2.1.    
(b)   copy of one or more resolutions of the governing bodies of the Authority
and the Tribe authorizing and ratifying the adoption, or the execution, delivery
and performance by the Authority, or the Tribe, as applicable, of (i) the
Compact (if in effect), (ii) the Gaming Ordinance, (iii) this Agreement, and
(iv) the Note, such dominion account agreements and security agreements as Lakes
may require, and the other Transaction Documents and related documents and
security instruments.     (c)   original of any license(s) required by any
Government Authority for Lakes’ financing, development design and construction
oversight services (as described

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      in this Agreement) in connection with the development, construction and
equipping of the Project.     (d)   an opinion of an attorney for the Authority
and the Tribe in form reasonably satisfactory to Lakes to the effect that
(i) this Agreement, the Note, and any security instruments and other Transaction
Documents to be executed by the Authority or the Tribe in connection with this
Agreement will be valid, binding and, as applicable, perfected obligations of
the Authority and the Tribe, enforceable in accordance with their terms,
(ii) the Tribe is an Indian tribe within the meaning of IGRA, (iii) each of the
actions of the Authority or the Tribe, as applicable, referred to above in this
Section have been validly taken by that entity and is in full force and effect,
(iv) the Tribe is legally permitted to conduct Class II Gaming and Class III
Gaming activities in the State of California under all Legal Requirements, and
(v) the Gaming Facility Site for the Project constitutes “Indian lands” upon
which the Tribe may legally conduct gaming under IGRA.     (e)   An addendum to
this Agreement describing the contemplated scope of the Project has been signed
by the parties.     (g)   Lakes has received a copy of a letter from the NIGC
determining that the Gaming Facility Site for the Project constitutes “Indian
lands” upon which the Tribe may legally conduct gaming under IGRA.     (h)  
Lakes shall have received satisfactory evidence that all permits or other
authorizations, including, and without limitation, the building permit(s),
required by any applicable Governmental Authority to authorize construction of
the Project Facilities have been issued and are in full force and effect. At
Lakes’ option, the Authority and the Tribe shall furnish Lakes reasonable
evidence that all permits required in order to construct the Project Facilities
in accordance with the Plans and Specifications will be available when
necessary.     (i)   There shall be no pending or threatened litigation, claim
or dispute which, in Lakes’ good faith judgment, might materially adversely
affect the ability of the Authority or the Tribe to timely perform its
obligations under this Agreement.     (k)   Lakes shall have received
satisfactory evidence that the Gaming Facility Site is free from environmental
contamination of any nature whatsoever or any other environmental condition that
would require any remediation pursuant to any applicable Legal Requirement.

     Further, Lakes is not required to make any advance under the Development
Financing Loan or perform any obligations under this Agreement if, in the
reasonable determination of Lakes, financing and operation of the Project
Facilities will be substantially impaired by changes in federal law relating to
permitted Class II and Class III gaming on Indian lands.

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ARTICLE 3
Development Design Services
     Section 3.1 The parties agree as follows in connection with design services
to be rendered by Lakes for the Project.

  (a)   Selection of Project Architect. As soon as reasonably practical after
the signing this Agreement, Lakes shall propose to the Authority one or more
Architects to provide customary architectural services with respect to the
Project Facilities, although the Authority also shall have the right to consider
additional architects. As soon as reasonably practical, the Authority shall
either approve or reject each proposed Architect. In the case of a rejection,
the process described in this Section 3.1(a) shall be repeated until the
Authority has approved one or more Architects proposed for the Project (“Project
Architect”).     (b)   Project Architectural Agreement; Plans and
Specifications. Once an Architect has been approved under Section 3.1(a), Lakes
shall negotiate proposed agreements with each Architect approved, and shall
propose the same to the Authority (each, a “Project Architectural Agreement”).
As soon as reasonably practical, the Authority shall either approve or reject
each proposed Project Architectural Agreement. In the case of a rejection, the
process described in this Section 3.1 (b) shall be repeated until the Authority
has approved the Project Architectural Agreements proposed by Lakes. Upon
approval, the Authority shall take necessary action to authorize and execute the
applicable Project Architectural Agreements. After execution of each Project
Architectural Agreement, Lakes shall coordinate the Architect’s preparation of
preliminary basic plans, drawings and specifications for the Project Facilities.
Lakes shall also coordinate the Architect’s preparation of construction drawings
and final design, plans and specifications for the Project Facilities, and
propose the same for approval by the Authority. The completed and approved final
plans, together with any modifications thereof proposed by Lakes and approved by
the Authority, shall constitute the “Project Plans and Specifications.”     (c)
  Scope of Project. The scope of the project contemplated by this Agreement
shall be stated and established in the Project Plans and Specifications. It is
contemplated the scope of the Project will be substantially as described on the
Scope of Project Description Sheet dated January 17, 2006 attached hereto as an
addendum, subject to such changes as may be necessary or appropriate taking into
account competitive conditions, financing and other circumstances. As a
condition precedent to this Agreement being given legal effect, the parties
shall agree to and execute the Scope of Project Description Sheet. Once
executed, any changes to the Scope of Project Description Sheet must also be
executed by both parties.     (d)   Selection of Additional Design Professionals
for Project. If the Authority determines that design services for the Project
Facilities from Design

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      Professionals are desirable, Lakes may propose to the Authority one or
more Design Professionals and the proposed services of each. As soon as
reasonably practical, the Authority shall either approve or reject the proposed
Design Professionals. In the case of a rejection, the process described in this
Section 3.1 (d) shall be repeated until the Authority has approved all Design
Professionals proposed by Lakes. After approval of each Design Professional by
the Authority, Lakes shall coordinate the services of each Design Professional.
    (e)   Project Safety/Health Standards. The Project shall be designed and
constructed so as to adequately protect the environment and the public health
and safety. Subject to any Compact requirements, the design and construction of
the Project shall, except to the extent a particular requirement or requirements
may be waived in writing by the Authority, meet or exceed all reasonable minimum
standards pertaining to the Tribe and national, State of California and local
building codes, fire codes and safety and traffic requirements (but excluding
planning, zoning and use laws, ordinances, regulations and requirements), which
would be imposed on the Project by existing State of California or federal
statutes or regulations which would be applicable if the Project were located
outside of the jurisdictional boundaries of the Tribe, even though those
requirements may not apply within the Tribe’s jurisdictional boundaries. To the
extent that the Tribe has adopted or may in the future adopt more stringent
requirements, those requirements shall govern. Nothing in this subsection shall
grant to the State of California or any political subdivision thereof any
jurisdiction (including but not limited to, jurisdiction regarding zoning or
Gaming Facility Site use) over the Project or its development.

     Section 3.2 Other Project Contractors. Lakes shall propose to the Authority
for its approval all third-party professionals, such as environmental
specialists, feasibility analysts, and others providing services or materials to
the Project Facilities as are customary for undertakings such as the Project
(“Project Contractors”). The Authority shall also have the right to consider
additional Project Contractors. Lakes, in consultation with the Authority, and
subject to the final approval by the Authority, shall negotiate all Project
Contractor contracts. All contracts shall require the Project Contractor to
adhere in regard to recruitment, employment, reduction in force, promotion,
training and related employment actions to a publicly announced policy and
practice of Tribal preference and/or any publicly announced policy of Indian
preference, both of which must be reasonably promulgated by the Tribe. Except as
provided in this Agreement, each Project Contractor contract shall be between
the Project Contractor and the Authority as determined by the Authority.
Notwithstanding the foregoing, all legal representation of the Authority shall
be determined solely by the Authority.
     Section 3.3 Project Budget. Lakes shall consult with the Architect to
develop and propose to the Authority a budget for all Project Costs relating to
the Project, along with a scheduled timeframe(s) for development of the Project.
Revisions to the Project budget may be proposed to the Authority from time to
time by Lakes until a final budget is approved by the Authority. The Project
budget approved by the Authority, together with any modification thereafter
proposed by Lakes and approved by the Authority, shall include all Project Costs
and shall be the “Project Budget.”

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     Section 3.4 Contracts with Project Professionals. All professionals
providing services to the Project shall be independent of Lakes, unless
otherwise agreed to by the parties in writing, and all contracts with such
professionals will be negotiated by Lakes and the Authority on an arms-length
basis and in the best interests of the Authority.
     Section 3.5 Compensation Paid to Lakes for its Development Design Services.
As compensation for its development design services rendered under this
Agreement related to the Project, in addition to interest earned on the
Development Financing Loan, Lakes shall receive a flat fee equal to $15,000,000
(“Development Design Services Fee”).
     Section 3.6 Terms of Payment of Development Design Services Fee. The
parties agree that it serves the Authority’s interest to delay payment of Lakes’
Development Design Services Fee until such time as the Authority is likely to
have acquired the funds necessary to make such payments. Accordingly, the
Authority and Lakes expressly agree that the Development Design Services Fee
shall be paid in ten (10) equal semi-annual installments commencing on the sixth
month anniversary of the Opening Date for the Project. No interest shall be
charged in connection with payment of the Development Design Services Fee as
long as each payment is made when due; in the event that a payment is not made
when due, then interest shall accrue on that installment amount at the rate of
the prime interest rate of Chase Manhattan Bank U.S.A., N.A. (or any successor
bank) plus five percent (5%).
     Section 3.7 Development Design Services Fee Security. To secure payment of
the Development Design Services Fee, the Authority and the Tribe hereby pledge
and grant a security interest in all Collateral to Lakes to secure Authority’s
and the Tribe’s obligations under this Agreement in connection with payment of
the Development Design Services Fee. The parties further agree to enter into
standard and customary dominion account agreements/security agreements necessary
to evidence and effectuate such liens, and to authorize Lakes to file those UCC
Financing Statements and similar documents and agreements as Lakes may believe
appropriate to perfect such liens.
ARTICLE 4
Construction Oversight Services
     Section 4.1 Project General Contractor and Construction Contracts. Lakes
shall propose to the Authority for its approval one or more general or prime
contractors to provide customary construction contracting services with respect
to the Project Facilities (the “Project General Contractor”). As soon as
reasonably practical, the Authority shall either approve or reject each proposed
Project General Contractor. In the case of a rejection, the process described in
this Section 4.1 shall be repeated until the Authority has approved a Project
General Contractor proposed by Lakes. Once the Project General Contractor has
been approved by the Authority, Lakes shall negotiate and propose to the
Authority for its approval one or more forms of agreements for execution by
Authority to engage the Project General Contractor (the “Project Construction
Contract”). After the Authority has approved and entered into the Project

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Construction Contract(s), no change orders shall be made without the written
recommendation of Lakes and written approval by the Authority.
     Section 4.2 Project General Contractor Expectations. The Project General
Contractor must (i) exhibit the financial capability to complete the work,
(ii) have the ability to obtain adequate payment and performance bonds and
builder’s risk insurance in amounts requested by the Authority, (iii) provide an
acceptable bid as determined by the Authority, (iv) be capable of meeting the
construction schedule and (v) construct quality facilities. The General
Contractor shall be responsible for providing, including through subcontractors,
all material, equipment and labor to construct and initially equip the Project
Facilities as necessary in conformance with the Project Plans and
Specifications, including site development.
     Section 4.3 Project Construction Contract Provisions. Any Project
Construction Contract shall contain such provisions for the protection of the
Authority and Lakes as the parties deem appropriate, and shall provide that
construction of the Project Facilities shall commence within thirty (30) days of
the Project Construction Contract being signed, subject to Legal Requirements;
and shall also provide that the Project General Contractor, and all its
subcontractors, shall exert their best efforts to complete construction within
such time as the Authority requires.
     Section 4.4 Lakes’ Construction Oversight Duties. Any Project Construction
Contract shall provide that Lakes shall be responsible for all construction
administration during the construction phases of the Project. Lakes shall act as
the Authority’s designated representative and shall have full power and complete
authority to act on behalf of the Authority in connection with any Project
Construction Contract. To the extent allowed by the Project Construction
Contract, Lakes shall have control and charge of any persons performing work on
the Project site, and shall interpret and decide on matters concerning the
performance of any requirements of the Project Construction Contract. Lakes
shall have the authority to reject work which does not conform to the Project
Construction Contract. Lakes may conduct inspections to determine the date or
dates of substantial completion and the date of Completion. Lakes shall observe
and evaluate or authorize the observation and evaluation of Project work
performed, review or authorize review of applications for payment for submission
to the Authority and review or authorize review and certification of the amounts
due the contractors and/or the Project General Contractor. The Project General
Contractor shall, at a minimum, warrant its work to be performed free of defects
and unworkmanlike labor for at least one year after Completion or not less than
the maximum period subsequent to Completion customarily covered by the liability
and insurance policy a Project General Contractor would usually obtain in the
State of Califonia, whichever is longer. Unless otherwise provided in the
Project Construction Contract, the Project General Contractor shall also be
required to obtain before construction commences and maintain until Completion a
policy of insurance in an amount at least equal to the estimated Project Costs
naming the Authority as an additional insured; said policy to be issued by an
insurance company licensed by the State of California and having an AM Best
rating of A7 or better.
     Section 4.5 Construction Change Orders. Construction change orders in
excess of the Project Budget for the Project Plans and Specifications shall
require written approval of the Architect, the Authority and a representative of
the Gaming Commission if required by applicable

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law. If completion of the construction, equipping and furnishing of the Project
cannot be reasonably accomplished within the Project Budget, then, the
Authority, upon receiving advice from Lakes and the Architect, shall promptly
determine which components of the Project shall be deleted or reduced in size,
such that the total expenditures for Project Costs shall not exceed the approved
Project Budget.
     Section 4.6 Lakes Project Inspections. As part of the Project Costs, Lakes
shall inspect the Project Facilities prior to the disbursement of each requested
advance of funds, and (i) approve the progress and the workmanship of the
construction; (ii) verify compliance with the Project Plans and Specifications;
(iii) satisfy itself that all work for which such advance is requested has been
performed and all materials for which such advance is requested are in place or,
as to stored materials, are owned by the Authority and suitably safeguarded.
Such inspection will be performed in a timely manner and not unreasonably delay
the disbursement of any advance.
     Section 4.7 Final Acceptance Upon Completion. Final acceptance of
construction of the Project Facilities shall not occur until (i) evidence of
Completion has been received and approved by Authority, (ii) a fully executed
indemnity or release from liens is received from the Project General Contractor
and all subcontractors, (iii) any other documentation reasonably requested by
the Authority, the Gaming Commission or Lakes is received from the Project
General Contractor and (iv) all approvals have been received from all
Governmental Authorities from which approvals are required.
     Section 4.8 Authority’s Representative. The Authority shall select an
individual of its choice knowledgeable in construction practices to act as the
Authority’s construction monitor. The construction monitor shall be allowed
access to all project contracts, including plans, designs, and construction cost
information. The construction monitor shall inspect and approve each phase of
construction, including change orders, before each subsequent phase may be
initiated. The construction monitor shall inspect and shall not unreasonably
withhold approvals within twenty-four (24) hours of notification. The
construction monitor shall be compensated at a commercially reasonable rate, and
the fees for such services shall be part of the Project Costs.
     Section 4.9 Project Equipment Contracts. Lakes shall propose to the
Authority for its approval one or more contractors to provide equipment or
personal property for use in connection with operations of the Project
Facilities, exclusive of property to be provided pursuant to a Project
Construction Contract (the “Project Equipment Contractor”). The Authority shall
also have the right to consider additional Project Equipment Contractors. As
soon as reasonably practical, the Authority shall either approve or reject each
proposed Project Equipment Contractor. In the case of a rejection, the process
described in this Section 4.9 shall be repeated until the Authority has approved
a Project Equipment Contractor proposed. Once the Project Equipment Contractor
has been approved by the Authority, Lakes shall negotiate and propose to the
Authority for its approval one or more forms of agreements for execution by the
Authority to engage the Project Equipment Contractor (the “Project Equipment
Contract”). After the Authority has approved and entered into the Project
Equipment Contract(s), no change orders shall be made without the written
recommendation of Lakes and written approval by the

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Authority. Lakes will assist in the selection, ordering, expediting, and
installation of furniture, fixtures and equipment required for the Project
Facilities.
     Section 4.10 Project Contractor Costs. All costs incurred by or paid
pursuant to the Project Construction Contract(s) and Project Equipment
Contract(s) in accordance with the Project Budget shall be Project Costs.
     Section 4.11 Compensation Paid to Lakes for its Construction Oversight
Services. As compensation for its construction oversight services rendered under
this Agreement related to the Project, in addition to interest earned on the
Development Financing Loan, Lakes shall receive a flat fee equal to $15,000,000
(“Construction Oversight Services Fee”).
     Section 4.12 Terms of Payment of Construction Oversight Services Fee. The
parties agree that it serves the Authority’s interest to delay payment of Lakes’
Construction Oversight Services Fee until such time as the Authority is likely
to have acquired the funds necessary to make such payments. Accordingly, the
Authority and Lakes expressly agree that the Construction Oversight Services Fee
shall be paid in ten (10) equal semi-annual installments commencing on the sixth
month anniversary of the Opening Date for the Project. No interest shall be
charged in connection with payment of the Construction Oversight Services Fee as
long as each payment is made when due; in the event that a payment is not made
when due, then interest shall accrue on that installment amount at the rate of
the prime interest rate of Chase Manhattan Bank U.S.A., N.A. (or any successor
bank) plus five percent (5%).
     Section 4.13 Construction Oversight Services Fee Security. To secure
payment of the Construction Oversight Services Fee, the Authority and the Tribe
hereby pledge and grant a security interest in all Collateral to Lakes to secure
Authority’s and the Tribe’s obligations under this Agreement in connection with
payment of the Construction Oversight Services Fee, further agree to enter into
standard and customary dominion account agreements/security agreements necessary
to evidence and effectuate such liens, and authorize Lakes to file those UCC
Financing Statements and similar documents and agreements as Lakes may believe
appropriate to perfect such liens.
ARTICLE 5
No Operations Management Services to be Rendered;
No Grant of Proprietary Interest to Lakes
     Section 5.1 No Management Contract or Grant of Proprietary Interest. The
parties agree that it is their intent that neither this Agreement nor the Note
or any related security documents and instruments described herein (individually
or collectively) constitute a “Management Contract” within the meaning of IGRA
or grants a Proprietary Interest to Lakes in violation of IGRA. If agreed to by
the parties, this Agreement can be submitted to the NIGC for review and
determination that (a) it is not a Management Contract and therefore does not
require the approval of the NIGC in order to be valid, regardless of whether it
constitutes a “collateral agreement” as that term is defined in IGRA; and (b) it
does not violate IGRA’s “sole proprietary interest” requirements. If submitted,
each party shall use its best efforts to pursue such

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determination and timely execute, deliver, and if necessary, record any and all
additional instruments, certifications, and other documents as may be required
by the NIGC in order to issue such determination; provided that such required
instrument or other document shall not materially change the respective rights,
remedies or obligations of the parties under this Agreement. If the NIGC finds
that this Agreement does constitute a Management Contract within the meaning of
IGRA or grants a Proprietary Interest to Lakes in violation of IGRA, then the
parties shall immediately take all necessary steps to amend or modify the
Agreement in a way that preserves the economic benefits of the transactions to
the parties without constituting a Management Contract within the meaning of
IGRA or granting a Proprietary Interest to Lakes in violation of IGRA.
     Section 5.2 Mechanics Liens. The Authority shall keep the Project
Facilities and Gaming Facility Site free and clear of all mechanic’s and other
liens resulting from the construction of the Project Facilities, which shall at
all times remain the property of the Authority. If such lien is claimed or
filed, it shall be the responsibility of the Authority to discharge the lien
within thirty (30) days after receiving written notice of such claim. The
Authority shall indemnify and hold harmless Lakes for any pre-existing
conditions on the Gaming Facility Site and from any and all liability alleged to
arise from any other prior agreements entered into by the Authority or the Tribe
with any persons or entities in connection with development of the Project,
including but not limited to, Indian Gaming of America, Inc.
     Section 5.3 Title to Project Facilities. The Project Facilities and all
related improvements and assets shall be the sole and exclusive property of the
Authority, subject to no liens or encumbrances except for any UCC and other
liens permitted in favor of Lakes to be granted pursuant to the provisions of
this Agreement or any related security documents and instruments between Lakes,
the Authority and the Tribe entered into on or after the date the parties
execute this Agreement.
     Section 5.4 No Liens. During the term of this Agreement, neither the
Authority, the Tribe nor Lakes shall act in any way whatsoever, either directly
or indirectly, to cause or permit any other party to lease or to become a
lienholder of the Gaming Facility Site or the Project Facilities, or any related
assets except as expressly permitted herein.
ARTICLE 6
Representations and Warranties
     Section 6.1 Representations and Warranties of Lakes. Lakes represents and
warrants to the Authority and the Tribe that:

  (a)   Organization. Lakes is a limited liability company duly formed and
validly existing under the laws of the State of Minnesota.

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  (b)   Authority. Lakes has the full legal right and authority to enter into
this Agreement, to perform its obligations under this Agreement, and to
consummate all other transactions contemplated by this Agreement.     (c)  
Binding Obligation. Each of this Agreement and the other Transaction Documents
has been duly executed and delivered by Lakes and constitutes a legal, valid and
binding obligation of Lakes, enforceable against Lakes in accordance with its
terms, except as enforceability may be limited by future bankruptcy, insolvency
or similar proceedings, limitations on rights of creditors generally and
principles of equity, and assuming such agreements are binding against the other
parties hereto.     (d)   No Litigation. There are no judgments entered, or
actions, suits, investigations or proceedings pending against Lakes, or any of
its assets or properties that could have a material adverse effect on its
ability to enter into or perform this Agreement.     (e)   No Violation or
Conflict. The execution, delivery and performance by Lakes of this Agreement
does not violate any Legal Requirement applicable to Lakes, other than a
violation that shall not materially adversely affect the Project or the
Authority’s of the Tribe’s obligations or rights under this Agreement.     (f)  
No Consents. No consent from any Governmental Authority arising from any Legal
Requirements not heretofore obtained by Lakes is required for Lakes to execute,
deliver and perform its obligations hereunder; provided that Lakes makes no
representation or warranty with respect to any consent that may be required by
the Gaming Commission, the Tribe, the Authority, the NIGC or the BIA.     (g)  
Full Disclosure. No representation or warranty of Lakes in this Agreement and no
written report or statement delivered to the Authority or the Tribe by or on
behalf of Lakes, contains any untrue statement or omits to state a material fact
necessary to make any such representation, warranty, report or statement, in
light of the circumstances in which they were made, not misleading.     (h)  
Financial Capacity. Lakes will use its best efforts to to finance any and all
amounts necessary in order to comply with Lakes’ commitment to provide the
Development Financing Loan under Article 3 hereof, and the provision of such
financing will not result in Lakes becoming insolvent or otherwise being unable
to pay its debts as they become due.     (i)   Brokers’ Fees and Other Fees and
Expenses. Lakes has not, as of the Effective Date of this Agreement, engaged,
nor has any liability or obligation to pay any fees, commissions or expenses
with respect to, any broker, finder or agent, investment banker, or any similar
advisor or services provider, with respect to or in connection with the
transactions contemplated by this Agreement for which Lakes could become liable
or obligated.

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     Section 6.2 Representations and Warranties by the Authority and the Tribe.
The Authority and the Tribe represent and warrant to Lakes that:

  (a)   Organization. The Authority is governmental component and
instrumentality of the Tribe duly established pursuant to the Tribe’s laws; and
the Tribe is a federally recognized Indian Tribe duly organized under the
Constitution and laws of the Tribe and the United States, and is eligible to
conduct gaming within the meaning of IGRA.     (b)   Authority and Power. The
Authority and the Tribe have taken all action required by tribal law without the
necessity of further action to authorize the execution, delivery and performance
of this Agreement, the Note and the other Transaction Documents (to the extent a
party thereto). The Authority and the Tribe, to the extent a party thereto, have
all requisite power and authority to enter into this Agreement, the Note, and
other Transaction Documents and to perform their obligations under this
Agreement, the Note, and other Transaction Documents or related security
documents and instruments described herein, and to consummate all other
transactions contemplated by this Agreement, the Note and other Transaction
Documents.     (c)   Binding Obligations. Each of this Agreement (including but
not limited to, the waiver of sovereign immunity in Article 10), the Note and
other Transaction Documents has been duly executed and delivered by the
Authority and the Tribe and is a legal, valid, binding and perfected obligation
of the Authority and the Tribe, to the extent a party thereto, enforceable
against the Authority and the Tribe in accordance with its terms, except as
enforceability may be limited by future bankruptcy, insolvency or similar
proceedings, limitations on rights of creditors generally and principles of
equity, and assuming the foregoing agreements are binding against the other
parties thereto.     (d)   Gaming Facility Site. The Gaming Facility Site for
the Project constitutes “Indian lands” upon which the Tribe may legally conduct
gaming under IGRA.     (e)   Gaming Permitted. The Tribe is legally permitted to
conduct Class II Gaming and Class III Gaming activities in the State of
California under all Legal Requirements.     (f)   Gaming Rights. The Compact
signed by the Tribe, and approved and published by the United States Secretary
of the Interior, is a valid and binding obligation of the Tribe. The Authority,
on behalf of the Tribe, has the right to engage in Class III Gaming at the
Gaming Facility to be operated by the Authority in connection with this
Agreement to the extent set forth in the Compact.     (g)   Gaming Licenses. All
licenses, permits, approvals or other authority required from the Gaming
Commission to permit the Authority and Lakes to enter into this

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      Agreement and perform their obligations under this Agreement have been
granted.     (h)   No Material Negative Obligations. There are no outstanding
obligations owing by the Authority or the Tribe or affecting either the Gaming
Facility Site or the Project Facilities, whether arising from contracts,
instruments, orders, judgments, decrees or otherwise, which are likely to
materially and adversely affect the Project or Lakes’ obligations or rights
under this Agreement, the Note and/or other Transaction Documents.     (i)   No
Violation or Conflict. The execution, delivery and performance by the Authority
and the Tribe of this Agreement, the Note and the other Transaction Documents
does not violate any Legal Requirements. The execution, delivery and performance
of this Agreement, the Note and the other Transaction Documents by the Authority
or the Tribe does not conflict with or result in any breach of any provision of,
or constitute a default under, or result in the imposition of any lien or charge
upon any asset of the Authority , or result in the acceleration of any
obligation under the terms of any agreement or document binding upon the
Authority or the Tribe, other than a conflict, breach, default or imposition as
shall not materially adversely affect the Project or the parties’ obligations or
rights under this Agreement, the Note and the other Transaction Documents.    
(j)   No Litigation. There are no judgments entered, or actions, suits,
investigations or proceedings pending, or to the knowledge of the Authority or
the Tribe, threatened, against the Authority or the Tribe, or any of the assets
or properties of the Authority, that could have a material adverse effect on the
Project, the Project Facilities, the Authority’s or the Tribe’s ability to enter
into or perform this Agreement or Lakes’ obligations or rights under this
Agreement, the Note and the other Transaction Documents.     (k)   No Consents.
No consent from any Governmental Authority arising from any Legal Requirements
not heretofore obtained by the Authority or the Tribe is required to execute,
deliver and perform its obligations hereunder.     (1)   Full Disclosure. No
representation or warranty of the Authority or the Tribe in this Agreement and
no written report or statement delivered to Lakes by or on behalf of the
Authority or the Tribe, contains any untrue statement or omits to state a
material fact necessary to make any such representation, warranty, report or
statement, in light of the circumstances in which they were made, not
misleading. The Authority and the Tribe have fully disclosed the existence and
terms of all material agreements and Legal Requirements, written or oral,
relating to the Project.     (m)   No Tribal Tax. Neither the Project, the
Project Facilities nor the transaction(s) between the parties contemplated by
this Agreement, the Note, and the other Transaction Documents are now, or at any
time during the term of this Agreement

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will be, subject to any tribal tax of any sort other than reasonable
pass-through taxes on Project patrons which are consistent with gaming resort
industry practices.
ARTICLE 7
Covenants
     Section 7.1 Covenants of Lakes. Lakes covenants and agrees to execute any
additional instruments as may be reasonably required by the Authority or the
Tribe to carry out the intent of this Agreement or to perfect or give further
assurances of any of the rights granted or provided for under this Agreement.
     Section 7.2 Covenants of the Authority and the Tribe. The Authority and the
Tribe covenant and agree as follows:

  (a)   Additional Documents. The Authority and the Tribe shall execute any
additional instruments as may be reasonably required by Lakes to carry out the
intent of this Agreement or to perfect or give further assurance of any of the
rights granted or provided for under this Agreement or the Note, including
execution of the other Transaction Documents.     (b)   Non-Impairment. Neither
the Authority nor the Tribe shall enact or permit the enactment of, any law,
ordinance, resolution, rule or regulation impairing the rights or obligations of
the parties under this Agreement or under any related contracts entered into by
the Authority or the Tribe or impairing the rights and obligations of Lakes in
furtherance of the design, development, construction, equipping or financing of
the Project Facilities, including but not limited to this Agreement and any
contract or agreement entered into or contemplated by this Agreement.     (c)  
Records. The Authority shall maintain or cause to be maintained Full and
accurate accounts and records for the Project and its Project Facilities
according to GAAP.     (d)   No Liens. Except upon the express written consent
of Lakes, neither the Authority nor the Tribe shall cause or voluntarily permit
any lien or encumbrance to be created on the Project Facilities, the Gaming
Facility Site, the Collateral or any proceeds of the Development Financing Loan.
    (e)   No Tax. Neither the Authority nor the Tribe shall impose any tax, fee
or assessment on Lakes, any Contractor, the Project Facilities, this Agreement,
the Note, and the other Transaction Documents other than reasonable pass-through
taxes on Project patrons which are consistent with gaming resort industry
practices.

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  (f)   No Subsidiaries. Neither the Authority nor the Tribe will create,
acquire or own any instrumentality, subdivision or subunits in connection with
any gaming operations of the Authority or the Tribe unless the actions and
assets of such instrumentalities, subdivisions or subunits are subject to and
bound by the terms of this Agreement.     (g)   Exclusive Financing. Both the
Authority and the Tribe acknowledge and agree that the Development Financing
Loan to be provided by Lakes under Section 2.1 shall be the exclusive financing
source for the Authority and the Tribe in connection with funding the
development, construction and equipping of the Project.     (h)   Contractor
Payments. Both the Authority and the Tribe acknowledge and agree to pay any
Contractor pursuant to the terms of the applicable agreement in a commercially
reasonable manner and time, and each of the Authority and the Tribe agree to
hold Lakes harmless from any Contractor claims for payment associated with
design, construction and furnishing of the Project

ARTICLE 8
Events of Default
     Section 8.1 Events of Default by Lakes. Each of the following occurring
prior to the date on which the Project has been substantially completed shall
constitute a “Lakes Event of Default”:

  (a)   A Material Breach by Lakes.     (b)   Lakes violates any of the
covenants in Section 7.1 of this Agreement, and sixty (60) days have passed
following a request by the Authority and/or the Tribe to Lakes to cure the
violation, during which the violation has not been cured unless caused by force
majeure.     (c)   Subject to Section 8.3, any license, permit or approval
required to be received or maintained by Lakes to perform its obligations under
this Agreement is denied, suspended, or revoked by proper and reasonable action
of any state or federal Governmental Authority, and all rights to appeal or
review the action have been exhausted.     (d)   Lakes has: (i) filed for relief
under the United States Bankruptcy Code or has suffered the filing of an
involuntary petition under the Bankruptcy Code that is not dismissed within
sixty (60) days after filing; (ii) had a receiver appointed to take possession
of all or substantially all of the property of Lakes; or (iii) suffered an
assignment for the benefit of creditors.

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     Section 8.2 Cure of Lakes Default. Upon the occurrence of a Lakes Event of
Default, the Authority and/or the Tribe shall provide written notice to Lakes of
such event of default requesting Lakes to cure the Lakes Event of Default. Lakes
shall have thirty (30) days following receipt of the notice to effect a cure;
provided, however, that if the nature of such breach is such that it is not
possible to cure such breach within thirty (30) days, such thirty-day period
shall be extended for so long as Lakes shall be using diligent efforts to effect
a cure thereof but no more than an additional sixty (60) days. The
discontinuance or correction of a Lakes Event of Default shall constitute a cure
thereof. If Lakes fails to cure the Lakes Event of Default within the cure
period, the Authority and/or the Tribe may: (a) suspend all performance of the
Authority and/or the Tribe under this Agreement; (b) terminate this Agreement
under Section 9.4; or (c) pursue any other remedy available at law or in equity,
subject to the provisions of Section 10.1.
     Section 8.3 Events of Default by the Authority or the Tribe. Each of the
following shall constitute a “Tribal Event of Default”:

  (a)   (i) a Material Breach by the Authority or the Tribe exists; or (ii) an
“Event of Default” by the Authority or the Tribe has occurred and exists under
the Note or any other Transaction Document; or (iii) the Tribe shall be in
default of any agreement now or hereafter executed by it in favor of Lakes.    
(b)   The Gaming Commission or any other applicable governmental authority of
the Tribe denies, revokes, fails to renew or otherwise impairs any license,
permit or approval required for Lakes to perform its obligations or enjoy its
rights under this Agreement.     (c)   The Authority or the Tribe violate any of
the covenants in Section 7.2 of this Agreement, and after sixty (60) days have
passed following a request by Lakes to the Authority or the Tribe to cure the
violation, during which the violation has not been cured.     (d)   The
Authority and/or the Tribe or any of their Affiliates material to the Project
has: (i) filed for relief under the United States Bankruptcy Code or has
suffered the filing of an involuntary petition under the Bankruptcy Code that is
not dismissed within sixty (60) days after filing; (ii) had a receiver appointed
to take possession of all or substantially all of Authority’s property; or
(iii) suffered an assignment for the benefit of creditors,     (e)   The Compact
is determined by any court of competent jurisdiction to be invalid and such
determination becomes final and non-appealable.     (f)   The Tribe is no longer
an Indian tribe eligible to conduct gaming within the meaning of IGRA.     (g)  
Any order or judgment of any court of competent jurisdiction enjoins the
development of the Project in any material manner, and the injunction continues
for thirty (30) days.

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     Section 8.4 Cure of Tribal Event Default. Upon the occurrence of a Tribal
Event of Default, Lakes shall provide written notice to the Authority or the
Tribe of such default and, if it is possible for the Authority or the Tribe to
cure the Tribal Event of Default, the Authority or the Tribe shall have thirty
(30) days following receipt of notice to effect a cure; provided, however, that
if the nature of such breach (but specifically excluding breaches curable by the
payment of money) is such that it is not possible to cure such breach within
thirty (30) days, such thirty-day period shall be extended for so long as the
Authority or the Tribe shall be using diligent efforts to effect a cure thereof
but no more than an additional sixty (60) days. Upon the occurrence of any of
the events described in Section 8.3 and during any applicable cure period, Lakes
may suspend its performance under this Agreement. The discontinuance or
correction of a Tribal Event of Default shall constitute a cure thereof. If the
Authority or the Tribe fails to cure the Tribal Event of Default within the
cureperiod, Lakes may take any one or more of the following actions: (a) suspend
all performance of Lakes under this Agreement; (b) declare all principal and
interest accrued on the Note and any Development Design Service Fees or
Construction Oversight Services Fees to be immediately due and owing,
(c) terminate this Agreement under Section 9.3; or (d) pursue any other remedy
available by agreement, at law or in equity, subject to the provisions of
Section 10.1.
ARTICLE 9
Term of Agreement
     Section 9.1 Term. Subject to Section 3.1(c), this Agreement shall become
effective and binding upon the parties on the Effective Date, and shall continue
in effect until the Development Financing Loan and Development Design Services
fees and Construction Management Services Fees applicable hereunder have been
fully paid, subject to earlier termination as provided in this Article; provided
that (a) all rights of any party to assert a Claim against the other shall
survive the termination of this Agreement, and (b) all provisions of Article 10
and Article 11 shall survive a termination.
     Section 9.2 Mutual Termination. This Agreement may be terminated at any
time by the mutual written consent of the parties.
     Section 9.3 Termination by Lakes. This Agreement may be terminated upon
notice by Lakes to the Authority and the Tribe if an uncured Tribal Event of
Default exists under Section 8.3 and all applicable grace and cure periods have
expired.
     Section 9.4 Termination by the Authority and/or the Tribe. This Agreement
may be terminated upon notice by the Authority and/or the Tribe to Lakes if an
uncured Lakes Event of Default exists under Section 8.1 and all applicable grace
and cure periods have expired.

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ARTICLE 10
Dispute Resolution;
Waivers of Sovereign Immunity and Tribal Court Jurisdiction; Governing Law
     Section 10.1 Dispute Resolution. The parties agree that any Claim shall be
governed by the following dispute resolution procedures:

  (a)   The parties shall use their best efforts to settle the Claim. To this
effect, they shall consult and negotiate with each other in good faith and,
recognizing their mutual interests, attempt to reach a just and equitable
solution satisfactory to the parties. If they do not reach such solution within
a period of ten (10) days, then, upon notice by a party to the other parties,
all Claims shall be settled by arbitration administered by the American
Arbitration Association in accordance with the provisions of its Commercial
Arbitration Rules in effect at the time of submission; except that: (a) the
question whether or not a Claim is arbitrable shall be a matter for binding
arbitration by the arbitrators, such question shall not be determined by any
court and, in determining any such question, all doubts shall be resolved in
favor of arbitrability; and (b) discovery shall be permitted in accordance with
the Federal Rules of Civil Procedure, subject to supervision as to scope and
appropriateness by the arbitrators. Unless the parties otherwise agree to in
writing, arbitration proceedings shall be held at San Diego, California.     (b)
  The arbitration proceedings shall be conducted before a panel of three neutral
arbitrators, all of whom shall be currently licensed attorneys, actively engaged
in the practice of law for at least ten (10) years, one of which shall have five
(5) years of experience in federal Indian law, and one of which shall have five
(5) years of experience in the gaming industry. The arbitrator selected by the
claimant and the arbitrator selected by respondent shall, within ten (10) days
of their appointment, select a third neutral arbitrator. In the event that they
are unable to do so, the parties or their attorneys may request the American
Arbitration Association to appoint the third neutral arbitrator. Prior to the
commencement of hearings, each of the arbitrators appointed shall provide an
oath or undertaking of impartiality. The Authority and the Tribe further agree
that any arbitration proceeding held in connection with any Claim may be
consolidated with any other arbitration proceeding involving Lakes and any of
the Authority’s and/or the Tribe’s Affiliates.     (c)   The arbitration award
shall be in writing signed by each of the arbitrators, and shall state the basis
for the award. The arbitration award shall be set forth in reasonable detail as
to its findings of fact and law, and basis of determination of award form and
amount. Except to the extent such enforcement will be inconsistent with a
specific provision of this Agreement, arbitration awards made pursuant to this
Article 10 shall be enforceable in federal court under Title 9 of the United
States Code and any applicable tribal, federal or state law governing the
enforcement of arbitration awards. In addition to any basis for appeal of an

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      arbitration award stated in Title 9 of the United States Code or any
applicable law governing the enforcement of arbitration awards, any party hereto
may appeal an arbitration award on the basis that the arbitrators incorrectly
decided a question of law in making the award, or the award was made in an
arbitrary or capricious manner or in manifest disregard of the factual evidence.
    (d)   Each party hereto, without having to exhaust any tribal remedies
first, shall have the right to seek and obtain a court order from a court having
jurisdiction over the parties requiring that the circumstances specified in the
order be maintained pending completion of the arbitration proceedings, to the
extent permitted by applicable law.     (e)   Judgment on any arbitration award
may be entered in any court having jurisdiction over the parties. The
arbitrators shall not have the power to award punitive, exemplary or
consequential damages, or any damages excluded by or in excess of any damage
limitations expressed in this Agreement.     (f)   The Authority and the Tribe
hereby expressly and irrevocably waive, and also waive their right to assert,
sovereign immunity and any and all defenses based thereon with respect to any
Claims; and the Authority and the Tribe hereby consent to (i) binding
arbitration under the Commercial Arbitration Rules of the American Arbitration
Association, (ii) empowering the arbitrators to take the actions and enforce the
judicial remedies described in paragraph 5 of their respective Resolution of
Limited Waiver of Sovereign Immunity dated January 17, 2006 (attached hereto as
Exhibit E and Exhibit F) adopted by the Authority and the Tribe in connection
with approving the execution of this Agreement, and (iii) judicial proceedings
in or before the United States District Court in which the Project is located,
the United States Court of Appeals having jurisdiction over the applicable
District Court, and the United States Supreme Court, for the purpose of
compelling arbitration or enforcing any arbitration award, orders or judgment
arising out of this Agreement, the Note, or related security documents and
instruments. If the United States District Court determines it is without
jurisdiction, the Authority and the Tribe consent to be sued in a court of
competent jurisdiction and all courts to which an appeal therefrom may be
available, but solely to compel, enforce, modify or vacate any arbitration
award.     (g)   To the extent lawful in connection with any such Claims, the
Authority and the Tribe expressly waive the application of the doctrines of
exhaustion of tribal remedies, abstention or comity that might otherwise require
that Claims be heard first in tribal court or other tribal forums of the Tribe.
    (h)   The waivers by the Authority and the Tribe set forth herein only
extend to claims or proceedings brought by Lakes and any award of damages
against the Authority or the Tribe shall be payable solely out of the
Collateral.

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     Section 10.2 Governing Law. This Agreement is governed by the laws of the
State of Minnesota, except that the State of Minnesota’s conflict of laws
provisions shall not apply.
ARTICLE 11
Miscellaneous
     Section 11.1 Assignment. The rights and obligations under this Agreement
shall not be assigned or subcontracted by any party without the prior written
consent of the other parties; provided, however, Lakes may assign this Agreement
to a wholly owned subsidiary without the Authority’s or the Tribe’s consent;
provided further that Lakes shall remain obligated for the performance of the
Lakes subsidiary hereunder. Other than as expressly provided in this Section
11.1, any attempted assignment or subcontracting without prior written consent
shall be void. Subject to the preceding requirements, this Agreement is binding
upon and inures to the benefit of the parties and their respective successors
and assigns.
     Section 11.2 Notices. Any notice, consent or any other communication
permitted or required by this Agreement: (a) must be in writing; (b) shall be
effective three (3) days after the date sent; (c) must be delivered by personal
service, via fax with reasonable evidence of transmission, express delivery or
by certified or registered mail, postage prepaid, return receipt requested; and
(d) until written notice of a new address or addresses is given, must be
addressed as follows:

     
If to the Authority:
  Jamul Gaming Authority
 
  P.O. Box 612
 
  14191 Hwy 94 #16
 
  Jamul, CA 91935
 
  Attn: Chairman
 
  Fax: (619) 669-4817
 
   
With a Copy to:
  Eugene R. Madrigal, Esq.
 
  28581 Old Town Front Street, Suite 208
 
  Temecula, CA 92590
 
  (951) 695-7080
 
  Fax: (951) 695-7081
 
  (copy to counsel does not constitute notice to a party)
 
   
If to the Tribe:
  Jamul Indian Village
 
  P.O. Box 612
 
  14191 Hwy 94 #16
 
  Jamul, CA 91935
 
  Attn: Chairman
 
  Fax: (619) 669-4817
 
   
With a Copy to:
  Eugene R. Madrigal, Esq.
 
  28581 Old Town Front Street, Suite 208

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  Temecula, CA 92590
 
  (951) 695-7080
 
  Fax: (951) 695-7081
 
  (copy to counsel does not constitute notice to a party)
 
   
If to Lakes:
  Lakes Jamul Development, LLC
 
  130 Cheshire Lane
 
  Minnetonka, MN 55305
 
  Attn: Timothy J. Cope
 
  Fax: (952) 449-7064
 
   
With a Copy to:
  Damon E. Schramm
 
  General Counsel
 
  Lakes Entertainment, Inc.
 
  130 Cheshire Lane, Suite 101
 
  Minnetonka, Minnesota 55305
 
  Fax: (952) 449-7064
 
   
and
  Kevin C. Quigley
 
  Hamilton Quigley & Twait PLC
 
  W1450 First National Bank Building
 
  332 Minnesota Street
 
  St. Paul, Minnesota 55101-1314
 
  (651) 602-6262
 
  Fax; (651) 602-9976
 
   
 
  Daniel R. Tenenbaum, Esq.
 
  Grey Plant Mooty
 
  500 IDS Center
 
  80 South Eighth Street
 
  Minneapolis, MN 55402-3796
 
  (612) 632-3050
 
  Fax: (612) 632-4050
 
  (copy to counsel does not constitute notice to a party)

     Copies of any notices shall be given to the Gaming Commission at its last
known address.
     Section 11.3 Amendments. This Agreement may be amended only by written
instrument duly executed by all of the parties and with any and all necessary
regulatory approvals, if any, required by Legal Requirements.
     Section 11.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.

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     Section 11.5 Force Majeure. No party shall be in default in the performance
due under this Agreement if that failure of performance is due to causes beyond
its reasonable control, including but not limited to acts of God, war,
terrorism, fires, floods, or accidents causing material damage to or destruction
of the Project Facilities.
     Section 11.6 Preparation of Agreement. This Agreement has been carefully
prepared and reviewed by counsel for each party hereto and may not be construed
more strongly for or against any party.
     Section 11.7 Entire Agreement. This Agreement, including all exhibits,
represents the entire agreement between the parties and supersedes all
provisions of any prior agreements between the parties relating to the
development, financing, construction and equipping of the Project and its
Project Facilities, and any other matter addressed in this Agreement
     Section 11.8 Indemnification by Lakes. Lakes shall immediately indemnify
the Authority and the Tribe and its agents, enrolled members, officers,
employees, consultants, attorneys and Affiliates (each an “Authority/Tribe
Indemnitee”) from and against any and all damages, claims, losses or expenses of
whatever kind or nature, including attorneys’ fees and expenses as and when
incurred in defending those claims, losses or expenses, to the extent they
result from the gross negligence or willful misconduct of Lakes with respect to
(a) the Project or (b) non-performance of any of Lakes’ obligations under this
Agreement. Lakes shall have the sole right to control the defense and settlement
of any matter in which indemnification is required of Lakes, and shall pay its
attorneys’ fees, provided that, with respect to those matters, Lakes shall not
be responsible for the attorneys’ fees of attorneys hired by the Authority/Tribe
Indemnitee.
     Section 11.9 Indemnification by the Authority and the Tribe. The Authority
and the Tribe shall immediately indemnify Lakes and its agents, officers,
employees, consultants, attorneys and Affiliates ( each a “Lakes Indemnitee”)
from and against any and all damages, claims, losses or expenses of whatever
kind or nature, including attorneys’ fees and expenses as and when incurred in
defending those claims, losses or expenses, to the extent they result from
(a) the gross negligence or willful misconduct of the Authority or the Tribe
with respect to (i) the Project or (ii) the performance or non-performance of
the Authority’s or the Tribe’s obligations under this Agreement, or (b) the
performance by Lakes of any of its obligations under this Agreement but
excluding any claims, loss or expense arising from the gross negligence or
willful misconduct of Lakes. The Authority and/or the Tribe and Lakes shall
consult and agree on the defense and settlement of any matter in which
indemnification is required of the Authority or the Tribe, Lakes shall have the
right to retain its separate counsel to advise it thereon (but such counsel
shall be at Lakes’ own expense), and upon the occurrence of any such claim, the
parties shall enter into a mutually acceptable agreement providing for the
procedures by which any such claims shall be prosecuted and related costs and
expenses shall be reimbursed. Lakes shall be listed as an additional insured on
all insurance policies with respect to any Project. The Authority and the Tribe
further agree to indemnify and hold each Lakes Indemnitee harmless from any and
all liabilities, claims, losses and expenses arising from any prior agreements
entered into by the Authority or the Tribe with any Persons or entities in
connection with development, construction and/or operation of the Project
Facilities.

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     Section 11.10 Compliance with Legal Requirements. All parties shall at all
times comply with all Legal Requirements applicable to their performance under
this Agreement.
     Section 11.11 Further Assurances. The parties agree to do all acts and to
deliver all necessary documents as from time to time are reasonably required to
carry out the terms and provisions of this Agreement, including the filing of
UCC Financing Statements and related security instruments described herein.
     Section 11.12 Cooperation; Approvals. Each of the parties agrees to
cooperate in good faith with the other to timely implement the purposes of this
Agreement. Any consents or approvals required to be given in connection with
this Agreement shall not be unreasonably withheld or delayed by the parties.
     Section 11.13 Confidentiality. Except as required by Legal Requirements,
including but not limited to, reporting requirements imposed on publicly traded
companies, each of the parties agrees that all non-public information exchanged
between the parties with respect to the Project shall be kept confidential by
each party and only disclosed to that party’s legal counsel, financial advisors
or as reasonably required to be disclosed in connection with the Project.
     Section 11.14 Effective Date. Subject to Section 3. l(c), this Agreement
shall become effective and binding upon the date of execution by the parties.
[Signature Page Follows]

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     The parties have executed this Development Financing and Services Agreement
as of the date stated in the introductory clause.

                  Jamul Gaming Authority         a governmental component and  
      instrumentality of the         Jamul Indian Village    
 
           
 
  By
Its:   /s/ Leon Acebedo
 
Leon Acebedo, Chairman    
 
           
 
  By   /s/ Erica Pinto    
 
           
 
  Its:   Erica Pinto, Secretary    
 
                Jamul Indian Village         a federally recognized Indian tribe
   
 
           
 
  By   /s/ Leon Acebedo    
 
           
 
  Its:   Leon Acebedo, Chairman    
 
           
 
           
 
  By   /s/ Julia Lotta    
 
           
 
  Its:   Julia Lotta, Secretary    
 
                Lakes Jamul Development, LLC         a Minnesota limited
liability company    
 
           
 
  By   /s/ Timothy Cope    
 
           
 
  Its:   President /CFO     3/30/06    

[Signature Page to Jamul Development Financing and Services Agreement]

34

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EXHIBIT A
Gaming Facility Site — Legal Description
EXHIBIT B
Property Not Subject to Development Financing Loan
EXHIBIT C
Detail of Advances Made by Lakes Affiliates Before January 17, 2006 and
Accrued Interest Thereon
EXHIBIT D
Form of Note
EXHIBIT E
Resolution of Limited Waiver of Sovereign Immunity — Authority
EXHIBIT F
Resolution of Limited Waiver of Sovereign Immunity — Tribe

35

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EXHIBIT A
Gaming Facility Site — Legal Description
LEGAL DESCRIPTION
PARCEL 2: THE UNITED STATE OF AMERICA IN TRUST FOR SUCH JAMUL INDIANS OF
ONE-HALF DEGREE OR MORE INDIAN BLOOD AS THE SECRETARY OF THE INTERIOR MAY
DESIGNATE
ALL THAT PORTION OF RANCHO JAMUL, IN THE COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO L.S. MAP THEREOF NO. 430, FILED IN THE OFFICE OF THE
RECORDER OF SAID SAN DIEGO COUNTY, MAY 28, 1931, MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
BEGINNING AT CORNER R.J. 16 AS SHOWN ON SAID L.S. MAP NO. 430; THENCE ALONG THE
NORTHERLY LINE OF SAID RANCHO JAMUL SOUTH 88° 42’ EAST, 529.24 FEET (RECORD
NORTH 88° 42’ WEST, 530.52 FEET) TO THE WESTERLY LINE OF THAT CERTAIN PARCEL OF
LAND NOTED INDIAN CEMETERY ON SAID L.S. MAP NO. 430; THENCE ALONG SAID WESTERLY
LINE SOUTH 01° 20’ 53” WEST, 239.66 FEET (RECORD NORTH 01° 18’ EAST, 239.0 FEET)
TO THE SOUTHWEST CORNER OF SAID INDIAN CEMETERY; THENCE ALONG THE SOUTHERLY LINE
OF SAID INDIAN CEMETERY; SOUTH 88° 39’ 07” EAST, 53.55 FEET (NORTH 88° 42’ WEST,
83.5 FEET) TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID
SOUTHERLY LINE AS FOLLOWS: NORTH 01° 20’ 53” EAST 59.94 FEET (RECORD SOUTH 01°
18’ WEST, 59.9 FEET); NORTH 87° 54’ 53” EAST, 665.17 FEET (RECORD SOUTH 87° 52’
WEST, 664.77 FEET) NORTH 01° 20’ 53” EAST, 58.04 FEET (RECORD SOUTH 01° 18’
WEST, 58.00 FEET); SOUTH 88° 42’ 00” EAST, 598.46 FEET TO THE SOUTHWESTERLY LINE
OF CAMPO ROAD, SAID POINT BEING ON A 559.59 FOOT RADIUS CURVE CONCAVE
SOUTHWESTERLY, A RADIAL LINE FROM SAID POINTS BEARS SOUTH 47° 16’ 18” WEST,
THENCE SOUTHEASTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 03°
29’ 08” A DISTANCE OF 33.80 FEET: THENCE LEAVING SAID SOUTHWESTERLY LINE NORTH
88° 42’ 00” WEST, 338.54 FEET: THENCE SOUTH 21° 58’ 02: EAST, 257.03 FEET:
THENCE NORTH 86° 48’ 26” WEST, 721.24 FEET: THENCE NORTH 86° 21’ 37” WEST,
338.78 FEET TO THE TRUE POINT OF BEGINNING.
PARCEL 3: THE UNITED STATES OF AMERICA IN TRUST FOR THE JAMUL INDIAN VILLAGE

 

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ALL THAT PORTION OF RANCHO JAMUL, IN THE COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO L.S. MAP THEREOF NO. 430, FILED IN THE OFFICE OF THE
RECORDER OF SAID SAN DIEGO COUNTY, MAY 28, 1931, MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
COMMENCING AT A POINT ON THE NORTH BOUNDARY LINE OF THE RANCHO JAMUL, DISTANCE
648.5 FEET EAST FROM THE RANCHO JAMUL CORNER NO. 16: THENCE EAST, ALONG SAID
NORTH BOUNDARY LINE 1383.0 FEET TO A POINT ON THE WESTERLY LINE OF COUNTY ROAD:
THENCE SOUTH 49° 13’ EAST, ALONG SAID WESTERLY LINE OF COUNTY ROAD 26.02 FEET TO
A POINT: THENCE WEST 594.7 FEET TO A POINT: THENCE SOUTH 58.0 FEET TO A POINT:
THENCE SOUTH 86° 45’ WEST 704.0 FEET TO A POINT: THENCE SOUTH 43° 30’ WEST 88.5
FEET TO A POINT: THENCE SOUTH 59.9 FEET TO A POINT: THENCE WEST 44.2 FEET TO A
POINT, THENCE NORTH 239.0 FEET TO A POINT OF BEGINNING.
EXCEPTING THEREFROM THAT PORTION THEREOF CONVEYED TO THE UNITED STATE OF AMERICA
IN TRUST FOR THE JAMUL INDIAN VILLAGE IN DEED RECORDED JULY 27,1982 AS FILE NO.
82-229256 OF OFFICIAL RECORDS.

 

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EXHIBIT B
(Property not subject to Development Financing Loan)
JAMUL — 11 ACRE PARCEL:
PARCEL 1:
THAT PORTION OF LOT 5 OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF
SECTION 10, TOWNSHIP 17 SOUTH, RANGE 1 EAST, SAN BERNARDINO MERIDIAN, IN THE
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO OFFICIAL PLAT THEREOF,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWESTERLY CORNER OF SAID LOT 5; THENCE ALONG THE SOUTHERLY
LINE OF SAID LOT 5 SOUTH 84°47’00” WEST 601.86 FEET TO THE SOUTHEASTERLY CORNER
OF THAT PARCEL OF LAND CONVEYED TO ORSEN B. THAYER BY DEED RECORDED JULY 19,
1888 IN BOOK 125, PAGE 390 OF DEEDS; THENCE ALONG THE EASTERLY LINE OF SAID
THAYER LAND, NORTH 0°07’00” WEST 706.81 FEET TO THE WESTERLY PROLONGATION OF THE
SOUTHERLY LINE OF THAT PARCEL OF LAND CONVEYED AMY B. NOBARD BY DEED RECORDED
JULY 24,1930 AS FILE NO. 35224 IN BOOK 1795, PAGE 217 OF DEEDS; THENCE ALONG
SAID PROLONGATION AND ALONG THE SAID SOUTHERLY LINE NORTH 86°23’40” EAST 614.36
FEET TO THE EASTERLY LINE OF SAID LOT 5; THENCE ALONG SAID EASTERLY LOT LINE
SOUTH 1 01’25” WEST 690.83 FEET TO THE POINT OF BEGINNING.
PARCEL 2:
ALL THAT PORTION OF LOT 6 IN SECTION 10, TOWNSHIP 17 SOUTH, RANGE 1 EAST, SAN
BERNARDINO MERIDIAN, IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING
TO OFFICIAL PLAT THEREOF, LYING WEST OF THE CENTER LINE OF THE RELOCATION OF THE
COUNTY HIGHWAY KNOWN AS ROUTE 16, DIVISION 2 ACCORDING TO MAP THEREOF ON FILE IN
THE OFFICE OF THE COUNTY SURVEYOR OF SAN DIEGO COUNTY AND LYING SOUTH OF THE
SOUTH LINE OF THE PARCEL OF LAND CONVEYED TO WILLIAM E. LOWE, BY DEED DATED
SEPTEMBER 25, 1930 AND RECORDED IN BOOK 1820, PAGE 143 OF DEEDS, RECORDS OF SAID
SAN DIEGO COUNTY.
PARCEL 3:
THE EASTERLY 8.00 FEET OF LOTS 31 AND 32 OF COUNTY OF SAN DIEGO TRACT NO. 3673,
IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO.
10781, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, NOVEMBER
30, 1983.
ALSO THE EASTERLY 8.00 FEET OF THE SOUTHERLY 0.40 FEET OF LOT 30 OF

 

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COUNTY OF SAN DIEGO TRACT NO. 3673, IN THE COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 10781, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, NOVEMBER 30, 1983.
SAID PARCELS 1, 2 AND 3 IN THE AGGREGATE CONTAINING 11.3 ACRES MORE OR LESS.
JAMUL — 87 ACRE PARCEL:
LOTS 12 AND 13 AND THAT PORTION OF LOT 11 LYING WESTERLY OF COUNTY ROAD SURVEY
NO. 150, IN SECTION 10, TOWNSHIP 17 SOUTH, RANGE 1 EAST, SAN BEARNARDINO BASE
AND MERIDIAN, IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO
OFFICIAL PLAT THEREOF.
SAID LAND IS ALSO SHOWN ON RECORD OF SURVEY MAP NO. 695, FILED IN THE OFFICE OF
THE COUNTY RECORDER OF SAN DIEGO COUNTY.
EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS:
COMMENCING AT CORNER NO. 16 OF RANCHO JAMUL, ACCORDING TO THE RECORD OF SURVEY
MAP NO. 695, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY;
THENCE SOUTH 88°23’30” EAST ALONG THE NORTHERLY LINE OF SAID RANCHO JAMUL, A
DISTANCE OF 1242.57 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH
88°23’30” EAST ALONG SAID NORTHERLY LINE, A DISTANCE OF 671.25 FEET TO THE
SOUTHWESTERLY LINE OF HIGHWAY ROUTE 16, DIVISION 2, ALSO KNOWN AS CAMPO ROAD AND
STATE HIGHWAY 94; THENCE NORTHWESTERLY ALONG SAID SOUTHWESTERLY LINE THE
FOLLOWING COURSES:
NORTH 47°30’30” WEST, 291.98 FEET; NORTH 46°30’30” WEST, 264.02 FEET; NORTH
61°03’30” WEST, 123.75 FEET; NORTH 47°57’30” WEST, 189.19 FEET; THENCE LEAVING
SAID SOUTHWESTERLY LINE SOUTH 01°36’30” WEST, 546.89 FEET TO THE TRUE POINT OF
BEGINNING.
SAID PARCELS IN THE AGGREGATE CONTAINING APPROXIMATELY 86.30 ACRES